China China China

[Smitty-48]

correct, Xi said "nobody is bigger than the party"

the super wealthy are a threat to the Communists, so the Communists are going to let them fall

Something Xi and Martin have in common I guess.

this is like a big game of chicken now

the Communists want things to fall to a certain point, then they step in to be the saviours

they want the billionaires to take a bath, and they want to whip up populist sentiment against the private sector

but they can only let this go so far before it becomes a threat to regime stability

it's like Congress chickened out in 2008, they bailed Wall Street out before Wall Street paid the price

the Chicoms are trying to stick the landing here, don't bail it out until the private interests are reined in by the party

[Smitty-48]

it's like the Chicoms copy America when it comes to business

but they try to learn from America's mistakes

so what they see is that Congress stepped in too early, Congress didn't let it fall far enough before coming to the rescue

so then Congress didn't get any credit for being the saviours, Wall Street got away with it

the Chicoms clearly want to test things further, let it fall further before stepping in to be the saviours

being Communists, their objective ls likely a kind of nationalization, so they are angling for that outcome from a bailout

if the CPC is dropping a trillion US dollars to bail something out, they are going to want the direct control that goes with that

[PartyOf5]

this all started a year ago when Evergrande went to the Communist Party begging for a bailout

and the Communists said no

so they clearly want the crisis to come, to unseat the private interests

they will then come in after with their massive US dollar reserves and take state control of the assets

Started further back than that, but the people that are now paying attention to the game can point out that it started about a year ago... at least the decline.

Realistically it started a little over 10 years ago, and it didn't start with what most people are thinking about, it was what was going to happen when the baby boomers were going to leave the economy and retire. With the 1 child law still in effect, it was going to cause utter chaos because the pension would implode upon itself.

They went through reactionary measures, and we are now seeing those measures cause a cascade effect...

Let me guess, you called this 10 years ago.

[Smitty-48]

China is probably more like America than you'd expect

the CPC and their military arm the PLA, are in a kind of occupation, since 1949

they rule from Beijing like the Swamp & MICC does from Washington

but China is actually rather unruly, the provinces assert a lot of local authority like American states do

so it's a similar dynamic of the CPC & PLA trying to herd cats from the Beijing Beltway

this is why they are obsessed with Taiwan, because Taiwan is Chinese Dixieland in effect

[Smitty-48]

Let me guess, you called this 10 years ago.

the origins of the Chinese real estate bubble go way back, long before the Communists took over in 1949

it's deeply ingrained in Chinese culture

in Chinese culture the son has to buy a women a house if he wants to get married

so families have always amassed as many houses as they could, to give to their sons

the Communists made all this go exponential, when they imposed the one child policy

because then the Chinese started aborting female babies in favour of having male babies

but now there is a severe shortage of young girls for their sons to marry

so the imperative of having a house to offer as the dowry has gone to exponential levels

every buyer who can afford a house on average owns three of them already

so there are no buyers, it's market saturation, the people who don't have houses can't afford to buy them from the people who do

the people who can afford to buy houses already have way more than they need

too many sons, not enough daughters, is the dysfunction that was imposed by Communist central planning

if you want to get married in China now, you have to shower the girls with riches to woo them

young illegible child bearing girls are the most valuable commodity in China

[The Conservative]

this all started a year ago when Evergrande went to the Communist Party begging for a bailout

and the Communists said no

so they clearly want the crisis to come, to unseat the private interests

they will then come in after with their massive US dollar reserves and take state control of the assets

Started further back than that, but the people that are now paying attention to the game can point out that it started about a year ago... at least the decline.

Realistically it started a little over 10 years ago, and it didn't start with what most people are thinking about, it was what was going to happen when the baby boomers were going to leave the economy and retire. With the 1 child law still in effect, it was going to cause utter chaos because the pension would implode upon itself.

They went through reactionary measures, and we are now seeing those measures cause a cascade effect...

Let me guess, you called this 10 years ago.

I brought this up 10 years ago, and people on the DFC ignored me.

People have been raising the flag for a while though, and mostly ignored because of the fear of the dragon overtaking everything.

https://thediplomat.com/2019/03/chinas- ... ging-well/

https://link.springer.com/article/10.1057/pm.2009.13

and there are further ones as well, but what do I know...I just work in IT... and fix issues before they become big problems.

[Smitty-48]

the Chinese real estate market is quite different from the American real estate market

in America, people buy one house, if they can't afford it in the end, they walk away

in forty states you can walk away without penalty, that is what the caused the crash in 2008

the NINJA loans came due, Americans walked away from them, investors were left holding the bag

it's not the same in China, they can't walk away, and there is nobody to dump the properties to

they are much more conservative, they will sit on their properties long, so it won't likely be the same as America in 2008

they've had a real estate bubble for decades, it has weathered many storms, so it's not likely going to implode at the drop of a hat

[The Conservative]

the Chinese real estate market is quite different from the American real estate market

in America, people buy one house, if they can't afford it in the end, they walk away

in forty states you can walk away without penalty, that is what the caused the crash in 2008

the NINJA loans came due, Americans walked away from them, investors were left holding the bag

it's not the same in China, they can't walk away, and there is nobody to dump the properties to

they are much more conservative, they will sit on their properties long, so it won't likely be the same as America in 2008

they've had a real estate bubble for decades, it has weathered many storms, so it's not likely going to implode at the drop of a hat

Then you are ignoring the other two major bubbles.

[TheOneX]

I do not think this is an attempt to nationalize. The CCP does not need a reason, let alone risk the collapse of their economy, in order to nationalize a few domestic companies. For the most they have already applies a soft nationalization to all companies in China. If they wanted to nationalize a few domestic companies, they would be able to with little to no recourse. There is something else going on at play here.

1. Could be simply hubris. They think they can let the company fail, and come out the other side without too much damage.
2. Those running the company are seen as having too much power, and need to be knocked down.
2. Those running the company got on the bad side of the party for some other reason, so they are letting it fail out of spite.
3. They think they can use the outcome to create further nationalism within the country.
4. Some other unknown reason.

[SuburbanFarmer]

Didn’t think this was an option…. Shaft the foreigners, just pay off their own citizens. Pretty slick.

https://www.zerohedge.com/markets/futur ... -liquidity