Peter, this is downright exciting, and “insurmountable problem” sums it up! Here we are watching in real time as the world’s second-largest economy accelerates its complete unraveling. You can just imagine the scrambling behind the scenes in China, as local officials and bankers try to prevent from being blamed as the scapegoat, and financially ruined in the process. Suppose you are a banker, being pressured by all-powerful Authorities to bail out billions of dollars of really bad loans. If you do so, your bank will take a huge loss and YOU will get the blame - ruined! If you refuse to lead your bank into financial destruction, the Authorities will literally take you to prison, and vilify you - ruined! The upper classes of China are probably scheming ways to get their families and wealth out of the country as fast as they can. (This is what happened in Venezuela, by the way, as the country accelerated to economic ruin - those who could, got out!)
Another thing that astounds me is that the average American has no idea this unraveling is happening. The MSM is busy giving Americans fluff news about which pop star is dating which athlete - while epic, historic changes are happening in countries like China and Argentina. I am indebted to you, Peter, for succinctly giving us all the hard data and details which make us actually informed and able to truly understand. Once again, thank you!
The irony is that the same catch 22 lies in wait for the Authorities pushing for the bank bailouts of China Vanke.
Unless Vanke can complete all the housing projects it has pre-sold, any bank bailout loan is going to go south. The nature of finance makes that a mathematical certainty. And unless Vanke can get enough loans to resolve its debts AND complete unfinished projects, it cannot complete all its pre-sold housing projects. This was what brought Evergrande down and what likely will bring Country Garden down.
Which means the Authorities are also faced with a dilemma: leave China Vanke to its fate and exacerbate the real estate crisis, or bail out China Vanke and precipitate a banking crisis.
Which handbasket does the CCP wish to take straight to Hell? That's the choice they are facing right now.
That’s phrasing it perfectly, Peter - which hand basket to hell is going to be chosen by each individual? There’s no solution now for bankers, local-government officials, even higher-level officials who could be painted as the ‘fall guy’ - except, GET OUT!
It's been a while since there's been any serious coverage of the "mortgage boycott" phenomenon in China, but I suspect that if that phenomenon had died down it is about to flare up once more.
Between such modes of protest and young people "lying flat", it's a fair bet that the Chinese people are moving closer to that inflection point where the evils of the CCP are no longer sufferable.
Off topic: another kangaroo-court anti-Navarro ruling - he has to report to jail in just a few days!
https://www.theepochtimes.com/us/appeals-court-denies-peter-navarros-bid-to-delay-jail-term-5607524?utm_source=ref_share&utm_campaign=copy
Peter, this is downright exciting, and “insurmountable problem” sums it up! Here we are watching in real time as the world’s second-largest economy accelerates its complete unraveling. You can just imagine the scrambling behind the scenes in China, as local officials and bankers try to prevent from being blamed as the scapegoat, and financially ruined in the process. Suppose you are a banker, being pressured by all-powerful Authorities to bail out billions of dollars of really bad loans. If you do so, your bank will take a huge loss and YOU will get the blame - ruined! If you refuse to lead your bank into financial destruction, the Authorities will literally take you to prison, and vilify you - ruined! The upper classes of China are probably scheming ways to get their families and wealth out of the country as fast as they can. (This is what happened in Venezuela, by the way, as the country accelerated to economic ruin - those who could, got out!)
Another thing that astounds me is that the average American has no idea this unraveling is happening. The MSM is busy giving Americans fluff news about which pop star is dating which athlete - while epic, historic changes are happening in countries like China and Argentina. I am indebted to you, Peter, for succinctly giving us all the hard data and details which make us actually informed and able to truly understand. Once again, thank you!
The irony is that the same catch 22 lies in wait for the Authorities pushing for the bank bailouts of China Vanke.
Unless Vanke can complete all the housing projects it has pre-sold, any bank bailout loan is going to go south. The nature of finance makes that a mathematical certainty. And unless Vanke can get enough loans to resolve its debts AND complete unfinished projects, it cannot complete all its pre-sold housing projects. This was what brought Evergrande down and what likely will bring Country Garden down.
Which means the Authorities are also faced with a dilemma: leave China Vanke to its fate and exacerbate the real estate crisis, or bail out China Vanke and precipitate a banking crisis.
Which handbasket does the CCP wish to take straight to Hell? That's the choice they are facing right now.
That’s phrasing it perfectly, Peter - which hand basket to hell is going to be chosen by each individual? There’s no solution now for bankers, local-government officials, even higher-level officials who could be painted as the ‘fall guy’ - except, GET OUT!
China needs to consult the 'experts' in the Biden Administration.
Ha! Funniest thing I’ve heard all day, Edwin!
How are all those prepayments looking? China will be at war with itself.
It's been a while since there's been any serious coverage of the "mortgage boycott" phenomenon in China, but I suspect that if that phenomenon had died down it is about to flare up once more.
Between such modes of protest and young people "lying flat", it's a fair bet that the Chinese people are moving closer to that inflection point where the evils of the CCP are no longer sufferable.
Maybe LITERALLY at war with itself soon, as people come to see themselves as having nothing left to lose!