Gloom, Doom, or Boom? Finance and Economics

[Typhoon]

Spenglerman on the US Fed

AsiaTimes - Goldman | The great federal-debt Ponzi scheme

It’s like the pump part of a pump-and-dump scheme in the stock market – without the benefit of an exit strategy

[Typhoon]

Martin Hutchinson | Financiers have learned nothing in 250 years

[noddy]

https://youtu.be/1HmGLV46L60

Aussie youtuber explains merkindooooooom

[Simple Minded]

https://youtu.be/1HmGLV46L60

Aussie youtuber explains merkindooooooom

sooner of later, they will be right. This has been a rolling prediction since at least the 1970's when I first became semi-cognizant.

as noted in one of Colonel Sun's posted articles. Financiers never learn.

[YMix]

Rich Hampton residents and tourists are struggling with mowing their own lawns and foregoing salon appointments as the East End of Long Island is experiencing a labour shortage.

[...]

“I had to buy a lawnmower and cut my own lawn. I wanted flowers planted behind the pool. The landscaper didn’t show up. I had to do it myself,” one East Hampton resident said. “My brother just showed me how to use the thing that trims the weeds. Yesterday, I finally did that. I had to take my $800 sneakers off first, but it was actually satisfying.”

https://www.independent.co.uk/news/worl ... 81494.html

[Typhoon]

Rich Hampton residents and tourists are struggling with mowing their own lawns and foregoing salon appointments as the East End of Long Island is experiencing a labour shortage.

[...]

“I had to buy a lawnmower and cut my own lawn. I wanted flowers planted behind the pool. The landscaper didn’t show up. I had to do it myself,” one East Hampton resident said. “My brother just showed me how to use the thing that trims the weeds. Yesterday, I finally did that. I had to take my $800 sneakers off first, but it was actually satisfying.”

https://www.independent.co.uk/news/worl ... 81494.html

"The horror! The horror!"

[Typhoon]

Spenglerman on inflation - extended version.

Law and Liberty - Goldman | Prospects for Inflation

[Miss_Faucie_Fishtits]

Spenglerman on inflation - extended version.

Law and Liberty - Goldman | Prospects for Inflation

Then at a five to 10 year horizon, we will have a challenge that can push us out of first place. And this is not a nice competition we’re involved in, this is Glengarry Glen Ross, first prize is a Cadillac, second prize is a set of steak knives. If you lose your ability to borrow in your own currency globally, that is reserve status, and you lose the dominant position in the world market for high tech. It’s not just Huawei that’s the dominant telecom producer, but if Chinese companies are the dominant AI providers in a number of fields, then the United States would go through a decline similar to what Britain went through in the 60’s and 70’s, it doesn’t mean we disappear as a country, but it means we have lower living standards. We have even more deeply fractured body of politics. We have less military power and generally we hate life.

Goldman is getting ready to go out into the mainstream media and kick some serious butt....'>........

[Typhoon]

Martin Hutchinson | Banknotes should be issued only by banks

I enjoy reading Mr. Hutchinson's articles for his historical perspective and outlier from the mainstream views.

[Typhoon]

Spenglerman on inflation - extended version.

Law and Liberty - Goldman | Prospects for Inflation

Then at a five to 10 year horizon, we will have a challenge that can push us out of first place. And this is not a nice competition we’re involved in, this is Glengarry Glen Ross, first prize is a Cadillac, second prize is a set of steak knives. If you lose your ability to borrow in your own currency globally, that is reserve status, and you lose the dominant position in the world market for high tech. It’s not just Huawei that’s the dominant telecom producer, but if Chinese companies are the dominant AI providers in a number of fields, then the United States would go through a decline similar to what Britain went through in the 60’s and 70’s, it doesn’t mean we disappear as a country, but it means we have lower living standards. We have even more deeply fractured body of politics. We have less military power and generally we hate life.

Goldman is getting ready to go out into the mainstream media and kick some serious butt....'>........

More Spenglerian doom

AsiaTimes - Goldman | US quits CapEx as inflation squeezes margins

Capital spending at major US industrials is down 30% from 2019 despite rising shortages of consumer goods

[Typhoon]

The Spectator | How the ‘Nixon shock’ reshaped our economy

The dotcom bubble. The financial crisis of 2008 and 2009. The oil price spiral of the 1970s. The launch of the single currency. It would be fun, in a nerdish kind of a way, to debate which was the most seismic economic event of postwar history. But in fact the answer would be this: the ‘Nixon shock’, a fateful day when the final link between gold and the money you carry around in your pocket, or on your bank card, was finally severed. And it happened 50 years ago this week.

[Typhoon]

FT | Commodities: the Chinese real estate exposure [paywalled]

What might the fallout from Evergrande mean for demand?

© REUTERS
Jamie Powell

In markets, being right early is the same as being wrong. Fortunately for FT Alphaville, the same rule doesn’t apply to journalism.

Back in 2018, FT Alphaville took a look at Evergrande -- China’s largest property developer -- and its ballooning balance sheet, which included 408,000 car parking spaces, a land bank the size of Malta, and a curiously low yield on its rental properties.

Three short years later, Evergrande is facing a liquidity crisis. In a normal economy, this wouldn’t be such a big deal. But in China, where real estate is estimated to account for up to a quarter of GDP, this is slightly more of a concern. It doesn’t help that the property developer also has some $300bn of outstanding obligations to pay. And it’s crunch time: two interest payments on its long-suffering bonds are due Thursday.

So the question now is: how contagious would an Evergrande default be for the global economy? Chinese property stocks have started the week by already taking a battering, with Hong Kong listing Sinic Holdings crashing 87 per cent during trading on Monday, and the bonds of other developers sinking to distressed levels. Via UBS:


European equities this morning are also showing signs of suddern concern, with the FTSE 100 falling 1.6 per cent, and the Stoxx 600 off 1.8 per cent in midday trading. The basic materials sector is leading the charge, with the sector in the UK off 4.5 per cent, led by Anglo American’s fall of 8.6 per cent. In Europe, it’s a similar story, with steel company ArcelorMittal, as one example, down 6 per cent. (European banks also seem to be taking a battering, we should add.)

But why commodities? Well, the obvious answer is that real estate tends to use a lot of them -- whether it’s steel for the structure or copper for wiring.

With that in mind, you might be wondering about just what level of exposure to the business of digging stuff out of the ground we are talking about here. Well, not to worry, because Tom Price at Liberum did a quick back-of-the-napkin estimate on what a Chinese real estate crunch might mean for commodities, and . . . it’s not too pretty.

Here’s the key blurb from his note this Monday morning:

bearish commodities? yes. 

looking narrowly at the direct/first-round impact on commodities, this event threatens a slowdown in China’s property sector – 1-of-2 very large, broad-based commodity-consuming sectors of this economy (i.e. the other = infra). 

it’s generally well known (among resources sector investors, at least) that China’s share of global commodities consumption = 40-70%. 

but what share of global consumption is China’s property sector? Of China’s total commodity supply, its property sector consumes: 

40% of steel flow (380Mtpa = 20% of global total); 

20% of copper (2.7Mtpa = 20% of global) 

15% of aluminium (6Mtpa = 9% of global) 

15% zinc (0.7Mtpa = 5% of global) 

10% nickel (0.2Mtpa = 8% of global)

ANSWER: China property = 5-20% of global commodity supply. - so yes, Evergrande’s potentially a big deal to Commodity World.

Yep, Chinese real estate accounts for a fifth of all global and copper steel supply. Blimey.

We don’t have a whole lot to add on top of those eye-opening stats, bar a passing thought that if you were an economy which depended on commodity sales for a large chunk of your output -- say, Australia -- you might be concerned.

[Doc]

FT | Commodities: the Chinese real estate exposure [paywalled]

What might the fallout from Evergrande mean for demand?

© REUTERS
Jamie Powell

In markets, being right early is the same as being wrong. Fortunately for FT Alphaville, the same rule doesn’t apply to journalism.

Back in 2018, FT Alphaville took a look at Evergrande -- China’s largest property developer -- and its ballooning balance sheet, which included 408,000 car parking spaces, a land bank the size of Malta, and a curiously low yield on its rental properties.

Three short years later, Evergrande is facing a liquidity crisis. In a normal economy, this wouldn’t be such a big deal. But in China, where real estate is estimated to account for up to a quarter of GDP, this is slightly more of a concern. It doesn’t help that the property developer also has some $300bn of outstanding obligations to pay. And it’s crunch time: two interest payments on its long-suffering bonds are due Thursday.

So the question now is: how contagious would an Evergrande default be for the global economy? Chinese property stocks have started the week by already taking a battering, with Hong Kong listing Sinic Holdings crashing 87 per cent during trading on Monday, and the bonds of other developers sinking to distressed levels. Via UBS:


European equities this morning are also showing signs of suddern concern, with the FTSE 100 falling 1.6 per cent, and the Stoxx 600 off 1.8 per cent in midday trading. The basic materials sector is leading the charge, with the sector in the UK off 4.5 per cent, led by Anglo American’s fall of 8.6 per cent. In Europe, it’s a similar story, with steel company ArcelorMittal, as one example, down 6 per cent. (European banks also seem to be taking a battering, we should add.)

But why commodities? Well, the obvious answer is that real estate tends to use a lot of them -- whether it’s steel for the structure or copper for wiring.

With that in mind, you might be wondering about just what level of exposure to the business of digging stuff out of the ground we are talking about here. Well, not to worry, because Tom Price at Liberum did a quick back-of-the-napkin estimate on what a Chinese real estate crunch might mean for commodities, and . . . it’s not too pretty.

Here’s the key blurb from his note this Monday morning:

bearish commodities? yes. 

looking narrowly at the direct/first-round impact on commodities, this event threatens a slowdown in China’s property sector – 1-of-2 very large, broad-based commodity-consuming sectors of this economy (i.e. the other = infra). 

it’s generally well known (among resources sector investors, at least) that China’s share of global commodities consumption = 40-70%. 

but what share of global consumption is China’s property sector? Of China’s total commodity supply, its property sector consumes: 

40% of steel flow (380Mtpa = 20% of global total); 

20% of copper (2.7Mtpa = 20% of global) 

15% of aluminium (6Mtpa = 9% of global) 

15% zinc (0.7Mtpa = 5% of global) 

10% nickel (0.2Mtpa = 8% of global)

ANSWER: China property = 5-20% of global commodity supply. - so yes, Evergrande’s potentially a big deal to Commodity World.

Yep, Chinese real estate accounts for a fifth of all global and copper steel supply. Blimey.

We don’t have a whole lot to add on top of those eye-opening stats, bar a passing thought that if you were an economy which depended on commodity sales for a large chunk of your output -- say, Australia -- you might be concerned.

...World wide deflation. Well maybe.

The CCP does not give its citizens much opportunity to invest in anything other than property. At least legally.

Those properties also have a very short shelf life.
XopSDJq6w8E

[Doc]

FT | Commodities: the Chinese real estate exposure [paywalled]

What might the fallout from Evergrande mean for demand?

© REUTERS
Jamie Powell

In markets, being right early is the same as being wrong. Fortunately for FT Alphaville, the same rule doesn’t apply to journalism.

Back in 2018, FT Alphaville took a look at Evergrande -- China’s largest property developer -- and its ballooning balance sheet, which included 408,000 car parking spaces, a land bank the size of Malta, and a curiously low yield on its rental properties.

Three short years later, Evergrande is facing a liquidity crisis. In a normal economy, this wouldn’t be such a big deal. But in China, where real estate is estimated to account for up to a quarter of GDP, this is slightly more of a concern. It doesn’t help that the property developer also has some $300bn of outstanding obligations to pay. And it’s crunch time: two interest payments on its long-suffering bonds are due Thursday.

So the question now is: how contagious would an Evergrande default be for the global economy? Chinese property stocks have started the week by already taking a battering, with Hong Kong listing Sinic Holdings crashing 87 per cent during trading on Monday, and the bonds of other developers sinking to distressed levels. Via UBS:


European equities this morning are also showing signs of suddern concern, with the FTSE 100 falling 1.6 per cent, and the Stoxx 600 off 1.8 per cent in midday trading. The basic materials sector is leading the charge, with the sector in the UK off 4.5 per cent, led by Anglo American’s fall of 8.6 per cent. In Europe, it’s a similar story, with steel company ArcelorMittal, as one example, down 6 per cent. (European banks also seem to be taking a battering, we should add.)

But why commodities? Well, the obvious answer is that real estate tends to use a lot of them -- whether it’s steel for the structure or copper for wiring.

With that in mind, you might be wondering about just what level of exposure to the business of digging stuff out of the ground we are talking about here. Well, not to worry, because Tom Price at Liberum did a quick back-of-the-napkin estimate on what a Chinese real estate crunch might mean for commodities, and . . . it’s not too pretty.

Here’s the key blurb from his note this Monday morning:

bearish commodities? yes. 

looking narrowly at the direct/first-round impact on commodities, this event threatens a slowdown in China’s property sector – 1-of-2 very large, broad-based commodity-consuming sectors of this economy (i.e. the other = infra). 

it’s generally well known (among resources sector investors, at least) that China’s share of global commodities consumption = 40-70%. 

but what share of global consumption is China’s property sector? Of China’s total commodity supply, its property sector consumes: 

40% of steel flow (380Mtpa = 20% of global total); 

20% of copper (2.7Mtpa = 20% of global) 

15% of aluminium (6Mtpa = 9% of global) 

15% zinc (0.7Mtpa = 5% of global) 

10% nickel (0.2Mtpa = 8% of global)

ANSWER: China property = 5-20% of global commodity supply. - so yes, Evergrande’s potentially a big deal to Commodity World.

Yep, Chinese real estate accounts for a fifth of all global and copper steel supply. Blimey.

We don’t have a whole lot to add on top of those eye-opening stats, bar a passing thought that if you were an economy which depended on commodity sales for a large chunk of your output -- say, Australia -- you might be concerned.

...World wide deflation. Well maybe.

The CCP does not give its citizens much opportunity to invest in anything other than property. At least legally.

Those properties also have a very short shelf life.
XopSDJq6w8E

Plus the other shoe...
WYqKUEGEeuc

[Typhoon]

The Bear's Lair - Hutchinson | Losers from higher rates

StadowStats | Alternate Inflation Charts

[Typhoon]

FT | Commodities: the Chinese real estate exposure [paywalled]

What might the fallout from Evergrande mean for demand?

© REUTERS
Jamie Powell

In markets, being right early is the same as being wrong. Fortunately for FT Alphaville, the same rule doesn’t apply to journalism.

Back in 2018, FT Alphaville took a look at Evergrande -- China’s largest property developer -- and its ballooning balance sheet, which included 408,000 car parking spaces, a land bank the size of Malta, and a curiously low yield on its rental properties.

Three short years later, Evergrande is facing a liquidity crisis. In a normal economy, this wouldn’t be such a big deal. But in China, where real estate is estimated to account for up to a quarter of GDP, this is slightly more of a concern. It doesn’t help that the property developer also has some $300bn of outstanding obligations to pay. And it’s crunch time: two interest payments on its long-suffering bonds are due Thursday.

So the question now is: how contagious would an Evergrande default be for the global economy? Chinese property stocks have started the week by already taking a battering, with Hong Kong listing Sinic Holdings crashing 87 per cent during trading on Monday, and the bonds of other developers sinking to distressed levels. Via UBS:


European equities this morning are also showing signs of suddern concern, with the FTSE 100 falling 1.6 per cent, and the Stoxx 600 off 1.8 per cent in midday trading. The basic materials sector is leading the charge, with the sector in the UK off 4.5 per cent, led by Anglo American’s fall of 8.6 per cent. In Europe, it’s a similar story, with steel company ArcelorMittal, as one example, down 6 per cent. (European banks also seem to be taking a battering, we should add.)

But why commodities? Well, the obvious answer is that real estate tends to use a lot of them -- whether it’s steel for the structure or copper for wiring.

With that in mind, you might be wondering about just what level of exposure to the business of digging stuff out of the ground we are talking about here. Well, not to worry, because Tom Price at Liberum did a quick back-of-the-napkin estimate on what a Chinese real estate crunch might mean for commodities, and . . . it’s not too pretty.

Here’s the key blurb from his note this Monday morning:

bearish commodities? yes. 

looking narrowly at the direct/first-round impact on commodities, this event threatens a slowdown in China’s property sector – 1-of-2 very large, broad-based commodity-consuming sectors of this economy (i.e. the other = infra). 

it’s generally well known (among resources sector investors, at least) that China’s share of global commodities consumption = 40-70%. 

but what share of global consumption is China’s property sector? Of China’s total commodity supply, its property sector consumes: 

40% of steel flow (380Mtpa = 20% of global total); 

20% of copper (2.7Mtpa = 20% of global) 

15% of aluminium (6Mtpa = 9% of global) 

15% zinc (0.7Mtpa = 5% of global) 

10% nickel (0.2Mtpa = 8% of global)

ANSWER: China property = 5-20% of global commodity supply. - so yes, Evergrande’s potentially a big deal to Commodity World.

Yep, Chinese real estate accounts for a fifth of all global and copper steel supply. Blimey.

We don’t have a whole lot to add on top of those eye-opening stats, bar a passing thought that if you were an economy which depended on commodity sales for a large chunk of your output -- say, Australia -- you might be concerned.

...World wide deflation. Well maybe.

The CCP does not give its citizens much opportunity to invest in anything other than property. At least legally.

Those properties also have a very short shelf life.
XopSDJq6w8E

Plus the other shoe...
WYqKUEGEeuc

Time will tell . . .



Well, it's now Friday in E Asia and, to the best of my knowledge, the offshore bondholders not received any payment.

[Doc]

FT | Commodities: the Chinese real estate exposure [paywalled]

What might the fallout from Evergrande mean for demand?

© REUTERS
Jamie Powell

In markets, being right early is the same as being wrong. Fortunately for FT Alphaville, the same rule doesn’t apply to journalism.

Back in 2018, FT Alphaville took a look at Evergrande -- China’s largest property developer -- and its ballooning balance sheet, which included 408,000 car parking spaces, a land bank the size of Malta, and a curiously low yield on its rental properties.

Three short years later, Evergrande is facing a liquidity crisis. In a normal economy, this wouldn’t be such a big deal. But in China, where real estate is estimated to account for up to a quarter of GDP, this is slightly more of a concern. It doesn’t help that the property developer also has some $300bn of outstanding obligations to pay. And it’s crunch time: two interest payments on its long-suffering bonds are due Thursday.

So the question now is: how contagious would an Evergrande default be for the global economy? Chinese property stocks have started the week by already taking a battering, with Hong Kong listing Sinic Holdings crashing 87 per cent during trading on Monday, and the bonds of other developers sinking to distressed levels. Via UBS:


European equities this morning are also showing signs of suddern concern, with the FTSE 100 falling 1.6 per cent, and the Stoxx 600 off 1.8 per cent in midday trading. The basic materials sector is leading the charge, with the sector in the UK off 4.5 per cent, led by Anglo American’s fall of 8.6 per cent. In Europe, it’s a similar story, with steel company ArcelorMittal, as one example, down 6 per cent. (European banks also seem to be taking a battering, we should add.)

But why commodities? Well, the obvious answer is that real estate tends to use a lot of them -- whether it’s steel for the structure or copper for wiring.

With that in mind, you might be wondering about just what level of exposure to the business of digging stuff out of the ground we are talking about here. Well, not to worry, because Tom Price at Liberum did a quick back-of-the-napkin estimate on what a Chinese real estate crunch might mean for commodities, and . . . it’s not too pretty.

Here’s the key blurb from his note this Monday morning:

bearish commodities? yes. 

looking narrowly at the direct/first-round impact on commodities, this event threatens a slowdown in China’s property sector – 1-of-2 very large, broad-based commodity-consuming sectors of this economy (i.e. the other = infra). 

it’s generally well known (among resources sector investors, at least) that China’s share of global commodities consumption = 40-70%. 

but what share of global consumption is China’s property sector? Of China’s total commodity supply, its property sector consumes: 

40% of steel flow (380Mtpa = 20% of global total); 

20% of copper (2.7Mtpa = 20% of global) 

15% of aluminium (6Mtpa = 9% of global) 

15% zinc (0.7Mtpa = 5% of global) 

10% nickel (0.2Mtpa = 8% of global)

ANSWER: China property = 5-20% of global commodity supply. - so yes, Evergrande’s potentially a big deal to Commodity World.

Yep, Chinese real estate accounts for a fifth of all global and copper steel supply. Blimey.

We don’t have a whole lot to add on top of those eye-opening stats, bar a passing thought that if you were an economy which depended on commodity sales for a large chunk of your output -- say, Australia -- you might be concerned.

...World wide deflation. Well maybe.

The CCP does not give its citizens much opportunity to invest in anything other than property. At least legally.

Those properties also have a very short shelf life.
XopSDJq6w8E

Plus the other shoe...
WYqKUEGEeuc

Time will tell . . .



Well, it's now Friday in E Asia and, to the best of my knowledge, the offshore bondholders not received any payment.

George Soros is either freaking out about Evergrande or is selling China short.

https://www.irishtimes.com/business/eco ... -1.4660150

George Soros: Investors in Xi’s China face a rude awakening
The leader’s crackdown on private enterprise shows he does not understand the market economy
Mon, Aug 30, 2021, 16:23
George Soros

[Typhoon]

Soros makes a valid point: centralized command control of an economy, be it the former SU, Japan, the US, the EU, or PR China is inefficient, breeds corruption, and leads to stagnation.

____

ZH | PR China - "It's the property market, stupid."

[Doc]

Soros makes a valid point: centralized command control of an economy, be it the former SU, Japan, the US, the EU, or PR China is inefficient, breeds corruption, and leads to stagnation.

"You will own nothing, and you will be happy" The World Economic Forum

"Taking the human out of the human race since 1971"
____

ZH | PR China - "It's the property market, stupid."

Remember: for China this is not about Evergrande, it's about preserving confidence in the property sector
— zerohedge (@zerohedge) September 22, 2021

Its not about Evergrande or the property sector, it's about the XiCP staying in power.

[Doc]

Evergrande's market capitalization is now down to $31.2 billion Which is the lowest it has been in over a decade. $32 billion in maarket cap vs $300 billion in debts.



https://www.bloomberg.com/news/articles ... nts-missed

Evergrande Pain Spreads to Wealthy Investors as More Interest Payments Missed

Rich trust buyers join 70,000 retail investors who suffered losses and are demanding their money back

[Typhoon]

Evergrande's market capitalization is now down to $31.2 billion Which is the lowest it has been in over a decade. $32 billion in maarket cap vs $300 billion in debts.



https://www.bloomberg.com/news/articles ... nts-missed

Evergrande Pain Spreads to Wealthy Investors as More Interest Payments Missed

Rich trust buyers join 70,000 retail investors who suffered losses and are demanding their money back

庞氏骗局 | Páng shì piànjú is "Ponzi scheme" in [simplified] Chinese.

[Typhoon]

Spenglerman opines on ESG.

AsiaTimes - Goldman | Green bubbles threaten to pop stock markets

Magical US thinking of a Green agenda financed by endless amounts of printing-press money will only end in tears

Have to agree.

[Doc]

Spenglerman opines on ESG.

AsiaTimes - Goldman | Green bubbles threaten to pop stock markets

Magical US thinking of a Green agenda financed by endless amounts of printing-press money will only end in tears

Have to agree.

I would go into business selling toilet paper as a green money substitute, but toilet paper is getting hard to find again.

[Doc]

Evergrande's market capitalization is now down to $31.2 billion Which is the lowest it has been in over a decade. $32 billion in maarket cap vs $300 billion in debts.



https://www.bloomberg.com/news/articles ... nts-missed

Evergrande Pain Spreads to Wealthy Investors as More Interest Payments Missed

Rich trust buyers join 70,000 retail investors who suffered losses and are demanding their money back

庞氏骗局 | Páng shì piànjú is "Ponzi scheme" in [simplified] Chinese.

Seems like that can describe the entire CCP

[Mr. Perfect]

https://www.bloomberg.com/news/articles ... since-1947

BofA Says S&P 500 Real Earnings Yield is Lowest Since Harry Truman Was President