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China Enters The Danger Zone, SocGen Presents The Four Critical Themes

Tyler Durden's picture


As both anecdotal, local and hard evidence of China's slowing (and potential hard landing) arrive day after day, it is clear that China's two main pillars of strength (drivers of growth), construction and exports, are weakening. As Societe Generale's Cross Asset Research group points out, China is entering the danger zone and warns that given China's local government debt burden and large ongoing deficits, a large-scale stimulus plan similar to 2008 is very unlikely, especially given a belief that Beijing has lost some control of monetary policy to the shadow banking system. In a comprehensive presentation, the French bank identifies four critical themes which provide significant stress (and opportunity): China's economic rebalancing efforts, a rapidly aging population and healthcare costs, wage inflation and concomitant automation, and pollution and energy efficiency.  Their trade preferences bias to the benefits and costs of these themes being short infrastructure/mining names and long automation/energy efficiency names.

They detail their concerns about the Chinese economic outlook (weakening exports, housing bubble about to burst, local government's debt burden, and large shadow banking system), and show that China has no choice but to transition to a more consumption-driven economy leading to waning growth for infrastructure-related capital goods and greater demand for consumer-related manufacturing. Overall they see a hard-landing becoming more likely.


Weakness in PMIs, Exports, and Foreign Investments Are Emerging

Weakness Has Emerged In The Property Market

And The Chinese Financing System And Construction Industry Links Have Become Increasingly Complex

But Do Not Expect Another Large Infrastructure Stimulus Plan


Conclusion – The situation in China is worrying to say the least. Short-term indicators are weakening as past monetary tightening starts to bite and the export model is threatened once again by the risk of recession in Europe and the US. Data from the real estate industry show a significant deterioration, with a clear break in the confidence that real estate prices always go up. The debt burden of local governments and large ongoing deficits should prevent a large stimulus plan similar to that of 2008. Monetary easing could bring some relief, although we believe that Beijing lost some control of the financing system through the shadow banking.

So (Theme #1) Rebalancing Is Key - The Only Way Forward

And China Is Slowly Heading Towards Mass Consumption (Which Changes Commodity Demands)

Mining - The Hardest Hit


But There Are Three Other Long-Term Themes Driving/Stalling China's Growth

Theme #2: Aging Population and Healthcare Needs

Theme #3: Wage Inflation and Automation

Theme #4: Pollution and Energy Efficiency

And In Summary, The Global Industries Most At Risk (and likely to Benefit) From These Competitive Changes


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Wed, 01/11/2012 - 21:38 | 2056943 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

China likey inflation!

Wed, 01/11/2012 - 22:04 | 2057019 Eireann go Brach
Eireann go Brach's picture

Who flung dung at Mr Chung!

Thu, 01/12/2012 - 05:39 | 2057611 AldousHuxley
AldousHuxley's picture

Tim Geithner told them to not to buy oil from Iran anymore.


China told Tim to go take a hike.

Wed, 01/11/2012 - 23:09 | 2057195 Schmuck Raker
Schmuck Raker's picture

"Red China" -v2012

Fri, 04/06/2012 - 06:54 | 2321550 jaffa
jaffa's picture

The basic concept behind Critical geopolitics is that intellectuals of statecraft construct ideas about places, these ideas have influence and reinforce their political behaviors and policy choices, and these ideas affect how we, the people, process our own notions of places and politics. Thanks.
cell phone lookup

Sat, 04/14/2012 - 01:24 | 2343322 jaffa
jaffa's picture

The business of banking is in many English common law countries not defined by statute but by common law, the definition above. In other English common law jurisdictions there are statutory definitions of the business of banking or banking business. Thanks.
Click Here

Wed, 01/11/2012 - 23:53 | 2057267 BoNeSxxx
BoNeSxxx's picture

Me Chinee

Me play joke

Me go peepee

in your Coke

Thu, 01/12/2012 - 00:17 | 2057310 Real Estate Geek
Real Estate Geek's picture


OT Alert.

Dylan Ratigan will be speaking on the evening of the 18th at The Commonwealth Club in SF.  He’s going to be pimping his book, but I respect the guy for making a consistent effort to awaken the masses.  Ron Paul is a stronger catalyst than Ratigan, but I can’t think of any others; maybe Tabbi.  These events typically have a Q&A period and the venue holds a couple hundred people.   Tickets are $20 for non-members.

Sat, 04/07/2012 - 04:43 | 2324180 jaffa
jaffa's picture

In contemporary literary studies, a theme is the central topic, subject, or concept the author is trying to point out, not to be confused with whatever message, moral, or commentary it may send or be interpreted as sending regarding said concept. Thanks.
Scottsdale real estate Arizona

Wed, 01/11/2012 - 21:45 | 2056960 Yen Cross
Yen Cross's picture

tHE " yUAN " Peg was set  5 days  ago.   6. 1735- 6.34257!

                                                                                            I'm tired! C/U in Europe  I have a cross

 to ( BURN)!!!!

Wed, 01/11/2012 - 21:46 | 2056969 Cognitive Dissonance
Cognitive Dissonance's picture

I love Wednesday night chart porn, China division.

Wed, 01/11/2012 - 22:01 | 2057010 brew
brew's picture

when is the post going to learn that any story about china is an instant page turner...

Wed, 01/11/2012 - 22:32 | 2057087 Stax Edwards
Stax Edwards's picture

Good stuff TD enjoyed this

Thu, 01/12/2012 - 01:04 | 2057388 CrazyCooter
Wed, 01/11/2012 - 21:47 | 2056970 RunningMan
RunningMan's picture

How is nuclear most at risk when uranium prices and the nuclear industry in general is still suffering post-Fukushima?

Automotive seems promising as a global sector short term... lots of people need to drive. Until the oil runs out I suppose. Then we just need hamsters or humans to pedal to charge the batteries.

Wed, 01/11/2012 - 22:10 | 2057037 jimmyjames
jimmyjames's picture

How is nuclear most at risk when uranium prices and the nuclear industry in general is still suffering post-Fukushima?


My thoughts as well-

When something is hated so much and the sectors/uranium miners that furnish the industry are in the doldrums-what is there to fear-because it sounds like a bottom to me-

Thu, 01/12/2012 - 10:54 | 2058206 kauffmanch
kauffmanch's picture

Emitting 25% of world co2 and having highest energy intensity why wouldn't China turn more to nuclear with both low co2 emissions and relatively low cost?

Wed, 01/11/2012 - 21:49 | 2056976 junkyard dog
junkyard dog's picture

I like reading post by people like SocGen. If it were not for Bernanke, they would not be here.


Wed, 01/11/2012 - 21:50 | 2056977 Caviar Emptor
Caviar Emptor's picture

What a biflationary world we live in when even Chevron can't benefit from higher oil prices: 


Chevron warns 4Q earnings below 3Q results

All the old paradigms no longer work

Wed, 01/11/2012 - 21:57 | 2057001 fonzannoon
fonzannoon's picture

Caviar I am listening to your thoughts on biflation. If they do more QE like Kito says they will (joke) how does a weak dollar impact a situation like Chevron"s earnings? Worse or better? Sorry for the ignorance.

Wed, 01/11/2012 - 22:14 | 2057032 Caviar Emptor
Caviar Emptor's picture

No, not ignorant at all. It's not what we've all been conditioned to understand and expect. 

In every past time period, the large integrated oil majors (CVX, XOM etc) would gain large windfalls from a spike in crude prices: they produced more, sold more, refined more and simply passed the extra costs down the line to end consumers. They made so much money during the oil spike of the 1970s that Congress voted the Windfall Profits Tax on the oil majors in response to accusations they were price-gauging the public. 

Times have indeed changed. 

They can't pass the extra cost of crude, or the higher cost of crude production on to consumers or businesses constrained by biflation: decreasing incomes and net worth and poor employment prospects for consumers and narrowing margins for business (affected Chevron too). Demand for refined product has actually declined, a sure sign of deflation and a very alarming trend for the economy. Keep in mind it wasn't because of fuel efficiency: DOT and AAA reported that vehicle miles driven have actually dropped (!). Not only that, as the quality of crude is slowly deteriorating, the cost of refining is up. 

Caught between inflating costs and deflating demand. The classic picture of biflation. If the dollar declines, the cost of crude imports will rise further adding "fuel to the fire". Higher prices will only depress demand further. And QE is the ultimate Biflation-maker

Wed, 01/11/2012 - 22:23 | 2057065 fonzannoon
fonzannoon's picture

Okay thanks for explaining. Would the retailers be feeling this inability to pass through the increased costs as well? I feel like I am just not seeing it or the market just is ignoring it.

Wed, 01/11/2012 - 22:29 | 2057081 Stax Edwards
Stax Edwards's picture

Generally neutral refiners, long producers/exploration.  Refinery biz is tough on the margins.

Wed, 01/11/2012 - 22:33 | 2057093 Caviar Emptor
Caviar Emptor's picture

Margins have been declining since the start of QE. Companies from all industries are feeling it now. Retailers have been hit hard. Now even raw material producers. Watch for it in earnings this quarter

Wed, 01/11/2012 - 22:39 | 2057120 fonzannoon
fonzannoon's picture

They are playing games with the earnings. A comnpany reports earnings. A week later they revise guidance down. The bar gets lowered. Everyone forgets this happened. Two months later they report earnings and hit the lowered bar. All the market cares about is they hit the number. I guess my point is you are right but the market seems to shrug it off. Or it has so far anyway.

Wed, 01/11/2012 - 22:43 | 2057127 Caviar Emptor
Caviar Emptor's picture

The "Market" is no longer a reflection of economic growth. It's a barometer of anticipated monetary expansion

Wed, 01/11/2012 - 22:46 | 2057139 fonzannoon
fonzannoon's picture

If that is the case. Would it be better to try to maintain purchasing power in the market or in cash. Right now you can say gold and it will be checkmate. I understand this.

Wed, 01/11/2012 - 23:07 | 2057186 Caviar Emptor
Caviar Emptor's picture

With your money in the market you're entrusting your dollars to a combine who's interests you hope line up with yours. If that situation changes, your capital is at risk. 2008, 2010, and 2000-1 are not that long ago but memories can be short. There could be giant disapointment without QE. With gold you're hedging agianst monetary dilution and other risks we've discussed. Your buying power is protected. But your time frame has to be long term. 

Thu, 01/12/2012 - 06:42 | 2057638 tabasco71
tabasco71's picture

Retail has some flexibility with margins as they can move it around from one product to another (discounting, 2 for 1, etc) while they increase elsewhere and keep the average margin level-ish.  Apart from when something particular has happened that influences a business model (acquisition, commodity spike...) margin pressure has been steadily downwards since 2008 for sure.  Traditional buyer power still features although appears to be weaker relatively. 

Q1 retail will have to absorb a wave of returns from the christmas season's purchasing frenzy which benefitted from benign weather but was shadowed by austerity.

Difficult to say what the market is following as 40% of it is computerised HFT now - its more aligned to what Caveat mentioned.

Wed, 01/11/2012 - 22:33 | 2057097 Teamtc321
Teamtc321's picture

Service and support companies are unable to pass through as well. It is a vicious cycle that has hit us since 08'. The pinch hit the service and support companies for production companies hard in 09'. 

Wed, 01/11/2012 - 21:58 | 2057006 oddjob
oddjob's picture

The snivelling greedy boomers that comprise management have no intention of making money for anybody but themselves through outrageous compensation and stock option abuse. After that is paid out, who gives a fuck whats left for shareholders or the enviorment. Same goes for almost every corporation out there.

Wed, 01/11/2012 - 21:51 | 2056982 RunningMan
RunningMan's picture

I was looking at images of unfinished developments in Arizona and Nevada, and reminded of the empty cities in China. It is interesting that the US housing boom built capacity for hypothetical second home owners and retirees who will never arrive because of the bust, where China built cities for a middle class that may never arrive, because of their own hard landing. Everyone keeps telling me China is different though... 

Wed, 01/11/2012 - 23:01 | 2057172 ForTheWorld
ForTheWorld's picture

Everyone keeps telling me that Australia is different too, because we have immigrants (both legal and illegal) coming here, and everyone wants to live in Sydney, so that's why house prices MUST go up.

Nevermind these facts:

- With China purchasing as many Australian farms it can get its hands on, we're losing out on money from farming
- We've lost the majority of our manufacturing, and now a private equity group (KKR) wants to purchase a once famous brand of Australian made (now Chinese made) clothing
- Average rent per week in Sydney is $400, meaning that if you were on minimum wage ($583 per week before tax), you'd be paying 68% of your gross income for rent. That's good, right?
-  Average petrol price is $1.50/litre, a pack of cigarettes is $17, and a 6 pack of cheap beer is $12-$15. That would wipe out the rest of your minimum wage.
-  The Australian Government implemented a tax last year (they said would only last 1 year) on the majority of Australians incomes that would pay for rebuilding of towns hit by floods, and we'll have a "carbon pricing scheme" starting July 1st this year.

With food costs still going up, I'm not sure how people will still be able to afford to keep living the "Australian" lifestyle.

Oh that's right, it's different here.

Thu, 01/12/2012 - 05:31 | 2057602 ZeroPower
ZeroPower's picture

Whoa...with a strong AUD, that makes those prices (of beer, smokes) even more ridiculous. 

Thu, 01/12/2012 - 06:05 | 2057622 RunningMan
RunningMan's picture

Australia and Canada both have some corrections in their future. Housing never corrected in the major urban centers so price to income multiples are above long run averages in both countries. Exceptionally so in certain cities (e.g. Vancouver), suggesting a trigger event would start that decline. The prudence of the Canadian banking market (aka risk aversion, lack of GSEs, mostly balance sheet lending) makes it less risky there. Not so sure about Australia in terms of reliance on wholesale funding (and frankly the wholesale mortgage market there makes me think of US parallels, whereas less developed in Canada).

China may be the trigger for both countries.

Thu, 01/12/2012 - 23:51 | 2060593 ForTheWorld
ForTheWorld's picture

Australian banks post increasing profits year on year (it was north of $24bn for the 4 largest banks servicing around 12 to 14 million customers customers during the last financial year), and continue to pass on, as they state, "the increased cost of borrowing from overseas lenders".

The way I read this is that they've already used up whatever funds are available on their balance sheets, and have been hitting up overseas lenders for the last few years. One of our largest banks, Westpac Banking Corporation, was on the list of banks borrowing funds from the Fed in 2007/2008.

Looking at the following link paints a bleak picture for our banking sector:

As for housing prices, we've been seeing discounts on housing prices in major cities except Sydney, which is the golden child of all those in real estate as an example of prices "never going down" or "prices double every seven years". Purchasing a 1 bedroom apartment in Sydney will run you anywhere between $250K for a filthy shoebox, to upwards of $400K for something rather decent, but those are within 20km of the CBD. The further out you go, the worse it gets in most areas.

It's a case of the blind leading the mute here - the blind don't know where they're leading people to, and the mute can't say anything when they see problems, so we're all screwed.

Wed, 01/11/2012 - 21:52 | 2056983 Mr Lennon Hendrix
Mr Lennon Hendrix's picture

DoChen has got to start selling bearings to China

Wed, 01/11/2012 - 22:12 | 2057039 slewie the pi-rat
slewie the pi-rat's picture

has china lost its bearings?

Wed, 01/11/2012 - 22:33 | 2057098 ??
??'s picture

I know there is a great deal of hype about insourcing but I suspect bearings are still being produced in some slave factory in Zhejiang, which is the Ball Bearing capital of the world

Wed, 01/11/2012 - 22:41 | 2057125 Yen Cross
Yen Cross's picture

 Launching Paper Gliders off a " Soviet Carrier" ?    You tell me?

Wed, 01/11/2012 - 21:53 | 2056986 surf0766
surf0766's picture

How can any financial information about a communist country be taken with an level of trust? China this China that. No one really knows...

Wed, 01/11/2012 - 23:02 | 2057175 slewie the pi-rat
slewie the pi-rat's picture

not to mention enron; or the FED

at least if you question the chinese they will show you the abacus and say, "See?"

hard landing;  take it or leave it

your guess is as good as theirs or anybody else's since we all have about the same info and almost none of it is right

Danger Zone - Kenny Loggins (Top Gun)


Wed, 01/11/2012 - 21:55 | 2056992 The trend is yo...
The trend is your friend's picture

Somehow it will be twisyed as positive news by MSM tomorrow morning

Wed, 01/11/2012 - 21:55 | 2056993 Caviar Emptor
Caviar Emptor's picture

Gartner reports worldwide PC shipments declined 1.4% in Q4 after 2 positive quarters. Weakness in Europe, US cited. "The big surprise was the US" "Worst performance since Q4 2008"

Wed, 01/11/2012 - 22:05 | 2057021 tarsubil
tarsubil's picture

It's like it has already happened. We've seen the flash but the sound and shockwave still haven't made it to us yet. What a fucking bizarre situation.

Excuse me while I go get high.

Wed, 01/11/2012 - 22:41 | 2057126 fonzannoon
fonzannoon's picture

Thank you. That is exactly what I am saying but did not articulate.

Wed, 01/11/2012 - 22:45 | 2057137 Caviar Emptor
Caviar Emptor's picture

When things don't add up there's always a reason. 

Wed, 01/11/2012 - 21:57 | 2057000 847328_3527
847328_3527's picture
Michael Olenick: 9.8 Million Shadow Inventory Says Housing Market is a Long Way From the Bottom


Put more simply, things are actually worse than any of the prevailing estimates indicates, although Goodman is very close to the mark. Current loss experience suggests that this figure is staggering, easily in the $1 trillion range.

Why aren’t those losses more visible yet? Well, evidence suggests that servicers are stalling the foreclosure process, not taking title to and selling these houses. For the lenders, such delay likely allows them avoid the write-offs of both the negative equity as well as the worthless second liens. More generally, it keeps the trillion dollar losses hidden. Lenders aren’t acknowledging their stall tactics, however. When people notice how slowly foreclosures are progressing from initial steps to resale, lenders point at their foreclosure fraud related dysfunction. Lenders conveniently don’t mention that such dysfunction was self-induced, instead blaming borrowers and courts.

Wed, 01/11/2012 - 22:03 | 2057014 PSEUDOLOGOI


You got to read this:

This is just disheartening  and what's coming in a few other countries near you soon.

Wed, 01/11/2012 - 22:49 | 2057147 fonzannoon
fonzannoon's picture

Man that is so fked up.

Thu, 01/12/2012 - 01:15 | 2057409 xela2200
xela2200's picture

Yes, the "children of the streets" syndrome is beginning. Well known in Latin America, India, and other poorer nations. A sure sign that the SHTF. You can expect Greece to see a great increase in violent crimes in 20 years or so. When You see these children in American cities, You know we hit bottom.

Wed, 01/11/2012 - 22:05 | 2057023 chump666
chump666's picture

Excellent analysis.  And finance 101 that was drummed into our brains is when Brazil went nuts buying USDs when inflation hit them in the 90's.  China and pretty much most of Asia is doing the same at this present time.

Oh and short Australia


Wed, 01/11/2012 - 22:40 | 2057124 GenXer
GenXer's picture

Surely not Australia Cobber?

They are about to have a $112 Billion intrastructure boom so their mines can keep supplying China's never ending double digit growth.

Next you will say something completely wacky like that Australian House prices will fall.

/sarc off

Wed, 01/11/2012 - 23:01 | 2057171 chump666
chump666's picture


Wed, 01/11/2012 - 22:06 | 2057024 Poor Grogman
Poor Grogman's picture

They may be able to start exporting some gold. Hmmm...

Wed, 01/11/2012 - 22:08 | 2057028 zorba THE GREEK
zorba THE GREEK's picture

Why many people think China can grow 10%/year without encountering

pitfalls along the way amuses me. At least China has engineers and

economists running their country and not career politicians and buffoons

like we have here in the U.S.A.

Wed, 01/11/2012 - 22:12 | 2057040 Randall Cabot
Randall Cabot's picture

weakening exports? Didn't they just hit it out of the park yesterday?

Wed, 01/11/2012 - 22:18 | 2057050 bnbdnb
bnbdnb's picture

Obama's charge for "Made in America" suddenly has a new ring to it.

Wed, 01/11/2012 - 22:28 | 2057072 Caviar Emptor
Caviar Emptor's picture

Breaking China CPI 4.1% vs 4.0% expected...15 month low, sl below 4.2% November. Food prices up 9.1% yoy

Wed, 01/11/2012 - 22:28 | 2057079 ??
??'s picture



Owning a car, Television increases heart attack risk by 27%

Wed, 01/11/2012 - 22:36 | 2057108 Yen Cross
Yen Cross's picture

 Yuan Inflation / is a Joke!   Any HOT Air Blimps for sale?

Wed, 01/11/2012 - 22:37 | 2057111 Maos Dog
Maos Dog's picture

If they repeal the one baby per household rule they will have buyers for all the overbuilt housing inventory in about 23 - 24 years from now. I understand that chinese take a long term view of things.

Wed, 01/11/2012 - 22:46 | 2057138 bnbdnb
bnbdnb's picture

9% food inflation and rising. More babies would not be good haha

Wed, 01/11/2012 - 22:50 | 2057150 Yen Cross
Yen Cross's picture

 With  ( ALL), due Respect! More field plowing " MALES" , would be appreciated!

Wed, 01/11/2012 - 22:51 | 2057152 CitizenPete
CitizenPete's picture

re: one baby per household rule


Illustrates you know little to nothing about China and beleive the stero type main stream BS.

Wed, 01/11/2012 - 23:09 | 2057196 Maos Dog
Maos Dog's picture

Post some links showing I am wrong asshole or shut the fuck up.


Is Brookings institute mainstream media?


Here a fun one about a anti one-child activist being send to a labor camp:


Thu, 01/12/2012 - 00:18 | 2057312 Yen Cross
Yen Cross's picture

 Easy) Limp Dik Dong! I'll go long on the house hold ( RED) Rule!

Thu, 01/12/2012 - 00:19 | 2057315 Yen Cross
Yen Cross's picture

 Shark Fins for sale?

Wed, 01/11/2012 - 22:45 | 2057135 Yen Cross
Yen Cross's picture

  That Wage/ Inflation  chart Is sweet! Just like the 747 ( 800( Smart move Boeing!  I'm LOOONG!

Wed, 01/11/2012 - 22:47 | 2057143 Yen Cross
Yen Cross's picture

 Soc Gen?  What ? Who?

                                            The over night borrowing ( CHAMPION)

Wed, 01/11/2012 - 22:49 | 2057146 CitizenPete
CitizenPete's picture



Chinese Skyscraper built in 15 days

Quite impressive: lapse-video--30-storey-hotel-built-in-just-15-days.html

Wed, 01/11/2012 - 23:33 | 2057233 AC_Doctor
AC_Doctor's picture

Definately not build by Union phucks...

Wed, 01/11/2012 - 22:51 | 2057154 lolmao500
lolmao500's picture

And if it becomes too bad, China will do like us and start a war... against Taiwan, Vietnam, India... whoever they want.

Wed, 01/11/2012 - 22:52 | 2057158 gwar5
gwar5's picture

Bang Dai Ho: My cousin Ishnot Long Nao say China really screwed.

Wed, 01/11/2012 - 22:55 | 2057162 Yen Cross
Yen Cross's picture

  You all get a " Bean"  in your New Years' Stocvking! 

   Yes the " V" was intended!

Wed, 01/11/2012 - 23:07 | 2057191 earleflorida
earleflorida's picture

china's got at laest another 40 years plus of strong growth,... the trillionaires know where to invest - China, period!


Wed, 01/11/2012 - 23:21 | 2057215 Yen Cross
Yen Cross's picture

 A T-1 one of what?  Black and Pecker?  Harry Pot Metal?

Wed, 01/11/2012 - 23:47 | 2057260 lizzy36
lizzy36's picture

That is funny the Chinese millionaires, are investing anywhere but China, and sending their wealthy kids overseas (Australia, Canada, USA.....).

What does that tell you? The Chinese know it is all bull shit.

Wed, 01/11/2012 - 23:23 | 2057194 Bubbles_2.0
Bubbles_2.0's picture

China consumer( tied in with bubble / condo ect )  as part of GDP has been trending down for years not up. They backstop the cheap loans and manufacturing and with fixed asset investment way over 50% ( ghost cities ) so how can they rebalance ? 


What jobs are left after the bubble burst in construction / manufacturing. ( Dragging down many commodities ) s.korea, taiwan proxy- have been slowing for months

How many times has the china consumer / hosing investor / experienced a downturn in the long, long history of home ownership. Never, its been going up for what ? 10-12 years.


Next reserve currency ? WTF....





Thu, 01/12/2012 - 00:22 | 2057319 Yen Cross
Yen Cross's picture

 Float me some "YUAN"!  All the ponzi China money flowing through Canada is a JOKE!

Wed, 01/11/2012 - 23:16 | 2057210 vast-dom
vast-dom's picture

From Plato's Republic:


And is the city which is under a tyrant rich or poor?


And the tyrannical soul must be always poor and insatiable?


And must not such a State and such a man be always full of fear?

Yes, indeed.

Is there any State in which you will find more of lamentation and sorrow and groaning and pain?

Certainly not.

And is there any man in whom you will find more of this sort of misery than in the tyrannical man, who is in a fury of passions and desires?


Reflecting upon these and similar evils, you held the tyrannical State to be the most miserable of States?

And I was right, he said.

Wed, 01/11/2012 - 23:27 | 2057224 steve.stuart
steve.stuart's picture

Does any really believe what these investment bankers or rating agencies say? I do not anything they say ... China will slow down and instead of depending on exports to West, it will focus on exports to developing markets and domestic consumption. People in China have lot of money in terms of savings and they will survive this down turn. It is for the west to worry if China instead of subsidizing their demands focus on domestic needs.

Wed, 01/11/2012 - 23:45 | 2057255 lizzy36
lizzy36's picture


China is China and will implode internally at some point in the next 10 years. The small numbers of rich along the coast will meet the 100's of millions of poor in land. And then they will retreat for another 50 years. Can't fight history.

Thu, 01/12/2012 - 00:25 | 2057324 Yen Cross
Yen Cross's picture

 China and North Korea will unite for the biggest "GOULAG"show on earth!  It might be a bit smoky though!

Wed, 01/11/2012 - 23:49 | 2057262 bankonzhongguo
bankonzhongguo's picture

I think SocGen should consider focusing on its own balance sheet and France in general.

How can you take anyone's research seriously on any topic when the provider at large is already bankrupt.

Would you see a doctor repeatedly sued for malpractice?  Would you use a subbookkeeper that spent time in prison for tax evasion?  Would you invest time with a marriage counselor that has been divorced 5 times?

Banks like to talk about confidence, risk aversion and due diligence.

I sure the Chinese are hanging on every SocGen word.

I sure am.

Thu, 01/12/2012 - 00:06 | 2057293 The_Emperor
The_Emperor's picture

Short China and Short SocGen that says to be short China :)

Thu, 01/12/2012 - 00:29 | 2057329 Yen Cross
Yen Cross's picture

  That's about right. The Fed can't manage 300 million, let alone 1.3 billion...

   I laugh @ this shit!  A bucket of GOLF balls is on my menu!

Thu, 01/12/2012 - 00:12 | 2057304 AldoHux_IV
AldoHux_IV's picture

I hope the Chinese aren't expecting a global bout of QE will help the situation as it will only increase the shadow banking impact.

Thu, 01/12/2012 - 00:35 | 2057334 Yen Cross
Yen Cross's picture

Is China the "Carbon Fiber"Shadow?   Point being. China can't find enough "Steam Shovels"" , too bury the soot it produces!

  China is a giant "Cat Fish"!    It just dissappeared?  A full grown man that is!

Thu, 01/12/2012 - 00:36 | 2057343 walcott
walcott's picture

only onion and plastic rice in kung pao

no chikn tu spensive. vari good ;)

Thu, 01/12/2012 - 02:10 | 2057473 prains
prains's picture

5th critical theme


entire company threatens to jump off roof if wages are not increased

Thu, 01/12/2012 - 02:35 | 2057494 Whats that smell
Whats that smell's picture

China medical costs set to soar? I don't think so 70 year olds are not going to get triple bypasses and titanium hips paid for by big Red Brother. They just get taken out back and put out of their pain with a 9mm.

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