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China's Yuan Drops Most In A Week As Property Developers Tumble

Tyler Durden's picture




 

When we left China last night, it was all shits and giggles that bad news is great news and a Chinese stimulus plan will be here any minute to save the day. Having realized the sad fact that is not going to happen (as we explained here most recently) and the specter of banks runs looming, this evening's session has seen property developer stocks tumble - retracing all of last night's losses - the Yuan plunges by the most in a week back above 6.2150. Copper is holding in for now at the magic $300 level but corporate bond prices are falling once again (worst run in 4 months).

 

The Yuan is dumping at its fastest rate in a week...erasing all the hope-strewn gains from yesterday

 

 

Property Developers are taking it on the chin...

 

And it's no wonder, as Bloomberg notes...

Chinese developers' gross margins declined by a weighted average 294 bps last year.

 

Most developers have forecast a recovery. Further declines in prices could present a threat.

 

...

 

Chinese developers that have reported 2013 results have set an average 2014 sales growth target of 16%, about half last year's 30% rate. This is likely recognition of a need for better inventory management and of a more challenging sales environment. Developers will also probably curb construction because of slowdowns in some tier two and three cities.

 

...

 

Longfor Properties summed up the attitude among major Chinese and Hong Kong property developers in its company filings... ."In 2014, the Group's key operating focus will be inventory clearance and cost control... For the coming 6-12 months period, we wil strive to reduce the leve of unsold inventory, hereby gradually improving our sale through rate."

But apart from that... China's fixed and the world economy will be back to normal as soon as the US weather clears up...

 

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Tue, 03/25/2014 - 23:00 | 4592734 Gankfest
Gankfest's picture

Nothing new... -_-

Tue, 03/25/2014 - 23:04 | 4592745 TruthInSunshine
TruthInSunshine's picture

China has to demolish the relative value of the CNY in order to prevent a a literal economic depression, given their export intense economy.

Everyone will bitch about it, but in the end, China has no real alternative.

Tue, 03/25/2014 - 23:09 | 4592753 DoChenRollingBearing
DoChenRollingBearing's picture

Maybe, TIS.  I wonder if we can beat their bearing prices down (they quote in dollars).  I am NOT a China expert by ANY means, but the only thing i can think of is:

Yikes!

Tue, 03/25/2014 - 23:12 | 4592761 The Vineyard
The Vineyard's picture

The value of the Yuan dropped a smidge?  Wow!  That must be a sign of the upcoming apocalypse.  Quick.  Run to the hills.  Bitches.

Tue, 03/25/2014 - 23:15 | 4592764 TruthInSunshine
TruthInSunshine's picture

It's one night, dumbass, and your blog is fucking grade A retarded, bitch.

Tue, 03/25/2014 - 23:19 | 4592768 Ralph Spoilsport
Ralph Spoilsport's picture

"Smith" has a lot of friends here on ZH. And a lot ZH aliases that never seem to get banned. Must be some kind of thought experiment since the blog is an obvious hoax. Right DCRB?

Tue, 03/25/2014 - 23:49 | 4592816 DoChenRollingBearing
DoChenRollingBearing's picture

Ralph, I have no idea if Smith`s blog is a hoax or not.  Seems not.  Thought experiment?  Who knows?

But, he is married to a foreign gal and writes a non-commercial fringe blog. I like his strong language.

And, it appears that he wants to clean up his life.  Like I do.  His approach is different than mine.  So what.

Wed, 03/26/2014 - 00:01 | 4592827 Ralph Spoilsport
Ralph Spoilsport's picture

So what indeed. I'm not into getting people banned - that's up to the Tylers. His posts don't really bother me and the blog reminds me of P. J. O'Rourke and Henry Beard's stuff from the old National Lampoon mags. Peace.

Wed, 03/26/2014 - 00:06 | 4592833 enloe creek
enloe creek's picture

porgy tirebiter agrees

Wed, 03/26/2014 - 00:12 | 4592840 Ralph Spoilsport
Ralph Spoilsport's picture
Porgy Tirebiter!
He's a spy and a girl delighter,
Orgie Firefighter! He's just a student like you. If you're looking for a Captain of the Ringball Team, You can bet he won't be there. You'll find him pa-popping off at Pop's Sodium Shoppe, Tr-trailing a red, with red hair. Doobie doo-wah...
Porgy Tirebiter!
Just a student like you!
Wed, 03/26/2014 - 00:15 | 4592851 TruthInSunshine
TruthInSunshine's picture

I don't object to his thoughts on his blog, but the fact that he (and his many aliases) post a non-sensical one sentence utterance in so many threads with a link to his blog.

It'd be so less irritating if he actually, you know, put some effort into providing even a bare modicum of constructive, actual thoughtfulness into what he wrote.

Wed, 03/26/2014 - 00:20 | 4592860 Ralph Spoilsport
Ralph Spoilsport's picture

What you say is true, yet still he persists with multiple aliases that don't get deleted. I hesitate to protest too much about this (hint hint, nudge nudge).

Wed, 03/26/2014 - 07:11 | 4593113 GetZeeGold
GetZeeGold's picture

 

 

 

 

Reminds me of Dr. Hunter S Thompson......right before he killed himself.

 

Fear and loathing on Zerohedge.

Tue, 03/25/2014 - 23:20 | 4592769 knukles
knukles's picture

It's Bush's racist right wing conspiracy's weather's fault

Tue, 03/25/2014 - 23:32 | 4592789 maskone909
maskone909's picture

A little OT but

It appears that CNBC's new reality show of the life of steve stevens sports bookie is a total fabrication and fraud. This is what a dying network looks like

http://www.badlefthook.com/2013/7/31/4575832/steve-stevens-cnbc-money-ta...

Tue, 03/25/2014 - 23:48 | 4592813 TruthInSunshine
TruthInSunshine's picture

When do they just pull the plug on the absolute shit that is cnBSc?

An average of 15,000 viewers?

10,000 viewers?

It's an open joke. They should try to spice up their ratings with clay animation "newscasters."

Wed, 03/26/2014 - 01:08 | 4592907 zhandax
zhandax's picture

Either the advertisers are convinced that those 15K viewers are all CEOs, or they are willing pay for a 'MSM-quotable' platform on which to pump their propaganda.  My guess is B.

Wed, 03/26/2014 - 06:46 | 4593100 DeadFred
DeadFred's picture

Does rhe 15,000 include all the algos that hang on every word they say?

Wed, 03/26/2014 - 00:46 | 4592885 Schmuck Raker
Schmuck Raker's picture

@The Vineyard

"....a sign of the upcoming apocalypse."

It probably is for some:

http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2...

http://www.zerohedge.com/news/2014-02-26/morgan-stanley-warns-real-pain-...

[I suggest viewing the second link article via the printer- friendly version. (Pretty charts)]

Tue, 03/25/2014 - 23:13 | 4592762 TruthInSunshine
TruthInSunshine's picture

Yeah, strap in, because it's going to get messy.

Tue, 03/25/2014 - 23:56 | 4592824 DoChenRollingBearing
DoChenRollingBearing's picture

Arriving back to the USSA within a day.  As soon as my wife lets me free for a few hours, it`s off to the bank ($$$ out) then my LCS (Au) and stock up on more ammo.  Whee!

WATER is the big hole in my preps, but that only becomes an issue if things get really really bad.

Will things get that bad?  I hope not, I think (guess!) more like a Great Depression v. 2 myself.

Wed, 03/26/2014 - 01:28 | 4592928 zhandax
zhandax's picture

DoChen, where do you plan to be when we get there?  I got the impression you were between Biscayne Bay and the Everglades.  Water is the least of your worries.  You just have an immediate need for filtration.  Keep a quart or four of food grade hydrogen peroxide for bacteriologicals, first aid, and the like.  Not a bad idea for hurricanes, either.

Wed, 03/26/2014 - 07:07 | 4593112 fijisailor
fijisailor's picture

If you're in S Florida get a wellpoint and 30 ft of 1 1/4" pipe and drive your own well with a sledge hammer.  Put on a hand pump.

Tue, 03/25/2014 - 23:06 | 4592750 wee-weed up
wee-weed up's picture

 

 

Yep... not to worry.

The ChiCom gov't will back them up.

Just like The Fed does here.

Tue, 03/25/2014 - 23:09 | 4592755 disabledvet
disabledvet's picture

phuck you Central Bankers.
http://www.youtube.com/watch?v=5-sqkzCir9k

here's one that slipped through fingers assholes.

Tue, 03/25/2014 - 23:21 | 4592774 TruthInSunshine
TruthInSunshine's picture

In Mandarins it's "afuckarou!"

Wed, 03/26/2014 - 01:17 | 4592918 disabledvet
disabledvet's picture

this whole thing is such a fraud.
the only thing we're missing are the actual nukes at this point.

Tue, 03/25/2014 - 23:18 | 4592765 Oldwood
Oldwood's picture

Indifference is our only defense.

 

Tue, 03/25/2014 - 23:22 | 4592778 knukles
knukles's picture

Yawn

Tue, 03/25/2014 - 23:29 | 4592786 TheRideNeverEnds
TheRideNeverEnds's picture

meamwhile in the US....  

 

/ESM4

                       /

                     /    

             /\    /

           /    \/

         /   

       /

     /

__/

 

 e-minis to the moooooon! 

Tue, 03/25/2014 - 23:38 | 4592797 garypaul
garypaul's picture

TheRideNeverEnds, I know what you mean. If ZH was forced to print only those articles that actually have an impact, there would be like one post a month here!!

Tue, 03/25/2014 - 23:47 | 4592803 TheRideNeverEnds
TheRideNeverEnds's picture

yea, at least it gives me something to do other than watch my forex positions go immidiately and sharply against me.  god damn aussi dollar, who is buying it?  damn fools thats who.   its going back to .65, just a matter of time. 

Tue, 03/25/2014 - 23:57 | 4592825 TruthInSunshine
TruthInSunshine's picture

The CBs are just engaged in scheduled currency manipulation - U.S. open/close, Shanghai open/close, Nikkei, etc.

It's all a juggling act to try to keep the popsicle stick & glue Jerry-rigged model economy from crashing.

A major crash is now being prevented by carry trade manipulations.

Good luck with that.

Wed, 03/26/2014 - 00:13 | 4592850 Rusty Shorts
Rusty Shorts's picture

Shanghai 777 

Wed, 03/26/2014 - 01:24 | 4592924 disabledvet
disabledvet's picture

a regular RIOT.
https://www.youtube.com/watch?v=W3cGxlZjMWU

"Howard Cosell MC's World War III." PEEEEEEEEAAAAAAAS OUT BROOOOOOOOO'S!

Tue, 03/25/2014 - 23:38 | 4592798 HardlyZero
HardlyZero's picture

Hmmm...I looked and didn't see any serious ignition.   Maybe before the open ?

Tue, 03/25/2014 - 23:29 | 4592787 soopy
soopy's picture

Yuan-a dance??

Tue, 03/25/2014 - 23:37 | 4592796 syntaxterror
syntaxterror's picture

Yellen is probably on the phone now begging to bail them out.

Tue, 03/25/2014 - 23:43 | 4592804 HardlyZero
HardlyZero's picture

w/ Fannie and Freddie going bust, the lenders need a new gig to pump up their Sugar Daddy.   Ukraine or China would do the trick.   Yellen could then create a new syndicate, the new IMF.   Lagarde might get jealous of Yuana Yellen.

Tue, 03/25/2014 - 23:49 | 4592815 dontknowcrapabo...
dontknowcrapabouteconomy's picture

goddamnit.

just in november last year i was complaining what a slow news 2013 was.

Wed, 03/26/2014 - 00:04 | 4592831 ThorAss
ThorAss's picture

Chinese Real Estate can be summed up in the phrase, Ponzi is a bitch!

 

Wed, 03/26/2014 - 00:20 | 4592858 One And Only
One And Only's picture

A wise man once told me....

Always ask yourself.... why now?

That question has saved me A LOT OF MONEY.

Why now?

Wed, 03/26/2014 - 00:50 | 4592889 Schmuck Raker
Schmuck Raker's picture

Because later would be worse?

Wed, 03/26/2014 - 07:13 | 4593118 Bearwagon
Bearwagon's picture

You could save even more money, if you ask yourself why not now, from time to time ...

Wed, 03/26/2014 - 00:40 | 4592878 HardlyZero
HardlyZero's picture

I bet a lot of the property development(ers) will get to squat for a long time with super-shadow arrangements...maybe until this whole super-reset blows over in a few decades.   I bet there will be zombie limousine's driving all through 'dead towns' in a few years...there will be tenants...but officially 'no one is home'.

There are lots of 'unoccupied' houses in Japan where the owners 'ran away' years ago and are 'empty', but their owners are still living in them without paying any property tax or mortgages.  

Dismal.

Wed, 03/26/2014 - 01:51 | 4592954 Yen Cross
Yen Cross's picture

   The aud/jpy is going batshit crazy though. The level of complacency in these markets is mind numbing.

Wed, 03/26/2014 - 04:21 | 4593052 konputa
konputa's picture

Tell me about it. It's one of the only pairs I trade daily anymore. It's damn easy to pick up 20 or 30 pips every few hours of trading.

Wed, 03/26/2014 - 02:49 | 4592999 laomei
laomei's picture

There are so many shitty developers... and a handful of really good ones. Guess which ones are gonna go belly up?  Difference being, unlike previously (~5 years back), pre-sales are not allowed.  Projects must be completed prior to sales being allowed.

Wed, 03/26/2014 - 03:08 | 4593012 q99x2
q99x2's picture

The end of human civilization is fantastic for stocks.

BTFD (wouldn't want to miss out. This could be your last chance)

Wed, 03/26/2014 - 03:11 | 4593017 ChargingHandle
ChargingHandle's picture

Drip...Drop....Drip....Drop...SPLASH. 

 

 

Wed, 03/26/2014 - 05:27 | 4593068 RottenAlpha
RottenAlpha's picture
Wed, 03/26/2014 - 06:44 | 4593098 AdvancingTime
AdvancingTime's picture

Every country has unofficial lenders, but in China individuals, companies and even local governments who can not get loans from state-controlled banks have been on a borrowing binge from these unofficial sources. China is awash in overcapacity and debt.

After several years of growing debt loads concern is rising the whole unstable pyramid is about to come crashing down bringing China and possibly the global economy with it. The economic efficiency of credit is beginning to collapse in China and the unwinding of China’s giant credit spree could be vary painful. More on China's credit trap below.

http://brucewilds.blogspot.com/2014/03/china-and-great-credit-trap.html

Wed, 03/26/2014 - 06:46 | 4593099 jubber
jubber's picture

HK futures up and US & European futures full retrd, South Africa just hit a new ATH even with commodities in the hole...

Do NOT follow this link or you will be banned from the site!