Friday, September 16, 2011

China's Biggest Bubble Warning Ever

Biggest Story in the World? ... China Faces Hard Landing
China risks hard landing as global woes spread ... China's carefully-managed soft landing is turning harder by the day, threatening to deflate the torrid credit bubble of the past three years. Beijing is alarmed by inflation above 6pc and price-to-income ratios for property in the rich coastal cities ... "There is a large potential risk," said Zhu Min, the deputy managing director of the International Monetary Fund and a former Chinese official.

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China's Biggest Bubble Warning Ever
It's the biggest and clearest sign yet: China is a giant bubble waiting to burst.

With Europe in the spotlight, few are thinking about China these days. And when China does come up, it is typecast as the wealthy uncle with deep pockets -- the one player rich enough to help keep Europe afloat. (We saw that earlier this week, on hopes that China would buy Italian debt.Chinaitself, though, is in the grip of a dangerous bubble, complete with "ghost cities," infrastructure overload, Ponzi finance schemes and the potential for trillions in bad bank loans. China's finances are very opaque -- and deliberately hidden from the public. It is hard to see from the outside in. This can make it hard to determine just how far things have gone in the bubble department.But there are clues, just as there were with Japan's monster bubble in the late 1980s.
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China developers ‘short of cash’: analyst
HONG KONG (MarketWatch) — China’s real-estate market may face an escalating credit crisis, with industry data for August providing clues that big developers are running short of cash, according to Credit Suisse analysts.

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As China Prepares To Bail Out Europe, Who Is Preparing To Bail Out China?

The unfolding situation heralds a perfect storm for China’s home-building industry, and China’s deteriorating credit backdrop should be viewed by investors with alarm, the Credit Suisse analysts said." That's ok, by the time China is insolvent, Chinese stabilization of Europe will be complete, and Europe can boldly step up and rescue China in turn. And so on... And so on... In the wacky, wonderful, ponzi world of ours.

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