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A Major Bank Just Made Global Financial "Meltdown" Its Base Case: "The Worst The World Has Ever Seen"
When it comes to the epic bubble in China's economy, it really boils down to one - or rather two - things: a vast debt build up (by now everybody should be familiar with McKinsey's chart showing China's consolidated debt buildup) leading to a just as vast build up of excess capacity, also known as capital stock accumulation. And/or vice versa.
It is how China resolves this pernicious, and self-reinforcing feedback loop, that is a far greater threat to the global economy than even what happens to China's bad debt (China NPLs are currently realistically at a 10-20% level of total financial assets) or whether China successfully devalues its currency without experiencing runaway capital flight and a currency crisis.
One bank that is now less than optimistic that China can escape a total economic meltdown is the Daiwa Institute of Research, a think tank owned by Daiwa Securities Group, the second largest brokerage in Japan after Nomura.
Actually, scratch that: Daiwa is downright apocalyptic.
In a report released on Friday titled "What Will Happen if China's Economic Bubble Bursts", Daiwa - among other things - looks at this pernicious relationship between debt (and thus "growth") and China's capital stock. This is what it says:
The sense of surplus in China’s supply capacity has been indicated previously. This produces the risk of a large-scale capital stock adjustment occurring in the future.
Chart 6 shows long-term change in China’s capital coefficient (= real capital stock / real GDP). This chart indicates that China’s policies for handling the aftermath of the financial crisis of 2008 led to the carrying out of large-scale capital investment, and we see that in recent years, the capital coefficient has been on the rise. Recently, the coefficient has moved further upwards on the chart, diverging markedly from the trend of the past twenty years. It appears that the sense of overcapacity is increasing.
Using the rate of divergence from past trends in the capital coefficient, we can calculate the amount of surplus in real capital stock. This shows us that as of the year 2013, China held a surplus of 19.4 trillion yuan in capital stock (about 12% of real capital stock).
Since China is a socialist market economy, they could delay having to deal directly with the problem of capital stock surplus for 1-2 years through fiscal and financial policy. However, there is serious risk of a large-scale capital stock adjustment occurring in the mid to long-term (around 3-5 years).
Daiwa then attempts to calculate what the magnitude of the collapse of China's economic bubble would be. Its conclusions:
Even in an optimum scenario China’s economic growth rate would fall to around zero
We take a quantitative look at the potential magnitude of the collapse of China’s economic bubble to ensure that we can get a good grasp of the future risk scenario. If a surplus capital stock adjustment were to actually occur, what is the risk for China and how far would its economy fall?
Chart 7 shows a factor analysis of China’s potential growth rate. The data here suggests that (1) China’s economy has gradually matured in recent years, and this has slowed progress in technological advancement, (2) Despite this fact, it has continued to depend on the accumulation of capital mainly from public spending to maintain a high economic growth rate, and (3) As a result, this has done more harm than good to technological advancement. Between the years 2012-15 China’s economy declined, yet still was able to maintain a high growth rate of over 7%. However, 5%pt of the growth rate was due to the increase in capital stock. Labor input and total factor productivity contributed only 2%pt.
The major decline in the rate of contribution from total factor productivity is especially noteworthy, as it had maintained an annualized rate of 5% for thirty years straight since the introduction of the reform and opening-up policy and on through the era of rapid globalization.
According to a DIR simulation, if a capital stock adjustment were to occur under such circumstances, China’s potential growth rate would fall to around 4% at best. This adjustment process is shown in the bottom left Chart 7. As far as can be determined from the capital stock circulation diagram, capital spending at the level seen in 2014 should not have been allowable without an expected growth rate of over 10%. Hence if adjustment progresses to the point where the potential growth rate is only 4%, the situation for capital spending will continue to be harsh. If the adjustment process lasts from the year 2016 to 2020, capital spending will likely continue in negative numbers on a y/y basis. If this scenario becomes a reality, the real economic growth rate will hover at around zero as is shown in the lower right portion of Chart 7.
All of this is well-known by most (or at least those who are willing to accept reality at face value instead of goalseeking it away with Keynesian theories that serve to merely perpetuate fallacious groupthink). It does, however, underscore the severity of China's economic situation and the follow-through linkages to the rest of the world.
But where the Daiwa stands out from every other report we have read on this topic, and where it truly goes where no other research has dared to go before, is quantifying the probability of China's worst case scenario. Here is what it says:
Meltdown scenario: World economy sent into a tailspin
We have already stressed that the scenario discussed in the previous section is the optimum or bestcase scenario. What is just as likely or possibly more likely to occur is the following. If the expected growth rate declines and the progress of the capital stock adjustment causes the bad debt problem to become even more serious, the economy could spiral out of control, lapsing further into a meltdown situation.
The stunning punchline:
"Of all the possible risk scenarios the meltdown scenario is, realistically speaking, the most likely to occur. It is actually a more realistic outcome than the capital stock adjustment scenario. The point at which the capital stock adjustment is expected to hit bottom is at a much lower point than in the previously discussed capital stock adjustment scenario (see Chart 8). As shown in the bottom right portion of this chart, the actual economic growth rate will continue to register considerably negative performance. If China’s economy, the second largest in the world, twice the size of Japan’s, were to lapse into a meltdown situation such as this one, the effect would more than likely send the world economy into a tailspin. Its impact could be the worst the world has ever seen."
Translated: Daiwa just made a Chinese "meltdown" and global economic "tailspin" its "realistically speaking, the most likely", base case scenario.
And here we were thinking our calls (since 2011) that China's debt and excess capacity bubble would negatively impact global growth, are audacious.
The question, now that Daiwa has broken the seal on Chinese and global doomsday scenarios, is whether and how soon other banks will follow in Daiwa's path, and predict an armageddon scenario which sooner or later, becomes a self-fulfilling prophecy even without the help of China's increasingly clueless micromanagers.
Source: Daiwa
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It's kind of like when you know that you are going to puke...you keep fighting it..and fighting it until you get that feeling in your adams apple, and at that point you beg to just get it over with and projectile
We are now at the vomit stage
Puking is an art not appreciated by many people. Most think all vomiting is pretty much the same. You can't really equate a 12 pack plus a burger and fries hurl with a beer, Jaeger bombs puke on an empty stomach. Likewise,a full gut hurl in the bar is just not the same as a sneaky toss out in the parking lot near the trash bins. I'll leave it at that. Don't get me started on shit appreciation. I'm supposed to be working on my social skills.
Sorry to spam homies torrent client keywords survival, prepper & bushcraft. Cant seed forever...
That's it. I'm shorting the VXX. /s
Wish u luck...
/s
Panic first = panic best.
U just wait smell the coffee... napalm
Daiwa Securities Group Inc.,Daiwa Securities Group Inc.*,,,,
Ticker,8601 JP Equity,,,,
Includes Loans to:,Daiwa Securities Group Inc. and Daiwa Securities Group Inc.,,,,
Identified in Fed Documents as:,Daiwa Securities America Inc. and Daiwa Securities America Inc.,,,,
Capital Raised From Home Governments,,,,,
Programs,"PDCF, ST OMO",,,,
Country,Japan,,,,
Industry,Diversified Financial Services,,,,
"Average Daily Balance
From 8/1/2007 to 4/30/2010",$76.32 ,,,,
Peak Amount of Debt,"$1,000.00 ",,,,
Peak Date,12/24/2008,,,,
Number of Days In Debt to the Fed,99,Market Cap,Percent of Market Cap,ST OMO,PDCF
So looks like the FED loaned them peak amount of $1 Billion.
- No such thing as conservative Banking at the FED or Wall Street.
- We are still seeing the fall out from US Created problems
1) Bubbling Housing, Derivatives, Stock Market Prices
2) Poor Stewardship of the US Petro Dollar/World Reserve Currency
3) Out of Control US Federal Budget Spending and resulting mal-investing in MIC & Police State
4) US Control over Global Politics and Press/Media
5) US & EU Sponsored Globalization and Trade resulting in Mal-investment and greater wealth Gaps and concentration of Capital into Financial Schemes
6) US Globalization & War has thrown Europe into chaos with mass immigration and Cultural Destruction
but maybe it is just me.
“The focus for the month of September will be strengthening economic propaganda and . . . promoting the discourse on China’s bright economic future and the superiority of China’s system,” the party’s propaganda department said in a directive to national media outlets.
http://www.ft.com/intl/cms/s/0/b4b1caf4-5868-11e5-9846-de406ccb37f2.html...
See the irony is, China is more transparent than the US. Americans are so oblivious. Not only is the wizard behind the current blowing smoke, the goddamn sheeple think they are running the show and there is no such thing as whizzers.
China is just as transparent as the US.
So... good times?
if/when it happens expect a temporary break down of the supply chain and a few weeks of world war z
Anyone care to guess which nation will go to war first to obscure their financial collapse?
I'd like this article better if it weren't for Japan talking about Chinas problems. That's like Illinois crying about Greece.
giving you an up was not enough...I had to actually type.."good one"
Report on Special Purpose Entities - Bank for International Settlements
Don't forget about the tranche three ring circus. Known as SIV. Enjoy!
Daiwa can suck my dick. What a load of bollocks.
His name was Daiwa...
So this is the "Shemitah" event. China melts down tomorrow night since they are open on shemitah day.
been wondering about that...my thought process goes to the process of it not happening tomorrow but a process of speeding up the collapse...I mentioned in another post, that the pope will address the congress for the first time ever announcing the NWO, and I dont think the bankster/money changers want a distraction. ALTHO, maybe more major collapse news will make those in congress and those who watch on CNN accept the global currency...all I know is that this is going to be an interesting 4 weeks ahead of us.
I really wish that people that downvote me would tell me why...I am just trying to share thoughts, and if they disagree they should tell me why because maybe I need to learn more, and I am willing to admit if I am off track if I get examples of why...I think people that downvote without giving a reason are pussies.
I think people who whine about down votes are pussies!
Suck it up buttercup this is fight club.
thanks....I can at least see where you are coming from, and others can see it too....in your opinion, posting thoughts on zerohedge is a fighting club....thanks for clarifying, I dont think you are a pussy, you shared your thoughts.....thanks. stand up for your opinions, you did well. Altho, you did not explain why you downvoted my original post...you should do that instead of just calling names..thanks.
Who said that he downvoted your previous post?
Most likely it was someone else. He is here to help you grow a pair of balls.
If you need validation then you are like a WOMAN or an effeminate man.
Men do not need validation.
If somebody does not like what I write then too fuckin' bad.
I cannot care any less.
A downarrow does not change the truth and has no affect on me whatsoever.
On the other hand if I am mistaken, and if someone posts a viewpoint which I have not considered, then that argument is taken with more than a grain of salt.
In fact if it is persuasive enough then I may actually modify my view as it serves to enlighten and, perhaps, eduucate.
So go ahead and leave that downarrow and do not engage if you so desire.
Anybody who is here for Agreement Club, Echo Box Club, or Validation Club, is in the wrong place to begin with..
Even the uparrows and downarrows on posts do not influence me. I have seen heavily validated, or invalidated as the case may be, posts that I am certain that the reader who awarded the arrow had failed to understand the underlying implications.
Reading comprehension is sadly lacking as a skill here on Zerohedge. But it is better here than most other places on the web.
The lack of Reading Comprehension is even moreso evidential on other comment boards across the Internet.
(Of course this truth and fair criticism will garner downarrows because I have bruised some egos. Awwwwwwwwwww. I do not give a damn.)
See?
I am strong enough in my own convictions that I do not seek validation as I have been taught to be a leader and not a follower. I am one not easily led astray The question is, "Are you?"
Well said TT....
By the way coast I did not junk you.
Stop looking for validation and just post your thoughts.
Fuck you for whining. There. That's a reason.
Jeese, Tylers!
A THINK-TANK owned by an INVESTMENT FUND isn't a fracking BANK!
GOOD ARTICLE, but the HEADLINE really SUCKS!
Everyday, life gets crystal clear. Progressives take common core action.
FASB Issues Statements 166 and 167 Pertaining to Securitizations ...
so if we make it to October 21* without a hitch
I say all the doom will be revealed as faux
and than we rally !!!!
BTFD ! [or not]
* https://www.google.com/?gws_rd=ssl#q=back+to+the+future+october+21+2015
Article is pure Epic Doom Porn.
Why am I not aroused?
Again, if we didn't love our United States of America country. We wouldn't spend time exposing corruption.
Our country needs to restore the global image it once held. I remember those years. People where so happy to see a American. They loved us. Miss that during my international traveling during the 1980's +. 9/11 killed off all future trust.
If we carpet bomb Saudi Arabia and Israel. Good times will return.
Why yes. War and genocide follwed by theft. That is completely different from the plan of TPTB.
Bravo. You too now have the disease.
============
Hating THEM is their food. They feed on it. You are their perfect dupe. You think you are their enemy when in fact you are one of their foot soldiers in their false flag Army.
We can invade Saudi Arabia and steal their oil. Why haven't we? Central Banking Policy. And the Zionist Jews in Israel and Ukraine. Don't forget NYC and Washington DC.
Think about that.
Saudi's have little oil left - That's why they are trying to develop exploration with Russia - Iran has the vast oil AND gas - wouldn't the Rothschild's love a Central Bank there - won't happen though - Russia and China wil both 'Nationlise' their Banks - That's why China is deliberately CRASHING it - I thought everyone could see this coming.
Saudi's have little oil left - That's why they are trying to develop exploration with Russia - Iran has the vast oil AND gas - wouldn't the Rothschild's love a Central Bank there - won't happen though - Russia and China wil both 'Nationlise' their Banks - That's why China is deliberately CRASHING it - I thought everyone could see this coming. Not DOOM porn - just an economic certainty !
Globalization is crashing.
It was unnatural, unsustainable, contrived, controlled and corrosive.
Neptune home in Pisces, the grand flush.
Neptune rules liquidation and bankruptcy. With Pluto in Capricorn large institutions and governments go bankrupt.
All these people floating around the oceans looking for places to be is also part of it.
The grand unmasking, they have no place to hide.
They must be terrible uneasy now, because they have nothing inside of them to fall back on.
+1000 up votes. The silk road is going to crash, just like Rome did. The Jews will hit the gas chamber. History repeats.
Joseph tainter; The Collapse of complex ...
"If Pluto's a dog, then what the hell is Goofy?"
Hillary and Barry's lovechild.
A surfer.
What about the House of the Rising Sun?
https://www.youtube.com/watch?v=wDlrRQ6Yzis
I believe it is a leading indicator. Don't look for planets. Look for politicians and ministers.
The house of the rising Sun?
How did you know?
The house of the rising Sun refers to the constilation which is on the horizon for an age.
Now we are in the age of Pisces so the fish rises, we have been here for 2000 yrs when the "fisher of men" walked.
The Jews are stuck in the age of the Aries, they still blow the rams horn as they face the rising sun. It is their way of
denying Christ and ignoring the shift of the age from Aries to Pisces.
The change of a age is why we are seeing the grand tsumani and all washed away.
Sweden is calling for more chruchs to be demolished to make more room for the floaters.
Float, float on...Aquarius and my name is Ralph...
https://www.youtube.com/watch?v=WclAFJSvyWw
lol it's so easy that it is almost comical for us who spent a life to understand movements and shifts.
Future's End (John Wickey's novel not the comic book series). Switch out China for Ukraine in the novel. Interesting times indeed.
it must be them who re-packaged junk loans, giving them AAA ratings, selling them all over the world, and caused the world's financial crisis every one is in now.
state terror, state evil, state nigger, state gay, state whatever, state all.
must take them out, must take them out,
one way or the other, one way or the other.
now, now, now.
how much are you paid Daiwa, for such brilliant analysis?
did you reverse the conclusion of WWII? what do you mean by that?
USA is Hitler? Hitler and Daiwa are the embodyment of freedom, democrecy, peace and prosperity?
two nukes were not enough?
may God bless your poor soul, if you haven't sold that out to the Devil yet.
Daiwa, may God bless you, you need that.
unemployment is about 5%....guessing 200 million adults in the united states, which means only 10 million are out of work...So the wall street journal needs to correct their error saying there are almost 100 million out of work...Which means there are 190 million still working...and with the two to one ratio of government employees verses productive private employees, is almost 100 million people working for the government....And the other 90 million are servicing the government employees with hookers, hamburgers, porn shops, strip joints, haircuts and tattoos. ok, time for me to stop tonite I am losing it. see ya all tomorrow. love the zh'ers
Once you roll off of unemployment, they stop counting you. 5% is simply not the case, if it were, Obama would already be selling another 800 billion dollar budget increase.
The futurist think Robots will replace manufacturing. The Government wants to tax you on a robot.
You will be fucked full circle again. Go ahead, let robots replace your life for payment for owning under a permit to conduct certain duties.
I'm opening a robot lube and tune center.
Wanna buy a franchise?
Perhaps, my robots will not accept politically correct questions. My AI (artificial intelligence) has been programed for racially slurred remarks.
/sarc
BTW, piss off NGO'S. We are way ahead of your fucking bullshit.
Each day breaks down the crisis to avoid chaos theory. Bring on more fear, it will be exposed. Your last days will be living in fear.
Let's look at this from this point of view. China composes roughly a billion or more people. You do not want that large mass of people in economic chaos. If some kind of solution does not come forward in timely manner, history teaches us that war can only result, with the will of the people. We do not want war of this scale today ..
A short history lesson of Aneko Credit Pte, Ltd., a Singapore Licensed Underwriter; is in order. The purpose of Aneko was to prevent the aforementioned scenario described. Aneko had assets totaling nearly 900 billion.
In attempting to rectify itself in world parlance, it had to do so via the world reserve currency, the petro-dollar. China needed oil. Plain and simple. In exchange for petro-dollars, it would get some -- oil. Well, that is where the double-cross begins to begin ..
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp
Let's just conclude this way. WW3/4 is not going to happen on the former Ambassador to Somalia for Canada, and former Inspector General for the Department of Defense of these United States of America -- watch ..
Globalization creates negro peasants all over the planet Earth Globe. This time is Asians, upcoming is Africa.
The policy makers have to reboot from their grass roots.
Historically, when China descends into chaos, they kill each other off in astonishing numbers. Mao made Hilter look like the junior varsity, and that was not the first such event in Chinese history.
"We do not want war of this scale today .."
I believe the US govt., Pentagon, State Dept., FED, has another scenario in mind.
They see a China financial crisis leading to an unimaginable implosion and possibly a breakup of China as we know it into several pieces which they believe is likely to be under the administraion of different military warlords as what happened in the 1900s. This will effectively end China's economic gains and its emergence as a power centre which poses a challenge to the US in Asia. They probably believe they would be in a position to proposition and deal with these warlords and their nuclear armory individually. Divide and Rule.
GOOD! To hell with this bullshit economy that never was to begin with except as a pacifier for a handful of spoiled rich elitist narcissist scumbags. Good riddance to bad rubbage!
The linked report doesnt contain the data which is quoted..
Someone switched ??
Report vetted by Abe san as it suits his anti-China policy.
"Daiwa Institute of Research, a think tank..."
It's a think tank! It's a bank! It's a vegetable slicer!
Never mind.
"Every ten years or so, the United States needs to pick up some crappy little country and throw it against the wall, just to show the world we mean business."--neoconservative Michael Ledeen
Chosenite Michael Leeden
http://www.whale.to/b/ledeen1.jpg
This is the dirty secret of all major militaries. They ALL need periodic LIVE FIRE exercises to keep the troops in shape. And to prove they are serious.
To act like this is unusual is to be ignorant of how big militaries operate.
War is a racket. Until it isn't. We look to be heading into isn't territory.
You better check your thinking, most military's don't do that.
A few do and I think we all know who the worst offenders are.
They all tend to imperialism.
We can just find a new IMF country to over take on nonpayment to SDR obligations.
Then, spray paint the peripheral slave wage economy and kick the can of Quantitative Easing debt down the road. Spray the debt away.
1990's INFOMERCIAL HELL #19: Spray paint the bald away with ...
That first chart is beautiful.
Capital/ co-efficients.
Then I looked at the charts below. Where's the -+ right axis?
Being sarchastic. Cap Appreciation and Reform growth, pretty much "zero out" Reform Growth.
It looks pretty on paper though.
Hello Yen,
Charts are deceptive if your Al Gore selling a carbon credit exchange. The other crapper is the CERN Higgs Boson theory. What a waste of money. They still don't understand anti-matter. The atomic energy didn't collide.
Obama will begin his retorts on Climate change, he will drop off the control of managing the sun. Pure bullshit from Obama and POPE.
Send them both to MARS on a one way ticket.
Yeah it's China. No Japanese debt here. Is this all a game of golf, only the highest score wins?
Hi I would like to know where the Daiwa report actually reports chart 8?
And the conclusions:
"Of all the possible risk scenarios the meltdown scenario is, realistically speaking, the most likely to occur. It is actually a more realistic outcome than the capital stock adjustment scenario. The point at which the capital stock adjustment is expected to hit bottom is at a much lower point than in the previously discussed capital stock adjustment scenario (see Chart 8). As shown in the bottom right portion of this chart, the actual economic growth rate will continue to register considerably negative performance. If China’s economy, the second largest in the world, twice the size of Japan’s, were to lapse into a meltdown situation such as this one, the effect would more than likely send the world economy into a tailspin. Its impact could be the worst the world has ever seen."
What may economists (and I use that term VERY loosely) fail to address is the fact that there are millions of Chinese workers who don't pay tax. If you work for the government (CCP) you are tax exempt, that includes teachers, emergency services, army, politicians, CCP administrative workers, judges, train drivers and countless other state owned businesses. If China were to introduce a free and fair tax system for EVERYONE it would efectivley clear any and all of its debt, money problems in the first year.
This IS a viable option, no arguement.
What 'viable' options does the U.S.A. have to clear its 18 trillion in debt, other than to try and steal it from other countries?
A. Write it off
It's odious debt ..
Then claw back 300 TRILLION in stolen funds from the people ..
Public employees never pay taxes. The ones who do are just giving back part of their salaries, paid from taxes.
Get 3 dollars and gave back 1 or get 2 dollars. Choose.
Easy, print 18 x $1 trillion coins.
Consider it a devaluation
Improves US export performance too. lol
Okay, at the moment this is still the top story on ZH. So, I'll share this here for best exposure. Check out the following and see if this does not ring familiar, an example from the past, transmuted to the present ..
I say we need some real change we can believe in. Change is on the way. (As Sinclair has posited recently, most of what we have seen to date is theater and PSYOPs) It does not come via Soetoro. He's um, NOT legit. Change will come to us via a legit POTUS. (One that was elected [not selected. this one could not be fixed.] with a mandate from The People that has yet to be fully fulfilled.) Even though he's been dead for about 11 years. His ghost haunts the present perps and will soon reign once again over America. Creepy? Well, I could show you creepier ..
For further context:
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp
Hey, we either get this, or behind door #2 is WW3. Door #3? Well, that would be WW4. You see WW3 has been going on since 1945. At least a dozen nuclear devices have been detonated in anger in this time span. Since 2001, probably half of those. The most recent in the last ~30 days, at about 1 kt. My suggestion is to take the deal, and spread the news ..
I agreed with everything until the "at least a dozen nuclear devices have been detonated in anger..." and especially "Since 2001, probably half of those." Oh, who employed a 1 kiloton nuclear weapon? Hiroshima was roughly 15 kts and Nagaski was approx. 22 kts.
The 'chemical' explosion in China was a NUCLEAR device? Based on what proof?
Never mind Gordon Duff/Vetstoday ....They claimed that the Israelis air dropped a nuclear device in Yemen for the Saudi gov't.
"Gordon Duff/Vetstoday"
They gotta be a psyop, confusing people who are trying to wake up while collecting their IP addresses.
Do you have proof? None of the pictures, I saw, were of a mushroom cloud. Some tried to say it was a mushroom cloud but it was not. If you have proof, please, show it.
Go to Veterans Today - they have the proof - Anyway i think China have all the evidence they need - they just won't release it - understandable as it would send the Chinese people into collective PANIC !
Boo hoo https://www.youtube.com/watch?v=DksSPZTZES0
/s
USG lost its moral compass a long time ago, Obama was the clincher
China spent most of the last century in chaos - and when there wasn't chaos? - there was mass murder (Korean War, Great Leap Forward, etc., etc.).
The "China Will Take Over the World Crowd" ignore this fact, they are as oblivious as Yugoslav polticians in the mid 1980's (or the "Japan will take over the world crowd" of the same era).
The USA is in deep shit- sorry, but the WHOLE WORLD is in deep shit. Buy physical precious metals, storeable food, guns, ammo, and pray. Pray this isn't the prelude to WW3 which would inevitably become nuclear - because the problem with nukes is that IF you don't use them they are worthless.
https://www.youtube.com/watch?v=ihcoj_Y_KJM
According to our main economic scenario, the chances that China’s economy could become mired in crisis are limit
Apparently ZH has access to a different report than the one linked on their web site or the weed the author is smoking is extraordinary good.
I want the weed you're smoking.
China's semiconductor sector is in turmoil. Too many Fabs chasing too few designs. Get a price chart for short run new designs. Amazingly cheap. And some of them are going out of business. Some of them are already gone.
Some one said upthread:
Moscow is sending an advanced anti-aircraft missile system to Syria, two Western officials and a Russian source said, as part of what the West believes is stepped-up military support for embattled President Bashar al-Assad.
Well what about anti-missile lasers being installed on American ships? Any chance there is a ground based version? Nah. That is way too crazy.
About 2 minutes: https://www.youtube.com/watch?v=PIKoCqJ8ppE - from Nov 2014. You suppose they have made any improvements since then?
From April 2013 - http://www.wired.com/2013/04/laser-warfare-system/
China sneezes, Japan gets covered by snot.
the anti-missile lasers are anti-drone lasers. The lasers woudl not be able to concentrate long enough on a high speed missile to cause it damage. In fact I doubt the laser would to even able to acquire a long range missile, and definately not a ground to air anti-aircraft missile that would be airborn only for seconds, despite the propaganda videos put out by defense
Even a drone could out smart these lasers with an inbuilt program that randomly changes it speed,height and angles, and no doubt coatings that require the laser to concentrate longer on the drone in order to disable it. And likewise for missile systems they can put random boost paterns in them, more complex missile, but defeats the laser system. Or simply multiple warheads.
How would they go if missiles were fire two at a time...etc...
Yeah. Absolutely. And getting a 10X power increase for single pulse kills is out of the question. And deploying 10 of the lasers on 5 ships is absurd.
The US Navy had NTDS in the 70s. No improvements have been made since then.
***
Most ZHers don't do dynamic analysis.
My typical calculation runs like this: if the US military announces an advanced weapon for deployment, I expect they have something 3X to 10X better nearly ready for deployment.
===================
In any case the laser as installed was designed to go against Iranian assets. Drones and attack boats.
Do you suppose that releasing $150 bn of Iranian assets is to encourage them to do something stupid? Nah. Americans don't think like that.
===================
Hate causes blindness.
China has the WU-14 - nothing can come near it - it can cover the entire planet in just 1 hour - is manouverable AND nuclear capable - China also has the ONLY satellite destroyer - tried and tested - China is deliberately crashing it's own economy - things have changed - China wants the Rothschild's out ! As for Japan they are an economic basketcase who can't even PRINT their way out of trouble !
7 weeks 2 days
Hmmm, definitely a Chinese commenter, and definitely spectacularly ignorant, so probably a spotty teenager. Hey, Jack Oriver, the USAF had an operational anti-satellite missile in 1985. Here's a few hints as all of these systems can double as satellite killers and this is just the missiles (there's much more):
http://www.homestead.afrc.af.mil/news/story.asp?id=123068364
https://en.wikipedia.org/wiki/ASM-135_ASAT
https://en.wikipedia.org/wiki/File:Asat_missile_20040710_150339_1.4.jpg
https://en.wikipedia.org/wiki/Anti-ballistic_missile
https://en.wikipedia.org/wiki/Ground-Based_Interceptor
https://en.wikipedia.org/wiki/Aegis_Ballistic_Missile_Defense_System
https://en.wikipedia.org/wiki/RIM-161_Standard_Missile_3
https://en.wikipedia.org/wiki/Terminal_High_Altitude_Area_Defense
https://en.wikipedia.org/wiki/Exoatmospheric_Kill_Vehicle
You do your best to keep up now Jackie-Chan, you're onry 30 years behind.
Also cogitate this:
http://aviationweek.com/blog/inside-rocs-lair
https://www.youtube.com/watch?v=y1mN6IcneTc
https://www.youtube.com/watch?v=lLsZhxrFhYE
"7 weeks 2 days"
Sounds as realistic as "The Ring". Timing prophecies rarely work out - pretty risky.
20 weeks 6 days
do you really not understand what it refers to?
A socialist market economy; aka a CP classical totalitarian model under the surface of market manipulation drowning in debt and malinvestment; as opposed to the west's version of the same beast :
A capitalistic oligarchical economy; now more and more CP'd under CB print and debt accumulation just like China; inverted totalitarianism.
When Charybdis MOCKS Scylla, the Gods of Capitalism and Statism have gone as mad as their mortal look alikes running around the financialized world like headless chickens.
Diogenes can truly mock Alexander's expedition on its march to his fool's paradise in Persepolis.
When Syrac dreams burn like Babylon.
I can't help but seeing a trend in recent negative articles & comments which resembles doomsday predictions not unlike 'the world is going to end' on 'fill in date'. Whilst fun to read the likelyhood is in the neighborhood of an asteroid striking the earth and doing the same. That is, ending the world.
Amusing, it makes me think of the guy who gathered some loonies around a mountaintop when the mayan calendar reportedly was foretelling the end of the world.
As in that case the reports of the death of worldeconomy are aggerated.
This whole narrative is exactly the same, just the wording differs.
The world is not coming to an end dumb-ass - but the current economic paradigm IS coming to an end. No fiat currency has ever lasted more than 50 years (the petro-dollar is nearing that date). So sorry you get confused.
USD
GBP
CAN
Well let us look at cement production. China has produced as much cement in 3 years as the US did in 100. Let adjust that for per capita. That would be 15 years vs 100. A 6X overcapacity.
I'd say overcapacity in cement was a little more than 12%. Same for steel. Other sectors? Probably.
I'd agree with you if overcapacity was 15%. But suppose it is 50% or 100% or?
Quantity has a quality all its own.
doublon
I personally am not concerned with the prophecies of doom and gloom about China. Of course, they could not maintain a 7-10% growth forever. The economy is pivoting, not just to another level, but also to a different nature. Once the projects of the New Silk Road are ramped up (and I am certain they would accelerate this), all talk of slow growth, doom and gloom would be moot. Why should the Chinese be responsible for overall world growth, or providing Wall Strret gamblers and junkies with more ill gotten gains, and additional cocaine for their pipes?
Yeah, I think you are right about the doom and gloom projections of chaos in the streets and people fighting each other for food and all that not happening. However you have to be clueless to think there isn't going to be pain when the Dollar and USTs become worth 30 cents on the dollar or worse. There will be a reset, no avoiding it now. You just can't ignore a 16 Trillion GDP and a 18 Trillion US debt (not including future SS payments etc). QE, don't QE, raise rates, don't raise rates it doesn't matter now other than buying us some time. Keep buying stocks, the rich own land, means of production, they actually have ownership of companies not just the common stock they have been selling the last several months. They will be fine when a reset occurs and will profit as they buy back common stock shares at true bargain prices not a 10% pull back.
Janet Yellen may start the whole thing this week.
m
The Chinaman did it - his name was 'Sumcunt'
The entire world economy has been built on the illusion that we will NEVER run out of OIL - The world before OIL is the world that we will become again - buy a horse !!
It will be worse than that initially because the world before oil was built for a world without oil. There was an infrastructure built up around horses, steam power, and etc. Only some Amish and a few oddballs out there still have the equipment and know-how. The great horde 99.9% of everybody will descend into violent desperation.
So you bought into the Oil Industry's cooked up non-sense of oil being a fossil fuel and thus rare? That works for them so they can maximize price, much like the diamond industry does with high priced cut gems limit their production and thus control price. Oil is the result of a natural process that occurs in the Earth's upper crust and migrates through fractures in the crust and collects in cavities underground and escapes from the ocean floor in massive amounts that we are just beginning to discover and to understand. However the oil companies learned this long ago after oil fields that were once thought empty produced again, even without the fracking process, where was this new oil coming from? Answer is, a abiogenic process creates oil in the hight heat and pressure of the Earth's crust. Of course you must give the Earth time to replinish since we can take it out of the ground faster than the oil is moving up toward the surface and cavities it collects in. However oceans have far greater oil fields than land based ones and worldwide we are just beginning to realize how much more oil there was than once thought.
Hate causes war. The NWO thrives on it. Divide and conquer.
1oz Silver American Eagle €13 @ EurGold
https://www.eurgold.eu/silver/american-eagle-1oz-silver-coin-1-dollar-le...
plus $30 shipping for a roll of 20
Ask why silver Maples are 18.6 Euros each?
US spot premiums get more and more surprising and annoying. Best price for Silver Eagles is $19.38 right now (a "mere" 33% mark up!). This spot game with silver among US dealers drives me nuts. https://comparesilverprices.com/
You lose 33% getting in... then 33% getting out. Meaning that any Silver Eagles you buy need to appreciate 66% before you BREAK EVEN.
So how does this European dealer ship those Eagles to Europe and sell them at a reasonable price?
€13 = $14.47
Shipping anywhere in EU = $22.61/kilo
That's 32 coins. Total cost with shipping is $485.65 or $15.18 per coin.
Meanwhile Apmex has a 45% (!!!) markup to $21.18 per coin.
But hey, Latitude25... FREE SHIPPING from Apmex, right? (-;
Has anyone else recently heard/read that HSBC might be the next big bank to fail? Seems I read somewhere that their balance sheet (liabilities) column is $1T.
The word is "chaos" as the world might soon witness a major shift in the value of one investment over another as investor seek firmer ground. Derivatives, currencies, plunging stock prices, air rushing out of a bond market bubble, how debts are structured, and the timing or direction from which problems arise are all elements that must be considered. Several factors determine just how much influence can be applied to how current economic policies unfold.
Using the metaphor of "let the chips fall where they may," things like the size of the chips, the rate or speed at which they fall, and the number of chips in the air may make them uncontrollable. We could find ourselves up to our neck in chips in a blink of an eye, at that time all bets are off as to how successful efforts to stem a catastrophe might be. The financial overlords may be losing control and this means during the final stage of the global shakedown events will be chaotic and become very wild. More below on how violent the crash might be.
http://brucewilds.blogspot.com/2015/08/the-final-shakedown-will-be-uncontrolled.html
https://www.bis.org/publ/qtrpdf/r_qt1509.pdf
Interesting 189 friggin' page link.
You have nothing to say besides "here, do this homework"?
Japs worrying about debt! That's like Hillary worrying about lying! Or jews about stealing from goy!
Okay nut job. The article isn't about 9/11 and your whacked out theory. Take it elsewhere.
We long passed the point of return. Raise rates or don't raise rates. Employ QE or don't employ QE. It doesn't matter we are certainly headed for default and some very ugly times for the Dollar and USTs. Both parties will sign off on raising the debt ceiling since we just reached the last ceiling. Doesn't matter that our GDP is approx 16 Trillion and our Debt is over 18 Trillion, doesn't matter that we are third after Japan and Greece in terms of debt to GDP. There is no political will, nor will among the population in general to do what it would take to fix our monumental crisis. Keep buying stocks and then when they crash, and they will, far worse than '08 what will you do? The rich own land, resources and production and don't care as much as you do about the common stock shares they've been selling over the last several months. BTW these socialists will take your 401Ks and then hand you an IOU when things get really ugly. Keep putting your faith in Socialism, it has always worked out well in the past for peoples in the past that have right?
Actually, Socialism has usually worked rather well for at least 90% of the population in Socialist countries. The very wealthy, however, are devastated by being forced to live like hoi polloi. Thus Ayn Rand, the daughter of a wealthy pharmacy owner, took advantage of Bolshevik egalitarianism to acquire a university degree which would have been impossible before the Revolution, and then emmigrated post-haste to the U.S. where horror of horrors, she had to WORK for a living. The trauma of not being her papa's pampered princess led to lifelong hatred of the very system which subsidized her education.
this is the final straw...
U.S. experts concerned by sightings of invasive Chinese marsh turtles(Obama can use this to prove that the Chinese have always been intent on invading the USA mainland, need more defense spending)
(have to convince the citizenry that the Chinese and Russians are evil, then everything the US does afterwards is justified)
a vast debt build up (by now everybody should be familiar with McKinsey's chart showing China's consolidated debt buildup) leading to a just as vast build up of excess capacity, also known as capital stock accumulation. And/or vice versa.
Has the writer looked at his own linked chart? It shows in 2000 a ratio of non-financial corporate debt to total debt to be 69%. In 2Q14 it shows it to be 44%.
Isn't it non-financial corporate activity that leads to "excess capacity"?
It's becoming more and more difficult to make sense of these articles.
http://www.zerohedge.com/sites/default/files/images/user5/imageroot/2015...
While the article conclusion isn't necessarily unreasonable, it smacks of the same desperation as similar articles in the USSA. In other words, "the collapse of our economy and the world economy wasn't our fault, and all our malfeasance was essentially irrelevant".
Uh, huh.
-----
The new normal == "it wasn't our fault".
"The question, now that Daiwa has broken the seal on Chinese and global doomsday scenarios, is whether and how soon other banks will follow in Daiwa's path, and predict an armageddon scenario which sooner or later, becomes a self-fulfilling prophecy..."
Math is a self fullfilling prophecy. 1+1 always = 2. In math, past is prologue.
From the same report you reference...
The spin you put on this is no different that the crap spewed out by CNBC.
But would we still have access to Twatter and Facefuck? If so then this would not be such a bad outcome (sarc)
If China has all this excess capacity and ghost towns then why dont they take all the Syrian refugees?
Probably afraid the refugees might make friends with the Uighur population.