So I didn't tell my wife, but I...
- 12 June 2020
China's overreliance on real estate has sent its economy tumbling toward what could be a version of the US's 2008 financial crisis, Kyle Bass said on CNBC on Tuesday.
"This is just like the US financial crisis on steroids," the Hayman Capital founder said. "They have 3 ½ times more banking leverage than we did going into the crisis, and they've only been at this banking thing for a couple of decades."
Bass said the years of economic growth China enjoyed prior to the pandemic were made possible by an unregulated real-estate market, which leaned too heavily on debt to expand.
With defaults now plaguing the industry, this could spell trouble for the country's broader economy. The real-estate sector makes up about a quarter of the country's GDP and 70% of household wealth.
"The basic architecture of the Chinese economy is broken," Bass said.
YANG to bet against it if you want to degenChina is facing the US financial crisis 'on steroids' according to Filip De Mott at Business Insider.
The China story is looking very ugly but the CCP is desperately trying to put as many fingers into as many dykes as they can. The dam won't hold for much longer.
How can people look at the Chinese economy and have any short term hope for the global economy given that China is the manufacturing powerhouse of the world and accounts for a sizeable amount of the demand for Australia's commodities?
The piper has not yet been paid. I've got both feet in the bear camp and believe that it is only a matter of time until global markets come tumbling down by at least 30%.
But I think this is the wrong thread for that discussion so I'll leave it there.
With the drought restricting the number and size of ships going through the panama canal, plus the attacks by Houtis in the Arabian sea, perhaps it comes as no surprise that inflation will hold up as transport costs increase.Yank CPI comes in above estimates. Predictable response.
Higher for longer!