Meanwhile in China, All Hell Is Breaking Loose



ORIGINAL POST
Posted by Ed 3 yrs ago
I guess building all those ghost cities is finally catching up to them...
 
https://hongkong.asiaxpat.com/Utility/GetImage.ashx?ImageID=a8c72efb-9ae3-48e4-a55c-7dfa1d101c3e&refreshStamp=0
 
https://hongkong.asiaxpat.com/Utility/GetImage.ashx?ImageID=dcf3b3bd-51d3-404e-a87a-59981cfe6689&refreshStamp=0
 
 
 
 

FOXCONN SUSPENDS OUTPUT AT CHINA HQ, IPHONE SITE IN SHENZHEN

Chinese stocks are crashing.
Lending to households dropped for the first time in 15 years. Lending to non-financial businesses is down.
Outsiders are not buying Chinese bonds, in part because the differential to US bonds is too low.ESG funds are dropping purchase of China stocks.
 

Given these problems, China is lowering interest rates while the US is raising them. The article ends:

 

“How long can US and China monetary policy diverge, with the former hiking and the latter cutting, before something terminally breaks?

 

I wonder whether an infusion of cheap resources from Russia could help keep China afloat for a while longer. It might give an excuse from more lending/easing as well. But a break with the US dollar seems inevitable.

 
https://www.zerohedge.com/markets/meanwhile-china-all-hell-breaking-loose 

Please support our advertisers:
COMMENTS
Ed 3 yrs ago
More Carnage in China etc   https://www.zerohedge.com/markets/carnage-china-breaks-apple-cracks-key-support-yields-soar-rate-hike-odds-surge

Please support our advertisers:
Ed 3 yrs ago
https://hongkong.asiaxpat.com/Utility/GetImage.ashx?ImageID=b0994025-69c1-467e-a7af-11eb3b64bd5f&refreshStamp=0 
 
The Seneca effect: why decline is faster than growth
 
 
Don't you stumble, sometimes, into something that seems to make a lot of sense, but you can't say exactly why? For a long time, I had in mind the idea that when things start going bad, they tend to go bad fast. We might call this tendency the "Seneca effect" or the "Seneca cliff," from Lucius Annaeus Seneca who wrote that "increases are of sluggish growth, but the way to ruin is rapid."


Could it be that the Seneca cliff is what we are facing, right now? If that is the case, then we are in trouble. With oil production peaking or set to peak soon, it is hard to think that we are going to see a gentle downward slope of the economy. Rather, we may see a decline so fast that we can only call it "collapse."
 
 
The symptoms are all there, but how to prove that it is what is really in store for us? It is not enough to quote a Roman philosopher who lived two thousand years ago. We need to understand what factors might lead us to fall much faster than we have been growing so far. For that, we need to make a model and see how the various elements of the economic system may interact with each other to generate collapse.


I have been working on this idea for quite a while and now I think I can make such a model. This is what the rest of this post will be about. We'll see that a Seneca cliff may indeed be part of our future if we keep acting as we have been acting so far (and as we probably will). But let's go into the details.
 
https://cassandralegacy.blogspot.com/2011/08/seneca-effect-origins-of-collapse.html?m=1 

Please support our advertisers:
Ed 3 yrs ago
Too-Big-to-Fail Risk Looms Over Commodities
 

“Too-Big-to-Fail Risk Looms Over Commodities… so-called variation margin calls have run into several billions of dollars per company in recent days, according to industry executives…

“If commodity prices were to spike further, central banks may very well have to step in, making sure the flow of dollars continues, in a similar fashion to emergency liquidity injections the U.S. Federal Reserve and the European Central Bank performed in 2008-09 during the global financial crisis.

“In public, all commodity traders, small and large, say everything is fine. Talk to executives in private, however, and the anxiety is plain — that their industry is one accident away from trouble.”

Read More

 

Please support our advertisers:
Ed 3 yrs ago
https://hongkong.asiaxpat.com/Utility/GetImage.ashx?ImageID=b29d4955-3195-451d-a88f-98818779b71b&refreshStamp=0 
China’s Credit Market Reaches Inflection Point as Stress Builds 
 
China’s property industry has been rocked by at least 17 offshore defaults by developers since authorities began cracking down on excessive borrowing and speculation in the housing market in 2020.
 
Shanghai-based Zhenro Properties Group Ltd., which was considered a rare beacon of strength earlier this year until it warned of a possible failure in February, has become the latest to default.
 
https://www.bloomberg.com/graphics/china-credit-2022-04/ 
 

Please support our advertisers:

< Back to main category



Login now
Ad