Wow ! Those shared bikes are an eyesore and a mess for traffic, they get thrown up and literally stacked up on walking paths, and when parked half properly in busy areas they cut largely on already jammed streets. Authorities try and regulate them, including ban new bikes, yet the bike companies appear to unload trucks full of bikes on the pavement at night. But i'd never seen pictures of such graveyards before. Impressive. Lots and lots of broken bright colored bikes all over the city, quite a mess.
My China Thesis Entitled... The Biggest Lie Ever Told
- Thread starter Stockolio
- Start date
Wow ! Those shared bikes are an eyesore and a mess for traffic, they get thrown up and literally stacked up on walking paths, and when parked half properly in busy areas they cut largely on already jammed streets. Authorities try and regulate them, including ban new bikes, yet the bike companies appear to unload trucks full of bikes on the pavement at night. But i'd never seen pictures of such graveyards before. Impressive. Lots and lots of broken bright colored bikes all over the city, quite a mess.
I completely agree with this view. As much as I enjoy @Stockolio 's analysis, its impossible to predict how it ends when the powers have so much leeway with how they handle the situation.
People keep asking how come the housing market hasn't crashed in places like Vancouver or Toronto when the fundamentals don't support the prices. I think when you take into account the influx of both immigrants, and also the unprecedented low interest rates for so long, you end up with the runaway prices that could not have been predicted. These interest rates were nowhere to be seen if you use historical data, so nobody assumed they could be so low for so long.
Likewise, the most logical thing to happen when debt is out of hand, (ie. default), is probably not how this all ends. Either it ends in a war of some sort, which in many ways will almost stimulate an economy, or it will be a forever sideways market, much longer than anyone ever thought possible. And of course, its more than likely that I am wrong as well.
Uh oh it looks like professional risk management associate has spoken
. It was a worthy attempt though, the pros are wrong once or twice in a decade after all!
up-voted although I have no opinion to agree or not yet but the thesis tells something to think deep.
Neither... have you considered the fact that like Japan most of debt in China is domestic debt?
Are you comparing Japan's Economy to China Economy ? Haha
Japan Economy is zombie but very well diversified and the multinationals of Japan are export powerhouses... China's Economy is the printing press and cheap labour to US, but now multinationals are moving away... China is no longer the cheapest labour, the factory workers earn double since 2010 due to very high inflation in country, employers were forced to increase salaries ( 500 US a month average salary now ), the days of being the cheapest labour are done, have been done... But to keep getting international business, companies have been operating at steep loses and using business loans as a piggy bank, hoping for a miracle that the debt disappears ... Like Evergrande, the biggest Real Estate Builder in China, has equivalent to 108 Billion US in debt, how can you suck so badly at business that you rack up this much debt without doing any acquisitions ?
Read into the amount of companies leaving China, 3D Printing and Automation is destroying them... Look at chart in page 1 I posted, showing account deficit... Why are state owned firms getting loans in International Markets, in US Dollars, if they can keep printing forever like you say ? Ever thought that China is so low on US Dollars, they are using there SOEs to obtain loans in US Dollars, swap them once in, to keep Reserves above the minimum of 1.5 Trillion ? What happens when they start defaulting on US Issued Debt like you will see in Q4 2019 and in 2020 ? Foreign investors flee bond markets, US Issued debt stops completely, then game over
Who else wants to get schooled ? Next!
https://asia.nikkei.com/Economy/China-s-1.4tn-distressed-debt-pool-draws-global-buyers2
The slowdown is deteriorating asset managers' ability to clear these debts off banks' books. One of these companies, China Huarong Asset Management, suffered a 90% drop in net profit last year.
On the surface, Chinese banks appear to be healthy with capital ratios of more than 10%. The rate of nonperforming loans, however, has risen to 10% to 20% at some small banks, which could tear a hole in country's financial system.
The slowdown is deteriorating asset managers' ability to clear these debts off banks' books. One of these companies, China Huarong Asset Management, suffered a 90% drop in net profit last year.
On the surface, Chinese banks appear to be healthy with capital ratios of more than 10%. The rate of nonperforming loans, however, has risen to 10% to 20% at some small banks, which could tear a hole in country's financial system.
@Stockolio So are you going to post your positions on this China short or keep giving us pdfs and spreadsheets?
If you are trying to pitch for capital you are in the wrong place.
If you are trying to pitch for capital you are in the wrong place.