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It’s hard to know really because the Chinese are so opaque. They should have substantial assets but there’s a real possibility that they have been overstated. However in that market so could their debts. The regulators don’t seem to work to the same standards that western jurisdictions do.
The impact isn’t like that from Lehman’s, who were systemically embedded into the market. It wasn’t just that Lehman’s owed money, it was who they owed money to. Their demise created a logjam of defaults That then cascaded throughout the financial system. That obliged a huge number of banks to try and realise assets only to find that their assets weren’t real at all, in spite of what the credit agencies had been telling them.
I will be surprised if any of the major global players have much exposure to Evergrande.
It may have quite an effect on the Chinese market though, and if there is a major contraction the reduction in demand could be enough to trigger recessions. But they are survivable.
Although I have wrongly overestimated institutional competence before.
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i just saw an interesting graph where the iron ore price and the Evergrande share price were freefalling together
this could have huge ramifications in Australia
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@mariner4life said in Is this thing sustainable?:
i just saw an interesting graph where the iron ore price and the Evergrande share price were freefalling together
this could have huge ramifications in Australia
and especially so in our new nation state WA
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@voodoo said in Is this thing sustainable?:
@mariner4life said in Is this thing sustainable?:
i just saw an interesting graph where the iron ore price and the Evergrande share price were freefalling together
this could have huge ramifications in Australia
and especially so in our new nation state WA
i had a chuckle at that point.
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Curious to see if Chinese investors in Aus properties suddenly have to liquidate as well
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The sequencing trap that risks stagflation 2.0
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well, this thread was started in a different world wasn't it
So, smart people of the Fern.
Things are, like, pretty fucked right now. A cavalcade of events, with the reinforcement of Government responses to said events, have led us down dangerous economic paths, both macro and micro.
My question is, what's next? Do we as Western societies (and economies) learn lessons, and become more self-reliant? Do we take back manufacturing? find ways to be less reliant on energy from OS? Do we work on our transport infrastructure?
Do companies move away from their Just on Time method of inventory management?
Or do we stick our heads in the sand, refuse to learn lessons, and just hope this all goes back to normal?
I do not trust private enterprise to do what is best for a countries population, but will Governments? Will a Government be brave enough in these times to stand up and lay out an actual future for a Country? Or will we just get ongoing election bribes of middle class welfare, and the promise of "jobs and growth" based on nothing more than hope?
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@mariner4life I'm going to bet on a heavy dose of the latter option.
If national or act get in. Open slather immigration mild tax cuts. Same problems
If labout greens stay more of the same but with worse and worse regulations that starve the productive sector to save the earth.
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Let's also add in that we have sold thousands of hectares of food producing land to be carbon sinks for offshore companies.
I think future food production and meat is a bit worrying right now.
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@mariner4life said in Is this thing sustainable?:
well, this thread was started in a different world wasn't it
So, smart people of the Fern.
Things are, like, pretty fucked right now. A cavalcade of events, with the reinforcement of Government responses to said events, have led us down dangerous economic paths, both macro and micro.
My question is, what's next? Do we as Western societies (and economies) learn lessons, and become more self-reliant? Do we take back manufacturing? find ways to be less reliant on energy from OS? Do we work on our transport infrastructure?
Do companies move away from their Just on Time method of inventory management?
Or do we stick our heads in the sand, refuse to learn lessons, and just hope this all goes back to normal?
I do not trust private enterprise to do what is best for a countries population, but will Governments? Will a Government be brave enough in these times to stand up and lay out an actual future for a Country? Or will we just get ongoing election bribes of middle class welfare, and the promise of "jobs and growth" based on nothing more than hope?
IMO work that comes back onshore will do so solely as a result of reduced logistics and automation. Ultimately reduced costs without an Apple effect capable of charging a premium win in the market place, so just in time manufacturing wins long term.
Ultimately as a cynic and borderline nihilist, I take the political temperature from America and the signs aren't encouraging: A political class that is only interested in itself, getting and expanding power and the benefits that accrue. We're seeing that already and with increasing contempt - they barely hide it anymore. They'll just lie to the electorate, at least half of whom are too stupid to not pick sides.
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@dogmeat said in Is this thing sustainable?:
Well one thing that is already happening is our supply chain is pivoting away from JIT and moving towards holding stock. Some mega distribution centres being planned.
does the transport infrastructure exit to enable that to be efficient?
Is this thing sustainable?