Pending Financial Crisis?

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You are wrong.

The market controls and interference by the gov, will have long term consequences and are almost guaranteed to precede a crisis.
Their govt controlled economy has excelled all others in the history of the human universe in the past thirty years. Worth thinking about.

The stock market will have no major role in a China crisis. A collapse in property/infrastructure units is where a crisis will most likely come from if it does occur due to rampant overspending and theft by local governments. But China has so much foreign assets and the govt much more control over resources and banks, rightly or wrongly, that it's almost impossible to see how a big crisis could occur in the absence of utter stupidity on the behalf of policy makers.
 
Their govt controlled economy has excelled all others in the history of the human universe in the past thirty years. Worth thinking about.

The stock market will have no major role in a China crisis. A collapse in property/infrastructure units is where a crisis will most likely come from if it does occur due to rampant overspending and theft by local governments. But China has so much foreign assets and the govt much more control over resources and banks, rightly or wrongly, that it's almost impossible to see how a big crisis could occur in the absence of utter stupidity on the behalf of policy makers.
The stock market will have a direct roll. Also you are mistaken, the current surge in stock prices was not a bull market, but a secular bear market. Bull markets usually beat previous highs and do so via sustained rise, whereas secular bear markets are known for short sharp, or rapid rises and rallies, which precede rapid losses.

I don't think you understand the mechanics of the Chinese economy. It is a house of cards, built on quick sand, to mix metaphors.

Property investment has been leveraged on the back of the share market, since shareholders can use stock as colateral for loans. Likewise, with a slowing of growth in property and construction, it is direct stimulus which has been preventing a slump or collapse. The problem is that current market controls are unsustainable and every yuan taken for stock buyouts and handouts to brokerages, is a yuan that would be used to drive internal growth.

Likewise, future growth is predicated on a transition to a more market based economy, pioneered by the planned special economic zone. However, by demonstrating that the main indices are in effect rigged, and propping up the market they have made short term plans almost impossible.
 

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If there's going to be another GFC then perhaps Sydney's housing median could reach 2 million in the near future?

Because in Australia the property market booms in a GFC!!! GFC's effectively encourage national credit debt. It makes perfect sense when you think about it (not).
 
The stock market will have a direct roll. Also you are mistaken, the current surge in stock prices was not a bull market, but a secular bear market. Bull markets usually beat previous highs and do so via sustained rise, whereas secular bear markets are known for short sharp, or rapid rises and rallies, which precede rapid losses.

I don't think you understand the mechanics of the Chinese economy. It is a house of cards, built on quick sand, to mix metaphors.

Property investment has been leveraged on the back of the share market, since shareholders can use stock as colateral for loans. Likewise, with a slowing of growth in property and construction, it is direct stimulus which has been preventing a slump or collapse. The problem is that current market controls are unsustainable and every yuan taken for stock buyouts and handouts to brokerages, is a yuan that would be used to drive internal growth.

Likewise, future growth is predicated on a transition to a more market based economy, pioneered by the planned special economic zone. However, by demonstrating that the main indices are in effect rigged, and propping up the market they have made short term plans almost impossible.


Good explanation on the current economic problems of China. The stock market in China is an instrument of the government with an expectation of executing government economic policy. This has been shown in the run up to the bubble, with Journalists and TV shows encouraged to discuss the stock market in the terms of "China's new normal economy". And was also shown last Thursday and Friday with the intervention in the market, including police investigations into who was selling stocks to the government on Wednesday afternoon, A ban on brokerages acting on sell calls on Thursday and Friday, and a ban on Journalists on analyzing or discussing last weeks events.

The government is very aware of the effect of a fall in the stock market on the economy and on social stability. It will protect the market at all costs, despite the market being wildly overvalued.
 
I don't think it is pending any more.
 
Personally, my main concern is the knock on effect aggressive attempts at market regulation will have on he wider economy. Social unrest, halting of market liberalisation which would further dent growth, capital allocation away from areas that are already unstable, like infrastructure and housing, which drive the construction industry and the creation of an unsustainable quasi casino stock market.

Panic over China does not yet seem to be spreading, but global financial markets may be in for a bumpy week or more.
So yeah, sadly this is totally a thing.

Chinese growth is slowing and calls Chinese stocks represented a secular bear market were accurate, however the oil price collapse (not mentioned in the thread) may continue well into the next 12-18 months, short of war in the Persian gulf.

Rocky times for international markets.

However, I will say that the Bank of Scotland warning of financial catastrophe actually makes me wonder whether the situation is not as bad as it appears, given the downside in actually publicly predicting market behavior for a big bank.
 
However, I will say that the Bank of Scotland warning of financial catastrophe actually makes me wonder whether the situation is not as bad as it appears, given the downside in actually publicly predicting market behavior for a big bank.

BOS has never had a decent markets presence, I wouldn't take too much notice of them. The Poms have actually cleaned up their mess to a large extent (and Yanks even better), though RBS still needs some repair as does the budget balance where Gideon has almost given up. The EURO banks on the other hand - who really knows. Deutsche results very poor and they are probably still sitting on a pile of turds, ditto French banks. Portugal could be the next Greece sooner rather than later.

And China is still stuffed, they have lied repeatedly in their data, so its just guesswork by analysts as to what the true growth rate is.

Chinese have been huge buyers of os property. If they get margin calls due to losses on Chinese shares etc and flog that property you would think it would have big consequences for Sydney and Melbourne property prices. Apparently already some evidence they have stopped buying in London. There is a big development near where I live, the developer originally was only going to market to Chinese investors, that's how strong demand was at the time (2 or so years ago)
 
Just heard a npr podcast interviewing ben bernanke

Apparently he thought there would never be a financial crisis because with deposits insurance there was no risk of a run in deposits because people would feel safe leaving their coin in the bank

Im genuinely stunned by just how many stupid assumptions are in that, and the people who believed them ran the fed

Ffs most punters dont even know deposit insurance arrangements even exist
 

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Just heard a npr podcast interviewing ben bernanke

Apparently he thought there would never be a financial crisis because with deposits insurance there was no risk of a run in deposits because people would feel safe leaving their coin in the bank

Im genuinely stunned by just how many stupid assumptions are in that, and the people who believed them ran the fed

Ffs most punters dont even know deposit insurance arrangements even exist
Stupid assumptions by supposedly professional are what the world is made of.
 
Just heard a npr podcast interviewing ben bernanke

Apparently he thought there would never be a financial crisis because with deposits insurance there was no risk of a run in deposits because people would feel safe leaving their coin in the bank

Im genuinely stunned by just how many stupid assumptions are in that, and the people who believed them ran the fed

Ffs most punters dont even know deposit insurance arrangements even exist

WTF.
 
Couple of Brisbane apartment developers gone belly up in the last few weeks. Rents dropping on old flats with the new units coming in - that nest egg investment in an old 6-pack block now looking shaky with retirement approaching.


On iPhone using BigFooty.com mobile app
 
Couple of Brisbane apartment developers gone belly up in the last few weeks. Rents dropping on old flats with the new units coming in - that nest egg investment in an old 6-pack block now looking shaky with retirement approaching.


On iPhone using BigFooty.com mobile app
I don't really like your post because there is trouble brewing. Too many new apartments are being built in SE Qld.
 
Just heard a npr podcast interviewing ben bernanke

Apparently he thought there would never be a financial crisis because with deposits insurance there was no risk of a run in deposits because people would feel safe leaving their coin in the bank

Im genuinely stunned by just how many stupid assumptions are in that, and the people who believed them ran the fed

Ffs most punters dont even know deposit insurance arrangements even exist
It's that financial stupidity that leads people to rely on assumptions like this. Then they have a ready excuse when things explode. "Who could have known??"
 
I don't really like your post because there is trouble brewing. Too many new apartments are being built in SE Qld.
We have been looking for somewhere for my mother in law to put her money for her retirement. Luckily we didn't pick up some units (one for her, some more for income for her) like we planned. Return is just miniscule with the expectation of yet more asset price inflation.

But don't worry. Just find out where the politicians have their investment properties and sell when they start selling.
 
It's that financial stupidity that leads people to rely on assumptions like this. Then they have a ready excuse when things explode. "Who could have known??"

Even worse if you were an educated investor, youd know the deposit insurance arrangements were not absolute, so the economically responsible thing to do would be to withdraw if you have concern about the bank.

Essentially the policy was " people are too stupid to question the banks"
 
When the GFC started, Australia had a surplus that was quickly pissed up against the wall by krudd. When the next GFC hits, we have no money and no hope of ridding it out. Tough times ahead for the Millennial Generation.
 
When the GFC started, Australia had a surplus that was quickly pissed up against the wall by krudd. When the next GFC hits, we have no money and no hope of ridding it out. Tough times ahead for the Millennial Generation.
So there is no hope? Mass unemployment, huge recessions, no money for health, and pensions. Should we just give up now?
 

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