CHINA CRASH "Financial Catastrophe"

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REMEMBER TIANNANMEN

Port Moody, Canada

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#1
May 14, 2013
 
Trends

China’s economy grows like it’s 1999

SCOTT BARLOW

The Globe and Mail

Published Monday, May. 13 2013, 8:12 PM EDT

Last updated Tuesday, May. 14 2013, 6:46 AM EDT

New reports that the Chinese government is developing a large scale strategy to avert financial system catastrophe provide clear indication that the Chinese investment story – one that has enriched so many Canadian resource investors – is in its late innings. The pattern is following the same boom bust pattern most recently endured during the technology bubble.

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On Monday, Australia’s The Age reported,“China is drawing up a blueprint for sweeping reforms aimed at .…. revitalizing the world's second-largest economy amid deepening fears about a trend of rising corruption, wasteful investment and local government debt.”

China’s government is now fully realizing the excesses caused by the country’s remarkable economic expansion. These excesses will be alarmingly familiar to Canadians old enough to remember the technology bubble. In both cases, a compelling, long term growth story with seemingly limitless potential attracts trillions of dollars in investment, leading to over-capacity and huge portfolio losses.

Modern China’s ghost cities and new airports working at a mere fraction of peak capacity (Time magazine reports that 80 per cent of Chinese airports are not reaching traffic targets) are very much analogous to the massive, ill-fated buildout of telecommunications networks in the late 1990s. In that case, the eventual realization that too much had been built too quickly saw $2-trillion (U.S.) wiped out from the Dow Jones Communications Technology Index by 2002. Twenty three 23 telecom companies – including Nortel – file for bankruptcy.

There are also signs that segments of the Chinese financial system are using a desperate form of accounting reminiscent of the technology bubble. While there is no evidence of the outright fraud that brought down Worldcom, official non-performing loan ratio statistics at Chinese banks are generally considered laughably low, according to News China Magazine:

“[O]fficial statistics show less than a 1 per cent non-performing loan rate at China’s banks... Industry insiders have revealed that in the first half of 2012 alone, China’s 16 listed banks saw an almost 126 billion yuan ($20-billion U.S.) increase in the value of overdue loans, indicating an estimated non-performing loan rate of more than 5 per cent. The questionable figures are believed to be due to falsified statistics from local banks, for whom non-performing loans can result in official sanctions.”

Investors will remember that the end of the technology investment bubble was not the end of the technology industry. Portfolio losses were severe between 2000 and 2003, but this did not stop Apple Inc., flat panel televisions, social media and online shopping from increasingly dominating our daily lives. In the same way, the end of the China bubble will not be the end of Chinese economic development. It is not a contradiction to predict severe economic upheaval in China – and global commodities markets – in the short term, and also that China will become the world’s largest economy by 2025.

For Canadian investors, reports of major economic reform are only the latest sign that there are too many similarities between China now and the technology sectors in 1998 or 1999. Investing lessons learned in 2000 and 2001 in the technology sector – not buying the dips on Nortel, for instance – should be revisited. Portfolio positions, notably in the mining sector, that are dependent on the “China economic tree growing to the sky” need to be reduced in the coming months.
REMEMBER TIANNANMEN

Port Moody, Canada

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#2
May 14, 2013
 
Get your money out of China while you still can!
CCP FACTION WAR IN CHINA

Port Moody, Canada

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#3
May 14, 2013
 
LOVE CHINA DESTROY CCP

Surrey, Canada

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#4
May 14, 2013
 
"80 per cent of Chinese airports are not reaching traffic targets"

Big, useless white elephants built for CCP vanity while the average length of education in China is a pathetic 6.4 years!

Poor China!
It is Amazing

Kuala Lumpur, Malaysia

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#5
May 14, 2013
 

Judged:

1

1

1

Time for Mirotard to take his medicine.

The way she is going, she will be a DANGER to others as well as himself. She may run AMOK. Another one of those countless incidences in North America we heard so much about!

For all the HATRED and NEGATIVENESS she has invented and generated, she is destined for a MISERABLE and LONELY LIFE.

The 1.6 billion Chinese told him to get a LIFE.

Nothing will changed in the short time...

China will continue to accumulate WEALTH and the rich will choose whatever life or place of abode they wanted while USA will continue to BORROW more MONEY from her.
LOVE CHINA DESTROY CCP

Surrey, Canada

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#7
May 14, 2013
 
"80 per cent of Chinese airports are not reaching traffic targets"

A FACT.

Big, useless white elephants built for CCP vanity while the average length of education in China is a pathetic 6.4 years!

But the only response to these facts is to crudely "denounce" anyone who DARES mention them!

Look at the pathetic CCP CLOWN above, PRETENDING he speaks for ALL OF CHINA! PRETENDING the Chinese economy is not withering. So SAD, the obvious mental and moral decay of these pathetic CCP criminals!

Poor China! Best be rid of them QUICKLY!
CCP are INCOMPETENT

Surrey, Canada

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#8
May 15, 2013
 
The empty runways of these useless airports will soon be used for drying corn by Chinese farmers!

Just like the useless, empty highways to nowhere ALREADY ARE!
WEAK and STUPID CCP

Surrey, Canada

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#9
May 15, 2013
 
It is Amazing wrote:
Time for Mirotard to take his medicine.
The way she is going, she will be a DANGER to others as well as himself. She may run AMOK. Another one of those countless incidences in North America we heard so much about!
For all the HATRED and NEGATIVENESS she has invented and generated, she is destined for a MISERABLE and LONELY LIFE.
The 1.6 billion Chinese told him to get a LIFE.
Nothing will changed in the short time...
China will continue to accumulate WEALTH and the rich will choose whatever life or place of abode they wanted while USA will continue to BORROW more MONEY from her.
"80 per cent of Chinese airports are not reaching traffic targets"

Big, useless white elephants built for CCP vanity while the average length of education in China is a pathetic 6.4 years!

And all you CCP have in response is hate propaganda and lies!

Poor China!
Indian

San Francisco, CA

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#10
May 15, 2013
 
Keep up your 24/7 good work Miro, my brethren from India. China will soon fall.
JUNE FOURTH MASSACRE

Surrey, Canada

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#11
May 15, 2013
 
Uhhh, I'm not Indian and I only post occasionally.

But I LOVE CHINA you see, and lived there for many years. It is a magnificent country that has suffered much. I certainly do not want China to "fall", but it is ill-served and horribly abused by the Chinese Communist Party dictatorship which I am CERTAIN will fall, and soon!

See you at the BIG DANCE on the GRAVE of the Chinese Communist Party!
JUNE FOURTH MASSACRE

Port Moody, Canada

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#12
May 16, 2013
 
The Short View
May 15, 2013 8:20 pm

Wall Street shuns China to buy American

By James Mackintosh

Wall Street shuns China to buy American

In the financial battle between communism and capitalism, Wall Street has spent much of the past few years betting on communist China. No more. Markets are now backing the US, positioning for an American economic recovery even as China slows....

http://www.ft.com/intl/cms/s/0/055d0a04-bd7f-...

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