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ADBOT LOVES YOU
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May 16, 2024 20:21
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- namaste friends
- Sep 18, 2004
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by Smythe
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lol 6.9% GDP growth u guys
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Oct 19, 2015 03:14
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- I would blow Dane Cook
- Dec 26, 2008
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lol 6.9% GDP growth u guys
Beat the forecasts again, how do they keep doing it?????
lol
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Oct 19, 2015 03:23
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- namaste friends
- Sep 18, 2004
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by Smythe
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Beat the forecasts again, how do they keep doing it?????
lol
probably the same way magnets work
in other news, you guys read about that massacre in xinjian? Of course not. lmao
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Oct 19, 2015 03:30
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- Artificer
- Apr 8, 2010
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You're going to try ponies and you're. Going. To. LOVE. ME!!
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lol 6.9% GDP growth u guys
Wait, where did they release that?
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Oct 19, 2015 03:33
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- coma
- Oct 21, 2010
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Wait, where did they release that?
...everywhere? It's the major economics stat to be reported this month besides all the U.S. quarterly earnings this week
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Oct 19, 2015 03:34
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- I would blow Dane Cook
- Dec 26, 2008
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Wait, where did they release that?
Ancient Chinese secret
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Oct 19, 2015 03:38
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.economist.com/blogs/freeexchange/2015/10/chinas-economy
quote:
Rate cut shows that even China's government doesn't believe its own data
IF GROWTH is so strong, why did the Chinese central bank feel the need to cut interest rates again? It is only reasonable to ask this after the People's Bank of China cut rates on October 23rd, the sixth time in a year, in the same week that the government said the economy grew 6.9% year-on-year in the third quarter, ahead of market expectations. The answer lies in the question: growth is not as strong as official data suggest, and the government knows that.
Nominal growth has slowed to 6.2%, the weakest since 1999, translating directly into weak cash flow for companies that already face heavy debt burdens. The industrial sector has been especially hard hit, with the country's northern rustbelt on the brink of a recession. And more than a percentage point of overall growth this year has stemmed from activity in the financial sector, a contribution that will fall away quickly in the wake of this summer's stockmarket collapse. Many analysts reckon real growth is closer to 5-6%, well shy of the government's 7% target. More than three years' worth of producer price deflation tilt risks to the downside.
If that all seems bleak, it is important to put the rate cut in the proper context. Paired with a reduction of bank's reserve requirements, and coming unscheduled on the evening of October 23rd, it might have appeared to be a surprise move. But all Chinese monetary policy moves are, strictly speaking, surprises. The central bank does not hold scheduled meetings and it often waits until the weekend to make big announcements, giving the market time to digest the implications. Over the past year it has settled into something of a rhythm, cutting rates every two months or so.
This latest easing is also a reminder that the central bank has actually been cautious thus far, leaving itself plenty of space if it wants to deliver more easing. Even after the succession of cuts, one-year benchmark lending rates stand at 4.35%. Big banks must still set aside 17% of their deposits as reserves. Indeed, most analysts and investors expect the central bank to continue to trim both into early next year, until it is satisfied that the economy is stabilising.
There have in fact been some tentative signs of improvement. Property sales have picked up and that has begun to filter into more construction, though primarily in bigger cities. A push for infrastructure investment has gained traction. Income growth and consumption, meanwhile, have so far remained resilient, showing little lasting impact from the stockmarket meltdown. All that helps explain why China's stimulus moves, both fiscal and monetary, have come in small doses over the past year. Growth is slower than advertised, but the bottom is not falling out.
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Oct 26, 2015 03:51
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- I would blow Dane Cook
- Dec 26, 2008
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http://www.zerohedge.com/news/2015-10-23/we-now-have-eta-when-biggest-bond-bubble-world-will-burst
Some good China economy lols here. Even as companies are starting to default more and more money is piling into bonds because the government is expected to bail them out.
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Oct 26, 2015 06:20
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- Spazzle
- Jul 5, 2003
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What evidence do we even have that the chinese economy is growing right now?
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Oct 26, 2015 14:08
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- pentyne
- Nov 7, 2012
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What evidence do we even have that the chinese economy is growing right now?
no why
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Oct 26, 2015 21:47
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- Ardennes
- May 12, 2002
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What evidence do we even have that the chinese economy is growing right now?
Electricity usage shrunk 3% which doesn't sound like gangbusters growth for a developing country.
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Oct 26, 2015 21:51
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- Spazzle
- Jul 5, 2003
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Because every article says something like "the 7% figure is bogus, probly 5-6%"
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Oct 26, 2015 22:17
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- I would blow Dane Cook
- Dec 26, 2008
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quote:
Chinese property investors turn sub-prime?
The AFR has reported that one of China’s biggest financial institutions, the banking division of PingAn Insurance, has been offering Chinese investors zero deposit home loans for off-the-plan apartments in Melbourne and the Gold Coast in a move that could stoke further demand from offshore buyers and potentially extend the apartment glut that is developing across Australia’s cities:
“Become an Australian property owner with zero down payment,” said one slide displayed at the [Shanghai] conference. “Join hands with PingAn and realise your overseas property dream,” said another…
“It will open up the Australian property market to a whole new class of investors,” said Eddie Yuen, the Shanghai-based manager of Austpac. “Investors may not have the cash now, but they can still buy a property in Australia”…
PingAn would typically lend Chinese investors the 30 per cent required for the down payment and the remainder would be financed by an Australian bank.
…there was also a risk for developers selling off-the-plan apartments, as some buyers would be tempted to walk away from their initial down payment if prices had not risen at the time of settlement.
A separate article at The AFR notes that the interest rate on the loans offered by PingAn Insurance is 14% for two years, and covers only the initial 10% deposit amount. At the time of settlement, Ping An would then extend 30% of the property’s value to the borrower, who would then seek the remaining 70% financing from an Australian bank.
As noted above, the development greatly heightens risk in the apartment sector. No deposit loans are more likely to attract speculators punting on capital growth, rather than for personal reasons (e.g. future retirement, residency or a child’s education). And without any ‘skin-in-the-game’, these buyers would be more likely to walk away from settlement if prices and the currency do not move their way, which seems likely given the apartment gluts developing in Melbourne and Queensland along with the headwinds for the Aussie dollar.
On the other hand, the move could also significantly increase demand from Chinese buyers, thereby extending the apartment construction boom a little longer, exacerbating the apartment oversupply, and delaying the shock to jobs as dwelling construction declines, which has been tipped to occur from mid-2016.
http://www.macrobusiness.com.au/2015/10/chinese-property-investors-turn-sub-prime/
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Oct 27, 2015 03:00
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.bloomberg.com/news/articles/2015-10-19/the-great-ball-of-china-money-rolls-into-bonds
quote:
The Great Ball of China Money Rolls Into Bonds
Bringing leverage and distortion in its wake.
China's markets resemble nothing if not a great rolling ball of money that moves from asset class to asset class, constantly searching for the next source of sizable returns.
After shifting away from stocks this summer, when the value of the Shanghai Composite Index almost halved in a dramatic market selloff, the Great Ball of China seems to have found a new home: bonds sold by Chinese corporates.
The strength of the switch into corporate credit is underscored in a new report from Zhi Ming Zhang, director of asset allocation research at HSBC, and financial analyst Helen Huang, who argue that the links between China's credit market and other parts of its financial system have been strengthening.
While the daily turnover of A-shares — shares generally reserved for mainland Chinese investors — has shrunk to a quarter of what it was at the market's peak, a major hallmark of Chinese markets has already been making its way into corporate credit: namely, leverage.
"Since the equity market slide started in July 2015 and liquidity switched from equity to credit products, there has been a growing leveraged investment in corporate bonds listed on the exchange market," the two analysts note.
Where China's retail investors traded stock on margin, when it comes to corporate bonds investors appear to be using a different form of leverage known as repo. Repoing bonds allows investors to effectively pawn the securities in exchange for short-term loans that can be used to buy additional assets.
According to HSBC, the daily volume of one-day repos on the Shanghai Stock Exchange has doubled since 2014, indicating investors are using that particular form of leverage to juice their returns. Meanwhile, structured products that allow investors in more junior tranches to leverage on the senior slices have also appeared, effectively allowing investments to be leveraged by as much as 10 times.
That has culminated in a rather topsy-turvy effect for China's corporate credit market.
Where the yield for five-year AAA-rated exchange-traded corporate bonds was about 70 basis points higher than the yield on Chinese government bonds as recently as July of this year, it compressed to as little as 10bps in September.
One Chinese company — a property developer known as China Vanke — managed that month to sell a 5 billion yuan ($785 million) bond at a yield of 3.5 percent. That was 4 basis points lower than the yield of China Development Bank bonds that effectively come with a government guarantee and a zero risk weighting, meaning investors are asking for less of a return to hold China Vanke debt.
All of which indicates that China's Great Ball of money has well and truly arrived in the corporate credit space, and has carried with it its hallmark distortive effects.
Meanwhile, Zhang and Huang argue that the growing intricacy of China's credit markets, and its entwining with other areas of the country's financial system, demands a new approach from policymakers.
"This new normal is not just simply about slower growth but also the increasing sophistication and linkages between different economic and financial factors and asset classes," they write. "In turn, a wider group of asset classes now requires policy support to ensure the smooth functioning of the financial system. This explains why policy is becoming more experimental — entering uncharted territory requires new thinking."
I don't fully understand what's going on in this article so if someone can better explain it, please do.
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Oct 27, 2015 05:35
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- I would blow Dane Cook
- Dec 26, 2008
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Another speculative frenzy, made worse by the expectation that the government will bail out any defaults.
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Oct 27, 2015 05:41
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- The Lord of Hats
- Aug 22, 2010
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Hello, yes! Is being very good day for posting, no?
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Welp. It was nice knowing you, Australia, enjoy the impending implosion of your housing and construction sectors. Really, you're just being fashionably late to that particular party.
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Oct 27, 2015 05:57
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- Bip Roberts
- Mar 29, 2005
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I'm not sure if China is the worst or best capitalist country.
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Oct 27, 2015 06:26
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- ocrumsprug
- Sep 23, 2010
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by LITERALLY AN ADMIN
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I'm not sure if China is the worst or best capitalist country.
I think it may be both.
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Oct 27, 2015 06:32
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- Yadoppsi
- May 10, 2009
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70% worst, 30% best.
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Oct 27, 2015 15:25
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- point of return
- Aug 13, 2011
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by exmarx
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Oct 28, 2015 05:45
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- Spacehams
- Jun 3, 2007
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sometimes people are mean, and I think they should try being nice
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Grimey Drawer
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Apparently President Xi's new style is a dystopian Schoolhouse Rock.
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Oct 28, 2015 16:23
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- dr_rat
- Jun 4, 2001
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I have now completely lost interest in what china's going to do.
I also never again want to hear the words 十三五.
....十三五, 十三五.
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Oct 28, 2015 16:44
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- Ardennes
- May 12, 2002
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The final evolution of Portlandia is a bit hosed up, but seriously I love (hate?) how so much comes together from 20th century and the 21st century into one mind numbing package.
Ardennes fucked around with this message at 20:36 on Oct 28, 2015
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Oct 28, 2015 20:22
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- I would blow Dane Cook
- Dec 26, 2008
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Shisanwu has replaced Hotline Bling as the annoying song stuck in my head, take that Drake!
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Oct 29, 2015 00:36
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- Deep State of Mind
- Jul 30, 2006
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"It was a busy day. I do not remember it all. In the morning, I thought I had lost my wallet. Then we went swimming and either overthrew a government or started a pro-American radio station. I can't really remember."
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Fun Shoe
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We will complete the Five Year Plan in four years!
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Oct 29, 2015 02:09
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- namaste friends
- Sep 18, 2004
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by Smythe
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http://www.bloomberg.com/news/articles/2015-10-28/china-steel-chief-says-demand-evaporating-at-unprecedented-speed
quote:
China Steel Head Says Demand Slumping at Unprecedented Speed
If anyone doubted the magnitude of the crisis facing the world’s largest steel industry, listening to Zhu Jimin would put them right, fast.
Demand is collapsing along with prices, banks are tightening lending and losses are stacking up, the deputy head of the China Iron & Steel Association said on Wednesday.
“Production cuts are slower than the contraction in demand, therefore oversupply is worsening,” said Zhu at a quarterly briefing in Beijing by the main producers’ group. “Although China has cut interest rates many times recently, steel mills said their funding costs have actually gone up.”
China’s mills -- which produce about half of worldwide output -- are battling against oversupply and sinking prices as local consumption shrinks for the first time in a generation amid a property-led slowdown. The fallout from the steelmakers’ struggles is hurting iron ore prices and boosting trade tensions as mills seek to sell their surplus overseas. Shanghai Baosteel Group Corp. forecast last week that China’s steel production may eventually shrink 20 percent, matching the experience seen in the U.S. and elsewhere.
“China’s steel demand evaporated at unprecedented speed as the nation’s economic growth slowed,” Zhu said. “As demand quickly contracted, steel mills are lowering prices in competition to get contracts.”
Making Losses
Medium- and large-sized mills incurred losses of 28.1 billion yuan ($4.4 billion) in the first nine months of this year, according to a statement from CISA. Steel demand in China shrank 8.7 percent in September on-year, it said.
Signs of corporate difficulties are mounting. Producer Angang Steel Co. warned this month it expects to swing to a loss in the third quarter on lower product prices and foreign-exchange losses. The company’s Hong Kong stock has lost more than half its value this year. Last week, Sinosteel Co., a state-owned steel trader, failed to pay interest due on bonds maturing in 2017.
Crude steel output in the country fell 2.1 percent to 608.9 million tons in the first nine months of this year, while exports jumped 27 percent to 83.1 million tons, official data
show. Steel rebar futures in Shanghai sank to a record on Wednesday as local iron ore prices fell to a three-month low.
Worst Conditions
China’s mills face some of their worst conditions ever and the vast majority are losing money, Citigroup Inc. said in September. The outlook is the worst ever amid unprecedented losses, Macquarie Group Ltd. said this month.
China’s steel production may contract by a fifth should the country’s path follow the Europe, the U.S. and Japan, Shanghai Baosteel Group Chairman Xu Lejiang told reporters in Shanghai last week. The company is China’s second-largest mill by output.
“Financing remains an acute problem as banks strictly restricted lending to the steel sector,” Zhu said. “Many mills found their loans difficult to extend or were asked to pay higher interest.”
You know what they should do? Use all that steel to build stoves and farming equipment for the workers in the countryside
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Oct 29, 2015 04:10
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- I would blow Dane Cook
- Dec 26, 2008
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quote:
China’s ruling Communist Party will lift its more than three-decade-old one-child policy as President Xi Jinping rolled out his blueprint to manage the economy’s shift to slower, more balanced growth.
The party’s decision-making Central Committee approved plans to allow all couples in China to have two children, the official Xinhua News Agency said Thursday at the end of a four-day party gathering in Beijing.
http://www.bloomberg.com/news/articles/2015-10-29/china-abandons-three-decade-old-one-child-policy-to-lift-growth
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Oct 29, 2015 11:42
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- Adbot
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ADBOT LOVES YOU
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May 16, 2024 20:21
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- Ardennes
- May 12, 2002
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It has been in the cards for a while, but I think the recent crisis has caught them flatfooted. Also, it is going to take 18 years before that new generation comes of age, a bit too late to save Chinese growth.
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Oct 29, 2015 13:23
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Oct 15, 2015 04:58
My bad.
