Unpopular Opinions That You Have.

[jw1739]

1 hour ago, GreenSeater said:

This isn’t an unpopular opinion, this is an unpopular fact. They even said after the curfew ended in 2020 that it had no health reasons, it simply made it easier for police to maintain compliance.

Curfews have been used elsewhere as well as here. However, a curfew almost seems counter-intuitive to me - for example if someone wants to take exercise after 9.00 p.m. I would suggest that they are less likely to encounter anyone else than if they do that exercise at an earlier time. If it's designed to stop people in nightclubs etc. than surely it's better to police that activity rather than just being "outside." Apparently a curfew was trialled in Melbourne in 2011 to control juvenile crime, but for me a curfew invokes images of martial law and I don't think it should be used unless we really do have, or are very likely to have, civil disturbances etc.

[bt50]

The curfews are predominantly theatre to show they mean business and are cracking down.
IMO it was folly to reintroduce it this lockdown, as blind Freddy could see that compliance was on the wane as it is; and doubling down in that circumstance rarely produces results, its often counter-productive.

The theory only works if everyone is buying in, and the Andrews government exhausted a lot of that goodwill last winter. Plus a lot of people dont have much more left to lose. 
That's not a political statement or opinion, or even a statement of my views personally, its just the cold, hard fact of the matter and as such the policy was doomed to fail.

Edited September 3, 2021 by bt50

[NewConvert]

Curfews do work if all that you are trying to do is to reduce the volume of people going about. One of my neighbours is a cop and he said it was very easy to stop people. The major difference thsi time around is that Commissioner Patton said in an interview that what was implemented last year would not be done this year because it was deemed inefficient and there were better ways to do the policing.

Given the number of people who seem to be travelling around to regional areas, my question would be directed to Patton how he could possible consider the new policing regime to be better than last year.

The other thing that has affected the contagion is that last year with Jobkeeper meant that a lot of people who deliver the stuff I buy over the internet are now having to work. Hence the detection of virus in the sewerage.

[Shahanga]

The biggest story around the globe right now should be the looming collapse of Evergrande.

This is going to cause massive ructions to the Chinese economy with regional political fallout.

Strap In.

[HeartFc]

2 hours ago, Shahanga said:

The biggest story around the globe right now should be the looming collapse of Evergrande.

This is going to cause massive ructions to the Chinese economy with regional political fallout.

Strap In.

Yep! Seems we've been distracted enough by Covid and LBGT toddler rights. 

The 2008 crash gonna like nothing compared to this shit. This country is in massive massive trouble very soon. 

[jw1739]

2 hours ago, Shahanga said:

The biggest story around the globe right now should be the looming collapse of Evergrande.

This is going to cause massive ructions to the Chinese economy with regional political fallout.

Strap In.

I don't think that this is unpopular at all. Booming economies can't last forever. Just like a bull run on the market. Even if it's only a "correction" China couldn't go on as it has been doing. I would say it's now a matter of how big the correction is.

[malloy]

1 hour ago, jw1739 said:

I don't think that this is unpopular at all. Booming economies can't last forever. Just like a bull run on the market. Even if it's only a "correction" China couldn't go on as it has been doing. I would say it's now a matter of how big the correction is.

Given that the GFC was a debt crisis and nearly every countries response was to increase debt and inflate assets, I would expect that it would be bigger than the GFC. In addition to that Australia was in a pretty good position prior to the GFC, this time not so much, so I would expect it would also hit Australia harder too.

That being said I believe Australia's debt to GDP ratio is much better than most countries so we may have an advantage, however given our economic reliance on mining to drive our GDP our debt to GDP ratio could deteriorate quite quickly.

[Shahanga]

3 hours ago, jw1739 said:

I don't think that this is unpopular at all. Booming economies can't last forever. Just like a bull run on the market. Even if it's only a "correction" China couldn't go on as it has been doing. I would say it's now a matter of how big the correction is.

Had to post it somewhere!

What concerns me is that their authoritarian government may soon have a lot of unhappy citizens.

The text book response in this situation is for that government to “blame foreigners” for something to distract the populace.

In this scenario I hope they don’t do something insane like invade Taiwan.

[NewConvert]

Interesting as I have not been keeping up with it although I had seen the headlines. The concern is international contagion which is going to come through the banking system, bond holders and share holders. The Age reports that there are 128 banks exposed to Evergrande (and presumably to other real estate developers) but did not say what percentage were local banks or international banks. Bond holders and share holders are likely to be screwed depending on each governments response. So whether for example Biden will provide funds to those who invested like Bush/Obama did or whether he will say maybe. Australia was spared the worst of the GFC because the big four had no exposure to the exotic financial structures that drove it. I don't know whether Australian banks or superfunds have any skin in the Chinese real estate market.

Australia is more likely to be hurt through the drop in iron ore price and employment. How the Federal government responds will be interesting.

As for China, I suspect that a lot of people will be getting ready for execution. Earlier this year a banking CEO was sentenced to death (carried out the following day I believe) for screwing up the bank. There will be a few that will experience the same fate.

[Shahanga]

It seems the CCP are going to bail out Evergrande.

Given some of the stuff I’ve read, they may have felt little choice, aside from the immediate impact of those owed the $300Billion it seems there are quite a few only slightly more soluble competitors. If this is true they wouldn’t survive the fall out either.

The impact of all that on the Chinese economy and thus the people would have been severe and thus a threat to the security of the powerful.

What happens from here will be fascinating. In the early 90s the Japanese banking system was in a similar mess. It was papered over and tidied up behind the scenes, but it was also the end of the Japanese economic miracle and they’ve never been the same economic force again. 

Edited September 23, 2021 by Shahanga

[jw1739]

2 hours ago, Shahanga said:

It seems the CCP are going to bail out Evergrande.

Given some of the stuff I’ve read, they may have felt little choice, aside from the immediate impact of those owed the $300Billion it seems there are quite a few only slightly more soluble competitors. If this is true they wouldn’t survive the fall out either.

The impact of all that on the Chinese economy and thus the people would have been severe and thus a threat to the security of the powerful.

What happens from here will be fascinating. In the early 90s the Japanese banking system was in a similar mess. It was papered over and tidied up behind the scenes, but it was also the end of the Japanese economic miracle and they’ve never been the same economic force again. 

Remember that Xi is coming to the end of his 10-year term of office and (if he doesn't change the rules and continue on) wants at all costs to retain his god-like status and reputation. China's economic miracle has already come at a huge cost to the people, especially the young - incessant study, parents in the rat-race to continue to fund their child's education, 12-hour working days in Beijing or Shanghai and then trying to grab a few hours of sleep in a dog-box of an over-priced apartment before dragging themselves back for more of the same...many are dropping out because they just can't take it any more. So a collapse of the size of Evergrande just cannot be tolerated.

[Shahanga]

4 hours ago, jw1739 said:

Remember that Xi is coming to the end of his 10-year term of office and (if he doesn't change the rules and continue on) wants at all costs to retain his god-like status and reputation. China's economic miracle has already come at a huge cost to the people, especially the young - incessant study, parents in the rat-race to continue to fund their child's education, 12-hour working days in Beijing or Shanghai and then trying to grab a few hours of sleep in a dog-box of an over-priced apartment before dragging themselves back for more of the same...many are dropping out because they just can't take it any more. So a collapse of the size of Evergrande just cannot be tolerated.

But now the press (I have some sympathy, China is opaque) are now saying they are likely to let it fail.

It seems the truth is no one knows in the west what will happen, but whatever it is  the impact will be big.

[NewConvert]

8 hours ago, Shahanga said:

It seems the CCP are going to bail out Evergrande.

Given some of the stuff I’ve read, they may have felt little choice, aside from the immediate impact of those owed the $300Billion it seems there are quite a few only slightly more soluble competitors. If this is true they wouldn’t survive the fall out either.

The impact of all that on the Chinese economy and thus the people would have been severe and thus a threat to the security of the powerful.

What happens from here will be fascinating. In the early 90s the Japanese banking system was in a similar mess. It was papered over and tidied up behind the scenes, but it was also the end of the Japanese economic miracle and they’ve never been the same economic force again. 

What amused me about the Japanese economic force was when the housing bubble burst there were a lot of banks/financial houses propped up by the taxpayer because of the fear of financial collapse amd eventually these became zombie banks and it wasn't until about 2010 that the debt had washed through - almost 30 years. In the meantime the West pushed for better financial accounting standard which became known as Basel II which Japan had refused to sign until 2007 and for it to come into force in 2008. Japan refused to sign because that would reveal the extent of the zombie banks and loans. Basel II shifted the accounting from value of asset at time of purchase to current market value (to summarise), hence Japan thought that they would be ripe for foreign companies to cash in. And in 2008 the GFC happened just as Basel II was coming into force and the Americans and the Brits tore Basel II because they would have been cherry ripe for picking. Now we are up to Basel III which is still being negotiated.

BTW the key component for Japan's apparent economic weakness is the retired cohort which is estimated to be about 28% being the highest in the world. Once that is taken to account, then the figures improve. Italy and Spain are heading in the same direction population wise and they seem to be tracking Japan.

As for the Chinese, we may find out what happened after the event. In some ways I am beginning to appreciate Andrew Mellon who was Treasury secretary for Herbet Hoover and presided to take the USA and the world into the great depression. Basically the USA/Europe at the time found themselves in inflated assets territory and when the bubble burst the consequences were disastrous. But Mellon believed that letting the companies fail and to naturally find the bottom was the best option. What he didn't count on was that it became a self vicious circle where bad companies started taking out the good ones with no end in sight. It didn't help that he was a strict moralist who believed that this was divine punishment for people succumbing to greed and lust. In any case, post WW2 restrictions were placed on banks/financiers to reduce the asset bubble from ever happening again and central banks stepped in when required. Even the libertarian Alan Greenspan stepped in when LTCI went bust and of course when the GFC occurred everyone stepped in. But since Thatcher/Reagan days the idea of placing limits to prevent asset bubbles, the laws were whittled away. Now China because of its totalitarian regime may well let Evergrande go bust and deal with the consequences in other ways - both benign and malign (eg mass executions). As a side note, and definitely not on this scale, the Westpac almost went bust in 1991 because the reserve bank kept on increasing interest rates (home mortgages hit 18%) which did burst the real estate bubble but that was not the sole or even principal reason for increasing interest rates. The bank was supported by the government, the economy found its floor but it took nearly 7 years before economic growth started being felt by the punters. So in a way the Chinese are following the lessons we learnt back in 1991.

[kingofhearts]

On 21/09/2021 at 10:42 AM, Shahanga said:

The biggest story around the globe right now should be the looming collapse of Evergrande.

This is going to cause massive ructions to the Chinese economy with regional political fallout.

Strap In.

Bump.

Evergrande has just defaulted.

What does this mean now for the world? Are we all fucked?

[haz]

26 minutes ago, kingofhearts said:

Bump.

Evergrande has just defaulted.

What does this mean now for the world? Are we all fucked?

Buy the dip! 

[HeartFc]

2 hours ago, kingofhearts said:

Bump.

Evergrande has just defaulted.

What does this mean now for the world? Are we all fucked?

Depends on who you are and what you own. It'll be the usual bail out, print print print, ram it right up the middle class and move on.... but... this one if different, it's got rabid covid fomo attached. The combo of market crash and fomo fizzle will be huge. 

I'm thinking cooling in late 2022 and first half of 2023, then 2023 and 2024 the market crashes at least 30%. I would hate to have bought in the last 6 months and have a 500/600k mortgage. 

Only place I would buy would be regional and under 400k. Low risk and decent rental yield. 

[Shahanga]

On 09/12/2021 at 9:02 PM, kingofhearts said:

Bump.

Evergrande has just defaulted.

What does this mean now for the world? Are we all fucked?

My life has been so crazy I’ve just seen this.

Possibly. 
Apart from their eye watering debt (and the fall out from that) then there is the number of other Chinese developers who are only slightly more solvent.

Best bet (to understand implications)  is to read what the astute financial commentators are saying.

[Shahanga]

On 09/12/2021 at 9:02 PM, kingofhearts said:

Bump.

Evergrande has just defaulted.

What does this mean now for the world? Are we all fucked?

Ok. Did 2 minutes of research. They haven’t defaulted, which is why the news hasn’t gone ballistic about it. They keep paying their debts very close to the deadline though. 
Reporters are speculating that the money is coming from the government. Perhaps just as well, collapse could lead to civil unrest which could (in the party’s view) require a major foreign distraction to quell. 

[jw1739]

What the pundits of Evergrande Doom are forgetting is the concept of "face." It would be unthinkable for the Chinese central government to allow such a major loss of face.

[NewConvert]

4 hours ago, jw1739 said:

What the pundits of Evergrande Doom are forgetting is the concept of "face." It would be unthinkable for the Chinese central government to allow such a major loss of face.

Disagree. The government is winding down Evergrande (and maybe a few other large corporations) so that it does not have a domino effect. A bit like when LTCI or Bear Sterns went bust - the US Fed provided cash flows so that the disruption to the capital markets would not affect the real markets. Unfortunately the lesson learnt was that if you are in finance then the gov will always bail you out without loss of income to managers - enter the GFC. The reasons for a controlled wind up was Barclays back in the 90s.

Given the nature of the CCP they are having a controlled shut down because they can (I am assuming that small companies are being let go to the wall) but whether they shoot the owners and managers of Evergrande remains to be seen. If they do shoot them then they will not have a GFC otherwise they will.