China

[Dave86ch]

36 minutes ago, mcliu said:

If you follow western media, China has been heading into a meltdown every year for the last 20 years.

 

They are clearly the winners, radio propaganda is never been so loud.

Edited July 29, 2022 by Dave86ch

[sleepydragon]

34 minutes ago, crs223 said:

I might just have "grump old man syndrome", but:

 

• US: students focus on race/inequality/mouthing_off/no_homework.  China: math/engineering/beatings
• US: Glued to tik-tok 7 hours per day.  China: working 9-9-6
• US: Theft, drugs, decriminalized.  China: executions galore
• US: guilty are let free.  China: innocent are punished
• US: companies regulated by lobbyists.  China: companies regulated by party
• US: propaganda says opposite political party is the enemy.  China: propaganda says americans are the enemy

 

... we'll see how things go after ~20 years... hopefully US is doing the right thing... for our kids' sake.

 

PS: never been to China... so I'm just imagining what it's like over there.

 

 

56 minutes ago, Castanza said:

 

9-9-6 = guarantee to succeed as a society? That's a bold statement. Historically being overworked and having no time for social life is a guarantee for failure. Why would China be any different. That type of environment just sows dissent, anger, jealousy and ultimately corruption as people look for ways to climb the ladder and beat the grind. Humans are humans.

996 is not the life style of most Chinese. I will say the life in US is more competitive for an average person. 
996 is the life a someone who work in a high tech company in China, and many US startups employee work the same hours.. just look at Elon Musk… 996 everyday 

 

 

[Castanza]

1 hour ago, crs223 said:

I might just have "grump old man syndrome", but:

 

• US: students focus on race/inequality/mouthing_off/no_homework.  China: math/engineering/beatings Yet all China does is steal IP. Their innovation track record is not great. And anything that has potential to become great is a black box that likely has the CCP parties hand so far up it's ass it eventually is just a puppet. 
• US: Glued to tik-tok 7 hours per day.  China: working 9-9-6 That's a choice in the US. Social media is problem everywhere. You can work hard and make something of yourself in the US without working your life away. Unless you want to live in poverty it's not in China. 
• US: Theft, drugs, decriminalized.  China: executions galore I agree US Judicial System is becoming a joke
• US: guilty are let free.  China: innocent are punished I agree with both but at least we still have due process in the US. 
• US: companies regulated by lobbyists.  China: companies regulated by party Lobbyist model although terrible is still preferred imo . 
• US: propaganda says opposite political party is the enemy.  China: propaganda says americans are the enemy Two party system is doomed to fail in the end. Communist party is guaranteed to fail. 

 

... we'll see how things go after ~20 years... hopefully US is doing the right thing... for our kids' sake. 20 years is probably not a good timeline to view success of a nations. US has a lot of stuff to fix for sure. 

 

PS: never been to China... so I'm just imagining what it's like over there.

 

 

1 hour ago, Dave86ch said:

 

They are clearly the winners, radio propaganda is never been so loud.

 How and winners of what? 

 

1 hour ago, sleepydragon said:

 

996 is not the life style of most Chinese. I will say the life in US is more competitive for an average person. 
996 is the life a someone who work in a high tech company in China, and many US startups employee work the same hours.. just look at Elon Musk… 996 everyday 

 

 

 

I guess I don't know enough about it. But from what I've read and the docs I've seen, it seems like it's not just in tech. It's also factory workers, middle and lower middle class. It seems like people are getting burnt out and they make less comparatively to their counterparts in the US. Both White and Blue collar workers. It seems like the only motivation for doing this is because they have to because they have to support their family. There is nothing positive about that as it's purely desperation. The 9-9-6 also seems to be evolving into forced overtime and 24x7 support. Elon Musk is not a normal human. There are very few people who want to work that much. You average Joe wants to work to live not live to work. That belief has been held by the majority in every country all throughout history. It just reeks of CCP and Corporate propaganda.  Again, just my observation so I could very well be wrong. 

[Spekulatius]

There is another article from the WSJ about the Chinese economy. It seems that the leaders were not too concerned about the property market or decided it’s not worth it risk because of external costs (high housing costs)

https://www.wsj.com/articles/chinas-leaders-arent-sweating-growth-slowdown-11659094452
 

 

I would say this much, housing is highly levered typically and has a huge multiplier effect on GDP. Someone owns all those mortgages in China, presumably banks. It also requires a lot of material, heavy equipment, energy.

 

Yes a lot of people have been predicting a doomsday in China before, but zi don’t think we ever had a confluence or so many factors and a lousy leadership  hampering the economy. Maybe Xi sails into the sunset, but I think this is very wishful thinking. I am not a macro guy generally, so I think the right course is to watch this closely and see which way it goes. I don’t have anything invested in China either so I am more concerned about the externally impacts that the direct ones.

Edited July 29, 2022 by Spekulatius

[Sweet]

Just because commentators have wrongly predicted the decline of China in the past doesn’t mean they are wrong about the serious economic challenges.

 

A country growing at a rapid clip, with lots of inwards investment, and a huge current account surplus, can mask these challenges through sheer momentum.

 

When the economic momentum slows / stops / reverses, economic challenges can become serious economic problems.

For China, the inward investment appears to be slowing, and it may cease to be the workshop of the world, with Western government hostile and suspicious.  The greatest economic miracle might yet become an economic disaster - I think there will be a reckoning.

[Spekulatius]

Pretty good summary on bank frauds and mortgage boycotts. Apparently 70% of the household wealth is stored in real estate but Ci point is that houses are to live in, not for speculation. Chinese do not tend to rent out their investment properties, because they lose value (they become used).

 

I can attest to this as well - was told the same when I was in China years ago.

[Parsad]

4 hours ago, Spekulatius said:

Pretty good summary on bank frauds and mortgage boycotts. Apparently 70% of the household wealth is stored in real estate but Ci point is that houses are to live in, not for speculation. Chinese do not tend to rent out their investment properties, because they lose value (they become used).

 

I can attest to this as well - was told the same when I was in China years ago.

 

China also has two sets of books...so write downs will never be seen by the public.  When your banks are state-controlled, they essentially have a lifeline of $14T a year.  The government isn't asked to intervene, they will intervene.  

 

After GFC, I remember the China experts that Fairfax used to bring to our dinner every year for a couple years.  The real estate bubble and bad loans by developers were known back then.  From what we were hearing, it was certain that China would have a day of reckoning.  Well guess what?  10 years later and we hear about bankrupt developers each year, but somehow no real estate crash.  The handful of times we've seen China real estate prices get volatile and citizens protest, it has been squashed.  

 

I saw the huge oversupply myself in a couple of cities about 7-8 years ago.  But still no crisis!  Still no correction.  And I saw the massive, vacant centers myself!  At the same time, I also saw the massive amount of wealth that China now had.  The technology they possessed.  The megacities that actually had people living in them.  The vehicles and hubbub of commerce everywhere.  

 

With China its like the three monkeys...hear no evil, see no evil, do no evil.  And here are the accounting books you should look at...don't worry about that other set!  Cheers!

[Spekulatius]

@Parsad What is strange about this is that despositors lost their money because a criminal gang managed to get control of this bank in Hanan and then plundered it, leaving the depositors out cold. I wonder how this is even possible. Don’t they have deposit insurance or a bank regulator ?

 

From the report it sounds like the central government pushes down the responsibility to handle all this down to the local government , including what to do on the housing end. that sort of makes sense, considering that China is a big place, but now it really depends on the local government how this works out. Systemic issues also are hard to handle on a local level.

 

I am not really doing anything, just watching, but if the confidence in the banking system cracks, we can see some funny stuff happening. So far, these incidents seem small.

[sleepydragon]

1 hour ago, Spekulatius said:

@Parsad What is strange about this is that despositors lost their money because a criminal gang managed to get control of this bank in Hanan and then plundered it, leaving the depositors out cold. I wonder how this is even possible. Don’t they have deposit insurance or a bank regulator ?

 

From the report it sounds like the central government pushes down the responsibility to handle all this down to the local government , including what to do on the housing end. that sort of makes sense, considering that China is a big place, but now it really depends on the local government how this works out. Systemic issues also are hard to handle on a local level.

 

I am not really doing anything, just watching, but if the confidence in the banking system cracks, we can see some funny stuff happening. So far, these incidents seem small.

I think the local “bank” that got into trouble is one of the many small private banks in China, usually controlled by local business man. They are not insured. They are private banks. And depositors know that. They are offered very high interest products , some depositors traveled across cities to deposit money with them. 

[Spekulatius]

9 minutes ago, sleepydragon said:

I think the local “bank” that got into trouble is one of the many small private banks in China, usually controlled by local business man. They are not insured. They are private banks. And depositors know that. They are offered very high interest products , some depositors traveled across cities to deposit money with them. 

This makes sense.The guy who lost ~$150k was asked to “invest” the money and I was wondering about this , since pretty much everyone should be able to put money in a bank account. So he probably collected money from his relatives/ family and put it in one of those high interest rate account in this private bank and got screwed.

 

Now, I still wonder how the banking system works. Most banks in China are private , since they trade as shareholder corporations. Is banking in China not regulated? No deposit insurance? What happens to depositors money if one of the large banks goes belly up?

Edited July 30, 2022 by Spekulatius

[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