Overnight Interest Rates in China hit 66.8%

[Toddsterpatriot]

I checked the loan/mortgage interest rates in China and they are basically the same as the US. So the overnight rate being the 'bank to bank' rate must mean there has been a huge run on Chinese banks and they don't have much money to lend. That doesn't sound good at all.

In absolute terms the Chinese housing bubble is about 20 times bigger than the US housing bubble was.

Don't you mean in relative terms?

No, sales rates exceed occupancy rates by so much that doors and plumbing fixtures are installed by the buyers, if and, when they move in. That in turn means that appliances cannot be moved in without inviting theft and trim and cabinetry should not be installed for fear of vandalism. There were reports of sold out properties with less than 1% occupancy. That was more or less confirmed by a famous case a few years back in which a rather large building with more than 100 units collapsed and one woman died. The building collapse was in full view of an office building housing the office of a non-Chinese news service which is how I heard about it.

I have no idea why or how this is going on. but youtube has worlds without end videos about the ghost buildings, developments and cities if you want to run the numbers yourself.

How big was the US housing bubble?

Really good question in as much as Erik Estrada was still working out leftovers from the S&L bubble tight up to the start of the meltdown. The theoretical value of non-performing debts is useless since the banks are state owned as are many firms. However China has @ 20 times more sold but unused housing, industrial, office and other real estate units than the US has ever had. Since that is the most conservative number I am aware of that is the one I used. Faber, Gordon Chang and other analysts use higher numbers. The BIS for example estimates that annual capital flight from China has reached at least 7% of GDP ($780 billion for 2015) or a trillion four in US equivalent. So, 20X the size of the Meltdown is low ball.

At its peak, in 2006, according to the Fed's, Balance Sheet of Households and Nonprofit Organizations, our real estate assets were worth $24.8394 trillion. That dipped to a low of $18.3193 trillion in 2011.
I guess you could call that a bubble of $6.5 trillion.
What is the equivalent bubble in China? Probably a lot less.
Certainly not 20 times bigger, in absolute terms.

 

[william the wie]

In absolute terms the Chinese housing bubble is about 20 times bigger than the US housing bubble was.

Don't you mean in relative terms?

No, sales rates exceed occupancy rates by so much that doors and plumbing fixtures are installed by the buyers, if and, when they move in. That in turn means that appliances cannot be moved in without inviting theft and trim and cabinetry should not be installed for fear of vandalism. There were reports of sold out properties with less than 1% occupancy. That was more or less confirmed by a famous case a few years back in which a rather large building with more than 100 units collapsed and one woman died. The building collapse was in full view of an office building housing the office of a non-Chinese news service which is how I heard about it.

I have no idea why or how this is going on. but youtube has worlds without end videos about the ghost buildings, developments and cities if you want to run the numbers yourself.

How big was the US housing bubble?

Really good question in as much as Erik Estrada was still working out leftovers from the S&L bubble tight up to the start of the meltdown. The theoretical value of non-performing debts is useless since the banks are state owned as are many firms. However China has @ 20 times more sold but unused housing, industrial, office and other real estate units than the US has ever had. Since that is the most conservative number I am aware of that is the one I used. Faber, Gordon Chang and other analysts use higher numbers. The BIS for example estimates that annual capital flight from China has reached at least 7% of GDP ($780 billion for 2015) or a trillion four in US equivalent. So, 20X the size of the Meltdown is low ball.

At its peak, in 2006, according to the Fed's, Balance Sheet of Households and Nonprofit Organizations, our real estate assets were worth $24.8394 trillion. That dipped to a low of $18.3193 trillion in 2011.
I guess you could call that a bubble of $6.5 trillion.
What is the equivalent bubble in China? Probably a lot less.
Certainly not 20 times bigger, in absolute terms.

Double and often triple counting in that final figure for the US from legacy issues of 82-93 S&L and 1995-2000 bubbles being improperly subtracted. The collapse of Thornberg Mortgage, the Bear Stearns REITs, Bear Sterns proper and Lehman Brothers easily doubles the losses being given. Then the equity REITs, which were mostly Office and apartment buildings with a few specialty cases like Sodexho that provided building services took big hits as well. The top number is also suspect since it is less than the fines sought for fraud from the surviving lenders `130 trillion? Since 1980 the Chinese bubble has caused more than 6.5 trillion in capital flight to escape the bust. So yeah, I'm cool.

 

[Two Thumbs]

Although legally impossible to do in China and legally impossible to confirm by recipients capital flight from China appears to be at record levels with everyone taking the money and running. This is part of the reason for the collapse of the market.

This is what happens when the government runs everything

It looks good on paper, looks good in action, at first, but the efforts to keep up the good eventually destroy the country.

and this is the kind of shit American leftist want

 

[Toddsterpatriot]

Don't you mean in relative terms?

No, sales rates exceed occupancy rates by so much that doors and plumbing fixtures are installed by the buyers, if and, when they move in. That in turn means that appliances cannot be moved in without inviting theft and trim and cabinetry should not be installed for fear of vandalism. There were reports of sold out properties with less than 1% occupancy. That was more or less confirmed by a famous case a few years back in which a rather large building with more than 100 units collapsed and one woman died. The building collapse was in full view of an office building housing the office of a non-Chinese news service which is how I heard about it.

I have no idea why or how this is going on. but youtube has worlds without end videos about the ghost buildings, developments and cities if you want to run the numbers yourself.

How big was the US housing bubble?

Really good question in as much as Erik Estrada was still working out leftovers from the S&L bubble tight up to the start of the meltdown. The theoretical value of non-performing debts is useless since the banks are state owned as are many firms. However China has @ 20 times more sold but unused housing, industrial, office and other real estate units than the US has ever had. Since that is the most conservative number I am aware of that is the one I used. Faber, Gordon Chang and other analysts use higher numbers. The BIS for example estimates that annual capital flight from China has reached at least 7% of GDP ($780 billion for 2015) or a trillion four in US equivalent. So, 20X the size of the Meltdown is low ball.

At its peak, in 2006, according to the Fed's, Balance Sheet of Households and Nonprofit Organizations, our real estate assets were worth $24.8394 trillion. That dipped to a low of $18.3193 trillion in 2011.
I guess you could call that a bubble of $6.5 trillion.
What is the equivalent bubble in China? Probably a lot less.
Certainly not 20 times bigger, in absolute terms.

Double and often triple counting in that final figure for the US from legacy issues of 82-93 S&L and 1995-2000 bubbles being improperly subtracted. The collapse of Thornberg Mortgage, the Bear Stearns REITs, Bear Sterns proper and Lehman Brothers easily doubles the losses being given. Then the equity REITs, which were mostly Office and apartment buildings with a few specialty cases like Sodexho that provided building services took big hits as well. The top number is also suspect since it is less than the fines sought for fraud from the surviving lenders `130 trillion? Since 1980 the Chinese bubble has caused more than 6.5 trillion in capital flight to escape the bust. So yeah, I'm cool.

Chinese real estate is a much larger portion of their GDP versus ours. And their over building and empty/unsold inventory is much higher, but the idea that their bubble, in absolute terms, is even close to ours, let alone 20 times ours is just ridiculous.

The top number is also suspect since it is less than the fines sought for fraud from the surviving lenders `130 trillion?

What are you talking about?

Since 1980 the Chinese bubble has caused more than 6.5 trillion in capital flight to escape the bust.

Plenty of reasons to pull money out of China. None are proof that their bubble is 20 times ours.

 

[william the wie]

Back to the OP for a moment. The absolute lowest capital flight number for 1980-2015 is to assume sum of the digits, which given known Chinese real estate purchases outside of China is no more than half the real total and only captures the fear of catastrophic collapse is as follows:
36 years 1980-2015 inclusive,
36+1/2 =18.5. 18.5x outflow in the 36th year or $780 billion = $14.43 trillion (Gauss' law).
Given the over-optimistic numbers put out by the central committee the lowest number for losses by the State Owned Banks only will be in excess of $10 trillion. Shadow banking, overseas financing and private losses are NOT included in that total. Those liabilities are suspected of being 10-20 times larger, $100-200 trillion. .

A more realistic set of numbers would be $20-40 trillion lost already to capital flight.

$20-30 trillion existing non-performing loans lost already by State Owned Banks.

or roughly 2+ US GDPs minimum lost before the crash has officially begun. Given the extend and pretend nature of Chinese politics another 10 US GDPs does seem likely.

 

[william the wie]

This month China has announced:

$6.5T in bad real estate loans.

$18T in bad State Owned Enterprise loans.

The official doctored numbers for the US meltdown is $6T. We have more than that in underwater loans that are more or less working out still in 2016.

China's numbers are not nearly as good so multiply by 10-20 to get expected effects. The above does not include bad foreign aid loans which are larger in absolute terms. than US XM loans and of lower quality..

 

[Toddsterpatriot]

This month China has announced:

$6.5T in bad real estate loans.

$18T in bad State Owned Enterprise loans.

The official doctored numbers for the US meltdown is $6T. We have more than that in underwater loans that are more or less working out still in 2016.

China's numbers are not nearly as good so multiply by 10-20 to get expected effects. The above does not include bad foreign aid loans which are larger in absolute terms. than US XM loans and of lower quality..

The official doctored numbers for the US meltdown is $6T.

Do you have a link for the official numbers?

 

[william the wie]

used yours see abive

 

[william the wie]

My apologies for understating the lie you linked to.

 

[Toddsterpatriot]

This month China has announced:

$6.5T in bad real estate loans.

$18T in bad State Owned Enterprise loans.

The official doctored numbers for the US meltdown is $6T. We have more than that in underwater loans that are more or less working out still in 2016.

China's numbers are not nearly as good so multiply by 10-20 to get expected effects. The above does not include bad foreign aid loans which are larger in absolute terms. than US XM loans and of lower quality..

$6.5T in bad real estate loans.

That doesn't mean $6.5T in losses.

$18T in bad State Owned Enterprise loans.

Ditto.

China's numbers are not nearly as good so multiply by 10-20 to get expected effects.

Why would you multiply an incomplete bit of info by anything, let alone by 10-20?

 

[Toddsterpatriot]

My apologies for understating the lie you linked to.

No problem. If you link to the truth, I'll be happy to discuss that as well.

 

[william the wie]

First off you have to add back in the Freddie Mac and Fannie Mae defaults to the Fed figure to het into radio contact with reality, then the bank loans to mortgage REITs which also got skipped and the short sale losses.

 

[Toddsterpatriot]

First off you have to add back in the Freddie Mac and Fannie Mae defaults to the Fed figure to het into radio contact with reality, then the bank loans to mortgage REITs which also got skipped and the short sale losses.

The Fed figure was total real estate value. From top to bottom.
Why do you need to add Fannie and Freddie to that?
But fine, feel free to add all those numbers up and let me know what you get.

 

[william the wie]

Reread your post it dealt only with households and non-profit organizations. Freddie and Fannie were neither, likewise their stock and bondholders but they dealt only with real estate. Also builders, banks and other investors were not included.