Evergrande?

[Seahawk]

Originally Posted by jyl

Demographic ticking bomb there.

And, let's not forget, 1.4 Billion people in a country roughly the size of the US.

On the Podcast, they mentioned that China is not vaccinating those over 60. Hard to know in my mind.

BTW, I always appreciate your insights. I am no longer an active daily investor, but my kids are.

[jyl]

Originally Posted by Seahawk

And, let's not forget, 1.4 Billion people in a country roughly the size of the US.

On the Podcast, they mentioned that China is not vaccinating those over 60. Hard to know in my mind.

BTW, I always appreciate your insights. I am no longer an active daily investor, but my kids are.

Right? Incredible resource and density pressures. China is not self sufficient in food, energy, commodities. https://chinapower.csis.org/china-food-security/ https://chinapower.csis.org/energy-footprint/ 30 million Chinese starved to death in the 1959-61 famines. That's within living memory of the CCP leadership. Maybe helps explain, if not justify, their aggressiveness about shipping lanes, the South China Sea, and trying to buy up resources around the world.

China started vaccinations with high-risk persons, rather than starting with the general elderly population. That kind of makes sense, since it was intensely locking down cities so grandpa/ma were in theory safe in their homes, the exposed people were healthcare, essential workers, etc. In March 2021 they started rolling out vaccinations to the elderly.

[Brando]

Actually I may be wrong.

Post-Evergrande: China's Waterfall of Pain

China itself is one big Evergrande.
One big debt crisis.

For years massively over-levered shadow banks masqueraded as propcos, got drunk on credit, flirted w/ default & called for bailout like a late-night uber.

Contagion has begun
👇
https://pbs.twimg.com/media/E_09SpKUUA8BjEA?format=png&name=small

— Ming Zhao (@FabiusMercurius) September 21, 2021

[tabs]

Originally Posted by Sooner or later

Why are you using future liabilities compared to current assets to come up with the 84 trillion claim.

What are current liabilities and current assets?

Or

What are estimated future liabilities to estimated future assets?

SS, medi, prescription drugs and pensions are an Acct Payable. Those payments/expenses are real..the CBO projected that it would be an 800B USD deficit per year which when paid becomes bearing. debt..it is a US govt contract wt the American people who have paid for the annunity. The US govt of course can default on that contract.

The values presented are todays valuations. It is the BALANCE SHEET OF THE USA. Assets minus liabilities which those anunities are part of..You.want to settle accounts today you have a negative 84T USD net worth.

A contract has a present value..even if it is to be paid out over time. The only way to abrogate that value is to end the contract.

[Crowbob]

Originally Posted by jyl

Right? Incredible resource and density pressures. China is not self sufficient in food, energy, commodities. https://chinapower.csis.org/china-food-security/ https://chinapower.csis.org/energy-footprint/ 30 million Chinese starved to death in the 1959-61 famines. That's within living memory of the CCP leadership. Maybe helps explain, if not justify, their aggressiveness about shipping lanes, the South China Sea, and trying to buy up resources around the world.

China started vaccinations with high-risk persons, rather than starting with the general elderly population. That kind of makes sense, since it was intensely locking down cities so grandpa/ma were in theory safe in their homes, the exposed people were healthcare, essential workers, etc. In March 2021 they started rolling out vaccinations to the elderly.

It helps to know what the virus is to develop a strategy to fight it. China knew what it was from the get-go and acted how best they thought it should.

We and the rest of the world OTOH, had no idea we were assaulted by a manufactured bio-weapon directly from a lab in Wuhan or even when it occurred. We were guessing and those guesses were squelched by not only China itself but also by the do-gooders with superior sensibilities and others in the science community who facilitated the creation of the weapon(s).

[berettafan]

Originally Posted by tabs

SS, medi, prescription drugs and pensions are an Acct Payable. Those payments/expenses are real..the CBO projected that it would be an 800B USD deficit per year which when paid becomes bearing. debt..it is a US govt contract wt the American people who have paid for the annunity. The US govt of course can default on that contract.

The values presented are todays valuations. It is the BALANCE SHEET OF THE USA. Assets minus liabilities which those anunities are part of..You.want to settle accounts today you have a negative 84T USD net worth.

A contract has a present value..even if it is to be paid out over time. The only way to abrogate that value is to end the contract.

If only it were just the Fed balance sheet we had to worry about! Counties and municipalities all over the country operate on budgets that do not account for failing infrastructure like sewer systems, treatment plants, roads, etc.

[tabs]

Originally Posted by berettafan

If only it were just the Fed balance sheet we had to worry about! Counties and municipalities all over the country operate on budgets that do not account for failing infrastructure like sewer systems, treatment plants, roads, etc.

True the State and Local debt is outa control..and the infrastructure is ahh looking like the 3rd world

I use the Real Debt Clock numbers where all debts are totaled plus the Acct Payable liability. It comes to a negative 84T...that is a big nut..to have to drag around.

Welcome to fkin he11..

[tabs]

Originally Posted by Crowbob

It helps to know what the virus is to develop a strategy to fight it. China knew what it was from the get-go and acted how best they thought it should.

We and the rest of the world OTOH, had no idea we were assaulted by a manufactured bio-weapon directly from a lab in Wuhan or even when it occurred. We were guessing and those guesses were squelched by not only China itself but also by the do-gooders with superior sensibilities and others in the science community who facilitated the creation of the weapon(s).

"Manufactured Bio Weapon"...that is a supposition on your part..don't think so. They were working with the SARS virus..and due to weak protocols it escaped. Or it did come out of that market?

Any hierarchical totalitarian regime ...will sweep it under the carpet and hope it goes away..then if they have to tell ya they ain't gona tell ya the skinny about it because they don't wana look bad.. that they are incompetent..

When you say it was planned you are saying that they are smarter than you are...

The Japanese experimented with Plague on the Chinese in WW2...but no one since has unleashed a bio weapon on an enemy..

Even though both sides had Gas during WW2 no one used it...Sadam and Asad used gas...but Bio don't think so.

[red-beard]

A bioweapon that kills less than one-tenth of one percent? Pretty poor bioweapon...

Evergrande is being sacrificed...

[Crowbob]

Originally Posted by red-beard

A bioweapon that kills less than one-tenth of one percent? Pretty poor bioweapon...

Evergrande is being sacrificed...

Good point.

But this was a trial which told the Chicoms that 1) it was much more transmissible and 2) much less lethal than they thought-so back to the drawing board.

And, of course, this pandemic is far from over.

[berettafan]

Originally Posted by red-beard

A bioweapon that kills less than one-tenth of one percent? Pretty poor bioweapon...

Evergrande is being sacrificed...

Seems we’ve been just about wiped out with a very few deaths.

[beepbeep]

When market is ripe, just about anything can make it tank. Microsoft earning warning or Chinese real estate Ponzi.

And boy is it ripe...we had quite a ride.

[sc_rufctr]

I'd never heard of Evergrande before this thread. After some YouTube searches about the subject... It seems they have a BIG problem of their own making and as always the ordinary Chinese people will suffer the most. I talked to a Chinese expat recently and she told me it's only a matter of time until things start to collapse.

Imagine starting a project like this and never finishing it.

[tabs]

Originally Posted by beepbeep

When market is ripe, just about anything can make it tank. Microsoft earning warning or Chinese real estate Ponzi.

And boy is it ripe...we had quite a ride.

Sounds far more realistic than what Americans think and say.

[tabs]

Originally Posted by Crowbob

Good point.

But this was a trial which told the Chicoms that 1) it was much more transmissible and 2) much less lethal than they thought-so back to the drawing board.

And, of course, this pandemic is far from over.

"A trial?" Your transmission is really slipping there.

[tabs]

Originally Posted by jyl

Right? Incredible resource and density pressures. China is not self sufficient in food, energy, commodities. https://chinapower.csis.org/china-food-security/ https://chinapower.csis.org/energy-footprint/ 30 million Chinese starved to death in the 1959-61 famines. That's within living memory of the CCP leadership. Maybe helps explain, if not justify, their aggressiveness about shipping lanes, the South China Sea, and trying to buy up resources around the world.

China started vaccinations with high-risk persons, rather than starting with the general elderly population. That kind of makes sense, since it was intensely locking down cities so grandpa/ma were in theory safe in their homes, the exposed people were healthcare, essential workers, etc. In March 2021 they started rolling out vaccinations to the elderly.

Everything the Chinese do geopolitically has to do with maintainimg internal stability and control. China is the center of the earth, turning inward in 1477 or so when they burned their fleet. They fear internal disent which can cause civil war and disolution ..remembering the Taiping Rebellion of the 1860s. So they see tjat they have to be more aggtessive. Then becoming more affluent they want to restore former Chinese greatness. To this end they feel.an opportunity and necessity of filling the vacuum left in the wake of American decline.

[javadog]

[Esel Mann]

Originally Posted by red-beard

A bioweapon that kills less than one-tenth of one percent? Pretty poor bioweapon...

Evergrande is being sacrificed...

Said bioweapon has unleashed holy hell on the economies and commerce of the world. A bioweapons purpose needn't always be to directly kill the masses in one swoop. You still belive it is a poor bioweapon?

[Tobra]

I would say it was very effective. Let no crisis go to waste. We have the Harlem Globetrotters and the Washington Generals, played in our political theater by the Democrat and Republican corporations t

Originally Posted by berettafan

Seems we’ve been just about wiped out with a very few deaths.

It is pretty amazing, mass psychosis facilitated by unemployment checks, that are fixin' to end.

Trepidation is the term that springs to mind


China may have people starving to death if they lost as much ag production as it appears they may have lost this year

[jyl]

Corporate Debt:

Here is a chart of corporate non-financial debt to GDP for China, US, Japan, etc. I have not verified the data but the chart is by a well known macro strategy data provider and I’m confident it is reliable. I don’t know if it includes commercial paper.

You can see China’s non-fin corp debt to GDP is about 160%. The US non-fin corp debt to GDP is about 82%.



Again, this is *corporate non-financial* debt, which means debt owed by companies that are not banks or other financial institutions.

Financial company debt is tracked separately, because for a bank, the debt it owes is balanced with the credit it extends, which is in turn debt of non-financial companies, so if you did include banks then you willl be double-counting debt.

China has a big debt problem, the biggest in the world right now. Note also that almost all of China’s debt is held domestically, very little by foreigners. So almost all of this debt is owed to Chinese creditors.

Wait, some will say, everyone knows the US has the biggest debt problem in the world! What about household debt, what about government debt, what about entitlements?

Household Debt:

China’s household debt is 61% of GDP. US household debt is 80% of GDP.

https://tradingeconomics.com/china/households-debt-to-gdp

https://tradingeconomics.com/united-states/households-debt-to-gdp

Government Debt:

Governments borrow via bonds rather than bank loans, so government debt means government bonds, referred to below as “SSA” (sovereign, state and agency).

https://www.icmagroup.org/Regulatory-Policy-and-Market-Practice/Secondary-Markets/bond-market-size/

As you can see, China’s SSA debt at $20TR is pretty close to US SSA debt at $22-23TR. But China GDP is about $15TR vs US GDP about $21TR.

So that’s China government debt to GDP of 133%, US government debt to GDP of 107%.

Entitlements

Entitlements like Social Security, Medicare, etc are, to a considerable extent, things the government will have to pay for, whether they are labeled “entitlements” or not. If there were no Social Security, could the US govt simply let tens of millions of elderly people starve on the streets or die outside hospital doors? It wouldn’t be called “Social Security” but there would be a huge slug of government spending directed their way regardless.

The same applies to China. The government will have to spend to support the population of elderly and ill, who don’t have private means, regardless of whether there is a named entitlement program today or not. I don’t know the present value of that future obligation as a percent of China’s GDP, and it is probably lower than the present value of future SSI/Medicare/etc as a present of US GDP, but I doubt it is vastly lower. The average SSI check is pretty modest.


So, that’s some numbers on the debt side to think about. Not suggesting the US debt load isn’t heavy but China’s debt load is much heavier.


We should look at assets and income too.