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THE GREAT BIG CHINA THREAD


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Meet China's Morlocks: 1 Million Beijing Residents Live Undeground

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For an estimated 1 million Beijing residents, dubbed the "rat tribe", living above ground (or in ghost cities) is a luxury they simply cannot afford. As NPR reports, with even the tiniest apartment costing a fortune (and 21 million people fighting for space), there has emerged a new 'affordable' housing option... below the city's bustling streets. Thanks to building codes that force the creation of basements and bomb shelters under new residences, there's a lot of underground space (1 - 3 floors down) that is illegally - but affordably - used for habitation. With the Shanghai Composite stock index up over 40% year-to-date, creating wealth and trickling down, how can this be possible?

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China Crashes: Shanghai Composite Plunges 5.4% Amid Record Trading, Biggest Tumble Since 2009

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Those who have been following the ridiculous moves in the Shanghai Composite in recent months, knew it was only a matter of time before yet another major stock market (one which recently surpassed the Nikkei for the second largest spot in the world) crashed violently, further eroding faith in the centrall-planned "price discovery" process. The only question was when. Tonight we got the answer.

Does China have a PPT?

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PBOC Pulls The Punchbowl——China Stock Market Plunges 5.5%

by Jeffrey P. Snider • December 9, 2014

..Now that they have tightened so radically in the repo market there can no longer be any doubt (not that there was any before to anyone outside of the orthodox ideology) about what is taking place in China. While mainstream economic observers and far too many financial participants remain stuck in 2010, central banks have evolved (though not enough). It is very revealing that the biggest priority in China right now is not growth but asset bubbles. That is a concern that is shared far more broadly even in central banking than anyone seems to want to recognize. The worst case economic scenario is not global recession; it is global recession with global asset bubbles.

http://davidstockmanscontracorner.com/pboc-pulls-the-punchbowl-china-stock-market-plunges-5/

A Message From the PBOC On Behalf Of All Central Banks

December 9, 2014

..For asset markets that think central banks are going to be as generous as they have in the past, they are sorely mistaken. The paradigm is much different now, though the change is not being digested easily. Broad, naked liquidity solves no economic problems and central banks, always late arrivals, have finally caught on to that. Targeted liquidity will likely, in my opinion, be ultimately as impudent, but since the emphasis is on fewer costs (read: less bubbles) you would think “markets” might want to be more aware.

http://www.alhambrapartners.com/2014/09/17/a-message-from-the-pboc-on-behalf-of-all-central-banks/

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China's falling inflation raises prospect of faster easing

BEIJING - China's inflation hit a five-year low in November, stoking expectations that Beijing will move more aggressively to head off the risk of deflation in a slowing economy, which put fresh life into soaring share markets after a reversal on Tuesday.

More easing to fix it...

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Beijing, We Have A Problem

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The Chinese stock market hit a four year high today at 3,020. This is up 53% since the middle of 2013 low and up 48% in the last six months. I guess this must mean the Chinese economy is operating on all cylinders. If you think so, you’d be wrong. As Anne Stevenson-Yang - who has lived there since 1985, told Barron's, the entire Chinese economic miracle is a fraud. The reforms are false. The leaders are corrupt and as evil as ever. The entire edifice is built upon a Himalayan mountain of bad debt. This lady is about as blunt as you can get about Chinese fraud, lies, mal-investment, and data manipulation.

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"Burning Money To Keep Warm" - China's New Normal

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Worried about money-printing in China... don't! As China.org reports, an electricity generation plant in China's troubled Henan province is burning banknotes in what appears to be an effort to raise efficiency and reduce toxic emissions. One ton of scrapped banknotes can generate about 660 kWh of electricity, which means around 4,000 tonnes of coal can be saved in the province every year by using this process. Perhaps that is the solution to higher natural gas prices in winter for the US NorthEast... just transfer some banknotes up from The Eccles Building and heat the nation...

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Exclusive - China tells banks to step up lending to lift flagging growth

SHANGHAI - China has told its banks to issue more loans in the final months of 2014 and has relaxed limits on their loan-to-deposit ratios to help hit a record new lending target as the government steps up efforts to lift flagging economic growth.

When the Chinese credit expansion finally folds there's going to be one hell of a mess, one just wonders at what fraud and corruption is finally revealed when this bubble finally pops.

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China November output, investment data show further weakness, more stimulus expected

BEIJING - China's economy showed further signs of fatigue in November, with factory growth slowing more than expected and investment expansion hovering near a 13-year low, putting pressure on policymakers to unveil stronger stimulus measures.

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China Manufacturing PMI Drops Back Into Triple-Dip Contraction, Lowest In 7 Months

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Perhaps the collapse in oil prices does have something to do with demand after all? HSBC's China's Manufacturing PMI tumbled to 49.5 (missing expectations of 49.8), its lowest since May (and first contraction). This is the 3rd contractionary print in the last 2 years as HSBC notes "domestic demand slowed considerably," with only new export orders (to whom we wonder) improving. Employment slipped yet again as did output leaving HSBC no choice but to demand "further monetary easing," due to "rising disinflationary pressures, which fundamentally reflect weak demand."

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China's Dalian Wanda prepares for the end of urbanisation

HONG KONG - The billionaire behind shopping mall developer Dalian Wanda says China's era of rapid urbanisation will end within a decade, so he is speeding up his company's shift towards tourism and entertainment after a $3.7 billion (£2.35 billion) initial public offering.

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http://www.bloomberg.com/news/2014-12-18/china-demand-drop-pushes-iron-ore-shipping-rates-to-5-year-low.html

'Iron ore and shipping costs plunged to the lowest in five years amid signs China’s slowing economic growth and a glut of the commodity are sapping seaborne trade.

China imported 67.4 million tons of iron ore in November, down 15 percent from October, according to customs data. This was the first November decline in China’s iron ore imports since 1998. The only other time November imports fell since records began was in 1996.'

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Frenzied Chinese Stock Buyers Soak Up So Much Liquidity, Central Bank Forced To Intervene, Prevent Seizure

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China's seven-day repurchase rate, a gauge of interbank funding availability in the banking system, surged 139 basis points, to a 10-month high of 5.28% in Shanghai, the biggest since Jan. 20. The reason for the sudden cash crunch, according to Bloomberg, is that subscriptions for the biggest new share sales of the year lock up funds. Twelve initial public offerings from today through Dec. 25 will draw orders of as much as 3 trillion yuan ($483 billion), Shenyin & Wanguo Securities Co. estimated. In other words, the scramble to allocate capital into China's surest way of making money, IPOs, has led to a drying out of general liquidity in the entire market. This in turn forced the PBOC to intervene and inject short-term money loans to commercial lenders in order to prevent the kind of interbank liquidity lock up that emerged in China in June 2013 in the aftermath of the first Taper Tantrum (and which before all is said and done, will likely take place again) and which sent global capital markets around the globe reeling before China resumed its massive liquidity injections which are at the heart of China's debt-fuelled bubble in the first place.

China aiming to improve on the crash of 29?

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