AuthorTopic: Official Chinese Toast Thread  (Read 196975 times)

Offline RE

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Official Chinese Toast Thread
« on: August 27, 2012, 02:14:08 AM »
I've been calling this one for YEARS.  About time.  The Chinese are....


RE

China Stocks Drop To Fresh Post-2009 Lows Following Plunge In Industrial Company Profits
Submitted by Tyler Durden on 08/27/2012 04:33 -0400

Bank of AmericaBank of AmericaCarbon EmissionsChinaDeutsche BankEurozoneHong KongJim ReidMonetary PolicyRealityWen JiabaoYuan

Today the Chinese stock market did something unthinkable: it plunged to fresh post 2009 lows on news so bad they would have been enough to send the stock markets of such "developed" bizarro economies as the US and Europe limit up. The catalyst, as Bloomberg reports, was that Chinese industrial companies’ profits fell in July by the most this year, a government report showed today, adding to evidence the nation’s economic slowdown is deepening. Income dropped 5.4 percent last month from a year earlier to 366.8 billion yuan ($57.7 billion), the fourth straight decline, National Bureau of Statistics data today showed. That compares with a 1.7 percent slide in June and a 5.3 percent drop in May. What is disturbing is that the slide persisted even as revenue in the first seven months increased 10.6 percent to 50 trillion yuan, today’s report showed. Which means that cost and wage pressures are starting to truly bite Chinese corporations, that the US ability to export inflation to China is much more limited, and that one can forget the PBOC easing monetary conditions any time soon for many of the reasons discussed in the past week. It also means that China is now stuck hoping that Wen Jiabao will at least implement some fiscal stimulus. The reality however, judging by the SHCOMP's reaction, is that the benefit from fiscal programs in China, and everywhere else, is far more limited than monetary policy intervention. End result: SHCOMP down 1.74%,to 2,055, a three year low.

From Bloomberg:

Today’s data add pressure on the government to step up policy easing to reverse a slowdown that may extend into a seventh quarter. On an inspection of Guangdong province from Aug. 24 to 25, Premier Wen Jiabao said difficulties in stabilizing the expansion are “still relatively large” and called for measures to promote export growth to help meet the country’s annual economic targets, the Xinhua News Agency reported.

“The economy is slowing faster than what had previously been expected,” said Patrick Bennett, a strategist at Canadian Imperial Bank of Commerce in Hong Kong. The profit outlook is for “further weakness throughout the year,” he said.

Industrial companies’ profits in the first seven months of the year declined 2.7 percent to 2.7 trillion yuan, according to today’s statement. That compares with a 2.2 percent drop in the first half and a 28.3 percent gain in the same period in 2011.

Bank of America and Deutsche Bank AG this month reduced their forecasts for full-year economic expansion to 7.7 percent, which would be the slowest pace since 1999. Wen in March set a target of 7.5 percent.

Company profits are declining amid falling prices, higher costs and slower demand.

Xinjiang Goldwind Science & Technology Co. (2208), China’s second- biggest maker of wind turbines, said last week that first-half profit slumped 83 percent as competition intensified and market growth slowed.

Deutsche Bank's Jim Reid had this to add:

Asian equities are weaker despite the positive US lead on Friday. The Hang Seng and the Shanghai Composite are down 0.15% and 1.32% as we type as China‘s latest industrial profits dropped 5.4%yoy in July (-2.4% year-to-date). Chinese Premier Wen was quoted by state media over the weekend as saying that “negative factors…will affect stable economic operations in the second half” and the difficulties of estabilising growth are “relatively large”. Adding to the negative sentiment, BHP Billiton CEO commented that he expects ''long-term'' price declines for the miner's commodities as slower economic expansion in China weighs on demand. Iron ore prices continue to fall with the spot benchmark down for its 8th consecutive day on Friday.

We showed the iron ore collapse previously here.

Finally, the Telegraph adds some more color on what is now China's last recourse, namely more fiscal stimulus, since courtesy of the risk of soaring Soybean prices first predicted here over a month ago, and since confirmed, the PBOC's hands are tied:

 The Telegraph has travelled to the south of China over recent days to witness a slowdown in the coastal economy and in the export sector, and also to areas which are flourishing with new investment, and where the local economy is booming. The picture appears mixed. China, geographically almost the same size as the Eurozone, appears to be struggling in some areas and flourishing in others. A new inland corridor, running from Liaoning in the north to Guizhou in the south, through cities such as Wuhan and Changsha, is booming.

In response, Guangdong has unveiled 177 "core projects" worth 1 trillion yuan, joining a long list of local governments to announce "stimulus" plans. The huge cities of Chongqing and Tianjin, meanwhile, both said they would spend 1.5 trillion yuan, while Guizhou, one of China's poorest provinces, has said it will spend 3 trillion yuan on eco-tourism and creating a series of national parks.

The central government, meanwhile, said it would spend to plough 2.4 trillion yuan into reducing carbon emissions and energy conservation programmes over the next three years, and has already set aside 26bn yuan in subsidies to encourage consumers to switch to low-energy appliances.

The role call of announcements may be a signal that after half a year of fine-tuning monetary policy, the government is preparing to take more drastic measures.

While the Communist party had pencilled in slower growth of 7.5pc for this year, in order to restructure and rebalance the economy, there are indications that China may suffer, or may already have suffered, a "hard landing", where growth would fall to below 7pc.

"A hard landing in China would look like the fourth quarter of 2008 and the first quarter of 2009 when exports collapsed, factories had no orders and migrant workers were laid off by the tens of millions," says Wang Tao, an economist at UBS.

Mr Wen said many "negative factors" would continue "to affect stable economic operations in the second half" and that the difficulties of boosting growth are "still relatively large".

"Facing the current difficulties, we have to improve the operating environment for companies and enhance the corporate confidence," he said.

At this point all we can add is that we are jealous and envious of China, where men are men, women are women, bad news are no longer not good news, and things are finally starting to make sense. As reported earlier, expect US stocks to soar on the realization that for China a hard landing now looks inevitable.
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Offline Golden Oxen

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Re: Official Chinese Toast Thread: China Announces £800bn Stimulus
« Reply #1 on: August 27, 2012, 03:17:20 AM »
 
China announces £800bn stimulus to boost confidence
China has announced a total of 8 trillion yuan (£800bn) of "stimulus projects" to try to boost confidence in an economy that appears to be cooling faster than expected.


China's export sector is suffering from anaemic demand from Europe and the United States. In the first seven months, exports rose 7.8pc, while imports rose 6.4pc, leaving China in danger of missing its 10pc target for trade growth this year. Photo: Reuters
Malcolm Moore

By Malcolm Moore, in Beijing

7:00PM BST 26 Aug 2012

Comments114 Comments

One Chinese province after another has stepped forward over the last fortnight to announce their plans, in what appears to be a propaganda effort to reassure the public that the economy is still on track.

Meanwhile, Wen Jiabao, the Chinese premier, promised over the weekend that the Chinese government would intensify its efforts to boost the economy in the second half of the year.

On a visit to Guangdong, the heartland of China's export industry, Mr Wen warned that "there will still be a lot of problems and uncertainties in      :icon_study:              www.telegraph.co.uk/finance/china-business/9500548/China-announces-800bn-stimulus-to-boost-confidence.html

Offline JoeP

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Re: Official Chinese Toast Thread
« Reply #2 on: August 28, 2012, 03:10:27 PM »
GO,

Thanks for link to the Telegraph article.  £800bn is not chump change.  I hope they use some of this money to fix some bridges.

From the Telegraph article:

"Many of the new stimulus projects appear to simply be restatements of existing commitments, and there was no indication of how they will be funded."

So I guess we'll find out if this is BS or the real deal when/if it happens....and isn't (at least partially) a "restatement of existing commitments".

I think they probably will "really" do it because the newz coming out of China is getting pretty crappy lately.  Like stories of non-performing loans and  mounting piles of unsold goods.


Bags of toys stored at a shop in a wholesale market in Guangzhou, a city in southeast China
just my straight shooting honest opinion

Offline JoeP

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Re: Official Chinese Toast Thread
« Reply #3 on: August 28, 2012, 05:58:56 PM »
...and it's not just bridges that are broken..."Broken Dreams" (emphasis added):

China: Broken Dreams

Despite the country's rapid economic growth, many young Chinese are growing disillusioned as they struggle to find jobs.

101 East Last Modified: 24 Aug 2012 17:39

<a href="http://www.youtube.com/v/aoP730EnFqM?feature=player_detailpage" target="_blank" class="new_win">http://www.youtube.com/v/aoP730EnFqM?feature=player_detailpage</a>

Many young Chinese are losing faith in China's economic miracle.

Although the nation's economy has expanded to more than $7 trillion and is poised to overtake the US in the next decade as the world's largest, fewer Chinese feel they are sharing in the prosperity.

A sense of disillusionment is spreading, particularly among the post-1980 generation, who are well-educated and mobile but still struggle to find profitable jobs.

Signs that the economy is slowing only add to the malaise. The Chinese government predicts the economy will grow by 7.5 per cent in 2012, down from 9.2 per cent last year, which would be the slowest growth rate since 1990. Economists say this could mean the loss of two million jobs.

At the same time a record number of new graduates are looking for work. Some 25 million Chinese will be on the job hunt this year. Even those who find work are frequently disappointed.

Surveys show that young Chinese office workers in big cities are widely unhappy. Most complain of a feeling of insecurity.

After two decades of economic reform, per capita GDP has risen 13-fold, and average salaries in major cities are on par with those in many developed countries. The post-80s generation, the first to come of age in this era of opportunity, has been raised on a belief that if one can do well in school, graduate from a good university and work hard on his or her career, one can enjoy a measure of success.

Instead, many find themselves squeezed by skyrocketing housing costs, rising prices for basic necessities and family pressures. As a large percentage of the post-80s generation are only children, they alone will be expected to provide for their parents and older relatives.

As many as three million young Chinese professionals toil in slum-like conditions in cramped housing on the outskirts of big cities. They are known as 'ant tribes,' a term coined by scholar Lian Si, China's foremost researcher on post-80s graduates.

"They share every similarity with ants," writes Lian. "They live in colonies in cramped areas. They're intelligent and hardworking, yet anonymous and underpaid."

Li Zhirui from China's northeast is one of them. Home is an eight square metre space outside Beijing that costs 500 Chinese yuan per month, a quarter of his salary. He dreams of one day buying an apartment, but with average real estate prices in the capital soaring to more than 20,000 yuan per square metre, he could be in for a very long wait.

He has already lost his fiancée, who dumped him when he refused to buy a second-hand car and an engagement ring.

The experiences of Li and other 'ant tribes' resonate strongly with young Chinese and have spawned a popular song and a TV series called Struggle of the Ant Tribe.

But for some despair takes over. Suicide has become the biggest cause of death for Chinese between 15 and 34 years of age.In a recent trend, some young graduates are deciding to flee the big cities and instead seek opportunity in smaller cities and towns. But there, too, they are frustrated, as they discover that good diplomas - and even ability - do not open doors. Local networks and family background do.

Leading Chinese sociologist Guo Yuhua calls this phenomenon of young Chinese "escaping and returning" an example of widespread disappointment that is spreading across China. She says people are bitter when they see their social status languishing in contrast to the "rise of a great and powerful nation".

"People are discovering that society's resources and opportunities are increasingly concentrated in the hands of a few. People in the middle and lower strata of society are becoming increasingly marginalised and are finding that improving their lives is getting harder," she says.

She warns this imbalance could lead to "the rich getting richer and the poor poorer, the strong permanently strong and the weak permanently weak .... The biggest harm may not be in the gap between rich and poor itself, but the deterioration of the overall societal ecosystem."

http://www.aljazeera.com/programmes/101east/2012/08/201282294320474807.html">China
just my straight shooting honest opinion

Offline Golden Oxen

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Re: Official Chinese Toast Thread
« Reply #4 on: August 28, 2012, 06:14:45 PM »
Quote JoeP "GO,

Thanks for link to the Telegraph article.  £800bn is not chump change.  I hope they use some of this money to fix some bridges."

Hi JoeP,  Have come to the point with this entire China conundrum that my brain just goes "Tilt"

1.3 Billion people in a country the size of Texas, putting more cars on the road than the US every year, with air, food, and water pollution rampant, suffering a severe economic contraction and real estate bust at the same time are just too much for my brain to handle.        :icon_scratch:

I just stare at the whole situation with my mouth wide open in bewilderment wondering what's next.   Have an instinctive feeling however, that it won't be pretty!               :icon_study:

Offline Ka

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Re: Official Chinese Toast Thread
« Reply #5 on: August 28, 2012, 10:41:58 PM »

1.3 Billion people in a country the size of Texas, putting more cars on the road than the US every year, with air, food, and water pollution rampant, suffering a severe economic contraction and real estate bust at the same time are just too much for my brain to handle. 

For the sake of your brain, China is over 13 times bigger than Texas. It's about the same size as the US, including Alaska.

Offline Golden Oxen

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Re: Official Chinese Toast Thread
« Reply #6 on: August 29, 2012, 03:07:55 AM »
Quote KA "It's about the same size as the US, including Alaska."

Sorry KA, Was thinking about something I had read about the majority living in an area about that size.  :icon_scratch: 

Offline RE

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Chinese Toast: Asia's Manufacturing Slump Deepens
« Reply #7 on: September 02, 2012, 08:36:23 PM »
No worries though, the Chinese are buying GOLD!

RE

Asia's Manufacturing Slump Deepens

By ARRAN SCOTT

SINGAPORE—Asia's manufacturing downturn deepened in August as China showed notable weakness, adding to pressure on governments and central banks to do more to prevent a sharper slowdown caused by flagging demand from Western markets.

Manufacturing in South Korea continued to shrink in August, as the HSBC Purchasing Managers' Index ticked up to 47.5 from 47.2 in July. The figure remained below the level of 50.0 that separates expansion and contraction for a third straight month.

The Korean PMI report followed Saturday's news of further deterioration in China's manufacturing sector, a worrisome sign for other Asian economies whose exporters are attuned to Chinese economic conditions. China's official manufacturing PMI fell for a fourth straight month in August and signaled a contraction for the first time since November, according to the China Federation of Logistics and Purchasing. The PMI fell to 49.2 from 50.1 in July, below a forecast of 50.0 in a poll of 11 economists.

Weakness in China's industrial sector poses particular challenges for Australia, which has invested heavily in its natural-resource sector to feed Chinese demand. Prices of iron ore and other industrial commodities have fallen in recent months in tune with softer demand from China, squeezing profit margins and calling into question the viability of some future mining projects.

The Australian Industry Group-PricewaterhouseCoopers Australian Performance of Manufacturing Index increased 5.0 points in August from July to 45.3, still signaling contraction. Basic metals and transport equipment were among the weakest performers as higher utility costs, the strong Australian dollar and soft retail demand continued to damp activity.
 
"Manufacturing conditions continue to be very challenging across the sector with the high (Australian) dollar and weakness in demand in the domestic and export markets weighing on growth," said Innes Willox, chief executive of Australian Industry Group.

The outlook for Asia's exports doesn't look good. Recent data suggest the euro zone is sliding into recession. The U.S. recovery also remains patchy, with Federal Reserve Chairman Ben Bernanke bolstering expectations Friday the Fed may pump more money into the economy to spur growth.

South Korea's exports—a bellwether of Asia's export trends—dropped 6.2% in August from a year earlier, with shipments to nearly all major global markets falling. In the first 20 days of August, exports to China fell 5.6%, while those to the European Union plunged 9.3%. Exports to the U.S. were down 2.1%, according to government data.

Economists said the Chinese manufacturing slump boosts the chance Beijing will turn up monetary and fiscal stimulus to support the economy. In Korea, where data showed inflation slowed to the slowest pace in more than 12 years, the central bank also has room to cut rates.

"Korea's manufacturing sector remains weak, even if conditions aren't deteriorating as sharply as before. Demand from home and abroad continues to contract, prompting local firms to reduce output further," HSBC economist Ronald Man said in a report. "With the Chinese economy yet to show signs of a meaningful recovery, policy makers in Korea need to support domestic demand as trade levels remain suppressed."

Mr. Man said he expects the Bank of Korea to deliver one more quarter-percentage-point rate cut this month after a similar cut in July.

Korea's Consumer Price Index rose 1.2% on year in August, the slowest pace since May 2000, Statistics Korea said. The August reading was also slower than a 1.5% rise in July and a 1.35% increase forecast for August by a Dow Jones Newswires poll.
—In-Soo Nam and Kwanwoo Jun in Seoul, Enda Curran in Sydney, and William Kazer and Rose Yu in Beijing contributed to this article.

Write to Arran Scott at arran.scott@dowjones.com
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Offline Golden Oxen

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Re: Official Chinese Toast Thread
« Reply #8 on: September 02, 2012, 09:33:09 PM »
RE Quote "No worries though, the Chinese are buying GOLD!"

What's the point?  They were buying it during their boom also.   

Offline RE

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Chinese Toast: Tanking Production is BULLISH!
« Reply #9 on: September 02, 2012, 10:56:59 PM »
OMFG.  The NEW Surreality!

The worse the data is, the better the markets do, because the "investors" figure Bad Data means more Free Money from the CBs!

No doubt, when La Garita Caldera goes Ballistic here and puts ANOTHER 5000 cu km of Ejecta up into the atmosphere, the Traders on the Hong Kong exchange will send it to new Highs for the year in anticipation of enough Funny Money being printed to squash the Super Volcano.

For those of you who don't keep track of these things, La Garita's Eruption at Fish Canyon Tuff was the BIGGEST one the Geologists have ever been able to find, bigger than Toba, bigger than the  Yellowstone eruptions.  2.3M Years ago, its probably Overdue also now to go Ballistic.

I sleep well knowing these Master Traders are at the Helm here, don't you?

RE

Asian stocks rise after poor China production data convinces traders that easing is on the way

By Associated Press,

BANGKOK — Asian stock markets rose Monday after a contraction in China’s manufacturing boosted expectations of more stimulus for the world’s second-biggest economy.

An industry group said on the weekend that China’s purchasing managers index, which reflects manufacturing activity, fell to 49.2 in August from July’s 50.1 on a 100-point scale. Numbers below 50 show a contraction. It was the group’s weakest reading to date.

That fueled doubts about whether China has started to recover from its deepest economic downturn since the 2008 global financial crisis. China’s economic growth fell to a three-year low of 7.6 percent in the second quarter. Corporate profits and other indicators have fallen despite government stimulus measures.

 “The numbers were really bad, and many people believe that the government will have to do something to increase liquidity,” said Francis Lun, managing director of Lyncean Holdings in Hong Kong.

Japan’s Nikkei 225 index fell 0.4 percent to 8,807.40. But after a lower opening, Hong Kong’s Hang Seng gained 0.4 percent to 19,549.82. South Korea’s Kospi also reversed course, gaining 0.5 percent to 1,913.38. Australia’s S&P/ASX 200 added 0.4 percent to 4,333.90.

Shares in mainland China and Taiwan also rose. The two countries signed an agreement Friday to allow Taiwanese banks to handle China’s yuan currency. Under the deal, signed by the two sides Friday, Taiwanese banks can take yuan deposits and convert yuan into the New Taiwan dollar, skipping the current process of first converting the yuan into U.S. dollars.

Benchmark crude for October delivery was down 22 cents to $96.26 a barrel in electronic trading on the New York Mercantile Exchange. On Friday, crude rose $1.85 to end at $96.47 per barrel after Federal Reserve Chairman Ben Bernanke made clear in a speech that the central bank will do more to revive the U.S. economy.

In currencies, the euro rose to $1.2577 from $1.2560 late Friday in New York. The dollar fell to 78.25 yen from 78.31 yen.
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Offline EndIsNigh

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Re: Official Chinese Toast Thread
« Reply #10 on: September 02, 2012, 11:10:50 PM »
Surreality is right.  What the f man?  This market has no shame.  What will it take to bring it down to earth?  Investors must be in so deep they figure there's no way they can pull out now. 

Strange days.

Offline RE

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Re: Official Chinese Toast Thread
« Reply #11 on: September 02, 2012, 11:44:30 PM »
Investors must be in so deep they figure there's no way they can pull out now. 

That is really a very perceptive observation.

The WHOLE financial "system" such as it is these days is based on the "Market".  The Capital the Banks have is in the "market", J6P Pension Fund is in the "market" etc.  If the Market Tanks, at this point everything is so connected to it that I think NOBODY KNOWS what they will do when it BLOWS.

For the TBTF, there is no "gentle" way to "ease" out of the market.  Anybody who starts selling now big time can cause a run, and nobody can sell fast enough to survive a run once it starts, not if they are Big Boys holding Billions in a variety of worthless Toilet Paper.

So they hang every day on the Hopium that their local CB will issue out still more Free Money and they keep Buying junk like Facepalm and PoopOn.

Something's gotta GIVE here.  The Emperor has no CLOTHES, and somebody will one of these days point out for all to see that he is NAKED.

RE
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Offline EndIsNigh

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Re: Official Chinese Toast Thread
« Reply #12 on: September 02, 2012, 11:59:12 PM »
If only someone would pay me to make perceptive observations I wouldn't be in the shit I am now.  My business has met with some problems and I'm starting to question the whole venture all over again.  I saw a job listing to do ATM upgrades for one of the big 4 banks that's been advertised locally which is tempting me to pull a WHD and join the dark side.  I'm just not hungry enough (BTW I agree with your sentiment along these lines in the OWS thread) yet to submit an application...

I suppose the beauty of the setup is that it provides someone who has the means to get out in a way that delivers the trigger that takes down the whole system to do exactly that.  Will it be a black swan, or an intentional short circuit that brings the house of cards falling down?

Offline RE

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Re: Official Chinese Toast Thread
« Reply #13 on: September 03, 2012, 12:01:43 AM »
For the sake of your brain, China is over 13 times bigger than Texas. It's about the same size as the US, including Alaska.

The nice thing about Alaska is that there are fewer people living here than in a Beiing suburb.  :icon_sunny:  In fact, your typical Apartment Complex in Beijing has more people living in it than Alaska.  Hell, more people are probably on a Beijing subway train on any giving morning than live in Alaska!

The LAST GREAT FRONTIER! Gotta Love It.

RE
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Offline RE

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Re: Official Chinese Toast Thread
« Reply #14 on: September 03, 2012, 12:22:47 AM »
I saw a job listing to do ATM upgrades for one of the big 4 banks that's been advertised locally which is tempting me to pull a WHD and join the dark side.

You can join WHD on the Dark Side as a means to survival...


or you can COME WITH ME IF YOU WANT TO LIVE!

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Lock and Load.

RE
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