AuthorTopic: Official Chinese Toast Thread  (Read 227458 times)

Offline jdwheeler42

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Re: Official Chinese Toast Thread
« Reply #150 on: December 12, 2014, 01:09:07 PM »
For all you or i know this point in history could go down as the turning point for the solar distributed future, a breaking point from centralized nation state powers and accompanying narratives towards the coalescence of an increasingly rhizomatically networked solar powered information based economy with an integrated non commodified integrated agroecosystems base.
Just remember, from the perspective of the baby, birth is the transition to a new life, but for the placenta, it means certain doom.
Making pigs fly is easy... that is, of course, after you have built the catapult....

Offline azozeo

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Re: Official Chinese Toast Thread
« Reply #151 on: December 12, 2014, 01:12:02 PM »
For all you or i know this point in history could go down as the turning point for the solar distributed future, a breaking point from centralized nation state powers and accompanying narratives towards the coalescence of an increasingly rhizomatically networked solar powered information based economy with an integrated non commodified integrated agroecosystems base.
Just remember, from the perspective of the baby, birth is the transition to a new life, but for the placenta, it means certain doom.

The caterpillar says "it's the end of the world", the butterfly says "it's only the beginning".....
I know exactly what you mean. Let me tell you why you’re here. You’re here because you know something. What you know you can’t explain, but you feel it. You’ve felt it your entire life, that there’s something wrong with the world.
You don’t know what it is but its there, like a splinter in your mind

Offline roamer

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Re: Official Chinese Toast Thread
« Reply #152 on: December 15, 2014, 11:32:28 PM »

So in the meantime, regardless of what the Final Outcome is, you operate the same way, which is to do what you can to stay alive, because the purpose of living is just to live.  The purpose behind observing what is going on with collapse is to be able to better negotiate it as it occurs.  I don't consider myself negative and I don't really get too depressed over the situation either.  It's really a very interesting thing to observe overall.

The next chapter is to figure out exactly how the society will reconfigure as the money becomes either ever more scarce or ever more worthless, or both.  That is a very challenging question, much harder than predicting Deflation or Chinese Toast.

RE

This comment seems to be sinking in with me and i'm finding myself again on better footing to simple observe and orient myself to what is actually happening.  I had been really having a bipolar relationship with sites like the dinner, on the one hand it is quite fascinating and intellectually stimulating to try to grapple with the large macro issues of our time and on the other it can lead to a really toxic emotional affect if you dwell and obsess and wish for a different outcome one way or another.  Just feel more and more like i'm here to observe learn and be as present as i can and not be fixated on outcomes.

Offline RE

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Chinese Toast: Banksters offer Mercedes for Deposits!
« Reply #153 on: December 31, 2014, 07:47:29 PM »
How come they aren't giving away EVs?  ::)

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Forget Toasters & Spiderman Towels, Chinese Banks Lure New Deposits With iPhones & Mercedes

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Amid the European crisis in 2012, European banks reached deep deep down to encourage depositors to lodge their savings in these highly levered financial institutions. Most notably, now defunct Bankia, which offered no lesser gift than a Spiderman Towel in exchange for a EUR300 deposit. So, one wonders just how desperate they are - and just how close to total collapse - when Chinese banks are offering Mercedes Benz, iPhones, or a gold pendant to encourage cash as Bloomberg reports one analyst warns, "Chinese banks are hemorrhaging their deposits."

 

 

As Bloomberg Businessweek reports,

 
 

Banks in the U.S. once gave away toasters and irons to lure depositors. Banks in China are upping the ante. With customers pulling out money and putting it into higher-yielding investments, they are offering Mercedes, iPhones, and daily deliveries of vegetables to sidestep interest rate caps and get people to stash some yuan in savings accounts.

 

“Chinese banks are hemorrhaging their deposits,” says Rainy Yuan, an analyst at brokerage Masterlink Securities in Shanghai. China’s banks lost 950 billion yuan ($154 billion) of deposits in the three months through September, the first quarterly drop since 1999.

 

In the first 11 months of the year, new deposits were 23 percent lower than in the same period last year, People’s Bank of China data show. Offering incentives to attract money is not the solution, Yuan says: “There is no fix for this. All the efforts they made to win savers back will only push up the costs, so it’s a losing battle to fight.”

However, The China Banking Regulatory Commission in September banned what it called “illicit” deposit-gathering practices, including gifts and rebates on deposits, without clarifying whether product giveaways in lieu of interest payments qualify as gifts.

 
 

Banks that flout the curbs could face punishment, the regulator said. The warning hasn’t deterred banks.

 

The iPhone promotion, at a Beijing branch of Ping An Bank in October, offered a 128-gigabyte iPhone 6 Plus in lieu of interest payments for depositing 38,000 yuan for five years.

 

For parking 903,000 yuan for the same period, savers could pick one of four Mercedes-Benz models. A Mercedes A180, which costs 252,000 yuan, would give investors the equivalent of an annualized return of almost 7 percent, compared with the benchmark rate of 4 percent on five-year deposits.

In northern Shanxi province, Industrial Bank offered a gold pendant for a one-year deposit of 10,000 yuan.

 

Also in Shanxi, Citic Bank promised a daily supply of eggs and vegetables for three weeks to elderly customers who deposited 10,000 yuan, Shanxi Daily reported in November.

 

In Ningbo, Ping An Bank is giving cash instead of gifts. Savers can get 258,000 yuan of interest payments immediately when depositing 1 million yuan, or receive an interest-and-principal payment of 1.3 million yuan in five years. A spokesman for Ping An Bank declined to comment.

Liao Qiang, a director at Standard & Poor’s in Beijing warns, "The battle for deposits will only get worse as China moves ahead with interest rate liberalization, which will drive up banks’ funding costs and hurt profit."

*  *  *

We are sure this will all end well. Buy Chinese stocks (like everyone else)!

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Offline RE

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Official Chinese Toast Thread: Ghost Factories
« Reply #154 on: January 02, 2015, 11:37:04 PM »
Here's a few places that will NOT be buying Coal this year...

RE

<a href="http://www.youtube.com/v/9Od2Lw4U0FE?feature=player_embedded" target="_blank" class="new_win">http://www.youtube.com/v/9Od2Lw4U0FE?feature=player_embedded</a>

China's "Illusion Of Prosperity" Exposed: Forget Ghost Cities, Meet Ghost Factories

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Having exposed the 20 1 charts of China's demise previously, we move to Exhibit (a) in the "illusion of prosperity" that keeps the dream (looking) alive to the outside (mostly Western get-rich-quick fast-money) world - China's Zombie Factories...

“There are large numbers of companies across China that should go bankrupt but haven’t done so,” says Han Chuanhua, a bankruptcy lawyer at Zhongzi Law Office, a Beijing legal practice.

 

“The government doesn’t want to see bankruptcy because as soon as companies go bust, unemployment spikes and tax revenues disappear. By stopping companies from going bankrupt, officials are able to maintain the illusion of local prosperity, economic growth and stable taxes.”

Here's Reuters from earlier last year...

 

This 'pretense' is occurring everywhere across the vast expanse of China, as The FT reports, similar experiences are playing out, with thousands of companies in heavy industrial sectors plagued by chronic overcapacity that should be going bust instead being propped up by local governments.

In the shadow of a group of enormous smokestacks and abandoned foundries, a peeling sign welcomes visitors to the Wenxi Steel Industrial Park.

 

But in the nearby village, the working-age men and many of the women have gone, leaving only the elderly and the very young.

 

“If you cut down the big tree, all the small trees around it will die,” says 69-year-old Wang Peiqing, referring to the collapse of Highsee Iron and Steel Group, which operated the foundries before its recent closure devastated the economy of a once-prosperous corner of Shanxi province in central China. “The entire region relied on the steel mill; now the young people have to go and look for work across China.”

 

Highsee stopped paying its 10,000 employees six months ago. Local officials estimate the plant supported indirectly the livelihood of about a quarter of Wenxi county’s population of 400,000. Highsee was the biggest privately owned steel mill in Shanxi, accounting for 60 per cent of Wenxi’s tax revenues. For those reasons, the local government was reluctant to allow the company to go out of business, even though it had been in serious financial difficulties for several years.

 

“By 2011 Highsee was already like a dead centipede that hadn’t yet frozen stiff with rigor mortis,” says one official who asks not to be named because he was not authorised to speak to foreign reporters.

 

“More than half the plant shut down, but it was still producing steel even though its suppliers wouldn’t deliver anything without cash up front and it was drowning in debt.”

It was only last month, four years after Highsee began to flounder, that the company was finally allowed by the government to initiate bankruptcy-­proceedings.

“The government’s plan is to sell off the plant quickly and restart production just like before, even though the steel market is in such bad shape,” says an official who asks not to be named.

 

“The problem is that it owes at least Rmb10bn [$1.6bn] and probably much more than that. We don’t know where we’ll find someone who can pay all that off.”

*  *  *

Some of the zombie factories... (Source: Reuters)

 

In the past month alone Chinese media have reported on at least nine large steel mills that appeared to be suspended in limbo after halting production but which are forbidden from going formally bankrupt.

The outstanding volume of non-performing loans in the Chinese banking sector has increased 50 per cent since the beginning of 2013, according to estimates from ANZ, the Australian bank, but the sector-wide NPL ratio remains extremely low, at just over 1.2 per cent.

 

In private, however, senior Chinese financial officials admit the real ratio is almost certainly much higher, obscured by local governments trying to prop up companies.

Read more here...

*  *  *

But apart from that... sure buy Chinese stocks, because well, they are going up...

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Offline RE

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Chinese Toast Thread: The Chinese Roll CRAPS
« Reply #155 on: January 03, 2015, 02:37:04 AM »
COME ON 7!  BABY NEEDS A NEW PAIR OF SHOES!



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What Macau Just Said About China’s Economy

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Few economic phenomena compare to the soaring gambling revenues in Macau since it opened up to foreign casino operators in 2001. In 2002, Macau blew past Las Vegas. It’s the only place in China where the Chinese can go and legally gamble away their money, and it’s one of the key places where they can go to syphon their wealth – however they’d obtained it – out of Mainland China and beyond the reach of the muscular arm of the government. Even during the financial-crisis years 2008 and 2009, Macau gaming revenues grew, despite a horrendous seven-month plunge. 2009 was the worst year on the books, with revenue growth of only 9.6%. The rest of the years, double-digit growth was the norm.

During the first five months of 2014, revenues soared 15.8%. Nothing could stop Macau, or so it seemed. But in June, Macau’s world changed with the first year-over-year revenue decline since the financial crisis. The soccer World Cup was blamed. VIP revenues, which used to account for 66% of total revenues, dropped an estimated 20%, a hole that increased marketing to regular folks couldn’t fill.

In July, the expected post-World Cup bounce failed to materialize. So they blamed the investigation of Zhou Yongkang, former head of state security, the most senior guy yet to be knocked down by the corruption crackdown that would go after “tigers and flies” alike. VIPs were suddenly taking the crackdown seriously, it was said. In August, revenues dropped again. The Taipei District Prosecutors Office had indicted the Taiwan branch of Macau casino operator Melco Crown Entertainment for alleged violations of banking and foreign-exchange laws.

Month after month, gambling revenues plunged, and new culprits were found each time: the prelude to Chinese President Xi Jinping’s visit to Macau in December; the pro-democracy protests in Hong Kong, just an hour away by ferry; Macau’s tighter visa regulations; new curbs on the UnionPay credit card with which gamblers can get around China’s currency controls, hitting mass-market Chinese gamblers more than VIPs; or the new smoking ban in casinos.

In November, it became known that Hong Kong had launched a money-laundering investigation into Cheung Chi-tai, one of Macau’s top VIP-junket figures, and seven of his closely held companies, the SCMP reported. Junket promoters are commissioned by the casinos to entice VIPs to Macau with a variety of services, such as evading China’s currency controls. Mr. Cheung has been one of the largest shareholders in a big junket operator, Neptune Guangdong Group. His assets were frozen under Hong Kong’s Organized and Serious Crimes Ordinance. It might have scared the bejesus out of VIPs.

In December, revenues plunged 30.4% from a year earlier, according to the Gaming Inspection and Coordination Bureau (DICJ), the worst decline in the history of its data going back to 2002. Pundits had expected a decline but not this “shocker.” It was the seventh month in a row of declines, matching the financial crisis record. Even after the glorious first five months, revenues for the year dropped 2.6% to 351.5 billion Macau patacas ($44 billion), the first revenue drop in the history of the data.

China-Macau-yoy-change-gaming-revenues-2014-dec

Shares of casino operators have gotten mutilated in the process, after their breath-taking multi-year rally: from their highs in early 2014, Sands China Ltd. dropped 44%, Wynn Macau 46%, Melco Crown Entertainment 50%, MGM China 46%, Galaxy Entertainment 49%, and SJM Holdings 55%. Junket operators have gotten hammered. The secondary effects are hitting high-end hotels, fancy restaurants, and vendors of luxury goods.

It didn’t help that Xi, while in Macau in December, suggested that it should diversify away from gambling.

But Macau isn’t about to give up on an activity that generates about 80% of its tax revenues. Casino operators are building even more casinos, such as the 3,000-room Parisian Macau with Eiffel Tower and all. This time the goal is to extract money from the mass-market Chinese, not VIPs – the “flies,” not the “tigers.”

By now, VIPs and the flies understand that the crackdown is serious business in China where corruption is the grease that makes the wheels turn. And removing the grease might make the already sputtering economy run a little rougher. Many of these “tigers” are connected to overleveraged industries dogged by overcapacity and faltering demand, such as the property sector, constructions, and heavy manufacturing that are now being put through the wringer of reality.

Even more troubling is a nasty correlation: Chinese GDP growth has been closely tracking Macau gaming-revenue growth since 2006, including the sudden cliff-dive during the financial crisis and the vertigo-inducing recovery afterwards, and at nearly every twist and turn since.

So they’re suddenly expected to decouple, with Macau gaming revenues in free fall, and the Chinese economy, where these missing high-rollers are making their money, growing at over 7%? Miracles do happen, but they’re rare.

More likely is that the Chinese economy is wheezing from the impact of lackluster demand, a credit bubble that is threatening to blow up, and a crackdown on corruption, the grease without which the economy has trouble functioning. The biggest beneficiaries of that system have gotten antsy and are reacting in a myriad ways. And Macau’s gaming revenues – just as they did during the financial crisis – show thermometer-like that the Chinese economy, despite official protestations, is turning cold.

2014 was a tough year for many currencies. Some declined as part of the currency war. But others got hammered for reasons of their own. Among the losers was one that left terrible value destruction in its wake. But it wasn’t the ruble. Read…  Worst Currency in 2014? (One You Might Actually Use)

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Offline Petty Tyrant

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Re: Official Chinese Toast Thread
« Reply #156 on: January 03, 2015, 04:04:50 AM »
I went to macau the asian version of monte carlo or monaco once and there are ONLY 5 star hotels nothing less, each has a huge casino, any one of them bigger than any other casino Ive seen anywhere else. I would guess they have easily 5 casinos that are each over a mile long and wide. Places like that are playgrounds only for the purpose of the upward funneling of all wealth to banksters and their bum chums to blow some, so should be doing better than ever now.
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Re: Official Chinese Toast Thread
« Reply #157 on: January 03, 2015, 04:29:13 AM »
I went to macau the asian version of monte carlo or monaco once and there are ONLY 5 star hotels nothing less, each has a huge casino, any one of them bigger than any other casino Ive seen anywhere else. I would guess they have easily 5 casinos that are each over a mile long and wide. Places like that are playgrounds only for the purpose of the upward funneling of all wealth to banksters and their bum chums to blow some, so should be doing better than ever now.

Apparently not, according to Wolf.

Quote
So they’re suddenly expected to decouple, with Macau gaming revenues in free fall

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Offline g

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Re: Chinese Toast Thread: The Real Reason Macau's Casinos Are Suddenly Empty
« Reply #158 on: January 04, 2015, 07:12:40 AM »
I don't agree with this article. Feel we are in a massive economic contraction presently. Posted as a point of interest on a recent Diner topic.


The Real Reason Macau's Casinos Are Suddenly Empty


A trip to the high-roller tables in Macau or Las Vegas strip casinos over the holidays revealed an unexpected, eerie (and terrifying if one is a bondholder in said casino) sight: empty chairs as far as the eye can see. Indeed, as Bloomberg reports [11], "Macau’s casinos just recorded their worst year, ending a decade of expansion that turned the former Portuguese enclave into the world’s biggest gambling hub. More tough times are ahead. Casino revenue in the city fell 2.6 percent to 351.5 billion patacas ($44 billion) in 2014, after a record 30.4 percent monthly drop in December, according to figures from Macau’s Gaming Inspection and Coordination Bureau today. Analysts projected a 2 percent annual decline, based on the median of nine estimates in a Bloomberg News survey."

    Casino revenue fell to 23.3 billion patacas in December for a seventh straight month of decline and the biggest drop since Macau began recording monthly figures in 2005. That compared with a median estimate of a 30 percent drop in a Bloomberg News survey of 11 analysts.

     

    Macau had posted its smallest annual casino revenue gain of 9.7 percent in 2009, after it began yearly records in 2002.

So what are the stated reasons? Chief among them: a crackdown on corruption by China's government, coupled with background checks on Macau gamblers.

    Chinese President Xi Jinping’s bid to catch “tigers and flies” in an anti-corruption drive and weaker economic growth means Macau may face shrinking revenue until at least mid-2015, when new resorts open. The crackdown has deterred high rollers who account for two-thirds of Macau’s casino receipts, and wiped out about $73 billion in market value of companies including Wynn Macau Ltd. and SJM Holdings Ltd. last year.

     

    “The VIP heyday is over,” said Philip Tulk, an analyst at Standard Chartered Plc in Hong Kong. “The anti-corruption crackdown doesn’t look to be a short-term phenomenon,” with funds flows between the mainland and Macau being much more closely scrutinized, he said.

Yes, there are concerns over corruption and embezzlement, which were capped when Macau implemented background checks for VIP gamblers, but a far bigger threat for Macau has been its abuse as a money-laundering mecca to which Beijing had turned a blind eye for many years but finally said enough. "Macau’s government has been curbing money flows to the territory over concern that illegal funds are being taken out of the mainland. It is restricting the use of China UnionPay Co.’s debit cards and its hand-held card swipers at casinos. Further clampdowns are expected with the help of banks."

To be sure, the crackdown on Macau "hot-money" meant that it was Las Vegas that emerged as a preferred money-laundering spot for Chinese billionaires. As we wrote previously [12], "as Macau has seen growth collapse, Las Vegas has seen Baccarat (the preferred game of China's rich) surge. In May, as Macau growth slumped, Las Vegas Baccarat surged over 85%. While slots (the staple indicator of the 99% in America) continues to decline (-4.4% in May), it seems rich foreigners are finding creative new ways to wash their money out of China.Macau had been the money-laundering center for Chinese elite: [13] "You don't actually buy anything," said Lai, standing near a half-empty display case containing a messy spread of watches and jewellery. "We just help people get money out of China so they can gamble more."

And yet, subsequent to the brief burst in Las Vegas Baccarat revenues in the summer, this too money-laundering alternative appears to have fizzled out, suggesting there is more to it than merely a corruption crackdown and a halt to money-laundering.

That something is simple: as noted repeatedly on these pages, even as China's economy has been careening dangerously to a hard-landing [14], its stock market has soared over the past six months.



Why? Beuase in addition to the PBOC quietly launching both a lite version of QE in the summer and cutting rates in November, something far simpler happened: China's habitual - and filthy rich - gamblers decided to move from point A to point B, namely from the dark-lit Macau gambling parlors to multiple-monitor lit trading desks.




    While mainland regulators have eased regulations on investors using margin debt to buy shares, Macau’s government has tightened visa rules for Chinese visitors and cracked down on the use of UnionPay debit cards to bypass mainland currency controls. President Xi Jinping, who has spearheaded the anti-corruption campaign, is expected to visit Macau this month.

The bottom line:

    "Customers who used to wager on casino tables are probably now sitting at home betting on stocks,” said Tai Hui, Hong Kong-based chief Asia market strategist at JPMorgan Asset Management. “Investors are levering up on margin trading, or ‘using a small knife to cut a large tree.’"

And there you have it: why gamble in a casino when one can gamble in the just as rigged stock market?

As for tumbling casino stocks, all Macau needs to do is wait for the Shanghai Composite to crash as the latest equity bubble pops, and all those gamblers who made the track from Point A to Point B hoping to get rich quick, rush back to where they came from.

That, or perhaps it is time for UBS to rent out its massive, world's-biggest, trading floor in Stamford [18]to Wynn, or Sands or Galaxy or MGM. It's not like UBS uses it anyway.

Then again, probably not, because so much snarky commentary would be avoided if finally none other than Chinese billionaires were manning the trading terminals to the biggest rigged casino ever.



http://www.zerohedge.com/print/499845  :icon_scratch:

Offline RE

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Ambrose SEZ: THE CHINESE ARE TOAST!
« Reply #159 on: January 10, 2015, 01:05:57 AM »
Tomorrow, Ambrose will keyboard out an article which sez China is a fabulous place to invest and will be the Next Empire!  ::)

For today though, he got one right.

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Bank of America warns of 'lethal' damage to China's financial system as deflation deepens

'Deflation, Devaluation, and Default' loom in China this year. The denouement for Shanghai's bourse will not be pretty, says the US bank.

Xi Jinping, the Chinese president, emerges from a key Communist party meeting with a stronger mandate and new powers to sidestep his own government
Chinese President Xi Jinping, centre, during the the third Plenary Session of the 18th CPC Central Committee in Beijing Photo: AP/XINHUA
 

China is at mounting risk of a financial crisis this year as growth sputters and deflationary pressures trigger a wave of defaults, Bank of America has warned.

The US lender told clients that a confluence of forces are coming together that threaten to chill the speculative mania on the Shanghai stock exchange and to expose the underlying fragility of China’s $26 trillion edifice of debt.

“A credit crunch is highly probable,” said the bank in a report entitled “Deflation, Devaluation, and Default”, written by David Cui and Tracy Tian.

They said the country’s highly-leveraged companies cannot safely withstand President Xi Jinping’s drive to stamp out moral hazard and wean the country off excess credit, warning that the mix of slower growth and excess debt “could prove lethal for the financial system”.

The report warned that it is rare for countries to escape either a financial crisis, or major bank failures, a currency upset, a sovereign crisis – or a mix of these – after letting credit grow at such vertiginous rates.

“The most likely scenario is a bad debt surge as growth slows, followed by a credit crunch in the shadow banking system, followed by a major recapitalisation of the banks,” said Mr Cui.

The report said China spent 15pc of GDP to rescue lenders in the late 1990s but the scale of the problem is much greater today, and this time the government cannot resort to fresh stimulus so easily.

Loans have jumped by roughly 100pc of GDP in the past five years under most estimates. This is twice the pace of growth in Japan over a comparable period before the Nikkei bubble burst in 1990, or in the US before the Lehman crisis in 2008.

Standard Chartered said total credit has surpassed 250pc of GDP once shadow banking and offshore lending are included, an extremely high level for an emerging economy without mature markets or layers of accumulated wealth.

Mr Cui said the explosive rise on the Shanghai stock market - up 50pc in barely three months - is being driven by “blue-sky talk” and $180bn of margin lending from brokers. It is happening at a time of deteriorating earnings. “When the sell-off happens, we suspect that it will not be orderly,” he said. The Shanghai composite index may fall back from 3,300 to 2,400 before it settles in a trading range.

He advised investors to stick to defence stocks or equities linked to the nuclear industry given that both are shielded from Mr Xi’s efforts to shake out excessive capacity in Chinese industry.

Bank or America said China has been in factory gate deflation for 33 months and the downward slide appears to be deepening. “We believe stimulus-induced overcapacity is the main culprit,” it said.

China has been in producer price deflation before. The index plunged in the late 1990s and it took six years to reverse. All the problems are on a greater scale today, while the country is struggling to find a new “demand driver” to restore dynamism. There is nothing on the horizon comparable with China’s accession to the World Trade Organisation in 2001.

One of the side-effects of falling inflation is to raise the real cost of borrowing. The average one-year rate for companies has spiked from zero to 5.50pc in real terms since 2011. This amounts to drastic financial tightening, which the central bank has chosen not to offset, beyond a token 0.25pc cut in rates.

Bank of America said hot money outflows raise the risk of devaluation. This will drain money from the stock market and tighten the vice on those with dollar debts. Chinese firms have borrowed an estimated $1.2 trillion in external currencies, mostly through Hong Kong.

The relentless rise in the US dollar is pulling up the Chinese yuan along with it as a result of the China's "soft-peg". The yuan has soared 60pc against the Japanese yen in barely two years.

Diana Choyleva, from Lombard Street Research, said the yuan is 10pc to 20pc overvalued, warning that China has “lost its competitive edge” as wages race ahead of productivity. The real effective exchange rate based on unit labour costs has risen 40pc since 2008. She said investors are acutely alert to risks in the shadow banking system, but have overlooked the mounting threat of a liquidity crisis caused by currency effects.

Guan Qingyou, from Minsheng Securities, said hot money may so soon start to leave the country as the US Federal Reserve prepares to raise interest rates, sucking in funds from across the world.

"Capital outflow on a large scale may cause a currency crisis and this is what triggered the Asian Financial Crisis in 1997," he told Caixin Magazine. Trackers at the central bank say the capital account has been in deficit for the past two quarters.

At the end of the day, China has great economic depth and is likely to muddle through without too much trauma. The challenge for investors is judging how far Xi Jinping intends to go in clamping down on excess debt and over-investment before considering the job done, and then reverting to stimulus. He has not blinked yet.

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What we CANNOT "Learn" from Li Ka-Ching!
« Reply #160 on: January 19, 2015, 01:41:03 AM »
If there is one Blogger on the net who makes me want to Heave the Technicolor YAWN every time I read one of his Sovereign Man Blogs, it is Simon Black.



In this blog, we are supposed to take Lessons from Li Ka-Shing, supposedly the Richest Man in Asia.  Li has apparently purchased for himself a Canadian Passport and is doing the best he can to take the money he stole in China and shift it over to "safe havens" like the Cayman Islands.

Precisely how many people can buy a Canadian Passport to start with?  Then how many can move $Millions$ if not $Billions" to foreign bank jurisdictions?

What exactly is even the moderately wealthy Texas Dentista for instance supposed to LEARN from Li KA-CHING?!?

Absolutely the stupidest stuff out there on the net in terms of Collapse Prep, for anybody except the .001%.

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What We Can Learn From The Richest Man In Asia


Submitted by Tyler Durden on 01/18/2015 20:45 -0500

    B+
    China
    Hong Kong
    Real estate
    Renminbi
 

Submitted by Simon Black via Sovereign Man blog,

It was nine months ago when we reported that Li Ka-shing, the richest man in Asia, had sold all of his major assets in China.

In 2013 when he started dumping his Chinese property holdings he was being ridiculed and criticized. Everyone was bullish on China’s real estate market.

It turns out you don’t want to bet against a man with a track record like Li’s.

Li Ka-shing’s grasp for major trends is unmatched. And he demonstrated his shrewdness and insight yet again when China’s real estate market went into correction mode last year.

He got out right at the peak of the market.

He recognized that China’s major credit bubble isn’t sustainable. Behind closed doors, the bosses in Beijing know it too.

A recent report by the chief economist at the Bank of Singapore reveals that the Chinese leadership is desperately trying to conceal the effects of excessive credit and engineer a ‘soft landing’.

And yet Chinese credit expansion continues.

Data from the Bank of International Settlements shows that in 2014 credit expansion’s share of GDP growth soared by 14%.

Since the end of 2008, credit expansion has accounted for 79% of China’s GDP growth.

Historical data and analysis shows that such levels of credit expansion inevitably lead to a lot of bad debts that can’t be repaid.

We’ve already seen first ever Chinese corporate defaults as a result of these policies, and we can expect more.

The long-term trend for China is of course, positive, but this doesn’t mean it’s going to be a smooth ride along the way. Nothing goes up or down in a straight line.

Right now, renminbi assets are falling and renminbi is weakening. Capital is fleeing China in fear of a major credit crunch.

Li was one of the first to spot this trend, and he got out.

Moreover, he’s hedging his bets across the board.

His most recent move is to restructure his investment companies and move them to the Cayman Islands.

 

Li is being very prudent– moving his money and his assets far away to safe, stable locations so that no single government has control over him.

Until now he was very much dependent on a single jurisdiction. He resides in Hong Kong and has Hong Kong SAR citizenship. His business interests were centered in Hong Kong and China as well.

Now, Hong Kong is an incredible place. The banks are well-capitalized, the government is solvent, and there’s a lot of economic opportunity.

But no matter how safe you think your home country might be, it NEVER makes sense to be completely dependent on one place.

Li understands that. Hedging your bets is crucial.

He has already acquired a second passport (Canada), and now he’s moving certain business interests and cash assets abroad.

In doing so, Li is also making sure that the wealth he worked to build over his entire life will be properly safeguarded for his family.

It’s hard to imagine he’ll be worse off for doing any of this. And if the worst happens, Li will be much better off for following his instincts.

This is good advice for anyone.

Remember: rational, successful people have a Plan B.

Rational, successful people take steps to minimize their downside risk.
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Online Eddie

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Re: Official Chinese Toast Thread
« Reply #161 on: January 19, 2015, 04:30:16 AM »
Just like a lot other people, Simon Black's interest is in making a buck off the fear factor and not much else. I looked into the whole offshoring thing years ago. Unless you have really big money, it's not only a huge up front expense, it's an ongoing one, and you have to put your faith in people I wouldn't ordinarily feel comfortable with.

It's about selling information to people who think they need it, but really don't. Like the Casey newsletters and others I could name.
What makes the desert beautiful is that somewhere it hides a well.

Offline RE

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Railroad to Nowhere
« Reply #162 on: January 22, 2015, 11:14:46 PM »
Obviously, the Chinese have not grasped that every Railroad ever built went Bankrupt and has to be subsidized to keep running at all.

WTF do you need a High Speed Rail line to get you from Moscow to Beijing in 30 hours?  How many Oligarchs need to make this commute on any given day, and who else can afford the train fare?

The stupidity continues to be astounding, including the Tyler Durdens who think this is just great evidence of the Sino-Ruskie economic alliance.  This is ridiculous.  It's yet more malinvestment and a complete waste of resources, on a project that has little chance of being completed and little utility if it is completed.

RE

More Isolation? Russia, China To Build $240 Billion High-Speed Rail Link

Tyler Durden's picture



 

The ongoing 'isolation' of Russia took another turn for the un-isolated-er today when, as Bloomberg reports, China will build a 7,000-kilometer (4,350-mile) high-speed rail link from Beijing to Moscow, at a cost of 1.5 trillion yuan ($242 billion), Beijing’s city government said. The rail-link - which will bring travel time between Beijing and Moscow down from 5 days to 30 hours - signals a 10-year partnership between the two nations and follows the dropping of the French company, Alstom, from the project.

 

As Bloomberg reports,

 
 

China will build a 7,000-kilometer (4,350-mile) high-speed rail link from Beijing to Moscow, at a cost of 1.5 trillion yuan ($242 billion), Beijing’s city government said on the social networking site Weibo.

 

The rail line seeks to facilitate travel across Europe and Asia, Beijing’s municipal government said Jan. 21 in a post on Weibo, China’s equivalent of Twitter. The journey from Beijing to Moscow would take “two days” on a route passing through Kazakhstan, the post said.

 

 

 

 

The proposed rail line comes as Russia’s economy struggles to recover from the fall in the price of crude oil and as relations with the U.S. and Europe deteriorate over the Ukraine conflict, and as China pushes to market its high-speed rail technology internationally.

 

The rail line was mooted in November, after Russia and China last year agreed on the largest natural-gas supply deal in history. Alexander Misharin, a first vice-president at state-owned OAO Russian Railways, said in a Nov. 18 interview that the plan would cost $60 billion to reach Russia’s border, and would cut the Beijing-Moscow journey from five days to 30 hours.

 


 

The link to Beijing would take eight to 10 years to build, Misharin said in November.

*  *  *

And would enable a new longest rail journey on earth...

 

 

But, as Malaysia Chronicle notes, not everyone's a winner,

 
 

The building of the huge project to China Railway High-speed (CRH), a subsidiary of the state-controlled China Railway (CR).

 

They will work with the local firm Uralvagonzavod after deciding to drop the French company, Alstom, from the project, one of the world’s leading high speed train manufacturers.

*  *  *

And follows more unisolated-er activity...

 
 

In May, after more than a decade of talks, natural-gas exporter OAO Gazprom reached a $400 billion deal with China to build a pipeline and start supplies. Misharin, in the November comments, compared the new transport network to the Suez Canal “in terms of scale and significance.”

 

Those comments came a month after a delegation to Moscow led by Chinese Premier Li Keqiang signed accords that included high-speed rail cooperation, a three-year 150 billion yuan ($24 billion) local-currency swap deal and a double-taxation treaty.

*  *  *

Now who's isolated?

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Offline alan2102

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Re: Official Chinese Toast Thread
« Reply #163 on: January 23, 2015, 04:51:39 PM »
RE: "WTF do you need a High Speed Rail line to get you from Moscow to Beijing in 30 hours?"

Surely you jest, RE.

Fundamental transport infrastructure of this kind is essential for development of the entire Eurasian continent. In its wake will be a great economic/developmental boom of tidal power lasting many decades. This is epochal, history-making stuff going on right in front of our noses.

I assure you that it WILL be completed, and in an unbelievably short time. In the West, we spend 20 years just TALKING about building 500 miles of high-speed rail. In Eurasia, they've ACTUALLY BUILT 5000 miles in the last 10 years. It is incredible. And it is the precise opposite of "malinvestment", being rather very wise investment that will pay for itself many times over in the developmental impact over decades.

Forget Zerohedge when it comes to understanding China and BRICS and Eurasia. They just Don't Get It (DGI), and probably never will until the Chinese OWN our asses (which may not be far off).

Read these two articles carefully. They are quite different. Engdahl's (the second) is more scholarly and information-dense; WW's (the first) is visually impressive and evocative. They're both saying basically the same thing.

http://thewealthwatchman.com/moscow-just-took-a-quantum-leap-into-the-future/
Moscow Just Took a Quantum Leap Into the Future
October 22, 2014

http://www.marketoracle.co.uk/Article34366.html
China's Land Bridge to Turkey Creates New Eurasian Geopolitical Potentials
Apr 28, 2012 - 05:03 AM
By: F_William_Engdahl

....................

Oh btw, RE: weren't you lamenting somewhere in years past about the dearth of large-scale public works or infrastructure projects?  Well, start paying some attention for a change! ENORMOUS, MIND-BOGGLING-scale infrastructure and public works projects are going on as we speak, and have been for years, in Eurasia, especially China. The trans-Eurasian land bridge (high speed rail) is one prominent -- but far from the only -- example. The Eurasians, most notably the Chinese (though I expect India to soon pick up the slack), are building a dazzling new civilization, and most Westerners fail to see and comprehend it.  This is to some extent understandable. It is difficult to comprehend, because in some respects it is unique in history. It would be nice to think that you, RE -- YOU, who pride yourself on being a big-thinker with futuristic vision and understanding -- might actually attempt to comprehend it, rather than merely posting silly nonsense like pictures of a few abandoned factories -- as though that proved (or even MEANT) anything.

I recommend to  you this recent book, which is available free. (Below). SERIOUSLY. I HIGHLY RECOMMEND IT, if you wish to know something about China and Eurasia.

The author points out, amusingly, that the very numerous predictions of China's imminent collapse have all, themselves, collapsed. One cannot help but chuckle at the way in which doomerism is itself doomed.

http://onmirror.com/dluvbmz165wr/The_China_Wave.pdf.html
http://depositfiles.com/files/7wc4wjelp

The China Wave: Rise of a Civilizational State

By Zhang Weiwei

from the introduction:

many China-watchers in the West to confidently crystal-ball a pessimistic future for China: the regime would collapse after the Tiananmen event in 1989; China would follow in the footsteps of the Soviet Union in its disintegration; chaos would engulf China after Deng Xiaoping's death; the prosperity of Hong Kong would fade with its return to China; the explosion of SARS would be China's Chernobyl; China would fall apart after its WTO entry; and chaos would ensue following the 2008 global financial tsunami. Yet all these forecasts turned out to be wrong: it is not China that has collapsed, but all the forecasts about China's collapse that have "collapsed". This unimpressive track record of crystal-balling China's future reminds us of the need to look at this huge and complex country in a more objective way, and perhaps with an approach adopted by the great German philosopher G. W. Leibniz (1646-1716) to focus on how the Chinese developed what he called "natural religion" or the secular application of ethics and political philosophy to social, economic and political governance. If we are freed from ideological hangups, we may come to see that what has happened over the past three decades in China is arguably the greatest economic and social revolution in human history: over 400 million people have been lifted out of poverty, with all the implications of this success for China and the rest of the world.

Interestingly, while China, following a model not endorsed by the West, stuns the world with its rapid reemergence, a sizable number of Chinese at home are not yet convinced. Some believers in the Western political and economic systems still hold that China will eventually fail if it is unwilling to follow the Western model. Yet no fair-minded person with a decent knowledge of world affairs today would turn a blind eye to China's rise. While the China model of development is by no means perfect, China's overall success is arguably unmatched by any developing or transitional economies that have copied the Western model, and this success has indeed taken most countries by surprise.

The China model has taken shape in the midst of global turbulence and competition. It is therefore resilient and competitive and unlikely to fall apart easily. With further improvements, the model's future is promising. From a long-term historical perspective, China's rise, at least to this author, is not that of an ordinary country, but the rise of a civilizational state (᭛ᯢൟ೑ᆊ).

This rise is unprecedented in human history. If the ancient civilizations of Egypt, Mesopotamia, the Indus Valley and Greece had continued till the present day and functioned within unified modern states, they would also be described as civilizational states. But this opportunity has been lost. If the ancient Roman Empire had stayed united till now and transformed into a modern state, Europe could also be a medium-sized civilizational state. But this is only a hypothesis. If dozens of countries of the Islamic world today could integrate into a unified modern state despite all their diverse traditions, it would also be a civilizational state with over 1 billion people. But this seems an unlikely prospect. Indeed, China is now the only country in the world which has amalgamated the world's longest continuous civilization with a huge modern state.

Offline alan2102

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Re: Official Chinese Toast Thread
« Reply #164 on: January 23, 2015, 06:22:29 PM »
But WAIT! R.E. is RIGHT!

China's 2014 GDP took a CATASTROPHIC hit -- from 7.7% growth in 2013 all the way down to 7.3% last year! We're talking a 6% decline in the growth rate, sufficient to assure China's utter collapse into permanent obscurity and ruin!  And those pictures of two abandoned factories and a rusty car door in a field provide further PROOF of China's hopeless situation!





 :D  :D  :D  :D

 

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