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Tag Archives: Asia

“A grave mistake,” China steps up support to arrest stock market slide

The Ultimate Crony Capitalist State is feeling a bit unstable right now. Instability is the great enemy of the Chinese Communist Party. The market mechanism continues to bleed through all across the Chinese economy and Beijing is getting (more) nervous. The state “capitalism” miracle is looking a lot less miraculous these days.

The Chinese stock market is off over 20% since mid June. (Though still up more than that for the year.) A property bubble continues to pop. Exports have slowed. Change is in the air. Of course it’s been in the air before.

Now it looks like China may have deployed its own version of the “Plunge Protection Team” to hold back reality. Thing is reality is reality.

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Could we be at war with China before the next presidential election? Some informed individuals say maybe

What’s the old adage? Never engage in a land war in Asia? Well we tossed that one out a while ago and now it looks like we might be heading for one on the high seas. No kidding. China is building island bases in the South China Sea, right over massive deposits of oil and smack dab in the middle of Asian trade routes, and we are not happy about it. In fact we’ve ordered China to essentially stop immediately.  They are not complying, and are using diplomatic talk of the kind which isn’t very diplomatic.

We have gotten to the point where sober minded people (well probably most of the time) with serious skin in the game are getting concerned.

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“Magic” Collateral: A Frank Look At The Sheer Credit Horror About To Be Unleashed In China

China is an amazing political and economic entity. Watching it is fascinating.

Is it slowing? How much? Is it a lot? Is it a lot more than even the pessimists think? Is the Chinese banking system looking at a “black hole moment”? Can the banks be bailed out by the Chinese central bank without setting off a worldwide economic wildfire? No one knows the answer to these questions, including the powers that be in China.

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Shadows falling in China? Credit tightens, desperate municipalities seek funding from “alternative” sources

This could be a good thing overall for China as the “alternative sources,” trusts, what is often called the “shadow banking system,” might actually be a stabilizing and limiting force in the economy. The rates of interest on loans through the shadow banking system are much higher than what municipalities can obtain through traditional lenders, and probably more accurately reflect the real risk of loans. (Which are considerable it appears.)

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Kyle Bass at Hayman Capital – How does the global debt ponzi scheme end? — War.

Bass makes a whole series of insightful observations regarding the global economy in the attached video, observations of the type one is unlikely to hear expressed on CNBC . But he makes one particularly chilling point. We have never seen peace time debt levels like this. In the past when debt levels spiked, during and just before war, the losers of the war got saddled with the debt. What happens now with much higher levels of debt to GDP ratios than we’ve ever seen, when the world is for the most part at peace?

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