The entire Chinese economic miracle is a debt financed farce. Their GDP growth is a fraud. Their burgeoning middle class are nothing but delusional lemmings. The whole tettering facade is going to collapse in an epic implosion. How can anyone not watch this piece and conclude that China and the rest of the globe are in store for a world of hurt? Even the smart Chinese billionaires know they are in the midst of a bubble. There is one absolute about bubbles. They ALWAYS pop. They don’t deflate slowly. I believe China’s bubble is popping as we speak and they are covering it up with fraudulent economic reports.
He’s showing us around the new eastern district of Zhengzhou, in one of the most populated provinces in China – not that you’d know it. We found what they call a “ghost city” of new towers with no residents, desolate condos and vacant subdivisions uninhabited for miles, and miles, and miles, and miles of empty apartments.
Lesley Stahl: Why are they empty? I’ve heard that they have actually been sold.
Gillem Tulloch: They’ve all been sold. They’ve all been sold.
Lesley Stahl: They’ve all been sold? They’re owned.
Gillem Tulloch: Absolutely.
Owned by people in China’s emerging middle class, who now have enough money to invest but few ways to do it. They’re not allowed to invest abroad, banks offer paltry returns, and the stock market is a rollercoaster. But 15 years ago, the government changed its policy and allowed people to buy their own homes and the flood gates opened.
Gillem Tulloch: So what they do is they invest in property because property prices have always gone up by more than inflation.
Lesley Stahl: And they believe it will always go up?
Gillem Tulloch: Yeah, just like they believed in the U.S.
…
Lesley Stahl: Giant cities being built with people not coming to live here.
…
Gillem Tulloch: Yes. I think they’re building somewhere between 12 and 24 new cities every single year.
Unlike our market driven economy, in China it’s the government that has spent some $2 trillion to get these cities built – as a way of keeping the economy growing. The assumption is “if you build it, they’ll come.” But no one’s coming.
…
Lesley Stahl: And it’s all Potemkin.
…
Lesley Stahl: So if the bubble bursts, who’s left holding the bag?
Gillem Tulloch: There are multiple classes of people that are going to get wiped out by this. People who have invested three generations worth of savings — so grandparents, parents and children – into properties will see their savings evaporate. And then, of course, 50 million construction workers who are working on all these projects around China.
Dear Chinaman
You just 1 of 1.3 billion. You no can grow enough food. Not enough dogs in China to eat. Me explode, maybe. But you disappear first. This year Year of Snake. I let you eat my trouser snake. Feed you whole family one year.
Many of us fall into the trap of basing our worldview off fables and half truths…at times, myself included. We all experience Cognitive Dissonance…or possessing at least 2 competing opposing ideas in our minds. Our actions are based off our perceptions of things so if we perceive that each individual country is working independent from one another and that there isn’t a skeletal system (IMF, BIS, World Court, United Nations) already established for world government and that the U.S. military as well as NATO member countries’ military aren’t the enforcement tentacles of this Giant Squid! I believe, seekers of truth, like myself and others who frequent TBP have the capacity to see through what we have been taught about “reality” and what has been regurgitated by t.v. personalities and Hollywood for decades!
Think about it for a second….Did you know that our Secretary of Treasury is U.S. Governor for the IMF and U.S. Executive Director of the IMF?!
Who do you think he really reports to? Do you really think the decisions the S.O.T. makes are in the best interest of the United States or in the interest to the Money Powers who actually run the world?
Oh how our memories fail us repeatedly! About 3 minutes into the video Geithner is quoted as saying “your government is faced with no good options”….Is this a slip of the tongue?! I think not…if you watch the whole video you will see that Bernanke and Geithner choose their words carefully.
Bachman even asks would you support a move away from the U.S. Dollar and towards a “global currency.” Both of the DOUCHEBAG liars Agreed with China and Russia that we should move away from the Dollar…Remember this went down in 2009.
ONCE the FEDERAL RESERVE is put to death (very soon now) Americans will think they have WON a battle! NOPE, just part of the plan! It won’t be needed anymore because the goal will be complete! Check out Damon Vrabel’s videos about “Debunking Money” to see the bigger picture.
What do you say Admin?
Ha, Ha Stucky, you funny guy. We eat cat, no dog. Korean eat dog. We eat rat, we eat mice, we no care. Food is food. When you country finish, you eat each other. We no have welfare, we work, you no work, you eat free and watch T.V., you lazy. We work like slave. You no work at all. How you run country when you no work?
Admin
“The Han Chinese are an ethnic group native to East Asia. They constitute approximately 92% of the population of China, 98% of the population of Taiwan, 74% of the population of Singapore, 24.5% of population of Malaysia, and about 20% of the entire global human population, making it the largest ethnic group in the world.” (From Wiki)
That is a whole lot of unity and racial/ethnic hegemony. Add into that the historic exertion of culture into nearby mongoloid / ethnically unrelated people (non-Han, non-Chinese Oriental people such as Koreans, Japanese, Thai, and Mongols) and the Chinese have a unity and dominance which should not be dismissed. The Chinese squashed their neighbors down to the southern sea border over thousands of years. They’ve been assimilating the Mongols for a thousand years (ching dynasty?). Chinese manifest destiny compels the Han to absorb Tibet, as the remaining Oriental/Mongoloid group between it and the logical geographic boundary of the Himalayas (with the racially/ethnically Indo-Europeans on the other side). The Han Chinese have been absorbing and pushing out other ethnic groups, and outbreeding everyone in continental East Asia for 10,000 years+ . They are in a very long term game. The West can also consider Australia and New Zealand lost – the Han will/are taking those as well.
But, whatever Admin. We can agree to disagree – its your blog, so you are right by default. Stucky is still a fucking retard – though (presumably) his Chinaman thing is hilarious.
SAH
You’ve got spunk. I can’t say anything that will offend you.
Dear Mr. Chinaman
Me give you credit. You make good point. But you no understand. You have wonton. We have Oreo. He give everyting for free. We no need to work. We just buy shit, with you money. Everybolly wins.
I like General Tso’s chicken.
SAH….Stucky not retardation…..Stucky Fu Kin Su Pah.
Stucky…Yu my friend.. Yu pic chick.. I mail
[img[/img]
Chinaman
You wise man like Confucius. Me join you side now.
Fuk Yu Ni States.
Stucky….so solly no got big butt here.
[img[/img]
[img[/img]
Numba 1 girl look porky.
Numba 3 girl look retard.
Numba 4 girl look white.
Numba 5 girl look like egg roll .. wrap to tight.
Numba 6 girl look like Vagin too tight for Stucky snake.
Numba 7 girl look relate to numba 1 fat girl.
Numba 8 girl look like masturbating.
I take Numba 2 girl. You no fuk me over like HZK! You send NOW!!
ITT: Stucky talks to himself a lot.
OK. I stop now.
Ms. Freud just walked in. I said to her … really; “Where yu put meat loaf dish? I no can find.”
She look at me like I ma roon. Fuk. I no can stop. What if I no speak normal again??
——————————————-
TPC
I am NOT doppling as Chinaman …. except for only exactly one post.
I have no idea which one of our regulars is Chinaman, but I would love to know. Maybe Admin can spill the beans later. But, I’m done before my brain seizes up for good.
It was fun though.
Chinaman is the same crazy doctor that started this nutjob shit throwing thread.
Muck – you said that we are forgetting that we owe China lots of money. Bzzzzzzz – wrong answer. It was one of the first points I made. But thanks for playing, you ornery old coot!
Glad to see Admin and Stuck are still getting a good old ass polishing from AWD and SAH.
Sorry I missed it.
I cannot believe it stayed so …… calm. Just goes to show we iz fighting for fun not for blood at the moment. Maybe Admin and I can revisit OWS – we were fighting for blood on that one. We both had to up our meds after that.
BTW – time has proven me right and the winner of that little tussle. Who wudda thunk it.
llpoh
This is your award for winning the OWS tussle.
You mean chinaman is dirty doppler? My daddy said to never trust a dirty chinaman, and I guess he was right.
So much for anonymity. Admin’s just pissed because I won.
SAH
I look like Brad Garrett (from everybody love raymond), sometimes I’m even mistaken for him in public. Thanks for the assist on spanking Admin.
[img[/img]
I got your China data right here:
[img[/img]
AWD – you are 7 feet tall? Or do you meet a lot of idiots?
Or do you meet a lot of idiots?
That goes without saying. I met Brad in Vegas once, he’s taller, but not by much.
@AWD – nice. 😉
@Admin – “Between about 3000 and 1000 BC speakers of Austronesian languages began spreading from Taiwan into Island Southeast Asia, as tribes whose natives were thought to have arrived through South China about 8,000 years ago to the edges of western Micronesia and on into Melanesia, although they are different from the Han Chinese who now form the majority of people in China and Taiwan. In fact Taiwan, previously inhabited mostly by non-Han aborigines, was Sinicized via large-scale migration accompanied with assimilation during the 17th century.” (From Wiki)
The poor Polynesians and Micronesians were already driven out of their homeland (what is now geographically South China and Taiwan) by the Han, and in the 21st century the Han will finish this job and take the best of the racially Maylay/Austronesian people’s islands (Singapore, Malaysia, Australia, New Zealand and Hawaii). In comparison, Tibet is easy-peasy-lemon-squeezey as they are racially mongoloid (Oriental) like the Han, share the same religion (Mahayana Buddhism) and Tibetians are damned pacifists. Consider them absorbed. Korea was peacefully a vassal state of China for thousands of years, it was only US meddling that changed that. The Koreas will reunify once US world domination ends and Chinese regional dominance resumes, and Korea will get along with little incident with China. Japan was the only rogue orienal group who could have challenged China but they got Nuked (Hiroshima) and Nuked (Fukushima) and were the only Asian country to enter the 20th century with a Western style economy. They have lost face and are 100% out of the game. The Han Chinese will rule the entire Pacific region in the next 100 years. It isn’t a Chinese “miracle” – it is thousands of years of strategic planning and concerted effort by the unified ethnicity of Han Chinese people.
Well, no more commenting on this thread for me. Admin is always right. Stucky is less funny than I gave him credit for. AWD is even funnier (and very nearly as handsome) as his fangirl believed him to be. And the whole world is fucked, Muck declared it, so obviously it’s true.
The Han Dynasty of the future in all its glory – 1,000 years in the making
Shanghai Surprise
By David Franklin, Market Strategist, Sprott Asset Management ([email protected])
The Economist recently reported that the Industrial and Commercial Bank of China (ICBC) displaced Bank of America to become the world’s biggest bank in 2012, marking the first time in history a Chinese bank has reached this pedestal. China now has four of the world’s ten biggest banks.
Together, these Chinese banks have a combined market capitalization of close to $1 trillion Canadian dollars, or three times the market cap of the Canadian banking sector. ICBC alone has 393 million individual customers, which according to the Telegraph is the equivalent of a single bank managing the bank accounts of every man, woman, and child in Western Europe. In fact, Chinese banking-sector assets have increased by $14 trillion since 2008, which is the entire size of the US commercial banking sector. China is a global banking force to be reckoned with.
From the outside, however, observing the Chinese banking system can be “like watching two dogs fighting under a carpet.” It’s clear that something is happening, but it’s hard to tell exactly what.
June 19, 2013 will go down in Chinese banking history as the day that overnight borrowing rates hit a record high 25%, thus effectively freezing the Chinese credit market. Under normal market conditions, the SHIBOR—which is the rate at which Chinese banks are willing to lend to each other for short periods of time—is typically less than 3%. Expert opinion is sharply divided over both the causes and implications of these skyrocketing lending rates.
In one corner we have Charlene Chu from Fitch Ratings, who evoked memories of Lehman Brothers and Northern Rock when she suggested in the Telegraph that an extreme spike in the SHIBOR is an indication that China is wrestling with “the worst ever credit bubble.” At the heart of this credit bubble is the opaque shadow banking system of trusts, wealth-management funds, and offshore vehicles that allows companies to avoid regulations and hide large amounts of debt.
Echoing the same sentiment, China watcher Gordon Chang, known for his book The Coming Collapse of China, sees the country on an economic decline and views the current interbank lending stress as further support for his position. Chang describes a timeline of key events leading to the jump in interbank lending rates:
“The crisis began in the first week of May when the state administration on foreign exchange issued that rule cracking down on fake export invoicing. That triggered a $40 billion outflow from the banking system and in the month of June we saw two failed central government bail auctions, two spikes in interbank rates, and two waves of default in the interbank markets. Each crisis is getting worse than the previous one.”
Both experts suggest that skyrocketing interbank rates signify the dire state of the Chinese banking system. They point to a credit bubble that has gotten out of hand and portends a collapse of the economy.
Surprisingly, other experts suggest that there is nothing to be concerned about. Earlier this month Liao Qiang, a Beijing-based director at Standard & Poor’s, argued that “Given that China’s credit is mostly funded by its internally generated deposits, I don’t think a real financial crisis, which is normally manifested in a liquidity shortage, will happen anytime soon.”
Adding support to this view, the People’s Bank of China (PBOC) stated in a letter published Monday, “At present, the overall liquidity of the banking system [is] at a reasonable level,” and further suggested that lenders should better manage their own balance sheets. The PBOC also soothed concerned markets this week when it assured that it would provide cash to institutions that need it.
In summary, both Standard & Poor’s and the PBOC are saying to us, “Nothing to see here folks, move along.”
These divergent quotes highlight the huge contrast of opinions when it comes to the SHIBOR spike. But whether investors believe in the “utter collapse” or a “business as usual” scenario, they are not waiting around for the winner to emerge from “under the carpet.” Investors are selling Chinese banking shares: the Shanghai financial subindex lost as much as 22% in the month of June and has yet to recover, according to data compiled by Bloomberg.
Investors have clearly chosen their dog in this fight by voting against the banks. Regardless of which scenario ultimately plays out, the fact that expert opinions are so divergent on such a critical issue at such a sensitive time is the real surprise.
So let me get this straight:
China doesn’t manipulate currency.
China holds more gold than the US, or, for that matter, India.
China doesn’t have welfare or social programs.
China doesn’t follow a time path of output similar to any emerging economy
China doesn’t experience increasing civil unrest.
^^^China plays poker^^^
Of course, if you like math, add “per capita” to the above and the hand gets interesting.
This isn’t 2003, folks. Only retards fold a full house because someone tells them they have a flush.
BTW, Admin:
That thumb ring is pretty fucking fly. Platinum?
Gotta grab one with the student loan disbursement. Maybe a new Ipad.
The laptop’ s unbelievably old after the semester. Its time to trade compuer entry dukets for a shiney piece of rubber dog shit and some bling.
The price is appetizing.
Resident Sophist
When are you going graduate and come back to TBP regularly. I need you to fight off these mangy curs nipping at my heals.
Glad to see Resident Softass has yet to learn to read, even after years of higher learning.
Colma/Resident Softass – come on back. We have missed ya. (seriously). But you still need a good ass whoopin. Just because.
Admin is a real optimist. He calls this as having his heels snapped at:
[img[/img]
llpoh still can’t figure out how to post a picture. Pathetic.
F’n wordpress. Try again.
[img[/img]
Admin looking around trying to figure out where that llpoh irritation is coming from.
BTW – that is me on the right.
Admin still cannot debug the site so that it posts pics properly.
Haha! That one made me laugh. Prolly just the absurdity of it. Admin needs to lay off the ketamine.
Last time Admin had a war with AWD he had to recruit me to help:
[img]http://t2.gstatic.com/images?q=tbn:ANd9GcTKsWadVG4FdSr-3ghSKckzgPqrSd2OrtySPoAOacmFr0LBEDOl[/img]
It wasn’t just a beat down, it was a Chinese beat down.
Shar Pei: The Chinese Fighting Dog
[img[/img]
AWD after getting his ass kicked by Admin. It looks like he has a case of the Chinese rot.
It wasn’t just a beat down, it was a Karate beat down
[img]https://encrypted-tbn3.gstatic.com/images?q=tbn:ANd9GcTtyxFe_qfuisgQNEtjW8iKyHb1tMHcCV44mwzJfdtFfV1l5V-Bpw[/img]
AWD vs Admin and Stucky
This thing went the full 12 rounds.
What a great fight.
Admin and Stucky ganged up on AWD, but he held his own!
And the winner is?
Scott
Nobody ganged up on AWD. He had help from his gay lover (llpoh) and lesbo-psycho chick (SAH). Granted, that’s not saying much, but still ..
Admin “Big Dog” Quinn has his ass sniffed by losing mutt curs AWD and llpoh.
[img[/img]
Stuck draws thumbs down at a prodigious rate. His last judgement was ridiculed into oblivion.
[img]http://t3.gstatic.com/images?q=tbn:ANd9GcRMIkvul_ESELwMXLCqbkdlt1ScqvAP28RC8OMr80RXdrXsd2i4hw[/img]
i’ll go with AWD’s of SAH as a sino-american hottie, i had it as sexy ass ho(usewife).
Easy Credit Dries Up, Choking Growth in China
By KEITH BRADSHER
SHENMU, China — As the Chinese economy boomed, few cities soared faster or higher than Shenmu, a community of nearly 500,000 in northwestern China.
Top luxury clothing stores in this city’s downtown were recording as much as $500,000 a day in sales. Tables at the best restaurants had to be reserved weeks in advance. The new Fortune Garden Club for the city’s business elite made headlines by paying $1 million for a king-size mahogany bed, to be used by members and their companions.
But a painful credit crisis is now spreading across Shenmu and cities nearby, as thousands of businesses have closed, fleets of BMWs and Audis have been repossessed and street protests have erupted.
Now the leading purveyors of Western fashions are deserted, monthly sales at restaurants are down as much as 97 percent and the marble entrance to the Fortune Garden Club is shuttered. All but one of the city’s car dealerships have failed.
The owner of the city’s largest jewelry store was detained by the authorities a week ago after creditors found him secretly packing millions of dollars’ worth of gold and jewels into cases and accused him of preparing to flee the city without settling his debts. A top restaurant closed a day earlier, and its owner left town, as have the founder of the Fortune Garden and many other executives.
“It’s an economic crisis just like the United States has had; just like it,” said Wang Ting, an operator of an illegal casino in Fugu, near Shenmu. “There’s no cash, everyone stays home without a job, there’s no way the economy can recover.”
Shenmu, and nearby cities like Ordos and Fugu, are at the leading edge of broader troubles that are beginning to afflict the entire Chinese economy. Across China, growth has slowed. With the slowdown have come rising defaults on loans made outside the conventional banking system, chronic overcapacity in many industries like coal mining and steel production and, in particularly troubled cities like Shenmu, a sharp decline in previously debt-fueled prices for real estate and other assets.
The cracks are showing in many sizable cities like coastal Wenzhou, where informal lending, a big part of so-called shadow banking, has dominated for a quarter-century. Cities with economies linked to commodities with falling prices have also been affected, as more people have defaulted on loans. The biggest, most economically diverse metropolitan areas like Beijing and Shanghai seem considerably less affected, but also have many small and medium-size businesses that depend on informal lending.
Lending has collapsed here in northern Shaanxi Province, where it was particularly speculative and frenzied, and where the local coal industry has also been crippled by steeply falling prices.
As some borrowers began defaulting early this year, worried lenders in the informal sector raised interest rates for small and medium-size businesses, previously 25 to 40 percent a year, to as much as 125 percent a year. The increase set off a much broader wave of defaults in recent weeks, as owners found themselves unable to repay billions of dollars in bad debts, many of them handwritten and hard to enforce in court.
“Almost no one will give you a loan,” said a construction executive who gave only his surname, Xie, as he stood next to his white Toyota Land Cruiser outside a project that had been halted.
Although changes are being slowly introduced, state-owned banks have long been allowed to lend only at low, regulated rates barely above the inflation rate, with the total value of loans controlled by quarterly quotas. All over China, these loans go overwhelmingly to large state-owned businesses, government officials and politically connected individuals, who then relend the money at much higher interest rates to small and medium-size businesses in the private sector that need money to grow.
Liu Linfei, a government official from nearby Yulin, stood on a Shenmu street corner in a T-shirt and shorts on a recent weekend afternoon, outside two high-rise hotels where construction had been stopped just before the windows could be installed. He said he had borrowed 600,000 renminbi, almost $100,000, from a bank shortly before the collapse, at an interest rate of 4.1 percent a year.
Mr. Liu then lent the cash to moneylenders here at an interest rate of 10.4 percent, planning to pocket the difference.
The moneylenders who borrowed from Mr. Liu defaulted, and now he is struggling to repay the bank. “I’m not going to lose my house, because I’m repaying it little by little with money I borrow from my relatives,” he said.
The Chinese are finding it harder to repay loans because the economy is slowing. Most analyses of China’s economy look only at the real economic growth rate, around 7.5 percent this year. But for companies’ sales and profits, which determine their ability to repay debts, what really matters is the nominal growth rate, which is real economic growth plus inflation.
Private sector businesses could afford to borrow at double-digit interest rates because nominal growth of 16 to 23 percent a year from 2004 through 2011 exceeded the rates. But nominal growth slowed last year to 9.8 percent and fell again in the first half of this year, to an annual pace of 8.8 percent.
At the same time, overinvestment led to overcapacity. Dozens of new mines opened around Shenmu in the last decade and older mines expanded. But demand has grown much more slowly than expected for electricity and steel, the two main users of coal.
Coal prices have dropped by half in the last three years as a result. Now, out of 90 mines near Shenmu, practically the only ones still operating are nine that are state-owned and do not need to show a profit.
The popping of the real estate bubble has been the most serious blow to the local economy. Real estate prices had soared in cities across China. In Shenmu, 1,200-square-foot apartments that sold for less than $20,000 a decade ago reached $330,000 by last winter.
Local real estate brokers say that they are advising sellers to avoid price cuts of more than 10 percent. But local business owners who buy and sell apartments say that deals are now being done for as little as $115,000 for a 1,200-square-foot apartment, a decline of 65 percent.
Public discontent is fueling street protests. Several thousand residents turned out in mid-July for a demonstration in the expensively paved square across the street from city hall, demanding that municipal officials revive the stalled economy. More recently, a smaller group of migrant workers protested, demanding that the local government pay their back wages after construction was halted on a row of high-rise apartment buildings.
Yet a Shenmu merchant, who insisted on anonymity because of local tensions, said that he had a lot of sympathy for officials, who even put up banners on city streets last year warning residents of the dangers of participating in informal lending schemes.
“It’s a national problem, it’s not a local issue,” he said.