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China Has Become One Big "Stuffed Channel"
Zero Hedge covered the topic of automotive channel stuffing long before it became a conversation piece, particularly as it pertains to Government Motors, a story which has recently taken precedence after being uncovered at such stalwarts of industry as German BMW and Mercedes, implying the German economic miracle may, too, have been largely fabricated. Another core topic over the years has been the artificial and inventory-stockpiling driven (in other words hollow) "growth" of China's economy, whose masking has been increasingly more difficult courtesy of such telltale signs of a slowdown as declining electricity consumption and off the charts concrete use. It was only logical that the themes would eventually collide and so they have: the New York Times published "China Besieged by Glut of Unsold Goods" in which, as the title implies, it is revealed that China is now nothing more than one big "stuffed channel."
First, we find, what has been painfully obvious to anyone holding an even modestly skeptical view on the Chinese centrally planned economy.
The glut of everything from steel and household appliances to cars and apartments is hampering China’s efforts to emerge from a sharp economic slowdown. It has also produced a series of price wars and has led manufacturers to redouble efforts to export what they cannot sell at home.
Just like in the US, and Europe, the Chinese government is, gasp, lying about everything:
The severity of China’s inventory overhang has been carefully masked by the blocking or adjusting of economic data by the Chinese government — all part of an effort to prop up confidence in the economy among business managers and investors.
Naturally the Politburo, which measures GDP once a product or service is created, is delighted to produce more, more, more of everything. The demand aspect of the core economy equation does not matter. The problem is that even the Chinese central planners have now run out of space under the rug.
But the main nongovernment survey of manufacturers in China showed on Thursday that inventories of finished goods rose much faster in August than in any month since the survey began in April 2004. The previous record for rising inventories, according to the HSBC/Markit survey, had been set in June. May and July also showed increases.
And now that China too has run out of collateral with which to fund endless supply, which in turn requires legitimate demand, it has big, big problems:
Business owners who manufacture or distribute products as varied as dehumidifiers, plastic tubing for ventilation systems, solar panels, bedsheets and steel beams for false ceilings said that sales had fallen over the last year and showed little sign of recovering.
“Sales are down 50 percent from last year, and inventory is piled high,” said To Liangjian, the owner of a wholesale company distributing picture frames and cups, as he paused while playing online poker in his deserted storefront here in southeastern China.
Wu Weiqing, the manager of a faucet and sink wholesaler, said that his sales had dropped 30 percent in the last year and he has piled up extra merchandise. Yet the factory supplying him is still cranking out shiny kitchen fixtures at a fast pace.
“My supplier’s inventory is huge because he cannot cut production — he doesn’t want to miss out on sales when the demand comes back,” he said.
Demand is not coming back, because every channel has now been stuffed. But what story of channel stuffing would be complete without one's auto industry being exposed as a total sham. Sure enough:
Inventories of unsold cars are soaring at dealerships across the nation. Quality problems are emerging. And buyers are becoming disenchanted as car salesmen increasingly resort to hard-sell tactics to clear clogged dealership lots.
The Chinese industry’s problems show every sign of growing worse, not better. So many auto factories have opened in China in the last two years that the industry is operating at only about 65 percent of full capacity — far below the 80 percent usually needed for profitability.
Yet so many new factories are being built that, according to the Chinese government’s National Development and Reform Commission, the country’s auto manufacturing capacity is on track to increase again in the next three years by an amount equal to all the auto factories in Japan, or nearly all the auto factories in the United States.
Even Detroit makes a cameo appearance:
The Chinese auto industry has grown tenfold in the last decade to become the world’s largest, looking like a formidable challenger to Detroit. But now, the Chinese industry is starting to look more like Detroit in its dark days in the 1980s.
It gets worse:
Automakers in China have reported that the number of cars they sold at wholesale to dealers rose by nearly 600,000 units, or 9 percent, in the first half of this year compared to the same period last year.
Yet dealerships’ inventories of new cars rose 900,000 units from the end of December to the end of June. While part of the increase is seasonal, auto analysts say that the data shows that retail sales are flat at best and most likely declining — a sharp reversal for an industry accustomed to double-digit annual growth.
“Inventory levels for us now are very, very high,” said Huang Yi, the chairman of Zhongsheng Group, China’s fifth-largest dealership chain. “If I hadn’t done special offers in the first half of this year, my inventory would be even higher.”
Manufacturers have largely refused to cut production, and are putting heavy pressure on dealers to accept delivery of cars under their franchise agreements even though many dealers are struggling to find places to park them or ways to finance their swelling inventories. This prompted the government-controlled China Automobile Dealers Association to issue a rare appeal to automakers earlier this month.
“We call on manufacturers to be highly concerned about dealer inventories, and to take timely and effective measures to actively digest inventory, especially taking into account the financial strain on distributors, as manufacturers have to provide the necessary financing support to help dealers ride out the storm,” the association said.
As dealer lots become cluttered, many salesmen have resorted to high-pressure sales tactics. That has resulted in growing customer dissatisfaction in the past year, according to surveys by J. D. Power. As a result, auto dealers are voicing the same complaints about inventory as businesspeople in a wide range of other industries.
China, like any self-respecting "capitalist" country has found the best way to deal with such a trivial nuisance: denial.
Officially, though, most of the inventory problems are a nonissue for the government.
The Public Security Bureau, for example, has halted the release of data about slumping car registrations. Data on the steel sector has been repeatedly revised this year after a new methodology showed a steeper downturn than the government had acknowledged. And while rows of empty apartment buildings line highways outside major cities all over China, the government has not released information about the number of empty apartments since 2008, according to a report last Friday.
Yet businesspeople in a wide range of other industries have little doubt that the Chinese economy is in trouble.
“Inventory used to flow in and out,” said Mr. Wu, the faucet and sink sales manager. “Now, it just sits there, and there’s more of it.
And now readers know why in addition to everything else, we have a special place in our hearts for the "inventory" component of US GDP, which in Q2 accounted for 0.3% of the 1.5% GDP.
As for China, we wish it luck in further easing to provide more supply-driven push for its channel-stuffed economy: with $14 trillion in deposits, or $5+ trillion more than the US, which can rush out at a moment's notice, and buy everything that is not nailed down (and certainly gold) at the faintest whiff of inflation, and record high soybean prices which we discussed previously will keep the PBOC on hold far longer than most experts predict, all those rumors of a China hard landing are increasingly becoming facts.
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so, let me guess ... the car manufacturers are going to need another bailout? ...
Just as long there remains a glut of Won Ton Soup and General Tso chicken, I will remain calm.
Channel-Stuffed Pan-Fried Dumplings...bring it on.
Can't get enough of those (with hot mustad).
Paul Krugman, Ph.D, Nobel Laureate, New York Times columnist, and all-around douchebag is of the opinion that thermonuclear f*cking war between the U.S., China, Russia & anyone else who participates, would lead to so many broken windows that it would be his wet dream come true, and the uber-stimulative economic "policy" sure to 'un-stuff' China's channel.
*Check out Paul Krugman's new book, When Mars Attacks, available in all fine bookstores now!
--Friedrich August von Hayek
"So if we could get something that could cause the government to say, ‘Oh, never mind those budget things; let’s just spend and do a bunch of stuff.' So my fake threat from space aliens is the other route,” Krugman said before a laughing crowd. “I’ve been proposing that.”
A false flag alien attack. I think it has been tried already.
central planning works well to pull a country out of poverty, but doesn't work to become a world class leader.
however, Chinese elites still care about China. unlike American billionares who sold out Americans to Chinese and Indian elites.
It seems like central planning has done the complete opposite, the more central planning (big government) comes less freedom more worthless currency, 0 growth, high unemployment and dont forget 50% of the pop. living on food stamps
You have to excuse A huxley. He lives in a socialist fantasy world where all outcomes are made up in his head. Same as Mao, Pol Pot, and Stalin, they would visualise a utopian world in their head then try to make it happen in the real world. And the real results were, well you know....
Sorry, but, man youcould not be further from the truth. The Mao days, when the elites would give up something for the country to do better are decades past. The elites all want more billions and they care not how many peasants heads they crush. I've seen it, it is very ugly there. The Chinese billionaires sold out their fellow countrymen the exact same as the American billionaires have.
Stuffed Crust Pizza for dinner ?
Your last sentence is telling...
But them elites are not tptb.
LOL you've been able to contraddict yourself in 2 seconds.
Central planning dont work to become world leader? and wtf are doing chinese now?
very Bullish, Truth...very.
Overcapacity is a serious problem and if it's not allowed to clear by bankruptcy, which the FED and apparently China is working overtime to avoid, it will be cleared some other way.
They should let the system work and stop screwing with it.
All China has to do is stop making such high quality, long lasting stuff. Make pots and pans that rust out in weeks instead of months, cloths that loose buttons the first time you do them up instead of the second time. You get the general idea.
Yes, that would certainly work.. but I just can't see the proud Chinaman stoop to such depths.
It’s just a good thing for us today that Hayek’s quaint notions about value have been discredited and that credit has eliminated the need for any and all capital anymore.
Indeed, manthong...indeed.
Hayek's value oriented ideals derivative of notional, barbaric sentiment, has no place in this modern money mechanics world, and we are told we should be grateful & indebted to others, allowing them much credit, for that.
re: nuclear war... if broken windows are economically stimulative, imagine the positive effects of melted windows!
Long sand.
People ran out of money (borrowed or otherwise) to buy stupid shit. At least at the same rate they were before.
http://www.finviz.com/quote.ashx?t=XRT
Think we'll see 15 again?
Mu-shu shrimp and scallion pancakes, nom nom nom!
I wonder if Miss Venezuela is available for channel stuffing.. Oh you mean inventories, oh never mind..
I don’t understand how anyone can zing you for that.. maybe because she is a godless communist?
Her channel is not worthy? Because the repartee standards here are so high?
Nope.. I still don’t understand.
no, probably because she is not rich.
most republicans marry for money....then 15 years later after mid life crisis, they ditch the old hag and go for some liberal young thing.
Wow, there must be a lot of Republicans in Hollywood. News to me.
Yes wascally Republicans like John Edwards.. What, I am wrong again, he channel stuffed who, Hunter Riell, ugh..
Anyway zinging me ha, most of the trolls here do not understand the human condition, our basic drives or economics much less my witty repartee.. Read a few of Aldous here.. Angry, disenfranchised and eyeing up the bath salts..
woof
Channel stuffing was a topic of conversation long before ZH existed. That's pretty ridiculous, bitchez - maybe you're just too young to know any better. Don't dislocate your shoulder backslapping.
"Channel stuffing was a topic of conversation long before ZH existed."
Where? Where was this a topic of conversation amongst the public before ZH existed?
Depending on whose figures you believe, there are between 70 and 90 Chinese vehicle brands now on sale in Peru alone!
There is going to be a bloodbath among the Chinese car companies.
Chinese automotive bearings? We have a nice order on the way for our "Precio Nada Mas" crowd...
Thanks Gramps, I was channel stuffing filter elements into Aussie mine inventories in the 80's.. The numbers must be made and at that time the PTB were interested in units moved they failed to check my margins, ha.. When they checked, I educated them (you) on the benefits of market share..
"so, let me guess ... the car manufacturers are going to need another bailout? ..."
No, just an another parking lot.
All of your channels are belong to us.
Governments lie, big time. This is a perceptions managed economy, based on mouth pieces, not on goods pieces. The only thing produced these days is a good story.
Truth is, all channels are stuffed. To admit the truth means one grand economic waterfall will follow shortly thereafter.
Its called Repetition
You can't eat perceptions.
What has been will be again,
what has been done will be done again;
there is nothing new under the sun.
-King Solomon
So how in the world do they pump up Q3? Stockpiles to the high heavans and nothing moving.
They have nothing left.
Period.
100% global recession indeed Faber.
For debtors anyway, big fucking difference between being a debtor and a creditor. Regardless of how many channels are stuffed.
America was a creditor once...
And China can trade finished goods for oil and other raw resources, assuming anyone still wants finished products.
I don't know what America produces. Lard mostly from what I can see on the streets. Oh and ammunition. And financial innovation.
We're screwed faster than the Chinese, unless they suffer some kind of sudden onset of mental retardation. All they have to do is wait for us to get so fat we can no longer produce our own food.
Fat people, with guns, starving to death. What a world.
Don't forget about Hope, we have an excess - we could sell some of that worthless crap to China.
What? And start another round of Hopium wars in Asia?
cougar_w, I am shocked that you didn't mention America's biggest export: fraud.
Fraud: Ah, but you see that's now called "financial innovation" which I did mention. Unless you meant the other kind of fraud, being government statistical analysis of the economy, which yes indeed the Chinese learned from us.
.
You are correct, as "financial innovation" encompasses the guile and subtlety of fraud. I had "financial innovation" confused with "rule of law", which is blatant theft in broad daylight with no consequences, and thus not subtle at all.
There are two problems:
The world has massive overcapacity for everything except peace, jobs, good medicine, good education and a good retirement and yet these are the basics. Unless world leaders concentrate on these, there is little scope for improvement in mankind's lot.
The second problem is that for China to encourage more in house consumption, it's going to have to get those raw material inputs at a much cheaper price than it is presently paying Austrailia and Brazil because otherwise it cannot produce at a sufficiently cheap price for the vast bulk of the Chinese people. This will bode ill for the resource producing nations.
The Chinese need to allow their currency to float naturally and rise against others.
This would lower material costs and provide their people with greater purchasing power.
But that might cost Apple 20 bucks or so in per unit profit from their Foxconn manufacturing.
I owe you $10,000 and it is my problem. I owe you, $3,000,000,000,000 and it is your problem.
There are no creditor and debtors anymore. Both sides of the debt are fucked because the debt bubble has gotten so unmanageable that only those that create "money" will come out as a winner.
Maybe china can "invest" in itself as the US did but, during the growth in the nineteenth century, the US was able to export to the world (particularly Europe) which allowed it's industry to grow rapidly.
China will not be able to do that in a global recession, thus massive channel stuffing.
Also, politically and socially, China today is nothing like the US in the nineteenth century.
China has long since recognized that the growth meme is dead. Their policies are very clear on this.
Maybe you are correct, but perception is everything. China sees themselves as a creditor, period. I don't think a U.S. default will result in a muted response from China (or Russia). I also recognize that the U.S. still has many natural resources, provided that it can physically protect and maintain control of those resources. Better get all those fat, well-armed folks out there.
It is a lawless world now, possession is the fucking law. Ask yourself what happened the last time a world creditor with a large population and strong manufacturing base dealt with a world depression and multiple currency collapses/devaluations?
I suspect a major land war in Asia is imminent and Iran/Syria are the likely flash points, though most certainly not the end points.
Something that needs to be considered is that China and Russia are not natural allies, they are indeed natural enemies and have been at war with each other, off and on, for centuries. They have a common "enemy" in the US but only in the short term as their true rivals are each other for the domination of Asia.
China's war machine will not be turned directly against the US... except as Japan's was in WWII. America was not ready to cede control of Asia to Japan at that time... they may be willing to let China have it.
War is coming, a big one.
Our Navy bosses say we need at least eleven carrier strike groups all the time for a reason. China has the biggest army, the 3rd biggest navy and air force.
Traditional warfare is off the table. So are nukes. China would get wiped out if they took the offensive directly towards the US. They know it too - so does everyone else. The threat and the battlefield is going to be very different this time (already in motion actually - but limited in nature... bound to escalate).
Quite the opposite, Iran/Syria are too far from home and it's always good to warm up before the major event. The upcoming conflict will start as a regional one and it will most probably be waged on water. China is already taking an aggresive stance towards it's neighbours for domination over South China Sea. Watch Beijing modernize it's navy while claiming more and more territories. They've drawn their first move vs. Japan on those uninhabited islands, now expect the simultaneous chess game to continue against the Philippines, Taiwan, Vietnam, Malaysia...
The timing of "the big one" depends on the Empire's response, as well as on further conflict developments in the Middle East.
As an addition, read this recent WSJ article written by Senator Webb http://online.wsj.com/article/SB10000872396390444184704577587483914661256.html (Look for the buzzwords)
I think you mis interpreted my comment. I am not say the Us and China will fight in Syria/Iran, but that it will be the catalyst that sparks a larger regional conflict. I absolutely agree with you that China wants/will attempt to expand it's influence in the South China Sea. They will use the Iran war as distraction and/or quid pro quo justification. The U.S. may tolerate this, but I suspect China will continue the pressure... into Siberia.
That is when the fun begins for real.
You overlook the fact that Russians are much better chess players... A China-Russia conflict is not unimaginable, but not in a foreseeable future. Right now the tiger needs an easier prey to improve it's "blood circulation".
Read http://stratrisks.com/geostrat/7648 and also related http://stratrisks.com/geostrat/7434.
72 Million people died
This time the numbers will be greater.
I know a fellow who was raised in Poland under communist rule. He seems to have a problem taking ownership of his property, his vehicles, etc. I wonder if the Chinese have the same problem when it comes down to turning off the machines and people in the factory.
Laying off Chinese and sending them back to the farm (now under 500 feet of water) is going to be a head ache and when people get hungry it will get nasty.
If they starting filling the empty cities with cars and the retail outlets with mannequins, rubber ducks, Ipads, Ipods and Obama banners that say, "Hope and Change 2012" they won't look as stupid.
The SS Jiugang II
You know, the more I read this site, the more amazed I am that this whole shit show we call an economy can keep taking body blow after body blow and not go down.
Four years of epicly horrible economic news and yet... Still no collapse.
Boggles the mind.
The government controls the currency, equities, exchanges, interest rates, and the media. Find the crack and the ship sinks.... quick!
It's a big game od chicken between governments, sooner or later someone's going to flinch.
Be patient Danielson. Rome wasn't built in a day, and in fact, Rome didn't end in a day, either.
Not sure I am too excited to live through the end of Rome... but I suppose it'll make for good stories around the mead table in Valhalla.
Well, yes and no. I don't date it 4 years, I think this goes back to the early to mid-90's. Economically, we've been in a decline for a long time (since Nixon took us off the Gold Standard), but in 1994 - "Irrational Exuberance" really started to take hold and the great credit bubble, which began in the 80's, really kicked into gear. Credit was reviled for decades, but suddenly anyone with a pulse was able to "charge it." This has been building until culminating in the massive RE Bubble where anyone who could fog a mirror was able to buy a half million mcmansion with no money down.
Now we're in year 5 or 6 of that unwind, but the ability to "kick the can" with games has been utterly remarkable, as you've said.
What I've noticed is that people are very quiet about their personal situation these days, and it leads me to believe that everyone is slowly figuring out how completely fucked they are. More and more people are realizing that the collapse is going to actually be the best thing for us in the long term, if only we would let it fucking happen!
I'll also mention something rather bothersome about the Collapse of the Roman Empire - from most accounts, it took 80 to 100 years! Then again, we're moving in dog years now....
I think we have 1 year left, at most......
the romans didnt 'store' their money as electrons on computers. they didnt resale a paper derivative over and over on a pc.........the massive debt overhang wouldnt be possible without modern tools. i think the 'end' will come quickly when the electronic banking system freezes up with no liquidity(real liquidity).
Maybe, but China is a creditor. They still actually know how to make shit and have the infrastucture/peons to do it and could simply start investing in themselves.
America was once a creditor and this is eactly what America did, leading to one of the most prosperous periods in history.
How's your mandarin?
They could simply start investing in themselves.
Yeah, but isn't that what they've already done, producing ghost cities, zero-occupant malls and never-used train stations... in numbers?
That's incorrect, most of Chna's capital originates elsewhere. It simply lends countries' money back to them, it cannot originate anything (it wouldn't have a current account surplus otherwise).
The Chinese gain capital by way of cheap labor and ... (drumroll) currency manipulation (believe it or not). They borrow against the accounts of other countries by way of foreign exchange.
The loser in this game is the Chinese worker who trades up part of his life that he'll never get back for some nicely printed IOUs.
Fair enough, playing devil's advocate here. It is more of a perception thing.
Go ahead, let the U.S. default and let's see if there is no response from Russia or China.
I say bring it.
right steve...! if china actually used dollars i would say they have money but since they do those conversion games and then print just like we do...well, they are just as screwed as the usa. also on a macro level they basicly loaned me money and i didnt pay them back so how rich are they....?
Larry Lang say China near bankrupt....all provinces like Greece
http://business.blogs.cnn.com/2012/01/05/chinese-provincial-debt-reaching-crisis-point/
Yes, China certainly does know how to make SHIT.
Being a creditor is meaningless if you don't have the power to collect. It's even more meaningless when the amount to be collected is so large that it's impossible for it to ever be paid back.
Good, bad... the US is just the guy with the gun.
Does this mean no more Chinese world resource blobbing-up?
Make me laugh!
China needs a war a lot worse than we do.
That can't be good.
Bingo. Remind you of any other world creditor that brought a bunch of production capacity online (during the industrial age) during a credit binge only to have the world enter a depression?
History may not repeat exactly, but I sense a rythme here.
I don't always up arrow "bingo" comments, but when I do, it's a "war with China" comment.
nah, not gonna happen, too far to swim.
With China gobbling up oil reserves in S. America and Africa, swimming -- and walking and biking and just not going anywhere -- is likely what we'll all be doing.
The mother-of-all crash derbies should clear out some of that inventory. Last car moving wins the war and gets a giant stack of FRNs!
They see that problem and are now building coal refineries to make plastic, diesel fuel and fertilizer. Read it on The oil drum as few weeks ago.
Not to mention they despise the west, if they go they'll do everything in their power to bring us down with them.
Hmmm, where are all those retards who claimed that China was going to take over the world????
China is following a 19th century industrialization playbook in the 21st century. They are way late to the party. They moved a lot of their farmers to the factories in the city and now the reality is that (A) Chinese-made goods are largely crap in terms of quality and (B) 21st century manufacturing is moving more and more to robots so all those worker-bee Chinese factories are obsolete and (C) the Chinese leadership is even more venal and corrupt (hard to think possible) than the U.S and Europe. Good luck with that world dominance China
and (D) they can't produce the food they need because the farmers are now in factories making stuff nobody wants. (E) starvation reduces the population even further, so no-one left in China to buy the crap that they didn't ship out to the U.S.
Sad story.
They also can't produce the food they need because the stupid fuckers have paved over farmland to build empty apartment buildings and empty shopping malls.
And what they can produce fewer and fewer can afford due to the printing press.
BTW, you're moniker is very fitting for this conversation. :)
the farmers that migrated to the cities never did make enough money to live. their cost of living was more than their wage so they always owed their employer more each week than they made in salary....they were slaves....that is why the jumped off the foxconn roof. they had mounting debt that would never get smaller.
same in the usa but we are so fat we cant climb the stairs to the roof to jump off.....also pres huessein said he would pay for everything.
It's the goal of the CBs, wherever you live.
China's leap towards the First World reminds me of a youtube of a guy trying to jump the St. Lawrence River in a rocket-powered 78' Lincoln Continental. The idea itself is ridiculous, but if you look at all the faces of all the mechanics, reporters, spectators, promoters, and helpers, if you were there with them, rolling that yellow hulk of Detroit angst to the starting line, polishing its "wings", firing up its jet engine, you'd get caught in the dream of it and think it was worth a shot. With ignition, and the roar of the jet, your heart would begin to soar, watching the Lincoln take off straight like a missile towards the unfathomly steep ramp, for an instant it darts into the sky, and then,...
GOLD, BITCHEZ!
I don't always up arrow a 'Gold Bitchez', but when it includes a "rocket powered '78 Lincoln Continental" and a steep ramp I do...
Great analogy! BTW, that was an ill advised, but truly non-pussified stunt if there ever was one.
do you really have to be able to work around the clock to be a world power? Germany almost did it and not at full speed either in a world war situation there are no norms either
Yup, great article.
Chinese Capitalist roader - Chinese who demonstrates a marked tendency to bow to pressure from Bourgeois forces and subsequently attempts to pull the Revolution in a capitalist direction
Good grief the Reds are lying, the Capitalist running Dogs
one more of those?
Everybody copies WS!
Its a disease!
$10 washing machines, bitchez!
Warranty void if plugged in.
Nope. Trade sanctions prevent you from having cheap washers.
http://www.zerohedge.com/news/us-launches-global-washer-trade-war
Overstuffed channels today mean short margins tommorow when they have to give the shit away to sell it. Then you have a consumer trained to buy the lower price and is less likely to pay retail ever again. This is what happens when supply and demand common sense is spared for short term manufacturing growth. It never works and soon the GDP numbers will start reflecting the overzealous manufacturing bindge that was created to pretend that growth was really happening. The "build it and they will come" mentality is dead. Time will prove that the world is way overstocked, not a place you want to be as more and more people globally are digging into their pockets and coming up with nothing more then a few lint balls.
I was in Lowes the other day and washer and dryer prices have actually gone up. Home Depot usually gives stuff away at Thanksgiving. The stuff has to be below GE/Obama's cost.
As far as China - Americans have really cut back because many Americans are jobless or broke. I have stopped spending. I can afford it but i just buy essentials.
Death of auto industry underway. Good riddance.
China = new Greece.
China depends on imported capital (just where do you think those trillions in dollar/euro reserves come from in the first place?) No flow of capital and Chna has squat. Diddly squat plus a bunch of used cars.
Cars are dead losses for car buyers, so is the fuel, so are roads to governments, destinations, insurances, finance industries for everyone's kids and grand-kids, etc. Don't even think for one second that finance 'earns' or produces anything that can pay for itself.
Where does all that finance represent? "Debt Baby, debt."
The debt is at least a hundred and fifty trillion$ in the various reserve currencies, leaving out the off-the ledger liabilities in the hundreds of trillion$ MORE that haven't been calculated.
All so that some fatcat robber auto barons can gain some squeeze. How about it if we cut off the barons' heads with a samurai sword on television and be done with it?
After the industry 'dies, Baby dies'!
"After the industry 'dies, Baby dies'!"
history shows otherwise. Unless of course you really think that the world is really going to have an adult conversation about the real value of everyone's labor.
value of one's labor hmm something like this, "nigga dig them taters and for every 100 in the basket I'll let you hold 2.. that's if you don't piss me off. Now there's value right there.
(after the reset)
Since we are talking about what a joke China is, I thought his would really be good for a laugh!
Apparently, Bankers do have the IQ's of "Fruit Bats"! Anyone remember the "Florida Face Chewer"(supposedly/not proven) high on bath salts earlier this summer?
Although not quite as tragic, without further notice > http://losangeles.cbslocal.com/2012/08/21/police-report-claims-deutsche-...
That news story explains a lot. It's a dot connector.
I heard 40% of factories have gone belly up in Guangdong and Zhejiang since 1/1/12. And more are soon shutting down. The CCP has the last rabbit in the hat, which is their defense spending/warz.
You may call it channel stuffing. But then again, you might also call it stockpiling in anticipation of an upcoming major disruption to global trade.
Good thing I stacked all those ceiling tile rails, Borjesson. Right next to my extra metallized plastic doorknobs. Ready for the disruption!! Chinstrap, ON
Stockpiling kitchen sinks great plan, just mount them on ICBM's scare the Tibetans maybe..
i find the idea that china actually has $14tril in saving a bit of a stretch. bet that there are 14 people with a trillion each and 2 billion people with nothing. if chinese are so fucking smart about saving money, why are they starving right now when soybean prices shot up...?
Movin the metal, BITCHEZ.
Ancient Chinese proverb: 'Re rill have rhast raff impirreral dogs'
Communist China wisdom strikes again. The economic engine of the world.
Look forward to purchasing my 60 inch LCD TV for $10.
Right after I move into one of their empty cities.
Was a horrific mess.
What hard landing? It's god damn crashing!
Watch it or Jim Rodgers might put you in a corner.
If it was water purification equipment, farming supplies, agriculture, infrastructure, and things that might help the people, might be a different story. The leadership appears to be planning the double double. Fleecing and fleeing. Move along.
The reason for Greek crisis is no secret. The Greeks don't produce anything--they borrow and buy Chinese goods. So what does China do? China buys Greek ship ports so they can increase their export capacity to the rest of EU?
Hope & Change hits the Chi Coms hard. LOL! Who knew an African islamic marxist would wreck the Chi Com's party.
Well they can always go back to what they are good at: organ harvesting of political prisoners.
I am sure there are plenty of kidneys of posters on China's Facebook who offended someone. They will need a quick trial in the field then a firing squad.
The doctors will be standing by to cut out the kidney with a free set of Ginzu knives.
Freddie is the AnAnonymous of African Islamic citizenism.
*bellylaugh*
+1
From reading this article,I assume China has it's own "Obesity Problem".
This piece on BH Billiton says it all. Those Australian "RBA minutes" are gonna get pretty dovish next month!
As I said, nothing good will ever come out of China. The current GFC comes with a label MADE IN CHINA. A more appropriate name for China would be TODT Inc.
i think Maria B is more the "stuffed channel"
Let's see the real story here
China has massive stockpiles of Goods because most of countries in the world are simply bankrupted and cannot afford to sustain their national credit system anymore.
US: Big Fucked
Europe: Super Fucked
Japan: Amazzingly fucked
These used-to-be first world developed colonial powers are quickly and definiltely slidding into the forever decline, and it's proven this part of world will definiltely not going to lead another industrial revolution because they are too broke to fund expensive projects and the workers skill level are no longer outperform than China. And interesting these countries can not wage a war like they did to the Soviet Union because of nuclear destruction
And because the there's only one hegemony system left from the old world that is the dollar/yen/euro troika dominating the false confidence about credit flowing and trade agreements around the world. That means if the host nations of these 3 currencies were literally broke and politically risker than ever, then there is of course going to be a global financial crisis. China is the game changer and amazingly China has be benefited greatly from the info exchange of modern times and he is prepared to tear down the old system. Everybody of course will suffer because of the sudden death of the old game, but the next round will be more important simply because we are now entering that sudden death of the old system which was being knocked down by China for the first time.
US could survive from the last depression because there were only the West and immature Russia messing around the entire world, this time he US will not be that lucky because all it has left it's just a big Apple and Farcebook not even Jewish bankers cannot bear with it.
this reminds me of another great leap forward..
A very good friend of mine who just opened up a brokeage account in shanghai who by the way think the stocks just hit the bottom(couple days ago china stock maret just hit new low), said to me, time to invest! I failed to convinced him that it just the begining of the collapse.
His future involves living in his car in the parking lot of WalMart.
There was an interesting bit on the WSJ yesterday regarding the inability of new university grads, including tech majors, in China to get jobs. Sounds like a replay of Japan in the mid-90's to me--they just reached that point much faster than postwar Japan.
But then again, China--due to repressive politics allied with traditional work ethics--has, since it exited Maoism, tended to imitate postwar Japan on steriods, minus the perfectionism that is a hallmark of Japanese manufacturing, and Japan in general (don't go all Fukushima on me--it was a GM model forced uopn them, and no, I'm neither Japanaese nor of Japanese ancestry, just a plain old green eyed gaijin who had the joy of teaching there years ago).
Japan never does anything half ass. They make a decision and stick with it, even if it is wrong. Rather than admit they did it wrong, they would rather crash and burn.
In many respects that culture made sure only the strongest and best run survived.
That culture has been lost in the USA today. Right now we shoot for compromise and middle of the road thinking, so nobody fails or succeeds.
so who's the lone -1 guy for this thread. lotta work eh? bkind of amusing. sign mine too? :)
so who's the lone -1 guy for this thread.
Hadn't you heard? The ChiComm FinMin doesn't start his day without first digesting everything on ZH.
Lol I guess he got you too.
Badge of honor to piss off the trolls ;)
Signed! YES!!!
The full retard circle jerk of global production is finally seeing the light of day.
I have been watching from the inside for years, seeing more product produced that can ever be consumed. It has been absolute insanity to see millions of units of inventory get sent to big box stores, only to see millions of units of inventory get sent back at the end of the year. Then this inventory is shipped off to Russia or China to be sold to their markets. Somebody at some point has to eventually buy all of this product, right? Sadly, no.
The Chinese factories can't stop overproducing because they have targets set by the Chinese government. The big publicly traded bullshit corporations can't stop overbuying because they have a legal obligation to maximize revenue for shareholders. The investment rapists like Goldman Sachs can't have this massive waste of resources slow down because they have billions upon billions of dollars bet on stores of high priced commodities. The realization that the world only needs to produce half of what it does on an annual basis would destroy every investment bank overnight.
The culprit is the publicly traded market that has to continue to grow forever without stopping. Every company must grow or die. A company can't just stop at $3 billion and say, that is enough.
The only way out is to shut down the global stock exchanges and force the privatization of all enterprise. If that means Goldman Sachs shuts down, and everyone on CNBC is out of a job, so be it.
Absolutely, you must destroy capital markets for the economy to survive.
Ignorance is bliss. Enjoy.
What they do NOT need is more cars. My friend told me it took his cab 3 hours to go across town in Beijing. He is athletic but said the pollution so so bad he could not walk it.
America was a creditor once...
And we told the king and his Hudson Bay Consortium to pound sand.
That was fun.
Then again, will we be able to tell all those countries holding interest bearing Timmy Bills the same? Or do we just load timmy and ben in the cannon and "fight another round"?
I see rots China stuff going Big Rots soon. Help China. Help Big Rots.
China definitely did work alot to get where it is, but unfortunately they played the part of the patsy.
Slaving away to create goods, which go to the Westerners, who in the meantime cavort in the sun living off debt that will never be payed back.
The fastest way to clear up the invetory channel is "WAR!"
sino sacks
The just in time parts delivery practice is being supplemented with just in time sales booking practice but this was often just called fraud in the past.
Brand new stretch of freeway falls down in China, five dead
http://nextbigfuture.com/2012/08/330-foot-long-ramp-section-of-eight.html