The Asian Crisis

[Aman A.K.A. Ahamburger]

  As on offshoot of the 2013 debt wall thread, I think it's important to focus a bit more on the situation that is developing in Asia.  As most are focused on Europe or the US, the fact is that Asian banks are now more leverage than they were in 1997 when the banking crisis hit the region.  This development has some economists thinking, Is Asia Heading for a Debt Crisis?  The center of this problem is something that has been mentioned in other threads, and now it has come to the forefront as some big fund managers are saying Investors in China should be wary of revolution.(China is heading for a social revolution, according to Fidelity fund manager Anthony Bolton.)

With 30-50k mass demonstrations a year it's not hard to imagine a revolution breaking out in China at all.  The commies have been trying to stimulate their economy and their new mantra is happiness not GDP, however, because there is a banking crisis now looming in Asia, spending their way out of a revolution might not be in the cards as China will have to act avert financial crisis.(Nomura says

China will sacrifice short-term economic growth to stave off a financial crisis, economists at Nomura have claimed.)

The other problem that China has, aside from corruption of course, is North Korea.  We have all heard the recent stories regarding the North's hostilities, and they have just fired back at the UN by saying their Nuclear program not a bargaining chip.

In an area of the world where most countries still view each other as enemies and not neighbours, it's no stretch of the imagination to think that Asia is heading towards more than just a banking crisis, in fact, there is a very good possibility that sometime in the future we could be looking at a war of the Asians, with the Great Chinese Depression mixed in. Stay  .

[Aman A.K.A. Ahamburger]

It would seem that the question of if there is an Asian Crisis in the Making has been answered.  I'm sure that lots have heard already that North Korea moves missile with 'considerable range' to coast and that North Korea pressures South by halting entry to industrial zone.  It's also pretty much known that South Korea vows fast response to North; U.S. positions destroyer and that the U.S.sends missile defenses to Guam over "clear" North Korea danger.  However, what makes this an Asian Crisis as opposed to just a Korean one is the amount of issues that the entire area has. Japan aims to jump-start economy with $1.4tn of quantitative easing trying to end years of deflation. In Myanmar and Sri Lanka it's the Muslims that bear brunt of extremism, by Buddhists?.

I could go on with similar regional issues that some of these smaller countries have, but lets face it China is by far the biggest news story in the area and they are facing by far the biggest problems of any country in the region.  Right now in China Scientists are racing to gauge pandemic risk of new bird flu, I wonder if it has anything to do with the Thousands of pigs found floating in major Chinese river?  The crazy thing about the Rivers in China is that apparently More than half the rivers previously thought to exist in China appear to be missing.  This is all very problematic for China because, as discussed before, more and more companies like Google are making things in the USA and domestic demand is the only way to move their economy along.  With all these problems at home and the Míddle East and Africa Dependent on them, those trillions of dollars in reserves don't look near as big do they?  Especially when you start factoring in the Chinese ‘ghost cities’ that are raising fears of an epic crash with global consequences (aka the Great Chinese Depression) Stay  .

[Aman A.K.A. Ahamburger]

It's interesting to note that former Ambassador to China Jon Huntsman thinks China is losing influence in North Korea while South Korea quietly prepares to protect its citizens from a North Korean attack.  Buddhist-Muslim Tensions Spread beyond Myanmar's borders and Vietnam Crony Communists Resist Constitution Backlash.  As the death toll rises to 7 and the number infected to 24, the WHO is saying there is no need to panic, however, it seems clear to me why China is trying to come out as the good guy now, saying that they promise a peaceful, prosperous China helping neighbors out of their problems; the commies are in PANIC mode. 

[Aman A.K.A. Ahamburger]

  The big econ news Monday was obviously that China's growth is slowing and today Moody's lowers China outlook after Fitch downgrade.

There are reports that China is denying military buildup on Sino-DPRK border. Why they would have to deny something that isn't happening seems a bit odd to me. Especially since they just released a white paper stating that they are building up the national defenses to protect themselves. This basically means they are building up their army across the country, not just on the border with Korea. To me the reason they would be denying this is because if it's true it means that they are very nervous over the situation in the Korea's, as they should be since North Korea issues new military threats on founder's birthday

The biggest "if" in this situation right now is getting more real by the day, and only time will tell if this new flu will be contained like Sars was.  The problem now with this virus is that a Symptom-Free Bird Flu Case Suggests a Wider H7N9 Spread, which means that it's starting to look like it could spread to other parts of Asia and beyond fairly easily.

 As usual, stay  .

[Aman A.K.A. Ahamburger]

As North Korea moves two more missile launchers, China says new North Korea nuclear test possible. The "if" situation in China is now at 102, including 20 deaths and around 40% of infections have come with no contact with poultry.  They are still saying that there is no human to human transmission, however, how are others getting infected if they haven't come into contact with birds?

 We have all heard about the massive money printing that Japan has once again preformed and the Yen slide echoes 1997 emerging crisis for some.  With debt levels higher now all throughout Asia than they were in 1997 and Ghost towns all over China, it's just a matter of time before there is another banking crisis in Asia.

The tensions between countries in the regions counties to heighten, the Japanese honored their past war heroes on Sunday. On Monday China called on Japan to face past after war shrine offering and South Korea minister shelves Japan.  But it's not just Japan that is making waves with their neghbours, China consolidates sea claims as Asian diplomacy struggles.  In other parts of Asia Buddhists are asking 'Violence for the sake of peace?' In other parts of Asia however, Buddhists are being accused by Rights group of 'ethnic cleansing'.

For the last few years we have heard all about the problems that the Western developed world faces, however, it seems that we all have issues that we are going to have to work out.  In the mean time all of these issues that are popping up in Asia are going to affect the global growth story for, most likely, years; all we can do here in the west is try to continue to lead by example. 

[Aman A.K.A. Ahamburger]

Apr 16, 2013 1:09:39 GMT -5 Aman A.K.A. Ahamburger said:

The biggest "if" in this situation right now is getting more real by the day, and only time will tell if this new flu will be contained like Sars was.  The problem now with this virus is that a Symptom-Free Bird Flu Case Suggests a Wider H7N9 Spread, which means that it's starting to look like it could spread to other parts of Asia and beyond fairly easily.

 As usual, stay  .

First Case Of New Bird Flu Found Outside China.  Only time will tell how much this is going to affect regional growth, stay  .

[Aman A.K.A. Ahamburger]

In the last 10-11 days the cases of H7N9 in China have continued to grow, meanwhile 23 people have died in India from H1N1 which is one of the strains that scientist are worried about mixing with the recent outbreak in neighboring China.  The really interesting thing is that in the Middle East over the last 7-8 months a new SARS like virus has been breaking out, and apparently this one is spreading easily between humans now as cases have been reported in France and Briton.

Now, we all know how the media likes to blow things like this out of purportion, and recent reports from Macdonalds and YUM confirm that the flu is having at least a minor effect on economic growth in China, however, I'm not overly worried that this is going to cause a massive pandemic like the Spanish Flu.

The real crisis in Asia has been recently outlined by the IMF nicely, there are risks of asset bubbles and a middle income trap in Asia.  As we can clearly see by the recent garment factory collapses in Bangladesh, the current path of labor is not sustainable in Asia, or anywhere in the world for that matter.  Aside from better working conditions being implemented by companies like Wal-Mart, the Govt in Bangladesh plans to raise garment worker wages, which takes us back into the trend path of everyone servicing their own economies.

As I mentioned before I'm not overly worried about a long lasting impact from this current flu outbreak, as The Real Reason to Worry About China is the fact that they have been trying to hide their massive debt problems from ghost cities.  For the longest time all we heard about was how amazing China's growth was, and now lots are starting to ask Can China handle the crises to come?  I think that the commies have an idea about the size of their problems, a leaked report today claims that China plans a revolution to head off fiscal crisis, it's a good thing too because I'm sure they know they have a different kind of revolution on their hands. On that point Phallic Communist Party's newspaper HQ gets ribbing to the point that they have banned looking at pictures or talking about the building online, China city quashes protest against petro plant.

The original title of this thread was a question about if there truly was a serious problem in Asia brewing. To further cement the fact that the title of this thread is now correct, a couple of recent events, aside from the rumor about a "revolution" to head off a crisis in China, that highlight just how serious the problem is; Latest China bailout reveals risk of local government's hidden debts, Asian nations say ready to act on asset bubbles, Chinese look abroad to preserve wealth. Stay  .

[Aman A.K.A. Ahamburger]

By saying that this situation is No 1997 Asian Crisis Returning, isn't that kind of like saying it's kind of like the banking crisis of 1997?  Especially when China's Bad-Loan Alarm Sounded by Record Bank Spread Jump, and China's Shadow Banking Sector Tops $5.8 Trillion.  I mean it's not like Hong Kong Stocks Show Property Collapse to BNP or anything.....

So........

China Bad-Loan Alarm Sounded by Record Bank Spread Jump 

Money-market rates touched the highest level last week since at least 2003, prompting three of the largest rating agencies to warn banks may run out of cash to pay investors in their wealth management products and to extend new loans, increasing the risk their customers will default. The People’s Bank of China is seeking to wring speculative lending out of the system after total credit approached 200 percent of gross domestic product, according to Fitch Ratings. 

Bad loans at banks including Industrial & Commercial Bank of China Ltd. have increased for six straight quarters through March 31, the longest streak in at least nine years.

Chinese commercial banks’ outstanding non-performing loans rose 20 percent to 526.5 billion yuan ($86 billion) at the end of the first quarter from a year earlier, accounting for 0.96 percent of total lending, according to data from the China Banking Regulatory Commission.

Those figures don’t reflect the real amount of debt because of the ways banks move loans off their books, Charlene Chu, Fitch’s Beijing-based head of China financial institutions, said in April. Some loans are bundled and sold to savers as wealth-management products, which pay more than regulated deposits, she said. Other assets are sold to non-bank institutions, including trusts, to lower bad-debt levels. 

Non-performing loans may rise faster as weaker borrowers have difficulty refinancing credit in the coming months, Moody’s Investors Service warned on June 24.

“The problem is that when debt levels have got so high, and it’s more debt that keeps the existing debt afloat, you absolutely have to stop the process, but it’s very difficult to do so in an orderly way,” said Michael Pettis, a finance professor at Peking University “There’s always a risk that the unwinding of the debt becomes disorderly and the PBOC will be blamed for mismanaging the process.” (*My thoughts* Or just on guy at the CB will get blamed like some do with Ben B. here)

China Failure to Grow With $1 Trillion Is Warning to Li: Economy

The government’s broadest measure of credit rose 58 percent to a record 6.16 trillion yuan ($1 trillion) in January-to-March, when gross domestic product gained 7.7 percent, compared with 8.1 percent a year earlier. Each $1 in credit firepower added the equivalent of 17 cents in GDP, down from 29 cents last year and 83 cents in 2007, when global money markets began to freeze, according to data compiled by Bloomberg. 

....all that sounds pretty familiar, doesn't it?  Sound like there is so much debt somewhere in the economy that no amount of money is helping the issue and money is literally just DRAINING from the banking system... But where did the money go??

  

[jarrett1]

The "ghost" towns...yes we were way ahead of the pack on this one too!

[flow5]

Some people also think Feb 27, 2007 started across the ocean. "On Feb. 28, Bernanke told the House Budget Committee he could see no single factor that caused the market's pullback a day earlier".

The U.S. & our trading partners are inextricably linked.  Bankrupt you Bernanke did it again.

[Aman A.K.A. Ahamburger]

Jun 28, 2013 8:20:04 GMT -5 jarrett1 said:

The "ghost" towns...yes we were way ahead of the pack on this one too!

 Why does that ALWAYS seem to happen? 

Just like in the US(before Ben B. was even close to being in office), the Chinese have hit their velocity peak. REAL ESTATE strikes again!!!

More and more debt is needed to keep those ghost cities alive...  A few trillion in currency reserves doesn't really seem like very much anymore, does it? 

 

 

How about a few of those other issues that are shaping up to be part of the Asian Crisis this time around?  You know, this isn't exactly like '97 after all. I mean small Asian countries are devaluing their currencies like the did in '97, and the banks are way more leveraged this time around, however, there are waaay more social issues taking shape. So it won't be exactly like it was in '97, this time... 

China media warns Philippines of 'counterstrike' in South China Sea 
Philippines Rebukes China for 'Militarization' in S.China Sea 
Rioters renew violence in Myanmar 
Vietnam devalues currency to aid exports, reserves

[Aman A.K.A. Ahamburger]

 Just after China sights growth at "7.5%"...... Record Downgrades Foreshadow First Onshore Default, while the earnings affecting bird flu virus  that is confirmed capable of airborne transmission pops up again... 

New case of H7N9 bird flu confirmed in China: Xinhua 

A 61-year-old woman from northern China was confirmed Saturday as having contracted the deadly H7N9 bird flu virus, state media reported.                                                                                                                                                                                                                                                                                                                                                       The woman is receiving emergency treatment in a Beijing hospital, Xinhua said, citing the statement as saying she had frequently purchased vegetables at a local market where live poultry is also on sale.

So far, nine of the woman's family members who have had close contact with her have not exhibited flu symptoms, the report said.

[Aman A.K.A. Ahamburger]

Oh and lets not forget the whole, the people want what we got, and these repressive BS regimes around the world better look out thing... 

Expats in Southeast Asia spread love of hockey 

Bomb Detonated At Beijing Airport: China State Media 

[Aman A.K.A. Ahamburger]

At least one person inside of China's elite has finally admitted that the "fun" has just begun for the Chinese real estate market.

Top Chinese official warn of 'empty cities' emerging in China

In a grim warning against rapid urbanisation in China, a top development official has said that reckless expansion of cities has turned many of them into ghost towns with no occupants in sight.

Qiao Runling, deputy director of the China Centre for Urban Development, said local governments had relied on quick urbanisation to stimulate economic growth and generate fiscal revenue.

"China now has an oversupply of cities, given the number of new urban districts that we have," Qiao said, adding that the excess of new urban districts are especially serious in medium and small-sized cities in central and western parts of the country.

State-run broad cater CCTV recently carried a report showing two such "ghost cities" with massive apartment and commercial complexes with no occupants, leaving local governments in deep debts.

Official statistics showed that land used for urban construction rose by 83.41 per cent from 2000 to 2010, while the urban population saw an increase of 45.12 percent in the period, state-run Xinhua news agency reported.

China, a predominantly rural society, has rapidly urbanised in the past decades with urban people now forming over 50 per cent of the population.

Speaking of those ghost cities that the Chinese leadership plans to fill up by further urbanizing their economy... China Urbanization to Hit Roadblocks Amid Local Opposition.

Like Qiao Runling was saying above, the amount of land use to build all those empty cities is double the amount of urban population growth, so the fact is there really isn't much need for more construction at this point. Since a big part of China's urbanization has been construction jobs, saying this is a catch 22 situation for the Chinese leadership is an understatement. Never mind that China's urban population ratio is at 50%, so their goal just to fill these empty places is having about 70% of their population urbanized...

How is this an Asian crisis? While Chinese ghost cities will be further hit by a slowing economy, and rising interest rates, the moderate slowdown that has hit China's economy this year has sent Thailand's economy into recession. The majority of the emerging Asian economies have tied their future to the Chinese economy and it's growth rate over the last decade, one that is unsustainable, which makes the entire region set for a re-balancing act.

This re-balancing act is going to be complicated by social issues, which the Chinese leadership sees. Even if they don't openly admit that they are headed for a depression like the 30's in the US, they know it's coming. Just look at their recent warnings on Western Values and how this fits right into what Wang Shi is saying about a "Chinese Arab Spring" in one of the articles linked to above. Stay .

Bird flu, slowdown hit sales at fast-food chains

HOUSE OF CARDS How China added $1 trillion to its economy by fudging data

[Aman A.K.A. Ahamburger]

As mentioned in the last post the biggest builder in China thinks there is a major bubble in Chinese's real estate, one that could lead to major social unrest if it popped.  He said in the 60 min interview that even the small drop in prices they experienced there earlier this year lead to protests outside his main office.  

When asked if he was worried about it popping and causing major unrest, he said that it was on the higher ups, but that he thought they had it under control. Yeah, they have it under control alright....

Spike in bad loans worries retailers in China. Decelerating investment in housing, infrastructure and manufacturing, is dragging on incomes.

We all know how well China dealt with the major social unrest in 1989, right? Stay .

[Aman A.K.A. Ahamburger]

More light on this whole situation that is a slow motion plane crash.

China Corporates Not Making Debt Payments

Chinese corporate debt was 113% of gross domestic product at the end of last year according to the widely followed Louis Kuijs of Royal Bank of Scotland RBS -2.79%. That’s worse than the 86% in 2008. J.P.Morgan thinks the 2012 figure was 124%, and BBVA, the Spanish bank, estimates almost 130%.

All these figures, in reality, are far too low. They are based on official GDP statistics, which grossly overstate China’s output. Make the proper adjustments to nominal GDP for inflation—this change by itself takes more than a trillion dollars off the 2012 results—and eliminate obvious fakery, and these percentages become astonishingly high, perhaps approaching 155%.

Will China’s corporate obligations trigger a nationwide crisis? “The level of debt is not a good judgment of whether a country has a serious problem,” said UBS UBS -1.5%’s Wang Tao in July. “The issue is whether it can afford the debt, and so far China can.”

So far, Ms. Wang has been right. Yet simple arithmetic indicates the country will suffer a wave of corporate defaults soon. As Tom Holland of the South China Morning Post tells us, “China Inc.’s balance sheet is flashing danger signals.” Specifically, Holland reports that Gillem Tulloch of Forensic Asia, a research firm, notes that the 1,500 largest public Chinese companies by sales have debt that is nearly seven times their annual operating cash flow. A healthy level is about three or four, he says, and the danger line is six.

Moreover, there has been a sharp deterioration in the condition of Chinese companies. Net debt of the corporate sector was 30 times net earnings in 2012, up sharply from 10 times in 2011.

With profits falling and debt increasing, the ability of China’s corporates to meet obligations will deteriorate quickly. Already free cash flow is severely negative, a “very rare” occurrence, seen in Asia only in the months preceding the 1997 financial crisis.

Soros Adviser Turned Lawmaker Sees Crisis by 2020: Japan Credit

[dothedd]

Sept 29, 2013 0:40:10 GMT -5 Aman A.K.A. Ahamburger said:

More light on this whole situation that is a slow motion plane crash.

China Corporates Not Making Debt Payments

Chinese corporate debt was 113% of gross domestic product at the end of last year according to the widely followed Louis Kuijs of Royal Bank of Scotland RBS -2.79%. That’s worse than the 86% in 2008. J.P.Morgan thinks the 2012 figure was 124%, and BBVA, the Spanish bank, estimates almost 130%.

All these figures, in reality, are far too low. They are based on official GDP statistics, which grossly overstate China’s output. Make the proper adjustments to nominal GDP for inflation—this change by itself takes more than a trillion dollars off the 2012 results—and eliminate obvious fakery, and these percentages become astonishingly high, perhaps approaching 155%.

Will China’s corporate obligations trigger a nationwide crisis? “The level of debt is not a good judgment of whether a country has a serious problem,” said UBS UBS -1.5%’s Wang Tao in July. “The issue is whether it can afford the debt, and so far China can.”

So far, Ms. Wang has been right. Yet simple arithmetic indicates the country will suffer a wave of corporate defaults soon. As Tom Holland of the South China Morning Post tells us, “China Inc.’s balance sheet is flashing danger signals.” Specifically, Holland reports that Gillem Tulloch of Forensic Asia, a research firm, notes that the 1,500 largest public Chinese companies by sales have debt that is nearly seven times their annual operating cash flow. A healthy level is about three or four, he says, and the danger line is six.

Moreover, there has been a sharp deterioration in the condition of Chinese companies. Net debt of the corporate sector was 30 times net earnings in 2012, up sharply from 10 times in 2011.

With profits falling and debt increasing, the ability of China’s corporates to meet obligations will deteriorate quickly. Already free cash flow is severely negative, a “very rare” occurrence, seen in Asia only in the months preceding the 1997 financial crisis.

Soros Adviser Turned Lawmaker Sees Crisis by 2020: Japan Credit

            Soros is the devil incarnate.

[Aman A.K.A. Ahamburger]

Could be, all I know is that he made money off the first one in '97. I have been saying for over a year now that this will be like a slow motion plane crash, and the second half of the Chinese "roaring" 20's still has to play out. Now we have this adviser saying basically the same thing, in my books that means the mathematical probability of my slow motion plane crash theory has increased.

[Aman A.K.A. Ahamburger]

Yes the Chinese govt knows exactly what they are doing, the fact they are buying up gold makes me want to rush into the asset class to protect my wealth from the USD falling victim to the Chinese Yaun. That's the story right? Never mind the ghost cities and....

China Major Cities Home Prices Jump, Fanning Bubble Concerns
Top China Banks Triple Debt Write-Offs as Defaults Loom

[dothedd]

NOT ASIAN .. BUT WORTH MENTIONING.

Norway’s Sovereign Wealth Fund Shuns Stocks on Reversal Bet
By Mikael Holter - Oct 25, 2013 9:53 AM ET

Norway’s sovereign wealth fund, the world’s largest, warned that stock market gains may reverse as Europe’s biggest equity investor said it won’t use new inflows to buy more shares.


www.bloomberg.com/news/2013-10-25/norway-wealth-fund-gains-5-as-recovery-boosts-global-stocks.html

[Aman A.K.A. Ahamburger]

Oct 25, 2013 11:33:44 GMT -5 dothedd said:

NOT ASIAN .. BUT WORTH MENTIONING.

 We are a global economy though, so it's worth mentioning here for sure. Fact is, while everyone is still focusing on the dead horse conversation of if the USA will make it or not(it already did back in '09), they are missing that the second leg in this global balancing act needs some serious medical attention. 

Hong Kong Home Prices to Drop 30% as Barclays Joins UBS, Merrill
Japan's PM warns China on use of force as jets scrambled
Increase in Activity Reported at North Korean Nuclear Test Site

[Aman A.K.A. Ahamburger]

As the story goes Russia and China are teaming up to end US dominance and destroy the US's stature in the world. China even went as far as printing stories in their state publication about a de-Americanized world... Problem there is China Debt Solution Seen Aided by Selling Listed Sharesand, Chinese premier warns slowing growth raises job concerns

Seems to me that the reality of major trust issues among countries in the East, discussed around here a few times, is the real story.

Russia, Japan upgrade defence ties as part of 2+2 mechanism
Japan to start large-scale war games exercise Tens of thousands of Japanese troops and aircraft on display in 18-day show of strength to neighbours
China says will stamp out Dalai Lama's voice in Tibet

[Aman A.K.A. Ahamburger]

Just about a year ago I asked...

Mar 17, 2013 13:04:39 GMT -5 Aman A.K.A. Ahamburger said:

Is Asia Heading for a Debt Crisis?

Now, the man who predicted Russia’s 1998 stock market crash months in advanceis calling for big trouble in China. His reasoning is the same as mine was when I first brought this topic up, China's economy can be summed up in one word, debt.

It's really starting to show to. Do headlines like this look familiar?

Hong Kong Home Discounts Rise With ’14 Drop Forecast: Mortgages
Shanghai Glut Rises With Tallest Tower: Real Estate
China Money Rate Tumbles Most Since 2011 as PBOC Injects Cash

Echo's of 2007-2008? I guess we will see. One thing is for sure, the Chinese govt isn't really known to be open about things. What does it say when?....

China Has ‘High’ Chance of Small Bank Failure, Official Says
Chinese leaders: Economy faces 'downward pressure'
Chinese PM Li Keqiang pledges 'appropriate liquidity' in 2014

Of course there is always that situation that is a cross over from the Míddle East and Africa:Now It's Dependent on China, thread. How China wants, nay, needs stability in the region. It's not only Russia that is experiencing an increasing amount of attacks...

Chinese police kill 8 in Xinjiang 'terrorist attack'
Riot in China's Xinjiang kills 16, 'terror gang' blamed

To top it all off, the Chinese people are increasingly seeing their govt for the totalitarian regime that it is. While the Commies are trying to pull off this giant task of avoiding a massive crash, urbanizing their population to 75%, cleaning up pollution on historic levels, trying to keep a lid on the situation in the Mid East that is spiraling out of control, even self made Chinese millionaires are Risking thier money Taking to Street to Fight for Justice.

Freedom is such a fickle thing.

[Aman A.K.A. Ahamburger]

Ah yes the catch 22, China needs to grow, but how? The slow motion plane crash continues.... China’s Credit Hole Seen Limiting 2014 Growth Prospects

[Aman A.K.A. Ahamburger]

I'm sure most have heard that Fed injects $2B more into banking system Central bank supplies liquidity again in an effort to calm fears about credit crunch. Wait sorry.. That was 2007 this one is from this week... China’s benchmark money-market rate fell for a second day, while stocks rallied by the most in two months, as fund injections by the central bank eased a cash squeeze

Jan 2, 2014 22:29:54 GMT -5 Aman A.K.A. Ahamburger said:

Just about a year ago I asked...

Mar 17, 2013 13:04:39 GMT -5 Aman A.K.A. Ahamburger said:

Is Asia Heading for a Debt Crisis?

Echo's of 2007-2008?

China Trust Products Gone Awry Evoke Soros: Echoes of ’08 Crisis

Asian Stocks Drop After China’s Flash Manufacturing PMI

“Growth in China isn’t going to pick up as the government is focused on rebalancing the economy and reducing reliance on credit,” Manpreet Gill, a Singapore-based senior investment strategist at Standard Chartered Bank, said by phone. “While Chinese equities look inexpensive, they lack catalysts. Ongoing reforms in China will be a key challenge for markets this year.”

The last thing to note. Those regional conflicts that I pointed out in the first few posts of this thread, have been posting about since 2011 in various threads, and have been talking about for much longer are really starting to pop up now. Stay .

Abe sees World War One echoes in Japan-China tensions

[Virgil Showlion]

ZH has been covering (and predicting) the Chinese bank crisis for months. Seems like it's finally coming to a head.

[jarrett1]

Super-FedWatch and some on Market Talk have been predicting this for...years....seems like others may have lost their heads

[Aman A.K.A. Ahamburger]

Yes, exactly what I was going to say. In fact, I think this is one of the first topics that we “bonded” over back in 2010 on the MSN boards, non? Back when China was going to take over, and the USA was doomed. Amazing the difference that a few short years can make, eh?

(Speaking of MT. Since the is back, and the one that shall remain nameless is gone. If it's not too much trouble, and flow doesn't mind, feel free to merge MT back together Virgil.)

On the current topic of Asia. It's the slow motion plane crash in full view now, that is for sure.

The thing is, this thread isn't just about the financial situation in China, or the Ghost properties that we have been talking about since 2011. It's an expansion of something else we chatted about back in 2010 “jarret”. It's about the conversations we had regarding the entire Asian region, and the many historical issues that they are going to have to work out before they can truly hit their stride like all of these other economists that get paid the big bucks predict they will.(Back before we all knew each other so well.)

It's all about highlighting the micro details to one part of my list of socioeconomic issues that could have aligned in 2013. China's coming finical catastrophe is one thing, but just look at the emerging markets. Thailand right now. The battles between Muslims and Buddhists in the region that are still going on and growing. Most importantly however, the heightened tensions that could, and did, occur between China and Japan.

All these micro issues in the Asian region are important because as a whole the difficulties facing the Asian region are part of the bigger overall trends that emerged in 2013. There was the recession/far right wing issue that did in fact grow in the EU in 2013, the war in the Middle east that grew, out of control, in 2013, and the USA's continued slow growth in 2013. Aside from the glimmer of hope that the EU may squeak out 1% GDP growth, as a whole this year not much is going to change. I guess we get to see in 2014 how much all these socioeconomic issues that did in fact emerge in 2013, are going to affect economic forecasts in the future from all the big houses.

All that said, right now China is just injecting money. If and when bank failures start, that's when the ghost cites become a black hole. It took from the start of 2007 until the end of 2008 for it to happen in the USA. Time to sit back and continue to watch what I like to call, “The Slow Motion Plane Crash”.

[bimetalaupt]

A+++,
It is interesting to note China is now the worlds largest debtor nation ..Total  National Government debts $25 Trillion vs $16 Trillion...or $2 debt for every dollar GDP.. Japan is about $3.5/gdp and USA is almost dollar for dollar..Both Export nations borrowed their way from the working class that built the nation rather then spend.

Now the new middle class in China is spending on French Wine and American Whiskey.

Just a thought,
BiMetalAuPt

[Aman A.K.A. Ahamburger]

Exactly B, the newly rich that spent on credit to get where they are today. Only thing is about 1 billion people in China live in abject poverty, or about $2 a day. China faces socioecinomic issues similar to USA circa 1880-1915, mixed with a credit bubble circa 1930 USA.

I was thinking about something regarding our conversation earlier, while the banking system in China could shift around til the end of 2015 in the current environment. A banking/stock market route in Asia and the middle east would rip a hole in the paper think banking system that is China. Was that 13k that MMxx was talking about

If I wasn't so damn tired I'd post on the mid east thread about the fecal storm that Egypt has turned into. Or how the Wahabbist announced a new chapter in Lebanon the day that the Syrian "peace" talks took place. Or how for the first time in history there was a planned Wahhabist attacks in Israel. For now though i'll just pass on how Israel is reconsidering their no attack policy on Syria because of the growing Wahhabist presence, and the grand eye told ya in the person desert says that the centrifuge is the center "peace".

While they all were looking west, their real play was to try and gain the resources to the east.