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

nytimes.com

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

#111

Post by kadfasd4324 »

jseliger wrote: post #21
ryandamm wrote: post #15

I think the best model to understand this is Michael Pettis's balance sheet analysis. He covers it extensively, but here's his latest digest of the model: http://carnegieendowment.org/chinafinancialmarkets/66221 It really makes clear how stark the choices are for China. The debt binge of the last ~10 years has masked the flattening out of productive investment, and there will need to be a reckoning. Hopefully it's a…

and there will need to be a reckoning And yet when I read things like this I also think of the cliché, "Markets can remain irrational longer than you can remain solvent." People have been waiting decades for Japan's post-boom day of reckoning and we've not seen it.

Nikkei peaked at 40k in 1990; it has been hovering around 10-20k ever since.

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

#112

Post by JumpCrisscross »

Mtinie wrote: post #98
JumpCrisscross wrote: post #88

Earlier quoted context omitted.

> They can't realistically move, or revolt Some can. Those are the ones who matter. No man rules alone--political leaders are only powerful insomuch as they can incentives or coërce others to act for them. A ruling class whose living standards is falling is a ruling class more willing to entertain other leaders. "Certain types of unemployment are likely to be perceived as more politically costly than others - e.g. be…

The vast masses of Chinese citizens are not those people. History isn't in agreement, and time after time, the peasants will starve before the bourgeoisie suffer to a point that they feel enough pain to revolt. It's economically cheaper for the State to continue to pay for the ruling classes' requisite "hookers and blow" than it is to pay for social programs.

> The vast masses of Chinese citizens are not those people.

I can't recall a single civilization where the majority of people were "those people". The point is there are enough who demand enough that mortgaging the non-influential majority to pay for "those peoples'" bread (or as you put it, "hookers and blow") will be a short-term patch at best. (Reverse wealth transfers are not uncommon in a regime's dying days. Case in point: Venezuela.)

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

#113

Post by csours »

skookum wrote: post #89
zeamaize wrote: post #70

Earlier quoted context omitted.

But Fukushima was a minor incident...

Not sure if you are trying to be sarcastic, but: https://en.wikipedia.org/wiki/International_Nuclear_Event_Sc...

Fukushima and Chernobyl are both classed as 7s, but the amount of radiation released at Fukushima was at least an order of magnitude less than Chernobyl, with 80% of that falling on the ocean.

Fukushima caused half as many people as Chernobyl to evacuate.

No one died as a direct result of Fukushima, as opposed to 2 immediate + 28 cleanup deaths from Chernobyl.

Fukushima definitely deserves to be taken seriously, and it belongs in the same class as Chernobyl, but at the other end of that class.

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

#114

Post by kadfasd4324 »

JumpCrisscross wrote: post #92
wu-ikkyu wrote: post #61

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.

They are not. They are legally independent in many countries incl. the US, Japan, India (de facto), S. Korea, and Thailand.

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

#115

Post by kadfasd4324 »

make3 wrote: post #47
matheweis wrote: post #43

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?

it's debt, all the way down :p

... until you hit the central bank.

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

#116

Post by xrange »

skookum wrote: post #89
zeamaize wrote: post #70

Earlier quoted context omitted.

But Fukushima was a minor incident...

Not sure if you are trying to be sarcastic, but: https://en.wikipedia.org/wiki/International_Nuclear_Event_Sc...

If Fukushima is a major event, with no fatalities, what does one consider the Banqiao Dam event, with 170,000 fatalities?

https://en.wikipedia.org/wiki/Banqiao_Dam

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

#117

Post by vectorpush »

WillPostForFood wrote: post #86
vectorpush wrote: post #65

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…

If it was random, you'd be right, But that image wasn't arbitrary, it was deliberately misleading and created to generate hype/outrage, and the numbers in it now come up as fact. It would be like taking a particular 5 year snapshot of temperatures that were declining, graphing it and labeling it "Climate Change Debunked." I'm open to it being in some other category of fake, but then we need a label for it.

> I'm open to it being in some other category of fake, but then we need a label for it.

I agree with you. I think "deliberately misleading", "factually inaccurate", even "complete bullshit" are applicable, I just disagree with the overloading of the term "fake news" to describe all manner of falsehood. The word fake followed by the word news in an english sentence is supposed to mean something very specific and when the term is blithely abused to suit the egos of warring partisans it diminishes society's ability to hold the influential news media organizations responsible for accuracy in reporting. In today's world everything is fake news to somebody and that wasn't true in 2014.

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

#118

Post by mistermann »

xrange wrote: post #116
skookum wrote: post #89

Earlier quoted context omitted.

Not sure if you are trying to be sarcastic, but: https://en.wikipedia.org/wiki/International_Nuclear_Event_Sc...

If Fukushima is a major event, with no fatalities, what does one consider the Banqiao Dam event, with 170,000 fatalities? https://en.wikipedia.org/wiki/Banqiao_Dam

"That's different!"

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

#119

Post by Nition »

xrange wrote: post #106
Nition wrote: post #85

Earlier quoted context omitted.

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 a…

Thanks xrange.

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

#120

Post by Mtinie »

JumpCrisscross wrote: post #112
Mtinie wrote: post #98

Earlier quoted context omitted.

The vast masses of Chinese citizens are not those people. History isn't in agreement, and time after time, the peasants will starve before the bourgeoisie suffer to a point that they feel enough pain to revolt. It's economically cheaper for the State to continue to pay for the ruling classes' requisite "hookers and blow" than it is to pay for social programs.

> The vast masses of Chinese citizens are not those people. I can't recall a single civilization where the majority of people were "those people". The point is there are enough who demand enough that mortgaging the non-influential majority to pay for "those peoples'" bread (or as you put it, "hookers and blow") will be a short-term patch at best. (Reverse wealth transfers are not uncommon in a regime's dying days. Ca…

I don't disagree with you, and I'm sorry if I wasn't clear. I just don't believe that those in power consider farther than the short term (say, three to ten years).

The bill eventually comes due, but what cost does the population pay in the interim?

I hope that all subjugated and disenfranchised people rise up to remind their governments that they are the reason that those governments ultimately exist, but the cost of that "disobedience" is a heavy burden if they don't succeed.

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