Political Posts

[ICUMD]

I'm intrigued by the fact that so many Chinese people are engaging in 'Mortgage Boycotts'

 

This seems like a behavioral change of non obedience that could threaten the banking system if it becomes contagious.

 

I had been under the impression that Chinese people feared the government and were essentially bound by their rules.  

 

Maybe times are a changing...

[John Hjorth]

And in the mean time the Evergrande saga [soap opera?] continues .

[no_free_lunch]

I was under the impression the mortgage boycott only applied to buildings under construction, where the buyers somehow took out a mortgage before completion.  So just a small part of the market and more justifiable for them not to pay.

 

In general I am far from bullish on China but as has been said, we have been hearing these stories since 2007.  Given the states ability to control and manipulate, I wonder if the USSR isn't a better comparison.  Yes, China has a large free market while USSR next to none, but in both cases you had this powerful state control.  In the case of USSR, there was never really a crash per se, it just stalled out and become dysfunctional.  It started to lose more and more ground to the west.  Perhaps you will see something similar in this case.   The one caveat being that the west has increasingly more government intervention (in particular Europe) and may follow a similar path itself.

[Spekulatius]

3 hours ago, ICUMD said:

I'm intrigued by the fact that so many Chinese people are engaging in 'Mortgage Boycotts'

 

This seems like a behavioral change of non obedience that could threaten the banking system if it becomes contagious.

 

I had been under the impression that Chinese people feared the government and were essentially bound by their rules.  

 

Maybe times are a changing...

I don’t think it’s that many people participating in mortgage boycotts yet. However, I think it’s interesting that this became viral and we know how viral things can work. Yes, these were mostly people who put in a deposit or paid for apartments under construction from builders that have defaulted , so these apartments are in a limbo state.

 

It seems however that most Chinese builders and not just Evergrande have ran into financial trouble and so far the central government just lets them just go. I guess we are at the Bear Sterns stage at this point. This means the above could easily repeat many times over.

 

If real estate crashing were the only issue, this probably wouldn’t be so bad. However with Xi being in charge and making things worse and kneecapping the economy (zero COVID-19, tech crackdown) and the ominous neo Maoism becoming a new reality as well as challenging the US on Taiwan (Pelosi is now almost forced to show up in Taiwan on an aircraft carrier doing a Mac Arthur style landing) I really think this could take a turn for the worse.

 

People think that companies can work around these type of issues in a totalitarian state like China - well really?

 

 

 

Edited July 30, 2022 by Spekulatius

[Gregmal]

Regardless of what’s going on, haven’t folks realized by now it’s a bad idea in general to make bets against basically everything blowing up? Essentially wagering that the powers that be will just stand by and let it happen? You’re already seeing it in the US….now folks wanna blame and be hostile that the bear trade is losing steam but bottom line is you should know better and when there’s intervention, like there always is, you don’t get to moan and groan about how you got screwed. 
 

Even more generally speaking, WTF is it with the bear people? Like there’s a million and one ways you can make easy money being long a whole variety of things. Yet for some reason these folks have this need to stand on a pedestal, screaming for attention, hoping to call a measly 10-25% down move? Which is not only challenging, but also difficult to time. So these experts and fund managers and doomsdayers aren’t even really trying to make money it seems, but simply get attention and walk around for a short while as “the guy who called it”….isn’t that kind of pathetic? 

Edited July 30, 2022 by Gregmal

[Gregmal]

Like look at this loser.

 

https://www.benzinga.com/amp/content/28122309

 

Guy blew up his fund being a know it all dipshit and then makes a couple hundred mill back, IE still nowhere near back to even, but yay! He got some publicity and can now take his victory lap.

[no_free_lunch]

1 hour ago, Gregmal said:

Regardless of what’s going on, haven’t folks realized by now it’s a bad idea in general to make bets against basically everything blowing up? Essentially wagering that the powers that be will just stand by and let it happen? You’re already seeing it in the US….now folks wanna blame and be hostile that the bear trade is losing steam but bottom line is you should know better and when there’s intervention, like there always is, you don’t get to moan and groan about how you got screwed. 
 

Even more generally speaking, WTF is it with the bear people? Like there’s a million and one ways you can make easy money being long a whole variety of things. Yet for some reason these folks have this need to stand on a pedestal, screaming for attention, hoping to call a measly 10-25% down move? Which is not only challenging, but also difficult to time. So these experts and fund managers and doomsdayers aren’t even really trying to make money it seems, but simply get attention and walk around for a short while as “the guy who called it”….isn’t that kind of pathetic? 

Nailed it.

[Sweet]

4 hours ago, Gregmal said:

Regardless of what’s going on, haven’t folks realized by now it’s a bad idea in general to make bets against basically everything blowing up? Essentially wagering that the powers that be will just stand by and let it happen? You’re already seeing it in the US….now folks wanna blame and be hostile that the bear trade is losing steam but bottom line is you should know better and when there’s intervention, like there always is, you don’t get to moan and groan about how you got screwed. 
 

Even more generally speaking, WTF is it with the bear people? Like there’s a million and one ways you can make easy money being long a whole variety of things. Yet for some reason these folks have this need to stand on a pedestal, screaming for attention, hoping to call a measly 10-25% down move? Which is not only challenging, but also difficult to time. So these experts and fund managers and doomsdayers aren’t even really trying to make money it seems, but simply get attention and walk around for a short while as “the guy who called it”….isn’t that kind of pathetic? 

I doubt anyone in this thread is wagering that it will blow up, things can rumble on for a long time before they do… if they ever do.

 

Plenty of people on Twitter and YouTube like to constantly predict doom.  Very few of these guys must make any money outside of the revenue stream of being a constant doomsayer. 
 

So many of those guys are broken records, lured me in when I started investing and cost money sitting out when I should have been participating.  Wonder how much money they have collectively cost investors, must be huge sums.

Edited July 30, 2022 by Sweet

[Spekulatius]

I wouldn’t predict anything as far as China is concerned , but it’s a situation worth keeping and eye on. I think the risk are higher then some here assume. For example BABA jumped when it seemed that they give US auditors a look in their books to stay listed. Noe it seems that this is not the case any more and China’s contingency is to have BABA listed primarily in HK to avoid transparency. This obviously warrants a lower valuation Imo.

 

It worth watching how these things develop over time and see the forest rather than the trees.

Edited July 30, 2022 by Spekulatius

[Gregmal]

Yup. The perma bears and perma short focused people are largely just pieces of shit. Pretty much none of them make money from the investments consistently. Chanos claims to be one of the best has from recollection lost like 3-5% a year since inception. These guys are cancer to the common investor in terms of how much money the cost them with the rhetoric. Of course, a lot of that also falls on the investor themselves, but not everyone is a professional. 
 

In this category are also folks like Jim or the Einhorn type. It’s one thing to think you’re outing scummy schemes. Sure. But guys like the above ones often target completely innocent companies who’s only fault is that they trade publicly and that some arrogant rich prick disagrees with their valuation. For no doing of their own these companies then become subject to these clowns engaging in public campaigns that often result in harming of the company, it’s shareholders and it’s employees, for no good reason other than the fact pencil dick disagreed with the “valuation” and thus felt entitled to lobby everyone else and get his profit. Fairfax is actually is a good example of that 15 years ago. 
 

I spent a good bit of time on the short side early in my career, and not only is it generally unproductive, but you also kind of also have to be content always just being a negative and miserable prick. There’s much better ways to live life and make money IMO.

[Spekulatius]

Parking this here, because it appears to be an excellent documentary about Xi Jinping - A man with a plan:

Edit - the plan:

https://en.wikipedia.org/wiki/Document_Number_Nine

Edited July 31, 2022 by Spekulatius

[Sweet]

Definitely @Gregmal I’ve learned that the hard way too.

 

Chanos is OK I think, he is a short seller I listen to, but never copy his positions.  I think he uses the short positions he has to go long the general market.  He loses money on the short side but (think?) makes it up on the long.

 

The guys I really dislike are the like of Peter Schiff, Marc Faber, John Hussman - those guys are parasites that have cost investors huge sums of money.

[Gregmal]

2 hours ago, Sweet said:

Definitely @Gregmal I’ve learned that the hard way too.

 

Chanos is OK I think, he is a short seller I listen to, but never copy his positions.  I think he uses the short positions he has to go long the general market.  He loses money on the short side but (think?) makes it up on the long.

 

The guys I really dislike are the like of Peter Schiff, Marc Faber, John Hussman - those guys are parasites that have cost investors huge sums of money.

Oh those guys are the absolute worst. Chanos I agree is worth following, as is Einhorn or really any of the guys who you know are gifted. I just prefer the more ethical ones. Tepper is great. He is candid. But doesn’t pull that cheap manipulate the market crap. Buffett of course too. Whereas these other guys, and especially even some of the small time short focused ones like Muddy Waters or Grizzly….they know the impact they have,  target companies, sometimes validly but a lot of times for little reason other than a bunch of technical factors, and then go out of their way to publicly wreck a company which is just scummy and a cheap way to make a buck. 

[Guest]

In my opinion if the US ever lost the reserve currency, I think the US would be in big, big trouble. 

[RetroRanger]

https://edition.cnn.com/2022/08/01/politics/nancy-pelosi-taiwan-visit/index.html

[backtothebeach]

Apparently this goes way back. Have to respect Pelosi for what she did in 1991 (not 1989):
 

 

Edited August 1, 2022 by backtothebeach

[Spekulatius]

24 minutes ago, RetroRanger said:

https://edition.cnn.com/2022/08/01/politics/nancy-pelosi-taiwan-visit/index.html

This appears to be confirmed by the WSJ:

https://www.wsj.com/articles/nancy-pelosi-begins-asian-tour-in-singapore-as-china-again-warns-against-visiting-taiwan-11659358264?mod=hp_lead_pos1

 

After Xi threads, Biden had no choice but to sent here there. If the US starts to respond to threads and does cave and not let US officials travel to other countries then we basically cease to be a superpower and mighty as well invite the Chinese to take the Island.

 

Again another one of Xi Jinping's unforced errors, imo. Ball is in his court.

[mcliu]

The US is a superpower but it's no longer the only superpower. Policy needs to adapt to reality.

[ICUMD]

On 7/30/2022 at 10:52 PM, Spekulatius said:

Parking this here, because it appears to be an excellent documentary about Xi Jinping - A man with a plan:

Edit - the plan:

https://en.wikipedia.org/wiki/Document_Number_Nine

Thanks for sharing this. 

 

No doubt China has made tremendous advances through its authoritarian government.

 

Global and esp US economic interests have essentially promoted China to this power.  

 

Hard to blame Xi for looking out for Chinese interests. 

 

Hopefully the world realizes that humanitarianism and cultural / territorial respect ultimately need to be prioritized above economic gain.  

 

In other words: be careful who you do business with and who you think your friends are.

 

 

[sleepydragon]

I guess China could retaliate Pelosi visit by .. holding birthday party for Putin? 
 

anyway. I think China is overreacting. This is not the first time some senior congress members visit Taiwan. They can’t stop US meeting Taiwan, same as US can’t stop Xi having a birthday party with Putin 

[Spekulatius]

5 minutes ago, sleepydragon said:

I guess China could retaliate Pelosi visit by .. holding birthday party for Putin? 
 

anyway. I think China is overreacting. This is not the first time some senior congress members visit Taiwan. They can’t stop US meeting Taiwan, same as US can’t stop Xi having a birthday party with Putin 

The threats were a dump move by Xi Jinping, because now he is in Zugzwang (german chess expression). If he does nothing, he "loses face" as they say in China (big deal for a leader in China), but every move is a bad one...

 

Again, totally unnecessary and unforced error in practical terms, but not in Xi's ideology framework of course.

 

[Sweet]

2 hours ago, ICUMD said:

Thanks for sharing this. 

 

No doubt China has made tremendous advances through its authoritarian government.

 

Global and esp US economic interests have essentially promoted China to this power.  

 

Hard to blame Xi for looking out for Chinese interests. 

 

Hopefully the world realizes that humanitarianism and cultural / territorial respect ultimately need to be prioritized above economic gain.  

 

In other words: be careful who you do business with and who you think your friends are.

 

 

 

We should never have been doing business with them, the second it became clear that doing business with them only strengthened the hand of the authoritarian government.

 

We should be doing business with like minded nations, and we should cease to do business with China even if it makes us poorer.

[Spekulatius]

7 minutes ago, Sweet said:

 

We should never have been doing business with them, the second it became clear that doing business with them only strengthened the hand of the authoritarian government.

 

We should be doing business with like minded nations, and we should cease to do business with China even if it makes us poorer.

I don't think it's as simple than that. When Den Xiaping started to change things after the Mao era, there as a genuine hope that China would become a valuable in terms of trade (which did happen) but also over time reform into a more open society that if not exactly westers would adopt some western values.

 

The latter just did not happen. There was Tianamen , but even after this setback, I don' think all hopes were lost. Changes rarely go in  strait line.

 

With Xi Jinping however, we are not looking into  China that goes it own way, they are also now keen to export their own totalitarian approach into the rest of the world. That part was news to me.

 

I also thought that the communist party in China isn't really communist any more. I was wrong about this after view this DW documentary. Xi Is a neo Maoist (he actually went through the Mao re-education) and now tries to Mao approach but with an more open economy, which is all but a tool to make his ideology work.

 

The problem with the Maoist approach was that it forced China almost back into the stone age and hence China lost 30+ years where they could have made their economy better. Xi knows better and uses the economic power to try Mao 2.0 and even more has a neo imperialist (belt and road fits nicely in that framework) edge to export the happiness to the rest of the world whether they like it or not.

 

 

So yes, sooner or later, this will have to come 

[Sweet]

I think the approach to open up China by integrating them into the global economy was at the time a smart move.

 

Since that policy has been failure, and in fact lead to the strengthening the hand of the CCP, it needs to be reversed fast.

 

For me Tianamen should have been the cut off point.  The policy of open up the economy had lead to that moment.  The hardliners in the CCP won and they crush the protestors.

 

I don’t know why we keep fooling ourselves anymore.  Xi’s stance is very clear, he’s not our friend, he doesn’t have to be our enemy, but we should be careful that one day he might be.

[mcliu]

The US has no problem doing business with authoritarian regimes.

Biden just went to Saudi Arabia. If anything they are far more repressive than China, especially towards women.

US is fine with manufacturing pivoting from China to Vietnam, another communist authoritarian regime.

Plenty of examples throughout history of the US allying with dictatorships to further its self-interests.

The problem with China today is not so much it's model of government but that it's powerful enough to challenge US dominance.