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Old 01-22-2019, 04:41 AM
Danny B Danny B is online now
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Join Date: Oct 2012
Location: L.A. Ca.
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China roundup,, BAD news

You know by now that a crash in China will really upset the apple cart. Here is a repost of a few numbers.
Finally, nonfinancial corporate debt rose from $24 trillion to $73 trillion (71% of GDP to 92%)
Bank loans were up 13.5% over the past year"
So bank loans are up but, productivity is down. Where did the money go?
"1/20 China slump squeezes workers, hammers consumer spending – APN"
1/20 China posts slowest growth in 28 years in 2018, more stimulus seen

China developed foreign markets but, lost them from undercutting the wages / consumptive power of their customers. That means that they have to focus more on domestic consumption.
1/21 The number of births in China hit its lowest level since 1961 – CNBC

Read Martin Armstrong and, you get another story.

Much had been talked about last week about the slowdown in China and on Sundays release we finally saw the latest. China GDP released at 6.4% but industrial output beat expectations. Both domestic and regional markets took this news as positive, as it tends to reflect a manageable slowdown rather than the feared ‘hard-landing’. Both Shanghai and the Hang Seng gave up early gains, but still finished up +0.56% and +0.39% respectively."

"Nobody knows for sure, but when we look at things that are harder numbers to fudge...our estimate is growth probably about 3.5 percent versus roughly 7," said Gary Shilling, "
China's Xinhua reported that November railways cargo fell 15.6 percent year on year, but the state statistics office said industrial production through the year was up 6.1 percent. "What? Did they just produce the goods and leave them on the factory floor and they never went anywhere?" Scissors asked.
"It doesn't take a rocket scientist to figure out the growth in old China for the past year or so has been somewhere around zero — it's nothing like 6.8 percent," Straszheim said,

"January 15 – Bloomberg: “China’s credit growth exceeded expectations in December, with the second acceleration in a row indicating the government and central bank’s efforts to spur lending are having an effect. Aggregate financing was 1.59 trillion ($235 billion) in December, the People’s Bank of China said on Tuesday. That compares with an estimated 1.3 trillion yuan in a Bloomberg survey.”
"South China Morning Post (Amanda Lee): “China’s banks extended a record 16.17 trillion yuan (US$2.4 trillion) in net new loans last year…, as policymakers pushed lenders to fund cash-strapped firms to prop up the slowing economy. "

China cuts refiners' oil import quotas with first 2019 allowances | Reuters
China's commodities imports falls highlighting economic weakness .

Oil & commodity and rail car loadings falling bad.

"In addition, debt issued by private enterprises increased by 70% year-on-year from November to December last year, indicating that the central bank’s efforts to support the private sector are working.”
So, debt is increasing but, imports, productivity and exports are falling.
" Bank loans were up 13.5% over the past year and were 28% higher over two years, a precarious late-cycle inflation of Bank Credit. Ominously paralleling late-cycle U.S. mortgage finance Bubble excess, China’s Consumer Loans expanded 18.2% over the past year, 44% in two years, 77% in three years and 141% in five years. China’s industrial sector has slowed"

"Typically – and as experienced in the U.S. with problems erupting in subprime – nervous lenders and a tightening of mortgage Credit mark an inflection point followed by self-reinforcing downturns in housing prices, transactions and mortgage Credit. Yet there is nothing remotely typical when it comes to China’s Bubble. Instead of caution, lenders have looked to residential lending as a preferred (versus business) means of achieving government-dictated lending targets. Failing to learn from the dreadful U.S. experience, Beijing has used an inflating housing Bubble to compensate for structural economic shortcomings (i.e. manufacturing over-capacity). This is precariously prolonging “Terminal Phase” excess."
To sum up, China built way too many factories and now has decided to pay for the related costs by inflating a housing bubble. That doesn’t sound very smart.

But China’s screw-up is just one in a very big crowd. Noland points out that the other emerging market economies are doing something similar:
Remember that newly printed money is counted as part of the gdp.

2017--- China's debt surpasses 300 percent of GDP, IIF says
The problem is simple but, unsolvable.
Wiki " The Chinese government is also demolishing rural villages and building new cities and towns to relocate villagers to. It ultimately aims to integrate about 70% of China's population, about 900 million people, into cities by 2025.[8]"
"China's urbanization took 22 years to increase to 39.1% from 17.9%. It took Britain 120 years, the US 80 years, and Japan more than 30 years to accomplish this."

China needs to create 15 million jobs every year.
China to add more than 50 million new urban jobs in 2016-2020 ...

Their gdp has gone negative. Population is falling. China has replaced real commerce with simple money printing.

China Housing Crash | The Coming Bubble Collapse - Gord Collins
Forget the Trade War. China Is Already in Crisis - Bloomberg
China's Coming Financial Crisis and the National Security Connection

Trump is singing to China;
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