End of the China bull?

[notting]

Name a real market economy without bbq'd books...

That's a classic dictatorship like sloganeering attempting to cloud the issue.

A bit like the Chinese pointing to Australia's treatment of refugees or aboriginals as somehow making that on par with the horrific viciousness and scale and of the murder and torture, pollution, animal cruelty, financial manipulation, lying and general enslavement of the people by the dictatorship of China.
To make the comparison is childish at best.
No one with an ounce of sincerity or integrity would paint all with the same brush.

The worst of the Morwell fires never got even close to just another day in Beijing.

The 'free' markets and watering down of distortions through the lumbering democratic process will always ensure that some bubbles are less destructive when they explode than others!!!

But hey you don't need to be told - Tick tock, tick tock.

 

[CanOz]

It's your opinion Notting. I have similar opinions about the US, but I'm not near as outspoken about them as you are with the Chinese....but then again, I don't or didn't have a stake in it....

 

[Uncle Festivus]

China - the worlds banker......built on an ocean of ephemeral fiat



Join the central bankers club.......



This one is real money......

 

[notting]

China's Shadow colony North Korea -

China dismissed on Monday a UN report alleging North Korea has committed crimes against humanity, effectively confirming the fears of human rights advocates that Beijing will shield its ally from international prosecution.

The report, published in February, accused the reclusive country of mass killings and torture comparable to Nazi-era atrocities and said officials, possibly even Supreme Leader Kim Jong Un himself, should face the International Criminal Court (ICC).

Read more: http://www.smh.com.au/world/china-r...chael-kirby-20140318-hvjwi.html#ixzz2wFpjLBfU

All this goes on within what China claims as it's boarders as well.

Whilst it's reported economic growth continues to trend in a negative direction -
China widens the Band on Yuan trading after a string of negative reports from the dictatorship.
That's not a loosening of policy on currency manipulation, that's manipulating the Yaun down as usual!
China continues it's efforts to beggar the rest of the world, then take it over, by monopolizing manufacturing with it's slave labor force and manipulated currency.
- A string of listings are being lined up for the US markets, Like Alibaba and Weibo.
Guess that will make them more lucrative for the Communist party members who own them with the weaker Yuan. The dictators are getting out by floating them to the US.
Won't be dipping my stake in anything Chinese ever.

 

[Trembling Hand]

Won't be dipping my stake in anything Chinese ever.

Never held a mining share? Or purchased a cheap toaster. LOL just nonsense!

 

[satanoperca]

Never held a mining share? Or purchased a cheap toaster. LOL just nonsense!

He also walks around naked.

 

[notting]

Never held a mining share? Or purchased a cheap toaster. LOL just nonsense!

Many times but that's not China, Chinese or nonsense.

 

[CanOz]

Chinese Developer Bonds Sink in Secondary Trade Amid Collapse

Some 66 percent of new Chinese developer dollar-denominated bonds sold this year are trading below their issue price amid the collapse of a private real estate company and news the housing market is cooling.

 

[skc]

Chinese Developer Bonds Sink in Secondary Trade Amid Collapse

Your link didn't work. Here's a piece on this.

http://www.nytimes.com/2014/03/19/b...ers-collapse-adds-to-china-concerns.html?_r=0

Cockroach No.3, your name is Zhejiang Xingrun Real Estate Investment Company.

http://www.forbes.com/sites/chriswr...ts-still-not-a-bear-stearns-moment-for-china/

Here comes the second cockroach... Highsee Iron and Steel.

Correction to the name... it's Haixin Steel.

Anyhow, that's 3 companies in 3 strategic industries. Green technology, steel and property. I still hold hopes of a controlled descent...

 

[CanOz]

That was a Bloomberg link, not sure what happened there...

Here's another.....surely those short sellers will get burned

Short Sellers Target Chinese Developers as Rout Deepens

Stock traders have doubled bearish bets against some of the biggest Chinese developers amid growing concern that a weaker real-estate market will curb property sales just as borrowing costs surge.

 

[CanOz]

The whole property bubble is a bit of a tricky call. People that invest in property basically have no other option for the pile of cash. So they buy hordes of apartments and they sit, empty. Seriously, its all around you here, no matter what city you live in. The investors think they're making money as the get the property valued now and again and of course this confirms what they've been expecting. The property has gone up according to the valuer. The thing is i don't think there is much of a market here for pre-owned apartments, unless they're in desired areas, in the bigger cities. If we tried to sell our place, i'm not sure that we could. Certainly we wouldn't expect the growth that the media is reporting. We're just outside Shanghai too. I think the bulk of the properties are being bought off plan. Now this is worrying. IF we start to get allot of developers failing, then in order to free up capital those that got caught with deposits in the failing property companies start to try and sell their other properties and 'POP', that's the bubble done. I don't know if i articulated this very well but basically i think there needs to be a big catalyst to entice the owners to start unloading. The lack of liquidity will force prices down so fast that there will be a panic.

However, those still with funds will want to be taking advantage of these 'great' prices and may halt the decline as they step in to buy again. The hard thing to comprehend here is the amount of cash looking for a home.

Its not all like the US where everyone was leveraged out...

 

[skc]

The whole property bubble is a bit of a tricky call. People that invest in property basically have no other option for the pile of cash. So they buy hordes of apartments and they sit, empty. Seriously, its all around you here, no matter what city you live in. The investors think they're making money as the get the property valued now and again and of course this confirms what they've been expecting. The property has gone up according to the valuer. The thing is i don't think there is much of a market here for pre-owned apartments, unless they're in desired areas, in the bigger cities. If we tried to sell our place, i'm not sure that we could. Certainly we wouldn't expect the growth that the media is reporting. We're just outside Shanghai too. I think the bulk of the properties are being bought off plan. Now this is worrying. IF we start to get allot of developers failing, then in order to free up capital those that got caught with deposits in the failing property companies start to try and sell their other properties and 'POP', that's the bubble done. I don't know if i articulated this very well but basically i think there needs to be a big catalyst to entice the owners to start unloading. The lack of liquidity will force prices down so fast that there will be a panic.

However, those still with funds will want to be taking advantage of these 'great' prices and may halt the decline as they step in to buy again. The hard thing to comprehend here is the amount of cash looking for a home.

Its not all like the US where everyone was leveraged out...

Questions for you CanOz...

- Is there a leading property website for China (or at least the big city markets)? Like realestate.com.au for Australia?

- Are mortgages generally tied to the borrower or are they non-recoursed (like the US sub-prime)?

- Is there a secondary market for mortgage debt? Like RMBS?

Sorry I could google them myself I guess

Don't forget this chart...

 

[notting]

To me it's a bit like the US and European stocks exchanges there is too much cash everywhere looking for a home.
It's just odd that the Chinese can't rent the apartments out.
If I were you I'd sell and take a long term lease as part of the deal just sit back and wait for a buyer no pressure, just yet.

Re being short China, not too bad -

 

[CanOz]

Don't get me wrong i'm not trying to say this bubble is different and won't end the same. Its worse, its much bigger. I'm saying it may take longer to really pop though. Maybe the bargain hunters are the retracement on your bubble chart.

Will ask my wife some questions about the property sites...give it a while, she's pregnant, not in a great mood at the moment

As far as i know the properties are directly tied to the borrowers. We still owe the bank a small amount (less than 20% of the value) on our mortgage, for example.

There is no derivative market pre se here, the debt is not bundled up and sold off as AAA investments...although the shadow banking system is a worry. The big problem is the degree in which allot of the debt has been rolled over into the shadow banking system. For example, i know a developer that is paying interest on his debts interest, by borrowing more money from the shadow bankers....so he is paying interest on interest.

 

[CanOz]

It's just odd that the Chinese can't rent the apartments out.

Most are not even finished, they're just concrete caves. That said there is a huge property rental market and its pretty cheap to get a decent place. My mate next door has a huge fifth story penthouse apartment with 2 floors, 3 bedrooms, 3 balconies for 5000 CNY per month. There is no way they have EVER been getting anywhere 5% yield on a rental property. The rent would even be paying their interest payments on newer places I'm sure. This is in a regional area, where the values are much more down to earth. Our place is like, 125 sq.meters and is likely worth about 2 million CNY.

 

[notting]

http://www.cnbc.com/id/101501718

Analysts are sayen it's not going to be a domino effect.
Oh I vaguely remember hearing that somewhere before about property that was ever going to be in short supply, like commodities.
It was about 5 years ago.:hide:

 

[havaiana]

article from the age:

"Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland."

http://www.theage.com.au/business/world-business/fire-sale-chinese-selling-off-hong-kong-luxury-homes-20140321-356ui.html

 

[notting]

And the richest man in Asia, the legendary Hong Kong tycoon ''Superman'' Li Kashing, has been busy dumping 20 billion yuan ($7 billion) of Chinese property from his portfolio.

''This is a signal worth attention,'' Wang says.

The Financial Times reported this week that China's central bank and one of its largest state lenders held emergency talks over whether to bail out failing Zhejiang property developer Xingrun Real Estate and help repay the company's 3.5 billion yuan debts. It came quickly after Chaori Solar became China's first bond default this month.

It came just a week after Premier Li Keqiang warned that defaults in China's financial system were proving ''hardly avoidable'' - highlighting the tightrope authorities tread between courting moral hazard and undermining confidence in the country's debt-laden financial sector.

In a rare move highlighting the sensitivity of the situation, the People's Bank of China denied it had sought to intervene.

''The People's Bank strongly condemns the media publishing false reports without verifying the facts,'' it said in a statement, only serving to add fuel to investor speculation that the report was right on the money.

Far from being a disparate issue, China's property conundrum is inextricably linked to its multi-trillion-yuan shadow banking sector.

Read more: http://www.smh.com.au/business/are-...onomic-ruin-20140321-358l2.html#ixzz2wnDLhnCL

Catalyst?

 

[havaiana]

This is the sort of thing that could make the Chinese M/Billionaires very nervous and just want to get their money out

"Chinese authorities have seized assets worth at least 90 billion yuan ($14.5 billion) from family members and associates of retired domestic security tsar Zhou Yongkang, who is at the centre of China's biggest corruption scandal........ But it may also be driven partly by political payback after Zhou angered leaders......"

http://www.reuters.com/article/2014/03/30/us-china-corruption-zhou-idUSBREA2T02S20140330

 

[skc]

Another day, another documentary about slowdown in China.

http://www.abc.net.au/4corners/stories/2014/03/31/3972864.htm

It feels like it is staring you in the face... but at the same time, do you have the conviction to land the big short? Will you be right? Will you make profit whilst being right?

I wish I run a macro hedge fund and short with other people's money