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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

#211

Post by mistermann »

kybernetikos wrote: post #172
mistermann wrote: post #171

Earlier quoted context omitted.

Whether or not it's "interesting", the trustworthiness of the source seems rather important.

> Whether or not it's "interesting", the trustworthiness of the source seems rather important. Not really. If the question is about the popularity of a sentiment, then of course the interestingness of the sentiment is relevant. But as with every argument, it's the quality of the argument that is important, not the arguer. The only way that the trustworthiness of the source is important is if you are unable to evaluat…

Economics is far more complicated than most other fields, and you very often don't know the real "quality of the argument" until years later. So yes, in this case prior track record does very much matter.

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

#212

Post by known »

pankajdoharey wrote: post #204

Here's the thing about China, if it doesn't pay up, the world at large can't do anything to China. The world is dependent on Chinese export. If China sinks it will sink the world economy with it. Too Big to fail actually applies to China. If China falls short of paying up its mortgages or loans on time it can't be recovered by anyone. The only thing one could do is wait. So all the talk is useless, China gas got ever…

China's external debt is just 8% http://www.usdebtclock.org/world-debt-clock.html

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

#213

Post by [deleted] »

jdavis703 wrote: post #198
cm2187 wrote: post #185

Earlier quoted context omitted.

It's funny because these massive debt accumulations invariably end up either in financial collapses or period of very high inflation, both of which can have dramatic impacts on a large part of the population (particularly savers and pensioners). But they are the most predictable thing in the world. Yet no one seems to be worried about them, whether in Europe or in the US. When the collapse will happen, people will be…

China is a bit more of a complex situation since they are a republic, the citizens have no direct say in government matters. Now of course the Chinese government knows they have to continue providing growth, otherwise citizens will question the system and revolution could happen. But let's say a majority of voting eligible citizens decided their country needs to dial down debt-fueled growth? Well there's almost nothi…

[deleted]

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

#214

Post by gunnyguy121 »

jdavis703 wrote: post #198
cm2187 wrote: post #185

Earlier quoted context omitted.

It's funny because these massive debt accumulations invariably end up either in financial collapses or period of very high inflation, both of which can have dramatic impacts on a large part of the population (particularly savers and pensioners). But they are the most predictable thing in the world. Yet no one seems to be worried about them, whether in Europe or in the US. When the collapse will happen, people will be…

China is a bit more of a complex situation since they are a republic, the citizens have no direct say in government matters. Now of course the Chinese government knows they have to continue providing growth, otherwise citizens will question the system and revolution could happen. But let's say a majority of voting eligible citizens decided their country needs to dial down debt-fueled growth? Well there's almost nothi…

I think China may be more on the brink than people realize. Right now there are about 30 million men in China who can't get married,not wont, can't. There simply aren't enough women in China for the men to find a bride. That's 30 million men who may be left jobless, and without a relationship. That is a recipe for disaster, maybe even a revolution

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

#215

Post by justinhj »

gunnyguy121 wrote: post #214
jdavis703 wrote: post #198

Earlier quoted context omitted.

China is a bit more of a complex situation since they are a republic, the citizens have no direct say in government matters. Now of course the Chinese government knows they have to continue providing growth, otherwise citizens will question the system and revolution could happen. But let's say a majority of voting eligible citizens decided their country needs to dial down debt-fueled growth? Well there's almost nothi…

I think China may be more on the brink than people realize. Right now there are about 30 million men in China who can't get married,not wont, can't. There simply aren't enough women in China for the men to find a bride. That's 30 million men who may be left jobless, and without a relationship. That is a recipe for disaster, maybe even a revolution

If your figure is correct that's only 2% of the population.

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

#217

Post by daemonk »

Do ratings agencies like Moody self sustain on the psychology of the people who listen to them? People who take them seriously factors them into their decisions. People who don't take them seriously has to still factor them into their decision because of the people who do take them seriously.

There might be some kind of tipping point where the amount of people who do not believe their ratings triggers a downward spiral in confidence?

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

#218

Post by seanmcdirmid »

whazor wrote: post #177
seanmcdirmid wrote: post #159

Earlier quoted context omitted.

Ghost cities are weird: first they talk about the ghost cities, then others say the ghost cities are filling up. If you actually visit, say, Ordos New Town, you'll really get that, no, those ghost cities really exist. Some will fill up, like Pudong did, I get Tianjin's new financial district will also. But those in areas with little economic hope in the near term (Ordos and dying coal), they really aren't going to ha…

I wonder how much percentage of all buildings are empty in China. In my visit I saw plentiful empty skyscrapers, especially next to decaying homes where people would still live.

Local governments have ways of telling, e.g. By electricity usage. You can also try counting the lights on at night to get an idea of apartment occupancy (a fun last time at the apartment complex I used to live in). Someone definitely knows, but you can be damned sure that this information is considered "state secrets."or

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

#219

Post by ethbro »

draw_down wrote: post #82
VintageCool wrote: post #60

Earlier quoted context omitted.

To quote Keynes: The market can stay irrational longer than you can stay solvent.

Good rule of thumb if you're an individual investor. If you're China, well...

I would also assume that a majority of the options to "call an irrational market's bluff" aren't freely available vis China. So it would be less exposed to international market driven deleveraging?

(Actually asking, I know they've been loosening their financial walls but am not sure what the current controls are)

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

#220

Post by emodendroket »

don_draper wrote: post #209
pankajdoharey wrote: post #204

Here's the thing about China, if it doesn't pay up, the world at large can't do anything to China. The world is dependent on Chinese export. If China sinks it will sink the world economy with it. Too Big to fail actually applies to China. If China falls short of paying up its mortgages or loans on time it can't be recovered by anyone. The only thing one could do is wait. So all the talk is useless, China gas got ever…

I question the assertion that allowing things to fail like big banks or China would be bad in the long term. And this is economics, which like religion, isn't an exact science so neither of us know for sure.

Can you point to an example where such things happened and the result was not calamitous? I can't think of many happy endings to stories that involve massive bank runs, which would presumably be what happened when big banks started failing.
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