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China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

nytimes.com

101–110 of 263 posts

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#101
China's development has really been fascinating.

10-20 years ago I can remember the analyses arguing China can only continue to grow with liberalization, even outright requirements for democracy. Perhaps these pronouncements are still being made.

I've come to believe that what's really useful to people isn't "democracy" or "freedom" rather rather stability. That means political and economic stability.

One thing I find fascinating is China's ghost cities. I remember reading some report that said housing for 64M+ was sitting vacant, largely unaffordable to locals. Now one can argue that such work is stimulating the economy by providing employment.

But here's another view. As much as we might (rightly) deride Trump, there are the (very) occasional nuggets of truth. Some might say even racist clocks are right twice a day [1]. Whatever the case, the specific issue is infrastructure.

Infrastructure in the US is crumbling. What's more, a lot of infrastructure exists now that would be completely uneconomic to build now. Look at the Second Avenue Subway in NYC that apparently somehow cost $17B+ to basically go 50 blocks. What's more, a lot of this infrastructure has not and is not being maintained.

So why is this unaffordable to build now? I suspect the answer is that labour is simply too expensive as is real estate.

So what if China is simply building infrastructure now while it's relatively cheap to do so? Obviously once built infrastructure depreciates but inflation also works in your favour (assuming positive inflation).

Now I don't know if that is the Chinese government's thinking but I find it an interesting thought.

[1] https://forums.penny-arcade.com/discussion/133477/new-patv-e...

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#102

Ok, this is probably a silly question, but who holds all the debt now? The avg US citizen would say China holds much of the US debt, but now it sounds like China is borrowing their way into trouble too... it's not any of these third world countries... who is it?

The source of all the debt is money creation. Any amount of money can be created by central banks. The commercial banks can also create money by lending more (up to 10x) money that what they have.

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#103

Earlier quoted context omitted.

>The avg US citizen would say China holds much of the US debt, but now it sounds like China is borrowing their way into trouble too... it's not any of these third world countries... who is it? The central banks, obviously. Many of them not being beholden to a nation but to private individuals.

> The central banks, obviously. Many of them not being beholden to a nation but to private individuals. Example? The largest countries' central banks are accountable to their governments.

[deleted]

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#105

For this subject I would like to offer this counter view: Why China bears are wrong: An interview with Andy Rothman ( http://supchina.com/sinica/china-bears-wrong-interview-andy-... ) As it is likely for someone to mention the Ghost cities, I recommend this video https://www.youtube.com/watch?v=AyBBQ-wF87M&list=PLxh5xkC0W-...

Given that this guy benefits financially from investor sentiment, I would take his advice with a very large grain of salt.

It's a catch 22, people who know the most about a market are almost certainly invested.

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#106
post #85

Earlier quoted context omitted.

But Fukushima was a minor incident...

Your comment goes pretty hard against the popular opinion of what happened. It would be good if you could explain your reasoning.

Not the OP, but 15,000 people died because of the tsunami. No one died from the radiation release at Fukushima and:

"A comprehensive assessment by international experts on the health risks associated with the Fukushima Daiichi nuclear power plant (NPP) disaster in Japan has concluded that, for the general population inside and outside of Japan, the predicted risks are low and no observable increases in cancer rates above baseline rates are anticipated."

http://www.who.int/mediacentre/news/releases/2013/fukushima_...

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#107
post #77

You know what I'd like to see? What conclusions China's economics community have had about the US environment.

The US economy will see a series of booms and busts. As all economies will. As will China's. When? Who knows? But I wouldn't be the one to bet on never.

Absolutely, but if the US (Moody's, even!) idea of China's cycle is valuable, then so must theirs be of ours.

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#108
post #31

Earlier quoted context omitted.

It seems like smart people have been predicting that China's growth is unsustainable on a regular basis for at least 15 years... it's tough for an average HNer like myself to take the time to tell which "expert" is just blowing smoke and which expert truly has a handle on the salient facts- Guess all I can really do is simply wait and see who ends up being right...

Agreed, to an extent (though not every 'expert' is equally reliable). Two ways I look at it: 1) Generally, the nature of a bubble is that nobody knows when it will pop. People knew about the U.S. asset bubble in the mid-2000s for years, but even those not caught up in the bubble mass psychology couldn't accurately predict when it would collapse. The same was true of the dot-com bubble around 2000. You can be right th…

I think this was in The Wolf of Wall Street or some other stock market related movie.

Re: China Can’t Sustain Its Debt-Fueled Binge, Moody’s Says

#109
post #81

Earlier quoted context omitted.

I think you're correct to point out the inaccuracies of the image, however I disagree with the cavalier use of the term "fake news" to describe arbitrary instances of false or misleading information. The problem of "fake news" is actively perpetuated in part by the impulse to use the term as a catch-all pejorative for information we deem to be specious. Fake news is when a media source that claims to report an accura…

like CNN, you don't get to define fake news. Fake news is as simple as it sounds: articles that are factually incorrect. Sadly, from random images to all major media, everyone is guilty of it.

> you don't get to define fake news. Fake news is as simple as it sounds: articles that are factually incorrect.

I'm happy to debate the nuance of the term fake news, but I think it's ironic that you presume to glibly assert your own definition of fake news right after exclaiming that one cannot do so (unless you're suggesting that CNN and myself, in particular, are forbidden from doing so).

Anyway, fake news is not simply "articles that are factually incorrect", otherwise every misreported fact or journalistic error could be classified as fake news which any intellectually honest person will admit is not what is intended to be described by the term fake news. Further, something cannot be fake news if it is not "news". Random images floating around the internet is not news. People posting memes and rumors on social media is not news. Honestly, even partisan bias and selective reporting by news organizations is not "fake news", and the terms "bias and selective reporting" accurately convey those qualities. Fake news is a loaded pejorative that carries the baggage of the 2016-2017 zeitgeist, so if you're going to use it at all, stick to the definition that common sense would have given us prior to 2016: reporting of current events that is deliberately presented as true when the authors know it is false.

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