The Asian Crisis

[Aman A.K.A. Ahamburger]

Sept 12, 2017 1:37:28 GMT -5 Aman A.K.A. Ahamburger said:

It's probably nothing.... Especially because ya know, fraud...

Chinese debt is so bad that even Chinese bankers now say it's a 'bubble'

Huarong trades in nonperforming loans, distressed assets, and bad debt. Investors are so sure that the government has the debt situation under control that people are pouring money into risky debt products rather than fleeing from them, he says.

"There is a bubble in the price of bad assets," he told the Financial Times. "If you don't understand the market for bad assets or asset restructuring and merging, for nonprofessionals there is big risk. Not only will you not make money, you will also lose money."


There has been an uptick in the number of voices openly worrying that the country's debt is out of control. One of them, Charlene Chu, now says Chinese debt is so large its scale is becoming almost unimaginable. Chu, a former Fitch analyst now at Autonomous Research, told the Financial Times recently:

"Everyone knows there's a credit problem in China, but I find that people often forget about the scale. It's important in global terms ... It can create a problem of proportions that people would think is never possible. We're moving into that territory."

Sept 21, 2017 21:03:32 GMT -5 Aman A.K.A. Ahamburger said:

Aug 30, 2017 0:40:35 GMT -5 Aman A.K.A. Ahamburger said:

and then: China Sacks Russia!!!.. considering all the hype surrounding the Sino-Russian cooperation: Russia, in One of Biggest Bailouts in its History, Rescues Otkritie Bank Stay

Aug 30, 2017 19:44:06 GMT -5 Aman A.K.A. Ahamburger said:

A and more negative rates for the fraudulent International monetary system and the Bank of Cyprus posts big loss on bad debt provisions...

Ah, this is where I posted about the last Russian bank failure. Might as well note; Russia's B&N Bank balance sheet hole could reach $6 billion. I don't have time to look for the post about dividend cuts, but another trend called which has been little discussed;

Pace Of Dividend Cuts Slows Near End Of 2017-Q3

Despite having the potential to be the best quarter in 2017, the pace of dividend cuts for the third quarter is at a level that is consistent with recessionary conditions being present in the U.S. economy...

Since DOW and S&P companies get 50% of their earnings from markets outside of the US... Perhaps all the fraud in the global economy?

S&P Cuts China’s Credit Rating, Citing Risk From Debt Growth

Oct 19, 2017 0:18:13 GMT -5 Aman A.K.A. Ahamburger said:

Ah yes, tying the information together on this thread: Xi uses speech to tighten China's grip on 'culture and morals'; and To inspire young communists, China turns to 'Red Army' schools. Stay

Oct 21, 2017 21:07:12 GMT -5 Aman A.K.A. Ahamburger said:

If the amount of fraud in China wasn't already at epic purportions... The reason for housing stabilizing shows up. Chinese Cities Buy Off Housing Glut With Borrowed Money

China central bank chief warns of ‘Minsky moment’

China’s central bank governor has warned in unusually stark language of the risks from excessive debt and speculative investment, as he used the Communist party congress to caution that the country’s fast-growing economy faced a possible “Minsky moment”.

[Aman A.K.A. Ahamburger]

With Xi tightening his grip on power, pushing for a bigger stronger Red Army, pushing bad earnings past the congress, the over hype of China's command economy - which I don't think the Chinese even buy because they know THEIR history - and the fact they have all but admitted their only way out of their liquidity trap is the one belt one road initiative which is blocked by "Islamic Terror"....

China’s Dandong Port Group Defaults on $150 Million in Bonds

[Aman A.K.A. Ahamburger]

China’s Central Bank Chief Warns of ‘Sudden, Contagious and Hazardous’ Financial Risks

China’s financial system is becoming significantly more vulnerable due to high leverage, according to central bank governor Zhou Xiaochuan, who has made a series of blunt warnings in recent weeks about debt levels in the world’s second-largest economy.

Latent risks are accumulating, including some that are “hidden, complex, sudden, contagious and hazardous,” even as the overall health of the financial system remains good

AKA, liquidity trap with exit blocked by war; AKA hidden, complex, sudden, contagious and hazardous.. stay

[Aman A.K.A. Ahamburger]

the over hype of China's command economy - which I don't think the Chinese even buy because they know THEIR history

Warnings From the "China Beige Book"

The China Beige Book, CBB, says that China had been covering up and smoothing over problems related to weak growth and excessive debt in order to provide a calm face to the world in advance of the National Congress of the Communist Party of China, which took place last month.

CBB also makes it clear that the much-touted “rebalancing” of the Chinese economy away from investment and manufacturing toward consumption and spending has not occurred. Instead China has doubled down on excess capacity in coal, steel and manufacturing and has continued its policy of wasteful investment fueled with unpayable debt.

It’s become obvious that the first cracks are starting to appear in China’s Great Wall of Debt.

[Aman A.K.A. Ahamburger]

Fraud, corruption and crossing over into the global conflict... Stay

-Why global powers are obsessed with containing China: 10-point guide
-Corruption in China could lead to Soviet-style collapse, graft buster says

China's Growth Miracle Has Run Out Of Steam

Typically, analysts assume that changes in reported GDP reflect movements in living standards and productive capacity. In China, however, this is not the case. Local governments are expected to boost spending by whatever amount is needed to meet the country’s targets, whether or not it is productive.

GDP growth is not the same as economic growth.

Consider two factories that cost the same to build and operate. If the first factory produces useful goods, and the second produces unwanted ones that pile up as inventory, only the first boosts the underlying economy. Both factories, however, will increase GDP in exactly the same way.

Most economies, however, have two mechanisms that force GDP data to conform to underlying economic performance.


First, hard budget constraints, which set spending limits, drive companies that systematically waste investment out of business before they can substantially distort the economy.

Second, there is a market-pricing factor in GDP accounting that when bad debts caused by wasted investment are written down, the value-added component of GDP and the overall level of reported growth are reduced.

In China, however, neither mechanism works. Bad debt is not written down and the government is not subject to hard budget constraints. It is the government sector that is mainly responsible for the investment misallocation that characterises so much recent Chinese growth.

The implications are obvious, even if most economists have been surprisingly reluctant to acknowledge them. Anyone who believes there has been a significant amount of wasted investment in China must accept that reported GDP growth overstates the real increase in wealth by the failure to recognise the associated bad debt. Were it correctly written down, by some estimates GDP growth would fall below 3 per cent.

Historical precedents suggest the potential magnitude of this overstatement.

Japan’s economy in the 1980s, for example, had distortions that resemble those of China today. Although not nearly as extreme, Japan too suffered from a very low consumption share of GDP and an overreliance on investment that, by the 1980s, had veered into substantial misallocation.

In the early 1990s, Japan’s reported GDP comprised 17 per cent of the overall global total, and few doubted that its soaring economy would become the world’s largest by the end of the century. Instead, once credit growth stabilised, Japan’s share of global GDP began to plummet, and has since fallen by nearly 60 per cent.

The same happened to the former USSR. It grew so quickly after the second world war that by the late-1960s it comprised 14 per cent of global GDP, similar to China today, and was widely expected to overtake the US. But two decades later, its share of global GDP had fallen by more than 70 per cent.
These cases may appear shocking, but, like China today, 1980s Japan and 1960s Russia lacked the mechanisms to account for wasted investment in reported GDP. At their peaks, growth for each country was seriously overstated by the failure to write down the waste, and understated once debt levels stabilised.

[Aman A.K.A. Ahamburger]

But, they are getting their debt under control.

China’s debt pile growing fast despite years of efforts to contain it

[Aman A.K.A. Ahamburger]

-China's Banks Need More Capital After Credit Boom, IMF Says
-China's growth objectives clash with financial stability goal - IMF
-China's HNA CEO sees asset sales as part of adjustment: media

[djAdvocate]

i'm hoping to close a deal with China before the end of this year. 

[Aman A.K.A. Ahamburger]

Get while the gettings good!

Honestly, I know you want out of the US, but the wealthy Chinese are fleeing. With the state of unrest in the East, and what comes next; you could be missing out on the opportunity of the greatest "repatriation" of wealth in human history. Just a thought as a wise man once said.

[djAdvocate]

Dec 8, 2017 20:50:29 GMT -5 Aman A.K.A. Ahamburger said:

Get while the gettings good!

Honestly, I know you want out of the US, but the wealthy Chinese are fleeing. With the state of unrest in the East, and what comes next; you could be missing out on the opportunity of the greatest "repatriation" of wealth in human history. Just a thought as a wise man once said.

i am moving for a very specific reason, and not immediately.  the specific reason is healthcare.

i have watched now as (3) of my four parents had their life savings drained away by the medical industrial complex.  that, to me, is the only "repatriation" of wealth that concerns me.  as an investor, i can profit from this folly, or i can suffer for it.  i am choosing the former.  unlike many in the US, i have the means to pack up and go, and i plan on it.

i have been to many countries in the last few years.  NONE of them share this problem.  people who have a nickle to their name die with it.  unless i have a stroke tomorrow and can't get out, the grave robbers are not going to get me.

edit: the deal i am closing with China is SELLING TO THEM, not BUYING FROM THEM.

[Aman A.K.A. Ahamburger]

I hear that. Healthcare is one area that needs some serious attention. The catch 22 seems to be that care is good, but outrageously costly... I can understand where you're coming from there.

I figured it was you suppling. Since quality is severely lacking in China, they whole thing is to buy it. As we discussed before, the newly affluent in China prefer American/foreign made products over ones produced there. Congrats on the potential deal!

[djAdvocate]

Dec 9, 2017 21:53:13 GMT -5 Aman A.K.A. Ahamburger said:

I hear that. Healthcare is one area that needs some serious attention. The catch 22 seems to be that care is good, but outrageously costly... I can understand where you're coming from there.

I figured it was you suppling. Since quality is severely lacking in China, they whole thing is to buy it. As we discussed before, the newly affluent in China prefer American/foreign made products over ones produced there. Congrats on the potential deal!

i've noticed how this works.  generally, they copy my shit, and then i stop selling to them.  if they got really good at MARKETING to the US, i would be in serious trouble.  but fortunately, they don't have that down, yet.

it is probably just a matter of time, but i am only a few years before i am out of that business.

[Aman A.K.A. Ahamburger]

Dec 9, 2017 23:15:17 GMT -5 djAdvocate said:

Dec 9, 2017 21:53:13 GMT -5 Aman A.K.A. Ahamburger said:

I hear that. Healthcare is one area that needs some serious attention. The catch 22 seems to be that care is good, but outrageously costly... I can understand where you're coming from there.

I figured it was you suppling. Since quality is severely lacking in China, they whole thing is to buy it. As we discussed before, the newly affluent in China prefer American/foreign made products over ones produced there. Congrats on the potential deal!

i've noticed how this works.  generally, they copy my shit, and then i stop selling to them.  if they got really good at MARKETING to the US, i would be in serious trouble.  but fortunately, they don't have that down, yet.

it is probably just a matter of time, but i am only a few years before i am out of that business.

China Inc. has been so busy ripping people off, while ignoring their own hubris.. their never gonna get it man. Once the free market takes them down and the playing field has been balanced, the rest of the Eastern Hemisphere will eventually be a market big enough market where there will be enough pie for all.

[tyfighter3]

Aman, I don't know about that. Sometimes, I can eat a whole pie by myself. LOL

[Aman A.K.A. Ahamburger]

LOL, well due to KFC's success at Christmas supper in Japan, Domino's is going after Christmas Eve...and I'm pretty sure there was something about an Emperor having to admit something a while back...

So, I guess however it works out, we get pie.

[Aman A.K.A. Ahamburger]

Here's an interesting one;

Could China cause the next global crisis?(or, why the one belt road hitting a roadblock of war is the next turning)

Quoting Axiom Capital’s Gordon Johnson, who handles the firm’s stock picking in the alternative energy and metals and mining sectors, Edwards highlights the possibility that after years of diminishing returns, China’s credit multiplier might finally be “exhausted”.

Johnson points out China’s credit issuance growth of 101.7% year-to-date through to October “it seems the level of credit necessary to stimulate growth in China could prove elusive at this point”.

“We don’t recall any economist’s forecasts exiting 2016 pointing to China’s new credit issuance more than doubling year on year in 2017, yet that’s exactly what’s happened,” he continues. “Had this been our base case, we would have expected all economic indicators in China to be moving substantially higher at this point in the cycle.”

AKA; massive supply of debt creates a black hole that eats money. And while keeping monetary policies loose(keeping the money supply primed) like the US could have done in 2007 and China did in 2015 might hold things off for a bit; the market always kills ya for trying to beat it; regardless of what one person does.

[Aman A.K.A. Ahamburger]

Sept 21, 2017 21:03:32 GMT -5 Aman A.K.A. Ahamburger said:

Aug 30, 2017 0:40:35 GMT -5 Aman A.K.A. Ahamburger said:

and then: China Sacks Russia!!!.. considering all the hype surrounding the Sino-Russian cooperation: Russia, in One of Biggest Bailouts in its History, Rescues Otkritie Bank Stay

Aug 30, 2017 19:44:06 GMT -5 Aman A.K.A. Ahamburger said:

A and more negative rates for the fraudulent International monetary system and the Bank of Cyprus posts big loss on bad debt provisions...

Ah, this is where I posted about the last Russian bank failure. Might as well note; Russia's B&N Bank balance sheet hole could reach $6 billion. I don't have time to look for the post about dividend cuts, but another trend called which has been little discussed;

Pace Of Dividend Cuts Slows Near End Of 2017-Q3

Despite having the potential to be the best quarter in 2017, the pace of dividend cuts for the third quarter is at a level that is consistent with recessionary conditions being present in the U.S. economy...

Since DOW and S&P companies get 50% of their earnings from markets outside of the US... Perhaps all the fraud in the global economy?

S&P Cuts China’s Credit Rating, Citing Risk From Debt Growth

Time to reiterate the above because; This is the third time this year that the Bank of Russia has taken emergency action over one of the country’s largest private lenders.

[Aman A.K.A. Ahamburger]

Dec 8, 2017 9:07:59 GMT -5 Aman A.K.A. Ahamburger said:

-China's Banks Need More Capital After Credit Boom, IMF Says
-China's growth objectives clash with financial stability goal - IMF
-China's HNA CEO sees asset sales as part of adjustment: media

HNA Liquidity in Question as Citic Bank Cites Repayment ‘Issues'

And a crossover in a pear tree; Riyadh media publish short film showing Saudi army invading Iran under Mohammed bin Salman's command

Stay

[Aman A.K.A. Ahamburger]

Three stories from different angles of the same issue, all outlining how important the One Belt Road is in China escaping their liquidity trap. However, the articles also demonstrate just how much debt there is throughout Asia. Once the articles below are added to the information from the last couple posts(this thread in total) then added with the information in the war thread... Being early is on time, being on time is late; and if you're late to this party you're going to get sour grapes thanks to margin in the market and the death of Socialism. Stay

-Debt Trap Diplomacy, Who Next?
-A grim reminder for Pakistan how it is sliding into the Chinese debt trap
-China’s Silk Road: Inroad to World’s other economies?

[Aman A.K.A. Ahamburger]

As mentioned throughout this thread since 2015: 

China Central Bank Official Says Bankruptcy May Benefit the Country

Too bad they weren't more proactive on the massive fraud that has plagued their system for years. Too little to late as they have hit a wall of war now!

Stay

[Aman A.K.A. Ahamburger]

As China's economy set to slow sharply in 2018, ADB warns, and China fourth quarter economic trends point to slowdown in 2018: Beige Book survey; which is backed up by China's Fosun Explores Sale of Hollywood Studio Stake; it interesting to note By 2032, China will surpass US to become world’s largest economy: report. Interesting to note because, China's Economy Will Overtake The U.S. In 2018...aka fraudulent numbers from China have seen commie China take over the US for years....aka; epic fail!

[Aman A.K.A. Ahamburger]

Reducing tax to increase growth.... It can't be!

China temporarily exempts foreign firms from taxes for reinvested profits

[Aman A.K.A. Ahamburger]

Debt Trap and war, er sorry.. "instability".. Stay

Dark clouds across Asia.....Kerala govt orders closure of Kochi school for promoting, teaching communal Islamic content

[Aman A.K.A. Ahamburger]

A great article was recently published in the FT. It outlines how China has been in a recession since 2014. Which lines up with the data presented in this thread. So, while China was able to stave off their day of reckoning in 2015 when their property bubble bursts by faking data to instill fake confidence from the world markets; they did so by making their debt completely reliant on the success of the One Belt road. Which has hit a wall of war. So, AKA China sacks Russia because Putin screwed them worse than anyone, and all this talk about Russia-China cooperation is more like; "welcome to my liar said the spider to the fly."

-China Vows to Toughen Rules on $38 Trillion Banking Industry
-China Is Heaping Debt on Its Least Productive Companies
-China's Dalian Wanda Group says 2017 revenue down 10.8 percent
-China's Wanda sells interests in high-profile London property project
-Turkey warplanes bomb Kurds in Syria
-Syria: Turkey war planes launch strikes on Afrin

[Aman A.K.A. Ahamburger]

and the other biggest thing the "China Economic Miraclers" don't want to address; China is aiming to become a consumer based economy. All this debt and fraud is being piled on to the people:

-Hidden peril awaits China's banks as property binge fuels mortgage fraud frenzy
-Fears grow over Chinese investors snared in $11 billion fraud probe

And it crosses into: there is no Canadian housing bubble.

Vancouver's housing crisis revealed by looking to China, Australia, New Zealand

Indeed, this year’s move by China’s authoritarian leaders to severely restrict how much money they will allow to leave their populous country appears to be a key reason prices on high-end detached houses in Metro have this fall been dropping by 15 to 20 per cent, even if most of the public hasn’t noticed.

[Aman A.K.A. Ahamburger]

It's just a gully...

HNA to Face $2.4 Billion Liquidity Crunch This Quarter

HNA’s overall debt, including those of its units, totals about 1 trillion yuan, with China Development Bank, which didn’t respond to a request for comment, being the group’s biggest creditor, according to the people. That’s 56 percent higher than the 637.5 billion yuan in short- and long-term debt the company disclosed as having as of November.

[Aman A.K.A. Ahamburger]

and an interesting one in today's market.

Hong Kong on alert as ATM withdrawals surge

INVESTING IN CHINESE STOCKS

The annual deposit war is particularly fierce this year. The last day of January in the [WeChat] friend groups, bankers "beg" for deposits one after another.

"There are more than 20 banks looking, every one is asking for deposits." a listed company's small partner told reporters that he had been too busy to reply, however. The banker's nickname is "Guixie."

"Perhaps because the New Year approached, company payments are more numerous, bank account capital is less, bank competition for deposits is even more intense." A banking source told reporters bluntly, these days are quite difficult.....

....
The conventional wisdom about equities, interest rates, inflation and emerging markets is wrong again, just as it was in 2011 and 2014.

[Aman A.K.A. Ahamburger]

You can go on for a long time, but sooner or later the invisible hand is gonna cut you down.

-Everything must go: Chinese investors sell off their foreign RE holdings
-Paydirt: HNA’s bills bills bills, Forest City’s future, new top firm rankings & other industry news you need to start your week
-HNA misses early payment on $272 million trust loan under liquidity pressure - sources

Of course, building ghost cities on top of piles of fraudulent debt, while trying to control every aspect of a billion or so people's lives is all just a conspiracy... Just like the wall of war they will have to overcome.

HNA Is Victim of Conspiracy Against China: Co-Chairman

HNA Group Co.’s second-most-senior executive argued that the group is a victim of a conspiracy against the Chinese government and one of the country’s most loyal companies, according to a speech to fellow board members.

In the Feb. 3 speech, Co-Chairman Wang Jian said recent attacks came from "reactionary forces from both China and overseas countering China’s rise, and are a major conspiracy against the Communist Party Central Committee with Xi Jinping at its core," according to a transcript of the speech distributed to employees, a copy of which was seen by Bloomberg. The aim is to disrupt China’s financial markets and subvert Chinese communist rule, according to the document.

"We are carrying out a great transformation; we are realizing the great dreams of the secretary general," Wang said, urging employees to be strong through this tough period, according to the transcript. "They want to disrupt the entire Chinese economy, then disrupt HNA, leading to social unrest, subverting the entire 19th Party Congress, China’s ‘Belt and Road’ initiative and the planning for further, deeper reform. This is their conspiracy, these are their evil motives, and they’ve been plotting for a long time. "

A.K.A. We are special, we have a superior culture, our economic model is far superior to one that has been evolving for the past 2000 years from the command economic structure we have...

[Aman A.K.A. Ahamburger]

China is heading toward a debt crisis that will throw into question everything we think we know about its economy is an apt description of current events, especially now that the wall of war is coming into focus: China’s latest move in the graveyard of empires

As the thread title suggests, there is some serious pull to this vortex:

-The fall of Faraday Future's key backer threatens a California town's dream
-[Update: Site now redirects] LeEco's website goes down as the company's financial troubles worsen
-China's Leshi Internet flags $1.8 billion loss for 2017, citing LeEco cash crunch
-Sri Lanka Caught in China’s Debt Trap
-Pacific nations drowning in Chinese debt[/a]
-Chinese property developers in debt refinance push
-Zambia to Seek Restructuring of Debt to China After IMF Warning

Stay

[Aman A.K.A. Ahamburger]

-HNA Borrows More From UBS as It Hedges Whole Deutsche Bank Bet
-HNA's Fire Sale Gets Into Full Swing From Hong Kong to London