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Beijing struggles to defuse anger over China's P2P lending crisis

reuters.com

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Re: Beijing struggles to defuse anger over China's P2P lending crisis

#41

Post by Sangermaine »

SuoDuanDao wrote: post #24
21 wrote: post #14

In the last 5 years retail Chinese investors had massive losses in bitcoin, gold, the local stock market, bitcoin again, now P2P. Is it fair to say that they rush from one investment fad to the next, typically buying the top? This is how it looks from far away, can someone with local knowledge comment? http://static.atimes.com/uploads/2015/07/retail-investors.jp...

I remember a significant anecdote about Chinese assumptions when a Chinese-Canadian I was dating explained she always goes to busy restaurants on the assumption that a lot of customers means they have good food. The western bias is towards being the first to discover an unknown restaurant with great food that just hasn't had time to build a reputation, but that's not how a typical Chinese person would approach the re…

>The western bias is towards being the first to discover an unknown restaurant with great food that just hasn't had time to build a reputation, but that's not how a typical Chinese person would approach the restaurant problem.

But that's not bias, the Western approach is correct and the Chinese approach is wrong, if the goal is to find good restaurants (with the assumption that "Western" and "Chinese" approaches are as described above).

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#42

Post by UlisesAC4 »

guessthejuice wrote: post #31
MichaelMoser123 wrote: post #22

Earlier quoted context omitted.

How did they get losses in bitcoin, given that the cryptocurrency had only been rising? Is that due to regulation?

BTC was trading at nearly $20K just a few months ago. Now it is trading at $6K. How is going from $20K to $6K "only been rising"? A lot of people are underwater when it comes to bitcoin.

It is ok. But keep in mind that in the overall graph BTC trend is upwards.

You only lost if you were actively trading on December.

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#43

Post by Leary »

Sangermaine wrote: post #41
SuoDuanDao wrote: post #24

Earlier quoted context omitted.

I remember a significant anecdote about Chinese assumptions when a Chinese-Canadian I was dating explained she always goes to busy restaurants on the assumption that a lot of customers means they have good food. The western bias is towards being the first to discover an unknown restaurant with great food that just hasn't had time to build a reputation, but that's not how a typical Chinese person would approach the re…

>The western bias is towards being the first to discover an unknown restaurant with great food that just hasn't had time to build a reputation, but that's not how a typical Chinese person would approach the restaurant problem. But that's not bias, the Western approach is correct and the Chinese approach is wrong, if the goal is to find good restaurants (with the assumption that "Western" and "Chinese" approaches are…

Despite being a westerner, I haven't heard of this correct approach to finding good restaurants, could you share with us what this is?

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#44

Post by the-dude »

finebalance wrote: post #32
sremani wrote: post #30

Earlier quoted context omitted.

>> always goes to busy restaurants on the assumption that a lot of customers means they have good food. It is actually good heuristic, I would just modify it ever slightly.. lot of customers means that they will not serve "stale" or yesterday's food.

That's actually a very useful heuristic because, unlike perhaps in the US, in many parts of the world food standards even in higher quality restaurants are rather lax.

That must be American Exceptionalism. Wow.

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#45

Post by [deleted] »

SuoDuanDao wrote: post #24
21 wrote: post #14

In the last 5 years retail Chinese investors had massive losses in bitcoin, gold, the local stock market, bitcoin again, now P2P. Is it fair to say that they rush from one investment fad to the next, typically buying the top? This is how it looks from far away, can someone with local knowledge comment? http://static.atimes.com/uploads/2015/07/retail-investors.jp...

I remember a significant anecdote about Chinese assumptions when a Chinese-Canadian I was dating explained she always goes to busy restaurants on the assumption that a lot of customers means they have good food. The western bias is towards being the first to discover an unknown restaurant with great food that just hasn't had time to build a reputation, but that's not how a typical Chinese person would approach the re…

[deleted]

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#46

Post by rhino369 »

UlisesAC4 wrote: post #42
guessthejuice wrote: post #31

Earlier quoted context omitted.

BTC was trading at nearly $20K just a few months ago. Now it is trading at $6K. How is going from $20K to $6K "only been rising"? A lot of people are underwater when it comes to bitcoin.

It is ok. But keep in mind that in the overall graph BTC trend is upwards. You only lost if you were actively trading on December.

It was going up because new speculators were jumping in. And those new speculators are all underwater.

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#47

Post by bobthepanda »

SuoDuanDao wrote: post #24
21 wrote: post #14

In the last 5 years retail Chinese investors had massive losses in bitcoin, gold, the local stock market, bitcoin again, now P2P. Is it fair to say that they rush from one investment fad to the next, typically buying the top? This is how it looks from far away, can someone with local knowledge comment? http://static.atimes.com/uploads/2015/07/retail-investors.jp...

I remember a significant anecdote about Chinese assumptions when a Chinese-Canadian I was dating explained she always goes to busy restaurants on the assumption that a lot of customers means they have good food. The western bias is towards being the first to discover an unknown restaurant with great food that just hasn't had time to build a reputation, but that's not how a typical Chinese person would approach the re…

This sounds like the pre-Yelp and pre-Instagram Western food culture. Big cities, in my experience, are just as trend hoppy as Asia these days.

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#48

Post by varsitywork »

SuoDuanDao wrote: post #24
21 wrote: post #14

In the last 5 years retail Chinese investors had massive losses in bitcoin, gold, the local stock market, bitcoin again, now P2P. Is it fair to say that they rush from one investment fad to the next, typically buying the top? This is how it looks from far away, can someone with local knowledge comment? http://static.atimes.com/uploads/2015/07/retail-investors.jp...

I remember a significant anecdote about Chinese assumptions when a Chinese-Canadian I was dating explained she always goes to busy restaurants on the assumption that a lot of customers means they have good food. The western bias is towards being the first to discover an unknown restaurant with great food that just hasn't had time to build a reputation, but that's not how a typical Chinese person would approach the re…

> in a country with a bias towards savings

that's a myth that keeps being persisted, much like their consistent 6-7% gdp growth every year.

if you read the article, it mentions that 'He and his family had invested 7 million yuan - their life savings'.

"The Myth Of China's 'Excess Savings' Is Weighed Down By Excessive Debt. Bank balances offset against enormous, rapidly rising, bad debts, a property bubble out of all contact with reality, a closed capital account to prevent money draining overseas while it still can, and an unregulated shadow banking sector where vast pools of notional value endlessly gyrate on air currents of uncertain origin"

https://www.forbes.com/sites/douglasbulloch/2017/04/26/the-m...

The average Chinese citizens savings have now been engulfed in bitcoin crash, stock market crash, real estate bubble, p2p lending, and gold crash. When money can't leave China because of capital controls for average citizens, money goes into a risky bubble (otherwise it gets eaten away by inflation).

The biggest bubble, China's real estate, which has "$202 per square foot. That's 38 percent higher than the median price per square foot in the U.S., where per-capita income is more than 700 percent higher than in China." https://www.bloomberg.com/view/articles/2018-06-24/why-china..., is at a dangerous size. And it could be bursted by any external factors: Trump's threat to tax $500B Chinese imports, manufacturers hastened exist from China, Fed raises the interest rate a few more times, faster capital outflow from China, one of the emerging market's collapse, one of the more indebted private firm collapses, triggering a wave of collection, etc.

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#49

Post by rhino369 »

maxxxxx wrote: post #23
koboll wrote: post #16

Earlier quoted context omitted.

If we're in a position where the options are a bailout or the catastrophic collapse of the world economy, we've already failed. This is why regulation is necessary.

"bailout or the catastrophic collapse of the world " In 2008 this is what the bankers told us but are these really the only options? I have my doubts.

The panic and economic damage from just Lehman Brothers failing shows that the fear was reasonable.

Finance is as important as energy, communications and food to the global economy.

I think the key is just making sure the bail out hurts nearly as much as actual bankruptcy.

Re: Beijing struggles to defuse anger over China's P2P lending crisis

#50

Post by bobthepanda »

bilbo0s wrote: post #12
vfulco2 wrote: post #4

There is a huge structural issue when investors of all asset classes believe the central government will bail them out. It happens to a vastly lesser degree elsewhere. We saw the folly of it in the US in 2008.

I don't know if the structural issue was people believing the US government would bail them out. The issue was probably more that we actually bailed them out. I can't really blame rich and powerful bankers for thinking we were gonna do something that we normally do for them. Stop bailing them out, and they'll stop believing they're gonna be bailed out.

The Greenspan put was an expectation from the '80s into the Great Recession: https://en.wikipedia.org/wiki/Greenspan_put

The problem is that not bailing out may have been more painful than anything involved. The only US guide for this was when Hoover let the banks go into free-fall in 1929, which didn't get resolved until Roosevelt stabilized them in 1933. Are we willing to pay the price to do the right thing?

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