At This Moment: Chinese Banks Are Being Hammered, Real Estate in the Ultimate Crony Capitalist State is Ugly | AgainstCronyCapitalism.org

At This Moment: Chinese Banks Are Being Hammered, Real Estate in the Ultimate Crony Capitalist State is Ugly | AgainstCronyCapitalism.org

You cannot even imagine how highly levered these Chinese banks and real estate developers are:think Japan 1980's, then double or triple your values. Japan didn't even build "ghost cities" to sustain their facade, but their multiple skyscraper- design proposals also got ridiculous rocketing for the moon. Similarities are apparent, although China is far from being comparable in terms of accounting, legal, audit and related regulatory standards. Risks are thus much greater. 

The Chinese are also capitalist neophytes associating with all forms of thespians practising nepotism. Imagine.Terrible! And no doubt suffer from the same old bubble syndrome " this time it's different ". It isn't. Never is, as most market bubble economies have, sooner or later, paid dearly for their excesses.

So as they say, "the rest as is history." Or will be.

March 29, 2013 

Wizards of Leveraged Bubbles

"Neophytes, Thespians and Nepotism - Could you Imagine?"

Marc Faber : U.S. Markets Won't Go Up Much More

Marc Faber : U.S. Markets Won't Go Up Much More

Yes, No or Maybe. While we would feel confident is saying that markets are pretty much stuck in a range because of real underlying downward pressures caused by both resource-population and mathematical interest rate constraints; anything can happen to push prices upwards for an extended period of time. Markets represent an aggregate collection of socio-pathic thinking and rarely conform to what might be called rational thought phenomena. 

The drivers of greed and fear are emotions that do not have carved in stone algebraic equations that determine outcomes. Still, they somehow, in strange ways, connect to "perceived rational thought" or what otherwise might be defined as powerful persuasions built on contextual logic. However, when any "perceived key assumption" behind such contextual logic changes - then all hell breaks loose.

So remember, today's markets were driven by the comforting abstracts of a liquidity that was poured into to them by 24-hour  fiat-currency printing; that many, seem to assume has no limits. It does. Some event, or series, or connected events, will trigger either interest rates to rise, or profits to fall dramatically. These are likely rational reasons; the irrational reasons behind the markets emotions and related changes are much more elusive.

The point being, while for the most part we agree with Marc; US markets could still rise another 30% from here, and stay there for some time, - not likely, but it is still a possibility we must keep in mind. Markets can be cruel mistresses. 

March 28, 2013

Market Alchemy:

Aggregate Emotional Algebra mixed with Collective Socio-Pathology