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With A Hard-Landing Imminent, China Reminds Residents It Is Illegal To Jump Off Tops Of Buildings
In retrospect, when last Sunday we wrote that "China's Shadow Banking Grinds To A Halt As Bad Debt Surges Most In A Decade" in which we showed that not only had China's shadow banking credit creation stopped outright, but had - due to a decline in Banker Acceptances and Trust Loans - shifted in reverse for the past 4 months...
... it should have become clear that it was only a matter of time for the PBOC to step in and provide additional "higher-quality" liquidity, as it just did on Friday morning when it cut rates for the first time since 2012, sending the US market to all time highs.
And yet many questions remain: will the PBOC be able to "shotgun" its way in stimulating an economy that has deceleration written all over it. Remember: for all the talk of massive outside money injection in the global system by QE at this central bank or that, the total assets of the Big 4 central banks have grown far less than what just China's bank assets have risen by over the same period, something we showed a year ago in "How In Five Short Years, China Humiliated The World's Central Banks" (the chart was as of Q3 2013).
In other words, for all the talk about the Fed, the BOJ, the ECB, the real attention should have been on China, and its fungible credit growth, all long.
So when stripped of the Politburo propaganda, and economic stats that are now only more credible than those released by the US Bureau of Labor Statistics, what is really going on in China?
For one answer we go to the final dispatch by the WSJ's Bob Davis, who has just concluded his four-year assignment covering China and has allowed himself some essayistic freedom with his parting words.
He writes that "during my time in Beijing as a Journal reporter covering China’s economy, starting in 2011, China became the world’s No. 1 trader, surpassing the U.S., and the world’s No. 2 economy, topping Japan. Economists say it is just a matter of time until China’s GDP becomes the world’s largest." Alas, "my own reporting suggests that we are witnessing the end of the Chinese economic miracle. We are seeing just how much of China’s success depended on a debt-powered housing bubble and corruption-laced spending. The construction crane isn’t necessarily a symbol of economic vitality; it can also be a symbol of an economy run amok."
Davis leaves the country less than optimstic about its economic prospects:
"So why, on leaving China at the end of a nearly four-year assignment, am I pessimistic about the country’s economic future? When I arrived, China’s GDP was growing at nearly 10% a year, as it had been for almost 30 years—a feat unmatched in modern economic history. But growth is now decelerating toward 7%. Western business people and international economists in China warn that the government’s GDP statistics are accurate only as an indication of direction, and the direction of the Chinese economy is plainly downward. The big questions are how far and how fast."
Ironically, it is the US and Europe that have adopted much of the same "loose excel data" policies that had made China the butt of all economic goalseek jokes in the past decade: how long before the US is also forced to admit its own "growth spurt" is also built on quicksand?
But back to the Middle Kingdom: here are some of Davis' reasons why China, which served as the global debt-fueled dynamo during the post-Lehman collapse when the rest of the developed world tumbled into depression, and managed to grow while everyone else was flailing, is set to become the biggest deadweight to the entire developed, and developing, world:
- Most of the Chinese cities I visited are ringed by vast, empty apartment complexes whose outlines are visible at night only by the blinking lights on their top floors. I was particularly aware of this on trips to the so-called third- and fourth-tier cities—the 200 or so cities with populations ranging from 500,000 to several million, which Westerners rarely visit but which account for 70% of China’s residential property sales.
- From my hotel window in the northeastern Chinese city of Yingkou, for example, I could see empty apartment buildings stretching for miles, with just a handful of cars driving by. It made me think of the aftermath of a neutron-bomb detonation—the structures left standing but no people in sight.
- Debt paid for the boom, including borrowing by governments, developers and all manner of industries. This summer, the International Monetary Fund noted that over the past 50 years, only four countries have experienced as rapid a buildup of debt as China during the past five years. All four—Brazil, Ireland, Spain and Sweden—faced banking crises within three years of their supercharged credit growth.
- China followed Japan and South Korea in using exports to pull itself out of poverty. But China’s immense scale has now become a limitation. As the world’s largest exporter, how much more growth can it count on from trade with the U.S. and especially Europe? Shift the economy toward innovation? That is the mantra of every advanced economy, but China’s rivals have a big advantage: Their societies encourage free thought and idiosyncratic beliefs.
- Even powerful Chinese leaders have trouble enforcing their will. I reported earlier this year on the government’s plan to handle one straightforward problem: reducing excess steel production in Hebei, the province that surrounds Beijing. Hebei alone produces twice as much crude steel as the U.S., but China no longer needs so much steel, to say nothing of the emissions that darken the skies over Beijing. Mr. Xi weighed in by warning local officials that they would no longer be judged simply on increasing GDP; meeting environmental goals would count too.
- In late 2013, Hebei staged an event called “Operation Sunday.” Officials sent demolition squads to destroy blast furnaces, and imploding mills made great TV on the 7 p.m. news. But it turned out that the destroyed mills had long been out of production, so blowing them up didn’t affect output. Indeed, China’s steel industry is on track for record production this year.
And the punchline:
- The situation has become so bad... that a middle-aged investor, fearing that a local developer wouldn’t be able to make his promised interest payments, threatened to commit suicide in dramatic fashion last summer. After hearing similar stories of desperation, city officials reminded residents that it is illegal to jump off the tops of buildings...
In other words, the Chinese growth miracle may be over, but please don't kill yourselves.
The market may have been quick to cheer the action of the Chinese central bank, but China has a very long and painful climb ahead of it: one where it will be America's turn to prop up global growth when the next global depression hits. One can only hope the US is up to it... and that this winter it doesn't snow too much and subtract $100 billion from US "trendline growth."
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Nail guns seem to be O.K.?
Jump, you .....
Ghost city high rise base jumping....a new olympic sport.
BWHAHAHAHAA!
Illegal to jump off buildings? Whaddya gonna do, arrest a dead guy?
No, you will be arrested and condemned in your next reincarnation.
In reality it's not the jump they have made illegal, it's hitting the ground. The jump has already been made.
They should just come to Australia, all fraud is welcome here. Chinese companies list on the ASX just so they can set their own "market" price, turning it into a marketing prize. Check out my latest blog post about a $800K turnover company with $1.4bn "market" cap.
http://drbenway.blogspot.com/ncr
Too late buddy. In Obongo's Bananamerika not only fraud and chicanery are welcome, but criminals are given amnesty.
China should just legalize it and charge a flat tax
100 billion? Peanuts
Suicide is a criminal offense punishable by death? That would make sense in an American sort of way. But this is China.
By the way, you have a lovely avatar. That's "The Great Wave off Kanagawa", by Hokusai, no?
Excellent eye "The Great Wave--" which was the album cover for one of Jazz greats Cal Tjader @late 50's? album "Brease from the East" Milestones
A lot of Musicians like that picture...
it's about organ transplants.
Why do you think the likes of Brzezinski, Kissinger, Rumsfeld, Bush are still around?
Except that Bush told his doctor he'd rather have a piano
He then asked his doctor if he could fill out a piano donor card
In many countries it is illegal to commit suicide. In England they once had the death penalty as punishment for the crime (so if you failed in your attempt you would be punished).
They don't need to arrest dead guys, just fine his estate big dollars/yuan and that will discourage others from killing themselves and leaving their children in even worse financial shape.
If a banker is thrown off a skyscraper in a ghost city - does anyone hear it?
Yes, the laughter of Satan adding one more soul to his collection.
When a ghost city has a hard landing,
is there a dead cat bounce?
There are no trees left in the woods, so I don't know who to ask.
No, it breaks wind
And the sound of concrete crumbling
---or care? Milestones
There goes the dollar peg.
Asia is getting interesting. Maybe Japaneessee cars will be cheap, cheap, cheap again.
Dollar peg is long overdue. Else, what China will do to all that excess labour.
JUMP YOU FUCKERS
http://youtu.be/yge311sFhC8
That may not be wise. With the quality of nails they produce under such high velocity, death though meat tenderization would be more than unpleasant.
Miffed
I wonder if they have any laws about puffer fish?
You have to wonder about a society that consumes something that contains a toxin more lethal than cyanide. Is it insanity or just balzy? And people here freak out when there is a salmonella outbreak.
Miffed
Nothing wrong with the quality of nails....
It's the mass, velocity and energy that count
https://www.youtube.com/watch?v=8xyvOCNCXdU
Hummmm, aren't pneumatic nail gun compressors made in China as well?
Miffed
From long experience ( 27 years married to a Japanese) I believe it's pointless to try and understand the Japanese in Western terms. They have their own internal logic which you just have to accept or go crazy.
That said, there's a lot of things I like about them.
Some examples:
http://www.youtube.com/watch?v=_mkiGMtbrPM
http://www.youtube.com/watch?v=guqVgQFvXXY
http://www.youtube.com/watch?v=-S6LFaciNjk
http://www.youtube.com/watch?v=W4h8m74pyC8
Brain is processing first link. 'Fraid to click on the second.
That's nothing. If you want your brain to melt:
https://www.youtube.com/watch?v=yzC4hFK5P3g
Really enjoyed the 1st and 4th videos, rest were OK; but are there NO altos in Japan, or they just can't make it to the big time in music / video?
The first one was the strangest of the bunch.
should send these vids to CHS next time he wants to rant about Japanese young people. :)
They have cosplay! and... and like weird stuff!
*shakes cane*
Preparation of Fugu requires licensing and years of extra training.
You can do some serious time for jumping off a building in China.
There will be no more crashes...as now you just print quintillions to cushion any landing, stock, real estate, roof jumping, bridge jumping, commodities. As you just lie about inflation...makes it TRUE! This time is trully Different!
this = The Big Black Swan in the room.
The black swan is in southern or eastern Europe.
Ultimately Japan will keep trying to prop things up in order to stave off the inevitable day they become a vassal territory of China. However, some pol or crat is going to see the butter on the other side his bread and flip it over, and the shit will come unwound pretty quick.
That's if Putin doesn't throw a "gold" monkey-wrench in the works because of the west's nonsense in the Ukraine and Syria.
An American, not US subject.
Dr. Jim Willie thinks the US stoleat least $1.2 trillion in Japanese pension funds by demanding that they buy US Treasury bonds.
http://www.gold-eagle.com/article/stealth-qe3-operation-tokyo-twist
Isn't it about time for the Chinese to put up or shut up re: Silk Road V2.0?
Yes! If you survive the fall, we'll arrest you!
Pre fab steel houses made in China for 500 bucks? "Comes with unlimited number of nuts, bolts and screws and a 100 year warranty." Plus a manual and free site work. They'll even fly over the labor on a temporary Obama Visa for 250 bucks extra!
What's up with Muddy Waters these days anyways?
He's ready!...
The present economic system is beginning to run into that small problem of the impossibility of infinite growth.
Happening all over.
We need to start growing internally as human beings because that is the last frontier if humanity is going to avoid self destructing.
Pfffttttt....loser. Give people video games, stolen Doritos and watered-down beer, weed, or wine and they will be fine compliant folks.
Marx was an idiot. Opium is the Opiate of the masses. Just prescribe oxycontin to everyone or dissolve it in the water supply, civil disorder fixed.
http://www.slate.com/blogs/moneybox/2014/11/21/corrupt_chinese_general_i...
Calling all bankers. Last chance to get some respect. Even if you are not in China you can still jump while I'm in NYC over the Holidays. If you make a good impression on a snowy sidewalk I promise to post my photos to show that you did the right thing.
Avoid walking close to buildings while you are in New York.
assisted bankster jumpings are also strongly discouraged
The prognosis for war, unfortunately, has never been higher; think of all those broken windows that will have to be replaced.
With the level of air pollution in Chinese cities I doubt any jumpers will be able to find their way to the ground.
.
If you scream while jumping off a ghost city building does it make any sound?
Only if you are recording yourself.
yes ..... " FUUUUUUUUUUUUuuuuuuuuuuuuuuuuuuuuuuuuuuuu "
Well, may be illegal jump but what if the guy up and slip?
Except the Jews, never saw people so Argentária as the Chinese.
Even in suicide guys save.
Fucked!
hehe!
China may be imploding, but at least they have factories and excess infrastructure and homes to collapse into.
We Americans will have the DC US collapse ON us, where we will discover how much of America, and how many Americans, have been sold off to foreigners.
"Don't tread on me! And get the fuck off of me!"
An American, not US subject.
Technically, it is probably legal to jump off the top of a building, however, what is illegal is to obey the laws of gravity and reach the ground.
Interesting idea ....
Maybe the guy stay a few years without anyone find.
Maybe the guy was standing jump, he find it in a Baroque statue in some grave.
hehe.
The math is wrong. China's cenral bank balace sheet expanded by approx. CNY 13 Tr. over the period in the chart which is (only) $2 Tr.
OMG, a fact checker in a weekend article!
STOP IT!!! 1,000 articles have said the same thing the past 6 yrs on this site. Doom doom doom doom. No matter what the news says this site zero hedge he's going to turn it into this is the end. Well guess what it's not the end. And before we kill ourselves there will be a new energy source. That's going to change this system we are living in this capitalist bullshit system
Its a doomer site what do you expect. If want hope and change go to whitehouse.gov
"On a long enough timeline, the survival rate for everyone drops to zero."
NOW, 'real', go back and play with your Legos. You've been here for 4 years 16 weeks, and you've never actually understood why, I presume.
https://www.youtube.com/watch?v=StTqXEQ2l-Y
A deep plant sleeper like YOU shouldn't bullshit everyone about this mythical stuff like; "And before we kill ourselves there will be a new energy source". QUIT your FANTISIZING, bitch.
STOP IT!!! 1,000 articles have said the same thing the past 6 yrs on this site. Doom doom doom doom. No matter what the news says this site zero hedge he's going to turn it into this is the end. Well guess what it's not the end. And before we kill ourselves there will be a new energy source. That's going to change this system we are living in this capitalist bullshit system
Its a doomer site what do you expect. If want hope and change go to whitehouse.gov
Yeah Why anyone complains here is beyond me. If you believe everything is the tits then great. Buy and leverage long. So easy. If you have any understanding of history then you know it's only a matter of time Wish it was different and everyone would get laid. But just ain't how it works
A new energy source? I wonder what sort of bomb they will make out of that.
Building jumping off of can be a boon to a sluggish economy. You need another worker to replace the guy that jumped off, a crew to clean up the mess on the street, the employer gets to keep the last weeks pay, and the red stain will not need unemployment, will not protest against the government and will not need state funded retirement.
"To the wise, life is a problem; to the fool, a solution."
— Marcus Aurelius, 167 AD
Wow, $15.4 Trillion in Chinese bank assets; did the Bankers get the "no jump" memo?
What are they going to do, take you're dead body to court for having jumped to your death in the first place?
For what its worth!
Bloomberg story says five of 16 listed Chinese banks raised their one-year deposit rates to the ceiling of the regulatory benchmark, in a mixed response to the lower rates the government announced. They called the move "unusual' the boomberg link below;
http://www.bloomberg.com/news/2014-11-23/five-of-16-listed-china-banks-r...
I here they are going to have a one banker policy soon to help control the ghost population.