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The Great Wall Of China—Its Economy—Is In Tatters

A weekend topic starting with South China Morning Post. “The catastrophic crash in Country Garden Holdings, once the gold standard in China’s property industry, has cost stock and bond investors steep losses. Nearly half of Country Garden’s liabilities at the end of last year were presale deposits from homebuyers, according to Barclays. ‘This not only means that nearly a million households could be affected by Country Garden’s debt issues, but also indicates that Country Garden would need to invest four times the amount Evergrande has done to ensure project completion and prevent pre-sold homes being undelivered,’ Nomura analysts including Lu Ting said.”

“The confidence hit to homebuyers and investors if Country Garden defaults could be even harder than that delivered by Evergrande, according to S&P Global Ratings, given that the macro environment is very different from three years ago and confidence among homebuyers is very fragile. ‘They will think twice when buying,’ said Lawrence Lu, senior director and analytical manager of S&P’s China properties and conglomerates team. ‘Why not wait for a bigger discount? Will I get into trouble if I buy now? Can they deliver homes on time? Why don’t I wait for a sale of existing projects.'”

The New York Times. “Once a beneficiary of China’s property boom, Lan Mingqiang is an unwitting casualty of its unravelling. The financial troubles at one real estate company, Country Garden, have left him unable to pay the school fees for his son, who is starting seventh grade. Country Garden owes US$21,000 to his company, which makes fences and billboards on construction sites. Now, with Country Garden days away from a default, this money is more out of reach than ever. ‘Nowadays, real estate is hard,’ Lan said. He recently gave up on the business and left his family in the southern city of Chongqing to try to make a living selling snacks to tourists in Zhengzhou, a city in the north of China.”

“Lan is just one in a long line of people waiting to get paid by Chinese property developers. A move by regulators to deflate a property bubble and China’s slowing economy have accelerated a crisis that is spreading to all corners of life. As a group, suppliers are waiting on at least US$390 billion in payments, according to the research firm Gavekal Research. And that’s a conservative estimate; the number is probably larger.”

“At first, some developers were able to keep going, even as they failed to make good on their obligations. They found other ways to compensate suppliers. China Evergrande, the behemoth that defaulted on hundreds of billions of dollars of debt in 2021, repaid some of its suppliers with unfinished apartments instead of cash, on the theory the suppliers could sell them to reclaim the money they were owed. These days, even bartering is no longer an option. ‘Such apartments have run out; we can’t get them,’ said Han Tao, a manager at a landscaping company that is owed US$1.4 million from property developers. For Han, apartments wouldn’t have been that useful anyway; no one is buying them right now.”

“Liao Hongmei spent years in a legal battle to try to get US$690,000 from China Evergrande. She even won. But Evergrande still hasn’t paid her and, in her view, businesses the size of hers will probably never get the money they are owed. Liao said that she hoped that once Evergrande finishes the apartments it owes homebuyers, there would still be something left for people like herself. ‘A little money,’ Liao said, is her only request. ‘But it doesn’t seem like that is going to happen.'”

From Newsweek. “The Chinese property sector is in such a state, currently, that cities across the country are now waiving credit reports ahead of mortgage lending, according to state media reports. Max J. Zenglein, chief economist at the Mercator Institute for China Studies (MERICS), said: ‘The Chinese economy is currently facing a broad, cyclical, and structural downturn. The leadership underestimated how the combination of diminishing economic prospects and geopolitical risks weighed down consumer sentiment. In contrast to past downturns there is little appetite for shoring up economic growth by rolling out a massive stimulus. The government is trying to provide a floor for the real estate sector as it must cushion the financial impact on highly leveraged real estate developers and local governments. The move should not be seen as a return to old habits. The real estate sector is currently painfully but purposely being downsized.'”

From The Print. “When university students in China donned their graduation robes this summer, many did not pose for the usual photos depicting jubilation and victory. Instead, they flooded social media platforms with snaps hinting at dejection and despair. Some posed as corpses, others appeared to bin their graduation theses. These viral photos were the result of one of China’s most pressing economic challenges: the alarmingly high youth unemployment rate, which soared to 21.4 per cent in June, when the 11.6 million newly minted college graduates were poised to enter the job market. The Chinese government responded to the students’ despair by suspending the public release of unemployment data from July. Similarly, vital economic reports, such as for exports and cement production, have also either disappeared or become ‘corrupted,’ reported Insider.”

“‘The government in Beijing has always come out with a stimulus package in the event of an economic crisis. But this time there is no bazooka of sorts, further dampening business sentiment,’ said Sriparna Pathak, an associate professor of Chinese studies at O.P. Jindal Global University.”

From Vox. “Vox called up Stephen Morgan, a professor emeritus of Chinese Economic History at the University of Nottingham, who wrote a book on the Chinese economy. ‘Investment is largely going into, as I said, infrastructure, real estate. At present, probably about 40 percent of that is unproductive. One way to think of that is “bridges to nowhere.” The thing about investment is it doesn’t matter whether the bridge goes to nowhere or it actually serves a purpose. It produces GDP growth.'”

“‘When I was living in China, between 2013 and 2020, in Ningbo, I used to take the bus to work every day. The bus stops between my apartment and the university were rebuilt three times — three times in about six years. The first time they needed rebuilding. The second time, there were some nice improvements, like electronic boards that told you when the bus was going to come. The third time they rebuilt all the bus stops with so much steel you would need a tank to knock them down. Other than that, there was very little welfare benefit. That’s wasted investment.'”

“‘This increase in investment means that local government has to get the money from somewhere. Basically, it gets that through loans and bonds and so on. Debt levels have gone up. They don’t really matter, unless they have to be settled. And that’s the problem. They haven’t been settled. They just keep on being pushed out. The Chinese investment-led model ran out of steam quite a few years ago but it’s been kept going because there’s been a reluctance to try to shift from investment to consumption. The reason for that is what it will mean. You’ve got to transfer assets and cash from the corporate sector and the government sector to the household. That means that corporations, like big property developments, local governments, and so on, are not going to have the resources they previously had. There’s no evidence that Xi and the party are listening and engaging in imaginative policies to shift resources from corporations and the government sector to the household sector. ‘”

From CBC News. “‘We could possibly be at a crossroads where things could turn in a direction we haven’t seen for a while,’ said Steve Tsang, director of the China Institute at the University of London’s School of Oriental and African Studies. Most China watchers, including those I spoke to, stop short of expecting anything like a new Chinese revolution. But as Gordon Houlden, director emeritus at the University of Alberta’s China Institute, told me, accidents can happen. After 30 years of spectacular market-led economic growth that raised living standards, based partly on a glut of public spending, the country is suffering from financial indigestion.”

“And while the whole world may have a similar malady, as outlined by commentator Martin Wolf in his recent book on the important links between politics and business, what he calls ‘China’s form of despotic capitalism’ may be dangerously brittle. ‘The move towards an Orwellian ‘Big Brother’ society, in which surveillance technology is employed by the party-state down to the very last individual, may work. But it is terrifying, threatening to crush the human desire for autonomy and self-expression,’ Wolf wrote in The Crisis in Democratic Capitalism, published earlier this year.”

From Defence News. “In the wake of China’s plummeting economic indicators, economists have been debating the ‘economic collapse’ of China. Paul Krugman, in an opinion column in the New York Times, posits that China’s economic stumble is systemic and holds China’s resistance to reforms responsible for it. However, he argues that even if the ‘Chinese leadership seems to be growing more autocratic and more erratic with each passing year,’ he believes that they will push through those reforms and ‘put more income in the hands of families, so that rising consumption can take the place of unsustainable investment.'”

“This argument has been trashed by John Ross, a senior fellow at Chongyang Institute for Financial Studies, Renmin University of China. Ian Johnson, in a recent article in Foreign Affairs, prefers to call it Xi’s Age of Stagnation or ‘new national stasis,’ or involution (内卷). Unlike Krugman, he sees the root cause for China’s economic troubles in ‘political ossification and ideological hardening.'”

“This perspective matches that of Liu Mengxiong, former member of China’s CPPCC, who in an attack on Chinese leadership said that the reason for China’s recent ‘downward economic spiral’ lies in economy, “but the root cause is the politics.” He argued that the three engines of investment, consumption and exports of China’s growth story have run out of steam (动力不足) and even could come to a grinding halt (死火). Citing the figures of the National Bureau of Statistics (NBS) for July 2023, he said these showed deflationary trends. According to Liu, in the second quarter, the amount of foreign investment in China touched only US$4.9 billion, down 87% compared to the previous year. Now the ‘new three engines of growth’ according to him are the NBS, the Central Publicity Department of the CPC and the Xinhua News Agency. Adam Posen, in an article in the Foreign Affairs also argued that it was the ‘end of China’s economic miracle.'”

New Indian Express. “The Great Wall of China—its economy—is in tatters. Analysts of all hues and colours are busy writing epitaphs of the Chinese economy, which was hitherto considered unstoppable. By now, all of us would have heard about China’s ‘ghost cities’ and ‘ghost factories’. According to many reports and estimates, around 65 million homes in different Chinese cities remain unoccupied. The vacancy rate in China is 12 per cent, second only to Japan (with a 13 per cent vacancy rate). Large parts of many Chinese cities with connected roads, public spaces, and skyscrapers remain uninhabited. A Wall Street Journal report cited an example of the country’s excessive infrastructure overspending. The report talks about one of China’s poorest provinces Guizhou, which boasts 1,700 bridges, and 11 airports. The province has a total debt of USD 388 billion, and in April it asked for more finances from the Central government.”

“More than its decreasing population, its ageing population is a bigger concern for the country. Those in the working age population (15-64 years) account for 69 per cent of the country’s population, which according to Moody’s is likely to drop 6 percentage points by 2040.”

“China followed the one-child policy from 1980 till 2016, and while it helped the country keep its population in check, it also created a demographic crisis. It junked the policy in 2016 but it was probably too late. The country’s working-age population, which had peaked in 2011 at 900 million, has been shrinking ever since. By 2050, China’s working-age population might fall to 700 million. According to Brookings, these 700 million working-age population might be supporting 500 million Chinese aged above 60 years, who are currently estimated at 200 million.”

The Globe and Mail. “On a recent afternoon, 24-year-old Sharon Guan joined a sea of people queuing outside Yonghe Temple, a Tibetan Buddhist monastery in central Beijing, just north of the Forbidden City. Dating to the Qing dynasty, the temple has always been a popular tourist site for those visiting the Chinese capital. But Ms. Guan had not flown an hour from her home in Shanxi province to admire the ornate architecture or golden statues – she had come to pray for a job.”

“‘I don’t believe in God, but the current environment forces me to,’ she told The Globe and Mail. ‘I read a lot of people’s posts online saying that after they worshipped at the temple, they not only found a job but a high-paying one.'”

“Ms. Guan, who graduated from a master’s program this year, is not alone in struggling to find work. In July, the government revealed the unemployment rate among 16- to 24-year-olds had hit a record 21.3 per cent the previous month; in August, it stopped publishing joblessness data, citing a ‘constantly developing and changing’ economy. Even if the figures were released, they would not encapsulate the true size of the problem: Government data only cover those actively seeking work and do not take into account young people in rural areas. In an article that was later censored, Peking University economics professor Zhang Dandan estimated in July that some 16 million young people had dropped out of the rat race entirely; were they included in the government’s figures, the actual unemployment rate among the young would be closer to 50 per cent.”

“‘I feel like my education is useless,’ Ms. Guan said. After reaching out to ‘200 to 300 employers’ through an online hiring platform, she said, she only heard back from a handful, none of which invited her for an interview.”

“Her generation is the best-educated in Chinese history. The number of young people enrolled in postsecondary education hit 60 per cent last year, double the rate of a decade ago. It is also a generation that has only known a growing – often booming – economy, in which going to a top university and getting a good degree was the ticket to a high-paying job and secure life.”

“Those expectations ran into a wall in 2020. The pandemic, combined with government crackdowns on the tech and tutoring sectors, which employed large numbers of graduates, wiped out millions of white-collar jobs. Many young people were encouraged to delay entering the job market and complete advanced degrees instead, but that has only added to the glut of highly educated job seekers, with millions more due to graduate next month.”

“Chinese officials, including President Xi Jinping, have offered little sympathy, entreating young people to ‘eat bitter’ as their parents did, while state media have profiled university graduates who have taken on menial jobs such as street sweeping or moved to the countryside. On social media, the Communist Youth League said graduates need to ‘roll up their trousers and go down to the fields.'”

“Zhang Wenwen, a 23-year-old recent graduate from Xuzhou, in Jiangsu province, moved to Beijing at the start of August to look for work. Most jobs offered salaries of about 3,000 yuan ($560) a month, she said, ‘which is not enough to make ends meet.’ The average salary in Beijing is about 16,000 yuan, according to state media. Ms. Zhang – who lives with her aunt and doesn’t pay rent – said she found some work on Xianyu, a spinoff of Alibaba’s e-commerce platform Taobao, making a few hundred yuan a day to run errands or help people make decisions, such as where to go on holiday.”

“Even low-level gig work is becoming increasingly competitive, however. Ms. Zhang said she’d heard of others making good money walking dogs or feeding pets while the owners were at work. But she hasn’t bothered offering such services on her own profile, ‘as the market is saturated now.’ ‘I didn’t think it would be this hard to find a job while I was in college,’ she said. ‘We were just very unlucky to graduate at this time.'”

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This Post Has 101 Comments

  2. ‘A little money,’ Liao said, is her only request. ‘But it doesn’t seem like that is going to happen.’”

    When housing losses we must eat
    Let us stamp our little feet!

  3. “When university students in China donned their graduation robes this summer, many did not pose for the usual photos depicting jubilation and victory. Instead, they flooded social media platforms with snaps hinting at dejection and despair.

    Maybe it’s time to overthrow your corrupt, evil CCP overlords.

    2. Too many schools (all planned by the central government), which dilutes the value of a degree from a non elite school.

    3. The last time the Chinese overthrew their corrupt overlords…they got a little help from communist Russia…

  4. On social media, the Communist Youth League said graduates need to ‘roll up their trousers and go down to the fields.’”

    That’ll motivate ’em!

    2. “On social media, the Communist Youth League said graduates need to ‘roll up their trousers and go down to the fields.”

      Sounds like PPU, i.e., Pol Pot University.

    3. On social media, the Communist Youth League said graduates need to ‘roll up their trousers and go down to the fields.’”

      Just buy a couple Dogecoin and retire. Oh, wait…..

  6. finding a good job is relative to who you know , not how many applications you fill out, dozens if not hundreds of them…..often they advertise openings just to fill in the blanks, when they’ve already got several people lined up……
    People around Reno should be out this morning ,hauling muddy hippies out of that wierd burning man thing , for a price of course ….

    1. Let the hippies stew in their own juice. Maybe next time they could check out the weather forecast.

  8. “The move towards an Orwellian ‘Big Brother’ society, in which surveillance technology is employed by the party-state down to the very last individual, may work. But it is terrifying, threatening to crush the human desire for autonomy and self-expression”

    Never forget, all the pro lockdown politicians and unelected bureaucrats want to implement this in the United States.

    They thought they could do it with CCP Flu. After the Canadian trucker convoy brought Ottawa to halt for a week, a Freedom Convoy started here in the U.S. driving to D.C. (replete with Antifa communist terrorists throwing rocks at them from bridges).

    As it gained momentum and participants, the lockdown and vaccine mandate narratives started to collapse. Unlike Canada, we have (what’s left of) the Constitution and 300+ million guns in the hands of civilians.

    #DoNotComply

  9. “Beijing has always come out with a stimulus package in the event of an economic crisis. But this time there is no bazooka”

    I’m sure the reason most keep recklessly spending here is that they too are expecting stimulus bazooka to show itself before things get desperate. Ain’t gonna happen.

  10. When Tesla slashes prices, as it did this week, shoppers looking for electric vehicles generally benefit. But for anyone who buys a Tesla right before such price cuts, the frustration can be acute. Waiting just a little longer to buy, after all, could have saved them a significant amount of money—but they had no way of knowing.

    One tweet posted on Friday reads: “Tesla screws with people so much when they drop price by $20k+. I just picked up my Model S Plaid one day ago, drove less than 100 miles on it and I’m shafted by over $20k. TESLA NEVER AGAIN.”

    That followed Tesla dramatically dropping the price—by about $18,500—of the Plaid versions of its Model X SUV and Model S sedan. The carmaker also made significant price cuts across the rest of its X and S range. Shoppers can now get a Model S for a base price of $74,990 and a Model X for $79,990—that’s $3,500 and $8,500 less, respectively, than earlier in the week. What’s more, the carmaker decided to no longer charge extra for certain paint colors.

    So a customer who on Monday bought a Plaid version of either model with a paint color costing extra was in all likelihood fuming by Friday—or will be soon when they learn of the reductions.

    “These big unexpected price cuts definitely not fair with one’s who recently bought Tesla vehicles,” reads one tweet posted Friday.

    A reply to that on Friday reads: “I just bought the S (today) but I agree, pretty crappy, they are going to lose some loyalty.”

    Also frustrated are those who bought either model at the beginning of the year. Then, a Model S started at $104,990 and an X at $120,990. Such customers are now seeing the same cars sell for $30,000 and $41,000 less, respectively.

    Anyone looking to sell a used Tesla is likely feeling agitated by the price cuts, too, of course.

    Some customers have called upon Musk to give them something of value to make up for the frustration. One tweet posted Friday and addressed to the billionaire CEO reads: “Thanks to the price cuts, my Model S with less than 2k miles is worth $25k less than I paid for it earlier this year, and the Plaid is only $6k more. At least release the track/power upgrade so I don’t feel like this was all a complete rip-off!”

    Another customer asked Musk, referring to Enhance Autopilot, “Can Model S&X owners who pick up within a week of the price cut get a free EAP upgrade? Would really love to be able to change lanes without disengaging AP.” That customer claimed to have purchased a Model S earlier this week and wrote: “How could you do this to your loyal customers.”

    Another post also addressed to Musk reads: “I should get free supercharging for life after paying the full 2022 price for model X Plaid and now you drop the price 30%?!?!?”

    Another customer wrote: “I feel completely duped. I just purchased a model S LR for $90,000 60 days ago, now the plaid is cheaper than what I paid for. I could of got FSD and the long range for cheaper. Value of my asset dropped 20k.”

    Yet this is hardly the first time Tesla owners have felt “duped” by falling prices. In January, customers made similar complaints after dramatic price cuts then. One self-described “Tesla fan girl” told Bloomberg after price cuts to the Model Y, which she had just bought: “I feel like I got duped. I feel like a got taken advantage of as a consumer. Right off the bat, I’m out $13,306. It’s such a large reduction that it’s going to affect a lot of people who just bought a vehicle.”

    Tesla also cut the price of its Full Self-Driving (FSD) software from $15,000 to $12,000 this week. In 2019, Musk suggested that customers buying a Tesla with FSD were “buying an appreciating asset” thanks to the feature. He tweeted, “If we make all cars with FSD package self-driving, as planned, any such Tesla should be worth $100k to $200k, as utility increases from ~12 hours/week to ~60 hours/week.”

    Tesla owners who bought their Model X or S earlier this week couldn’t be blamed for doubting that.

    https://www.msn.com/en-us/autos/news/tesla-owners-are-angry-about-buying-their-vehicles-right-before-the-latest-big-price-cuts-and-are-letting-elon-musk-know-i-feel-completely-duped/ar-AA1g9L4K

    1. “I feel completely duped. I just purchased a model S LR for $90,000 60 days ago, now the plaid is cheaper than what I paid for.

      Sorry, Tesla fanbois, but you pays yer money & you takes yer chances. Tesla prices & profit margins are unsustainable given the current downturn in the auto market – and it only gets worse from here.

      1. Would they be upset if Tesla had increased prices after they bought? Would they demand to pay Tesla more money since they got the car at a discount?

      1. A quick search shows:

        9 new ICE Mustangs in stock within a 50 mile radius of my ZIP.

        81 new Electric Mustangs in stock in the same radius.

        1. Ford lost billions last quarter making EV’s no one wants. At this point, EV is more like a cult than a viable business plan, and it’s all going to lead to Ford’s bankruptcy.

    4. “Tesla screws with people so much when they drop price by $20k+. I just picked up my Model S Plaid one day ago, drove less than 100 miles on it and I’m shafted by over $20k. TESLA NEVER AGAIN.”

      Sounds like the time to look into buying a Tesla isn’t that far off.

    6. “How could you do this to your loyal customers.”

      The stupidity amazes me when people think these massive companies are beholden to be their benevolent benefactors.

  12. In recent developments, the booming Metaverse market is exhibiting signs of cooling off as it experiences a notable price dip across various digital assets and virtual real estate properties. Once hailed as the ‘Next Frontier’ in technological evolution and a lucrative investment opportunity, the Metaverse is currently navigating through turbulent waters, sparking debates among investors, developers, and analysts about the sustainability and long-term prospects of these digital universes.

    At the market’s peak in November 2021, Metaverse, GameFi, and Play-to-Earn dominated the crypto space. Less than two years later, the majority of investors who bought into the Metaverse fad are currently calculating their losses.

    Note that as of September 2023, the total value of SAND, AXS, ENJ, and MANA has decreased to $1.23 billion. This is a startling 92% decline from November 2021’s market cap of $16 billion.

    https://www.msn.com/en-us/money/markets/is-the-metaverse-dead-investors-register-99-losses/ar-AA1g9B7D

    1. Once hailed as the ‘Next Frontier’ in technological evolution and a lucrative investment opportunity

      Hailed by the same touts & shills herding the retail investor marks into Wall Street’s rigged casino where they could be fleeced at will. The bagholders who bought into the contrived hype might be disabused of any notion the carnival barkers on CNBC, etc. were credible “analysts.”

    2. The market for all things that do not exist seems to be fading from the imagination, including Chinese condos.

      1. Speaking of things that do not exist, I keep getting banner ads for Temu, and I can’t figure out what half the stuff is in their ads, and when I can it’s for weird and ugly stuff, like bizarre looking sneakers. Who buys this stuff?

        1. These Chinese trinket suppliers are kind of awesome if you look at it from the right perspective. For years now I have enjoyed playing a game to see how cheap I can get something shipped across the world to my door. It is amazing what they can do! I have a collection of useless kitchen gadgets that I got to my door for 50 cents. I have things from ebay that I got for 25 cents. Temu will send you some very interesting things for almost nothing. Admittedly the quality may not be great but I can’t even send something across the street for these prices. My only real regret is the bear claws. Never buy the bear claws, they suck. (still was a cheap lesson, it would sting a lot more if I had bought them domestically) The tomato holder for slicing kind of sucks too. I will keep them forever though as shining examples of this golden era of globalism.

          1. to my door for 50 cents

            I think they have a super duper special deal with the USPS for shipping across the Atlantic below cost (subsidy). Every time you do this you are costing me money. Please stop!

  13. I just picked up my Model S Plaid one day ago, drove less than 100 miles on it and I’m shafted by over $20k. TESLA NEVER AGAIN.”

    Cry me a river. Deep discounts are coming on cars as well as shacks as the effects of the Fed’s scamdemic pump-a-thon are overtaken by deflation as #BidensEconomy sinks deeper into recession, if not outright depression. Strategic patience will pay off bigly for those who bide their time and wait for the Fed’s Everything Bubble to implode under the weight of its own debt, fraud, and mark-to-fantasy accounting.

    1. Patience works when buying a home. Patience for a new car is a bit more difficult. Especially when some illegal immigrant with no license or insurance crashes into your vehicle, or a KIA boy steals your ride, or like in my case, my car became so old and unroadworthy that spending money on repairs was a black hole.

  14. Unprecedented: China’s First Province Cuts 20% of Civil Servants, Shaking CCP’s Governing Foundation
    China Observer
    3 hours ago

    Amid China’s recession, local governments across the country have been amassing significant debt. Since last year, there have been ongoing reports of salary cuts for civil servants in various regions. Now, local government debt has gotten out of control, with many even defaulting on their obligations. Starting from August 18, the Chinese Communist Party’s official media, Caixin, ran a series of cover stories on “How to Manage Local Debt.” Based on information from various official sources, the reports claimed that the CCP government is preparing to issue special refinancing bonds worth 1.5 trillion yuan in the second half of the year for 12 provinces in debt, including Tianjin, Guizhou, Yunnan, Shaanxi, and Chongqing.
    The report highlighted that one southwestern province, which was allocated a substantial portion of the refinancing bonds, might need to cut its civil service staff by 20% as a trade-off. This implies that in addition to salary cuts, there will now be direct layoffs for civil servants. When this news broke, it triggered extensive public discussion. The “southwestern provinces” refer to Yunnan, Guizhou, and Sichuan. Based on previous reports, many netizens speculated that it could be the public employees in Yunnan or Guizhou who will lose their steady jobs, which they call their “iron rice bowls”

    https://www.youtube.com/watch?v=Ji8M23ot-ck

    13 minutes.

    1. Welp, if your iron rice bowl gets taken away, time to roll up yer trousers & get thee down on the farm – isn’t that the advice you CCP cadres were dispensing to unemployed college graduates?

  15. It turns out that a decade of global interest rate supression, followed by rapid interest rate hikes to quell rampant inflation, is a recipe for economic Armageddon.

    Nobody could have seen it coming!

    1. Financial Times
      German economy
      German business urges help for crisis-hit building industry
      Rising rates, skills shortages and inflation have pushed developers into insolvency
      Apartments under construction in Hamburg. A growing number of high-profile property developers have filed for insolvency
      Guy Chazan in Berlin September 2 2023

      Business groups and economists have called on the German government to intervene to help the crisis-hit construction industry, as a wave of insolvencies claims a growing number of high-profile property developers.

      Builders are facing a perfect storm of rising interest rates, more expensive construction materials, a dire shortage of skilled workers and slowing demand for new developments that has led to financing problems across the industry.

      “We are at the end of a 10-15 year property boom,” said Moritz Schularick, head of the Kiel Institute for the World Economy in Germany. “The financial cycle is now such that every day another property developer is going bust . . . The old funding models are no longer sustainable.”
      …

        1. Funny how construction sites and cranes were once a sign of prosperity, because it used to be that that you didn’t build unless there was strong demand and customers had money instead of being up to their eyeballs in debt. And it didn’t require near zero interest rates.

        2. Millions of north african and middle-easterners and nary one knows how to swing a hammer or put up dry wall.

    2. Sunday Summary: Could China’s Real Estate Problems Become Ours?
      By The Editors
      September 3, 2023 9:00 am
      China’s flag falling down
      Illustration: Adriá Voltá

      Whenever you get depressed about the state of New York’s real estate (or America’s, for that matter) just remember one thing: It can always get worse.

      Like, say, if you’re a real estate investor or lender in the People’s Republic of China.

      Because two major developers — Country Garden Holdings and Zhongzhi Enterprise Group — are currently in the middle of an extremely ugly meltdown.

      Shares of Country Garden — which, as of last year, owned some 2.2 billion square feet of real estate in China — have fallen some 70 percent in the last eight months, and the company is set to be delisted from the the Hong Kong-based Hang Seng Index tomorrow.

      Things are not good for Zhongzhi, either. As of July, Zhongrong International Trust (which is controlled by Zhongzhi) stopped making payments on many of its trust products, according to Reuters. (Oh, by the way, Zhongrong controls some $98.6 billion in assets. So, yeah. Kind of a big deal.)

      “The property sector is in a downturn that is just going to be very hard to come out of, so it’s going to impact economic growth in China,” Alfredo Montufar-Helu, who runs the China Center for Economics and Business of the Conference Board in Beijing, told Commercial Observer last week. “The real estate sector is estimated to account for 25 to 30 percent of total GDP in China.”

      The big question is: What’s the collateral damage? How many American banks and other companies are exposed and by how much?

      As of the middle of last month, BlackRock, for one, held $358.5 million of dollar-denominated bonds issued by Country Garden. JPMorgan Chase and UBS Group both hold Country Garden dollar bonds, but it’s a little murky how much, or if they dropped these bonds after their most recent August financial disclosures.
      …
      https://commercialobserver.com/2023/09/sunday-summary-could-chinas-real-estate-problems-become-ours/

      1. “Whenever you get depressed about the state of New York’s real estate (or America’s, for that matter) just remember one thing: It can always get worse.”

        “The big question is: What’s the collateral damage? How many American banks and other companies are exposed and by how much?”

        “Is this a ‘Lehman situation’?” asked Dennis Unkovic, a partner at law firm Meyer, Unkovic & Scott. “Not yet. But it could be. It depends on where it goes from here.”

        \\

        – The global central bank/Keynesian pandemic of MMT/too much debt/too much spending, with no (apparent) consequences (yet) is in full swing. Those countries infected – which is just about everyone – will have to see the full financial impacts of the disease run their course. This means that the artificial stimulus created an artificial boom and now the impacts of the real bust will be playing out over the next several years. I’m not seeing the “soft” or “no” landing scenario.

        – Independent of the China Syndrome and the bursting of their own self-inflicted real estate bubble, the U.S. will have to deal with its own. CRE is front and center, but RRE is also a huge bubble in its own right. Both CRE + RRE are just a part of “The Everything Bubble,” aka “The Central Bank Bubble” here in the U.S.

        – Everyone will have to ride it out. Moar stimmy (fiat) money isn’t forthcoming due to a) only prolonging and enlarging the bubble and worsening its bursting, and b) causing moar inflation.

        \\

        “You can ignore reality, but you can’t ignore the consequences of reality.”  – Ayn Rand

        “Sooner or later everyone sits down to a banquet of consequences.” – Robert Louis Stevenson

        “There are no rewards or punishments — only consequences.” – W. R. [William Ralph] Inge

        “The popularity of inflation and credit expansion, the ultimate source of the repeated attempts to render people prosperous by credit expansion, and thus the cause of the cyclical fluctuations of business, manifests itself clearly in the customary terminology. The boom is called good business, prosperity, and upswing. Its unavoidable aftermath, the readjustment of conditions to the real data of the market, is called crisis, slump, bad business, depression. People rebel against the insight that the disturbing element is to be seen in the malinvestment and the overconsumption of the boom period and that such an artificially induced boom is doomed. They are looking for the philosophers’ stone to make it last.” — Ludwig von Mises (1940)

        “Panics do not destroy capital, they merely reveal the extent to which it has been destroyed by its betrayal into hopelessly unproductive works.” — John Mills (1867)

        \\

        – Enjoyed the boom? Now enjoy the (global) bust…

        – Let’s see if there are any consequences to the central banksters that enabled and encouraged this mess. Only Iceland got it right after the GFC when they sent their corrupt banksters to jail.

        – BTW, Australia and Canada look to have worser housing bubbles than the U.S. China probably has the worsest, but I’m sure this is fine…

        \\

        “Socialists are happy until they run out of other people’s money.” – Margaret Thatcher

        “The enduring lesson of the 20th century is that socialism is a failure, and free markets are a success. But the politicians keep advocating just a little more socialism.” – Milton Friedman

        A major source of objection to a free economy is precisely that it … gives people what they want instead of what a particular group thinks they ought to want. Underlying most arguments against the free market is a lack of belief in freedom itself. – Milton Friedman

        \\

        – Have a happy Labor Day weekend dear readers here in the U.S.

    1. This May Be The Stock Market’s Biggest Bull Trap In 23 Years
      Sep. 03, 2023 6:15 AM ET
      Mott Capital Management
      Investing Group Leader

      Summary

      – S&P 500 rally likely to fade as economic data supports a higher for longer monetary policy.

      – Weaker job opening data and ADP job report sent rates down, but a strong job report and ISM data pushed rates higher.

      – Higher rates, a stronger dollar and rising oil prices may create challenges for the stock market, leading to lower levels as financial conditions tighten.
      …
      https://seekingalpha.com/article/4632794-stock-market-biggest-bull-trap-23-years

      1. In case you are feeling too lazy to do simple math, 23 years ago was 2000, at the very crest of the dot com / tech stock mania. Beanie Babies were selling like hot cakes, and nobody could foresee the end to the New Era, where companies connected to the internet didn’t need to show a shard of evidence that they would ever become profitable for their share prices to go stratospheric.

        A few months later, the whole Ponzi structure began a protracted period of collapse, with share prices tumbling day-in, day-out. At that point, you could see the bulls were trapped.

        1. Companies like Apple, Microsoft, etc are very profitable these days. The question is about their valuation. The real elephant in the room is the bond bubble. If rates go up to 10-20%, how profitable will they be?

          1. They’re profitable because they are monopolies or duopolies. I have an iphone and I use windows. As do literally billions of other people. It’s easy to be profitable when there is no real competition.

  18. They want to bring back Covid.
    Covid is invisible, therefore who can dispute it.
    PCR false testing to confirm the invisible enemy. Every respiratory symptom becomes a Covid case, and symptom less people become carriers. The flu literally goes away now labeled as Covid.
    Blank inserts on Covid vaccines is not “informed consent.” False advertising of “safe and effective” is not informed consent. Threat of job loss and vaccine mandates is not informed consent, but rather extortion.
    Free French fries and a hamburger, or being banned from normal activities, is bribery and extortion and isn’t informed consent.
    Monopoly by Pharmacy Business advertising is bribery of news media, and isn’t informed consent.Fear mongering and censorship of dispute to narratives is not informed consent. Brainwashing is not informed consent.

    Medical incentives for Hospitals and Doctors to kill patients is mal practice based on bribery coupled with job threat.
    Censorship and banning of effective cheap drug treatments for Covid is murder.
    Destroying business by shutting down targeted small business, is monopoly model of destroying competition.
    ” Disease of the unvaccinated ” is divide and conquer warfare.
    Lockdowns , masks and social distance was fraudulent health policy. Cutting off your air by useless masks caused immeasurable harm, as did warp speed expierment fake vaccines.
    Climate Change narrative of co2 being the culprit in doom to planet, is fraudulent.
    Covid was pre planned, climate change narratives pre- planned, and take over of humanity pre-planned by Genocidal hijackers of governments and systems.
    Biden part of the overthrow by the New World Order/Great Reset insurrectionists.

    So, just saying compliance with this NWO, will be surrender to enslavement by a enemy that is sinister, vile , dangerous and nuts.
    Klaus Schwab said, “Humans will have chips in their brain.” ” Who controls technology will control the World.” Larry Fink CEO of Blackrock said, ” People need to be controlled. ” Dr Harari said , “Humans are useless eaters.” Bill Gates wants to black out Sun, bury forests, release mosquitos, suck up co2, buy up farmland, vaccine the globe, and feed you bugs and fake food. Artificial Intelligence to take over up to 50% of jobs within 10 years with UN establishing the rights of AI over humans.
    How do you like the WEF, the United Nations, world governments, WHO, and the UN 2030 sustainable earth agenda now?

    1. One of my best friends from high school had a stroke last week.

      I haven’t asked him about it specifically, but he was probably subject to the employer vaccine mandates i.e. the state enforced medical genocide.

      1. ” One of my best friends from high school had a stroke last week.”
        I have a friend from high school who called me about getting major vaccine injury directly following the 5th shot.
        And make no mistake people, its not normal for young healthy people to die suddenly, have a heart attack or get heart diseases, or people under 54 dying or becoming disabled in great numbers ,as is registered by the insurance companies.
        Oh, it couldn’t be the fake vaccine because we say this warp speed expierment is safe and effective. The poison pushers want to scare you into another booster, than another, than another.
        I can’t trust the medical system at all any more, yet I still have to pay my health insurance. Look at the trillions that are being extracted by the health system and Big Pharmacy to threaten your life or disable you, or poison you.
        That was it for me when they used a inaccurate PCR test to con the world that there was a Panademic. Than what was the weird flu that people were getting you ask.
        We don’t know what a certain percentage was getting, how it was delivered, because a lot of toxins can cause respiratory systems. Everything became Covid if you remember.
        When I was young people in general were healthy without this Big Pharmacy intervention.I watched for a Century people being trained into a medical system , and a food system, that was anti health.
        Commie Obamacare, was the last blow for me, and I immediately envisioned vaccine mandates and killing boards. It happened.

      2. My wife is in a Fartbook group to keep up with her high school graduating class. Since the jabs were rolled out, four of the classmates have died suddenly in their sleep. We know at least a dozen people who have died suddenly or been diagnosed with aggressive stage 4 cancer since 2021. Never happened prior to 2021.

    2. Housing Wizard – — long time no see !?!?

      HELLOVA comeback monologue. well done!

      If I can just add:

      ” We know things are bad – worse than bad.
      They’re crazy.
      It’s like everything everywhere is going crazy, so we don’t go out anymore.
      We sit in the house, and slowly the world we are living in is getting smaller, and all we say is:
      ‘Please, at least leave us alone in our living rooms.
      Let me have my toaster and my TV and my steel-belted radials and I won’t say anything.

      Just leave us alone.’

      Well, I’m not gonna leave you alone. I want you to get MAD!
      I don’t want you to protest.
      I don’t want you to riot –
      I don’t want you to write to your congressman, because I wouldn’t know what to tell you to write.
      I don’t know what to do about the depression
      and the inflation
      and the Russians
      and the crime in the street.

      All I know is that first you’ve got to get mad.
      You’ve got to say: ‘I’m a human being, god-dammit!
      My life has value!’

      So, I want you to get up now. I want all of you to get up out of your chairs. I want you to get up right now and go to the window. Open it, and stick your head out, and yell: ‘I’m as mad as hell, and I’m not gonna take this anymore!’

      I want you to get up right now.
      Sit up.
      Go to your windows.
      Open them and stick your head out and yell
      ‘I’m as mad as hell and I’m not gonna take this anymore!’
      Things have got to change.

      But first, you’ve gotta get mad!…You’ve got to say,
      ‘I’m as mad as hell, and I’m not gonna take this anymore!’
      Then we’ll figure out what to do about the depression
      and the inflation
      and the oil crisis.

      But first, get up out of your chairs, open the window, stick your head out, and yell, and say it: ‘I’m as mad as hell, and I’m not gonna take this anymore!’

      Network 1976

  19. Just purchased an online auction mobile home lot , through an online real estate auction here in upstate SC …13K maybe 30% off what’s expected if you’re looking for one …so it does pay ….It’s a well known auction Company, out of Greer SC…… I trust them, somewhat, though not enough to bid in a predictable pattern…..do that early on , but at the last , just one bid at a time does it ….I do have another similiar lot 2 doors down ,has water and a septic tank already, so knew the area,gives one confidence ,and what’s going on with it ……Double wide area , but in unincorporated part of the county ,that’s a huge win, not fighting a city hall crowd …..

      1. Speculators are at risk of having their leveraged gambles wiped out if US housing follows China’s lead down the crapper.

        2. Watch the bankers insider buy/sell ratio to know when the SHTF. It will generally start a month before the collapse.

    2. “It’s a well known auction Company, out of Greer SC…… I trust them, somewhat, though not enough to bid in a predictable pattern…”

      You do know about the Winner’s Curse, don’t you?

  21. A Wall Street Journal report cited an example of the country’s excessive infrastructure overspending. The report talks about one of China’s poorest provinces Guizhou, which boasts 1,700 bridges, and 11 airports.

    Liberals have long been known for going into paroxysms of rapturous ecstasy at the mere mention of the word “infrastructure”, since it means more government assets at the expense of ordinary citizens, and more power and rationale for taxing, regulating, and micro-managing them. Now the once-conservative WSJ meekly adds a bit of balance by noting the costs and debts involved. Maybe we in the West can finally start to learn something from the excesses of the building frenzies in China and Japan.

  22. The parasites and looters of humanity, set up a system of economic failure, that is designed for a Great Reset . The plan is Monopoly Corporations, Rich Elites, Banks, United Nations, CCP, etc., take over in collusion with world governments , for the One World Order with UN 2030 sustainable earth agenda.
    They are in process of destroying any competition or dispute or rebellion to their One World Order/Great Reset ,the end game enslavement and genocide of humanity. They are going to use technology and artificial intelligence to take over as well as false Science, false narratives and disinformation, divide and conquer tactics, all in collusion with governments and United Nations. as the enforcers.
    When they say you will own nothing, eat bugs, have a brain chip, be deprived of energy, banks will control your consumption, and vaccines will be forced, they are not kidding.
    So, when people acknowledge that war has been unleashed against them, by a enemy so vile its beyond belief, than compliance would be a surrender to this sinister epic enemy.

    2. Who woulda thought: those nitwicks trying to keep people from attending the “festival” were doing them a favor.

  24. ‘Such apartments have run out; we can’t get them’ For Han, apartments wouldn’t have been that useful anyway; no one is buying them right now’

    Hold out for the goldfish Han, that’s where the real money is.

  25. ‘The real estate sector is currently painfully but purposely being downsized’

    Xitler said so much when he also said was going full commie. Globalist scum media didn’t report on that last part.

  26. ‘Similarly, vital economic reports, such as for exports and cement production, have also either disappeared or become ‘corrupted’

    Dan:

    via GIPHY

  27. ‘This increase in investment means that local government has to get the money from somewhere. Basically, it gets that through loans and bonds and so on. Debt levels have gone up. They don’t really matter, unless they have to be settled. And that’s the problem. They haven’t been settled. They just keep on being pushed out. The Chinese investment-led model ran out of steam quite a few years ago but it’s been kept going because there’s been a reluctance to try to shift from investment to consumption. The reason for that is what it will mean’

    via GIPHY

  28. ‘his recent book on the important links between politics and business, what he calls ‘China’s form of despotic capitalism’ may be dangerously brittle. ‘The move towards an Orwellian ‘Big Brother’ society, in which surveillance technology is employed by the party-state down to the very last individual, may work. But it is terrifying, threatening to crush the human desire for autonomy and self-expression’

    This is not Japan in the 80s-90s. And it’s a lot bigger, more corrupt. Comparisons to Japan are lame.

  29. ‘In the wake of China’s plummeting economic indicators, economists have been debating the ‘economic collapse’ of China. Paul Krugman, in an opinion column in the New York Times, posits that China’s economic stumble is systemic and holds China’s resistance to reforms responsible for it. However, he argues that even if the ‘Chinese leadership seems to be growing more autocratic and more erratic with each passing year…’

    ‘resistance to reforms responsible for it…leadership seems to be growing more autocratic and more erratic with each passing year’

    This is yer perfect system Krugman. Push buttons, wizard of oz! Funny how it turned to sh$t.

  30. ‘According to Liu, in the second quarter, the amount of foreign investment in China touched only US$4.9 billion, down 87% compared to the previous year. Now the ‘new three engines of growth’ according to him are the NBS, the Central Publicity Department of the CPC and the Xinhua News Agency’

    And what is it these engines of growth produce?

  31. ‘example of the country’s excessive infrastructure overspending. The report talks about one of China’s poorest provinces Guizhou, which boasts 1,700 bridges, and 11 airports’

    Powered by coal. But “they” want you to give up yer gas stove.

    1. “Powered by coal. But “they” want you to give up yer gas stove.”

      \\

      1)
      https://www.statista.com/statistics/265510/countries-with-the-largest-coal-consumption/
      Chemicals & Resources > Fossil Fuels

      Global coal consumption 2022, by country
      (in exajoules)

      [See chart]

      Published by
      M. Garside | Aug 29, 2023

      “The world’s two largest coal consuming countries in 2022 were also the world’s two most populous nations: China and India, at 88.4 and 20.1 exajoules consumed, respectively. In the case of China, this equates to approximately 54.8 percent of the global coal consumption, whereas India accounted for 12.4 percent.”

      – The U.S. way down there at 9.87 exajoules.

      – In a “science-based” world, the focus would be on reducing the largest emitter, but hey the globalists are modeling their world after the CCP, so no.

      – My gas stove and water heater are “a fart in a windstorm” compared to China, but that of course is not the real issue. It’s rather “you will own nothing and eat bugs,” says no one I voted for.

      \\

      2)
      https://ourworldindata.org/grapher/annual-co2-emissions-per-country
      Annual CO₂ emissions
      Carbon dioxide (CO₂) emissions from fossil fuels and industry.
      2021 data

      [See chart]

      \\

      – China leads the way in CO2 emissions.

      – Pres. Brandon says I need to give up anything that makes my life easier or otherwise improves your life. He says implicitly that I, John Q. Taxpayer, need to pay for the millions of illegal aliens crossing our southern border, as well as all of the other “Progressive” (read Marxist) policies currently being implemented. We’re getting close to “come and take it!” in my view. Let’s go Brandon! and the same to the other globalist cucks.

      – The globalists/totalitarians and their puppets at the highest levels of government hate your bourgeoisie / middle class a$$ and want you dead. This isn’t about gas stoves. Straight-up Marxism. The 2nd Amendment prevails. Have a nice day.

  32. ‘Those expectations ran into a wall in 2020. The pandemic, combined with government crackdowns on the tech and tutoring sectors, which employed large numbers of graduates, wiped out millions of white-collar jobs. Many young people were encouraged to delay entering the job market and complete advanced degrees instead, but that has only added to the glut of highly educated job seekers, with millions more due to graduate next month’

    Central planning!

  33. Is Zillow sitting on a steaming pile of depreciating used housing units?

    Maybe if they pray for a miracle, prices will rise against the backdrop of an incipient recession, the highest interest rates in twenty years and residential investors running for the hills.

    1. Economy
      Published August 28, 2023 2:40pm EDT
      Home prices could surge over the next year as affordability crisis worsens
      US home prices may continue to climb this year, despite steep mortgage rates
      By Megan Henney FOXBusiness
      Redfin CEO Glenn Kelman analyzes the state of the housing market after mortgage rates surged past 7% on ‘Cavuto: Coast to Coast.’ video
      Redfin CEO Glenn Kelman: Housing market is in gridlock

      Housing affordability is already at the lowest level in decades – and the problem may soon get worse.

      In a new analysis, Zillow economists estimated that home prices will rise by 6.5% between July 2023 and July 2024 because of limited inventory and stronger-than-expected demand. By comparison, home prices as tracked by the S&P CoreLogic Case-Shiller index typically climb by about 5.21% each year.

      “Limited for-sale inventory continues to push home prices upward even as mortgage rates remain elevated,” the economists wrote. “This shortage has buoyed competition for the homes that are for sale. Homes that went under contract (or ‘pending’) in July did so in 12 days – a week and a half faster than what was typical in 2018 and 2019.”
      …
      https://www.foxbusiness.com/economy/home-prices-could-surge-next-year-affordability-crisis-worsens

  34. Yahoo
    Bloomberg
    Stock Market Rally Is Set to Weather Higher Bond Yields, Investors Say
    Farah Elbahrawy
    Mon, September 4, 2023 at 2:38 AM PDT·5 min read
    In this article:

    (Bloomberg) — This year’s US stock market rally is strong enough to withstand another leg higher for bond yields, according to the latest Markets Live Pulse survey.

    With the soft-landing narrative for the world’s biggest economy gaining traction, the majority of 331 respondents expect losses for S&P 500 Index to be contained to less than 10% should yields on the 10-year Treasury resume their climb and hit 4.5%. That would allow the US equities benchmark to hold on to some of its 18% year-to-date gains.

    “If we get higher interest rates and bond yields, it will probably be because the macro economy surprises on the upside,” said Christopher Hiorns, portfolio manager at EdenTree Investment Management Ltd. “So equities, providing protection against inflation, may not be such a bad place compared to bonds.”

    Yields on the 10-year note reached a 16-year high of 4.36% in August as a persistently resilient US economy has investors betting interest rates will remain elevated. The jump in yields made August the worst month for the S&P 500 since February, though the stocks gauge remains at considerably higher levels than during prior periods when yields were as elevated as they are now.

    With the Federal Reserve prepared to keep borrowing costs elevated until inflation is on a convincing path toward the US central bank’s 2% target, there’s more room for yields to rise even further. Federal Reserve Bank of Cleveland President Loretta Mester said on Friday inflation remains too high despite recent improvements.

    However, strategists expect any march higher to be capped near 4.5%. Such a yield on the 10-year would drop the S&P 500 Index year-end target of HSBC Holdings Plc’s US equity strategy team to 4,500 from 4,600 — leaving the stock gauge with a 17% gain in 2023.

    Some strategists see yields falling. Wouter Sturkenboom, chief investment strategist for EMEA & Asia Pacific at Northern Trust Asset Management, expects the yield on the 10-year note to trade around 4% by the end of the year.

    And further stock gains may be a lot harder to come by, MLIV’s Ven Ram notes. In a world where you can lock in two-year US yields at a whisker short of 5%, you need to be immensely optimistic about underlying earnings growth to forgo the certainty of cash flows offered by Treasuries. It’s also hard to share the market’s optimism on the prospect of a soft landing.
    …
    https://finance.yahoo.com/news/stock-market-rally-set-weather-000000899.html

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