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China the monster.
jacsar
post Posted: Jun 3 2019, 12:01 AM
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In Reply To: nipper's post @ Jun 2 2019, 04:21 PM

thanks nipper, was on one of the Qantas crews that was part of the evacuation of westerners out of Beijing.. photos always bring back many memories


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nipper
post Posted: Jun 2 2019, 04:21 PM
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The thread title is China the Monster. Thirty years on ....

https://www.npr.org/sections/pictureshow/20...ng-on-for-china



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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne

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PeterH
post Posted: May 5 2019, 10:49 AM
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In Reply To: triage's post @ May 5 2019, 08:04 AM

Kyle Bass is nearly always the smartest guy in the room. Trouble is that he is an American, worse still, a Texan. And Americans just don't get China. They don't get Asia. They don't get anywhere in the world other than the USA. So while he has an extraordinarily incisive and quick mind, his output must be seen in the framework of his handicap.

Bass can still be seen regularly on Real Vision and I would never fail to watch whenever he shows up, but you have to pay for it. He now also appears on Real Vision sometimes as an interviewer of other gurus and he is possibly at his best in this role.
Another guy I would rate with Bass is Jim Grant who also shows up on Real Vision, although we haven't seen him recently. He has possibly a better world view than Bass.


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triage
post Posted: May 5 2019, 08:04 AM
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Kyle Bass was one of a group of analysts on China that I used to regularly listen to. I've not seen or read anything by him for years but my memory was that he made some couregous predictions which did not quite come to pass and he lost his standing somewhat. Anyway I've stumbled across this recent presentation by him in which he sort of comes across as a USA USA MAGA sort of spruiker rather than a rational analyst.

Interesting what he says about Hong Kong - it has been defying the odds pretty much for as long as I've had anything to do with it. I agree it is overextended in all sorts of ways but then again that has been the case for decades. Who is to say that now is the time it will all crash and burn. From a personal angle it would be not the worst thing to happen if HK hit a (small) wall as I know a few HKers who think that they are invincible as investors and who could do with an ego check (imo).

Also interesting how he is keen for Trumpy not to sign a trade agreement with China but rather wait them out for another six months until they have no choice but to submit, along the lines of the USSR collapsing. Again, I suspect that that is too simplistic a take on things because there is nothing to suggest that the Chinese Communist Party has reached a similar place to the Soviets under Gorbachev. China effectively stood by the US during the GFC and if they think that the US is successfully destabilising them now then there will be repercussions. But anyway USA USA MAGA.

https://www.youtube.com/watch?v=nFHblUtKOhw



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

Mozart fixes everything and Messi is a dog
 
mullokintyre
post Posted: Mar 14 2019, 02:18 PM
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From Bloombergs


QUOTE
For years, China’s biggest borrowers relied on accounting alchemy to prop up their balance sheets. Those days are over.

Corporate perpetual bonds have almost always been recognized by Chinese auditors as equity, not debt. That enabled state-owned enterprises to borrow billions of dollars without it showing up that way.

As part of its effort to shine a light on hidden debt, the Ministry of Finance earlier this year announced changes to its treatment of such securities. Now more than $360 billion worth of bonds could be reclassified as liabilities.

Of the 1,227 perpetual notes outstanding, almost all are issued by central or regional SOEs. It comes as little surprise that more than 70 percent of these issues get a pristine AAA rating.

Closing the Loophole
New issues of perpetuals fell off a cliff after the Ministry of Finance announced changes to their accounting treatment in late Januar

Perpetuals tend to have a call option, allowing the issuer to repay its debt in three to five years. If the borrower chooses not to do so, it has to reset its coupon rate, often paying 3 percentage points to 5 percentage points more. As a result, most chose to avoid the steeper interest costs: Of the 81 issues that have hit their call dates since issuance took off in 2014, roughly 90 percent decided to retire their debt.

In its announcement on Jan. 28, the Ministry of Finance decided these securities should be rightfully classified as fixed income. Perpetuals that have the same credit ranking as senior debt, or a step-up coupon rate much higher than the industry standard, also will need to be reclassified, the government said.

Over the past three years, loss-making SOEs from power generators to infrastructure builders embraced perpetuals. The latest accounting change could affect 80 percent of issuers’ leverage profiles, according to Guosheng Securities Co. China Communications Construction Co., for instance, which incurred a $7.7 billion free-cash-flow loss in the year ended September, would have seen its net debt-to-equity ratio jump to 121 percent from 92 percent.

Landslide
Some issuers pack their balance sheets with perpetuals. For about 18 percent of them, such bonds comprise at least 5 percent of total assets


Bond traders are now repositioning. They’ve been busily buying distressed dollar issues from China Minmetals Corp. and China Huaneng Group Co. with the expectation the companies will call their bonds, now that they’ve lost this convenient equity treatment.


The Ministry of Finance’s cleanup is also paving the way for China’s banking system to replenish capital. Just look at Bank of China Ltd.’s offering in late January, the first perpetual bonds from a Chinese lender. The People’s Bank of China established a new facility called the central bank bill swap that aims to boost bank liquidity through this channel. Insurance companies can also buy these bonds, China’s banking regulator said.

Now that perpetual bonds have become a new tool of the central bank, the market will no longer have room for the likes of troubled power generators and railway builders — even if they perform a public service at Beijing’s bidding. Meanwhile, the private enterprises farther down the totem pole simply lose an option they never really had.


Will be interesting to see how this one plays out.

Mick







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early birds
post Posted: Feb 21 2019, 08:58 PM
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In Reply To: mullokintyre's post @ Feb 21 2019, 05:40 PM

yeah Mick. i just surprised that Chinese hit aussie back sooo late after we joint USA to band Huawei 5G and all other stuff we throw at Chinese face.

as you;ve point out-----it's political shities

i always said ----we don't have to bow USA and we don't have to listen to China as well!!

how about ------Australia first!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

ps... Mick China has a lot of coal mine { may be the grade bit lower than us}, so it'a not their main attention for our coal miner. more of try to boost their own domestic economy after they been hit hard by Trump's Govt. IMHO

hope this shitiy stopped here, if goes any futher then our economy will feel it i'm afraid . thumbdown.gif



 


nipper
post Posted: Feb 21 2019, 05:42 PM
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In Reply To: mullokintyre's post @ Feb 21 2019, 05:40 PM

QUOTE
Customs at China’s Dalian port has banned imports of Australian coal and capped all imports for 2019, says port official.




--------------------
"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time." - Dr John Hussman

"If I had even the slightest grasp upon my own faculties, I would not make essays, I would make decisions." ― Michel de Montaigne
 
mullokintyre
post Posted: Feb 21 2019, 05:40 PM
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In Reply To: early birds's post @ Feb 19 2019, 04:38 PM

Well, its now official.
China has effectively banned Australian Coal imports.
China plays by its own rules.
We negotiate in a position of wekkness always.
Perhaps the plan is to come in and buy up all the dead coal extraction companies.

QUOTE
Australian coal producers have suffered another savage hit, with Chinese authorities placing an indefinite ban on imports ahead of a strict new regime of quotas.

Key points:
The ban follows a marked slowdown in processing Australian coking coal imports this year
Exporters are now experiencing similar delays for both coking and thermal coal through other big Chinese ports
Coal is now Australia's most valuable export and China is its biggest market
The Reuters news agency reported customs officers based at the key northern port of Dalian stopped Australian coal imports and would move to cap imports for through their harbours at 12 million tonnes a year.

The move appears political, with only Australian coal being targeted.

Reuters said imports from Russia and Indonesia would not be affected.

News of the ban sent the Australian dollar tumbling in late afternoon trade.

At 6:00pm (AEST) the dollar had tumbled below 71 US cents, having moved above 72 US cents after stronger-than-expected jobs data earlier in the day.

The Dalian custom officers oversee imports through five harbours — Dalian, Bayuquan, Panjin, Dandong and Beiliang — into the heavily industrialised steel-making heart of China's north.

At the moment, the ban is centred on coking coal used in steel making, but the fear is it will spread to other ports and thermal coal exports.



Mick



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early birds
post Posted: Feb 19 2019, 04:38 PM
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https://www.cnbc.com/2019/02/19/us-china-tr...f-commerce.html

The business community and American workers want a deal that is sustainable, that changes the trajectory of our bilateral relationship," Brilliant said.
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American first!!! i guess China will bow to USA , because it has bigger muscles [ military power]/ lmaosmiley.gif
isn't it how things works always ??????



 
mullokintyre
post Posted: Feb 19 2019, 11:13 AM
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In Reply To: early birds's post @ Feb 19 2019, 09:09 AM

No worries EB, if you go back further to when we were all convicts, all the trade was with Mother England!
We don't seem to learn from past mistakes.
Mick




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