Beijing's Great Bailout to Defuse Ticking Local Debt Bombs

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Thu, 12/29/2011 - 09:00 | 2018729 Iconoclast
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Tbh if I had to pick a winner I'd pick China over the mess that is the USSA

Thu, 12/29/2011 - 08:16 | 2018623 sampak101
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I really like your way of expressing the opinions and sharing the information. It is good to move as chance bring new things in life, paves the way for advancement, etc.
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Thu, 12/29/2011 - 05:12 | 2018443 non_anon
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ha ha, debt bombs, bitchez!

Thu, 12/29/2011 - 00:18 | 2018197 AndrewCostello
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They are doing exactly what Australia has been doing for years.  They keep bad loans on the books and keep on adding on more and more interest, falsely pumping up their balance sheets.


I suspect that Australia will go down before China, but who knows?





Wed, 12/28/2011 - 23:20 | 2018111 billsykes
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My jaw dropped when Chanos said that the chinese banks did'nt write off their bad 2004 loans but added them as bonds and kept them on the books at par. Now I read in bloomberg that loans are being given interest holidays for 2 months.


Wed, 12/28/2011 - 20:37 | 2017730 LookingWithAmazement
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Central gov. will bail all the local crap out. No crisis. Boring world we live in.

Wed, 12/28/2011 - 20:38 | 2017725 swani
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The Chinese are good at copying. I'm sure they can figure it out. 

Wed, 12/28/2011 - 23:57 | 2018174 mailll
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Yea, they are copying the USA with their real estate bubble. Our real estate bubble burst, and it's a matter of time before their construction boom becomes unsustainable also.  And once the Federal Reserve stops purchasing our treasuries (in secret of course), our bond market bubble will burst also and our dollar will become very weak as a result.  Hopefully the dollar survives though because I don't want the New World Order currency.

Wed, 12/28/2011 - 18:47 | 2017410 steve from virginia
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What a howl! China banks need a bailout in order to bail out the bailout: a bailout bailout.

Can a bailout-bailout-bailout-bailout be far behind?

What I wanna know is when are Chinese going to take some executives outside and shoot them? Is this going to be on TV?

It gets serious when the establishment gets to the bailout-bailout-bailout-bailout-bailout-bailout phase ... Maybe next week.

I feel sorry for the Chinese, they are so new to this 'capitalist roader' nonsense, Twenty short years they were holding high that Little Red Book. Now they have high speed rail crashing into each other over and over again.

The Chinese are like sheep getting butt-fucked first then shorn. They are losing all their money, Wall Street strikes again. Hoorah! America is Number One!

Wait until the Peoples Bank starts printing ... Oops! Been there, done that ...

( bailout-bailout-bailout-bailout-bailout-bailout-bailout-bailout-bailout-halibut-halibut ...)

Fri, 12/30/2011 - 14:33 | 2022084 ozziindaus
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Don't be too surprised if one of those bailouts indirectly comes from the US. It happened already with GM. Whilst GM NA had their pathetic hand out begging the US and Canadian taxpayer for a loan/gift, SGM (Shanghai GM) were building multi billion $ development centers in China. This entity was of course immune to any recourse or dividend sharing by US tax payers. We were left with the rust heap and China received the brand spanking new facilities. 

Wed, 12/28/2011 - 18:18 | 2017354 PulauHantu29
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I was afraid you would bring China's problems up again. China's recession will be Australia's recession too.

Can you ( or anyone) do a breakdown of exports to China from Brazil, Australia, etc to show what  a Middle Kingdom slowdown means for their trading partners? Nice if you can do it in graph form with colors::))


Wed, 12/28/2011 - 23:54 | 2018170 Schmuck Raker
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Try or

Wed, 12/28/2011 - 17:59 | 2017313 SAT 800
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Of course they'll bail them out; but it doesn't matter. They don't have the same financial system we do; but they do have a centrally controlled fiat monetary unit; if they wish to make good paper losses in the banks they can; there will be no downside to this action. It's profoundly irrelevant.

Thu, 12/29/2011 - 03:07 | 2018395 qussl3
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Yes they can wipe the slate clean, but there are consequences.

Bad credit wiped clean in that manner gets into the system much like printing notes into circulation.


Wed, 12/28/2011 - 17:31 | 2017252 JW n FL
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Europe IS! Grinding to a Halt (as I am type this).

China's Great Big Lie of servicing their debt thru building 10 to 15 Empty Cities a year IS! Catching Up With Them (as I am type this).

America's Printing Press IS! Hot To The Touch (as I am typing this).

There IS Not Enough Cheap Oil to go around (as I am typing this).

The slowdown IS! NOT!! about Financial Markets!

It IS! about Lite Sweet Crude or the Lack There Of!

There are trillions more floating around in cross jurisdictional dark pools!

There are Corporations sitting with Trillions in Reserves!

There is LOTS of CASH! what there is NOT! a LOT of is Cheap Energy!

The World Economic Model is Broken! Wage Arbitrage that built so many bridges across the World is no longer viable, thusly the Trade Wars are beginning!


       · Duties 0-35% (motor vehicles 34.2%)

       · VAT 17%

       · Consumption Tax 5-10%

       China will levy anti-dumping taxes of up to 22 percent on American car imports, potentially making US-made cars prohibitively expensive in this country.


The only thing left to do is fire the first shot!



Wed, 12/28/2011 - 17:25 | 2017234 Magua
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The thought crossed my mind that Chinese banking and their exposure to commercial development reminds me of Texas in the mid to late 1980s. Most Texas local banks started out with modest RE exposure, maybe 5% to 10%. But the development loan fees were too good to pass up, so most of the Texas banks eventually got their exposure up to 30% or more.

What happened here in Texas sounds a lot like China today. Some of the office buildings stayed mostly dark for 5 to 7 years. All the development loans and a lot of the commercial RE came back onto the banks balance sheet. RE prices dropped 40% to 50%, and the nonperforming loans reached 2x to 3x equity.

7 of the 10 largest Texas banks failed and 2 more were merged in larger US banks. Congress Avenue here in Austin lost all of its retailers and restaurants, and became a virtual ghost town.

Thu, 12/29/2011 - 00:21 | 2018204 toadold
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I remember when they tore down multi-family condominiums by Lake Ray Hubbard outside of Dallas because they couldn't find anybody to buy them and they stayed empty for too long.  Now rinse and repeat all over the dang world.

Wed, 12/28/2011 - 16:54 | 2017148 ebworthen
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The majority of the Chinese people are slaves.

The Chinese government will make them shoulder the debt.

Not unlike the U.S.S.A., but I'd say a Chinese revolution may free more than just the Chinese people.

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