I posted this comment
which seems to have angered the highly sophisticated /investing
community. I don't mind being downvoted but at least provide some counter arguments if you're going to be a dick. So in the pursuit of truth and tendies for all, I have prepared some juicy due diligence (DD) for WSB Capital on why China is on the verge of collapse.
TL;DR at the bottom. Point 1:
Defaults in China have been accelerating aggressively
, and through July 2019, 274 real estate developers filed for bankruptcy, up 50%
over last year. A bonus? Many Chinese state controlled banks have been filing for bankruptcy as well. Just google "china bank defaults" or something similar. Notice how many articles there are from 2019? When the banking system fails, everything else usually fails too. Point 2: The RMB has depreciated significantly
. Last time this happened, in 2015-2016, there was a significant outflow of foreign invested capital. According to the IIF, outflows reached $725bn due to the currency depreciation.
. This time is different why again? I have heard some arguments why there will be less outflow this time, but I struggle to buy them. Point 3:
Despite wanting to operate like a developed economy, China still has not been able to shrug off the middle income trap
. Their GDP per capita is comparable to countries we normally associated with being developing/emerging markets
. Tangentially related to point 10. Point 4:
China is an export-dependent economy, with about 20% of their exports contributing towards their GDP
. Less exporting means less GDP, less consumption (because businesses make less money, they pay people less, who in turn spend less), which has a greater effect on GDP than any declines in exports would have at face value. Guess what? Chinese exports dropped 1% in August
, and August imports dropped -1%, marking the 5th month this year of negative m/m export growth.
. Point 5:
Business confidence has been weak in China
- declining at a sustained pace worse than in 2015. When businesses feel worse, they spend less, invest less in fixed assets, hire less until they feel better about the future. Which takes me to my next point. Point 6: Fixed asset investment in China has declined 30 percentage points since 2010
. While rates are low, confidence is also low, and they are sitting on a record amount of leverage, which means they simply will not be able to afford additional investment. Point 7:
They are an extremely levered economy with a total debt to GDP ratio of over 300%
, per the IIF, which also accounts for roughly 15% of global total fucking debt
. Here's an interview with someone else talking about it too
. Point 8:
Their central bank recently introduced a metric fuckton of stimulus into their economy
. This will encourage more borrowing....add fuel to the fire. Moreover, the stimulus will mechanically likely weaken the RMB even more, which could lead to even more foreign outflows, which are already happening, see next point. Point 9:
Fucking LOTS of outflows this year. As of MAY, according to this joint statement
, around 40% of US companies are relocating some portion of their supply chains away from mainland. This was in May. Since May, we have seen even more tariffs imposed, why WOULD companies want to stay when exporting to the US is a lot more expensive now? Point 10:
Ignoring ALL of the points above, we are in a global synchronized slowdown, with many emerging market central banks cutting rates - by the most in a decade
. Investors want safety, and safe-haven
denominated assets are where we have seen a lot of flocking into recently. Things that can be considered safe-havens have good liquidity, a relatively stable economy, and a predictable political environment.
Would love to hear opposing thoughts if you think China is a good buy. I am not against China, nor any other country for that matter, but I am against losing money (yes, wrong sub etc.), and I can not rationalize why anyone would be putting in a bid. TL;DR: the bubble is right in front of your face, impending doom ahead, short everything, fuck /investing.
Edit, since you 'tards keep asking me how to trade this, there are a few trades that come to mind:
*not investment advice*
- US treasuries still have room to run (before the autists say that's not yolo enough you could trade OTM calls on UST-linked ETFs, US govvie futures for gainz)
- Japanese yen
- Sell SPX companies with big supply chain exposure and heavy cost of capital, buy their competitors without these features.
- Open up apparel factories in Bangladesh, India, Indonesia, Vietnam, Thailand, and sell to the US.
- Buy soybeans assuming farmers get a bailout from US
- I am sure there are plenty of China based ETFs which could be played, DYOR.
- Short any US listed company with mainland China domicile. If shit REALLY hits the fan between US/China, there are levers that US Govt. can pull to fuck them.
Our forex economic calendar allows you to view important economic events by time period, currency, market impact. Definitions are available for each event. Forex Calendar. Calendar Time Zone: GMT -5 (DST On) Printed Sep 27, 2020 at 2:36am (Filters Off) < This Week: Sep 27 - Oct 3 > Filter; Up Next; Date Range Begin Date. End Date . Last Week; This Week; Next Week; Last Month; This Month; Next Month; Default View. Calendar Filter ... Jan 15, 2015 was the day when a Tsunami hit the financial markets. It was the day when millions of dollars were wiped out from global financial markets and many big players of the forex exchange market suffered heavy losses while some even announced bankruptcy. On Gregorian calendar month fifteen 2015, the Swiss National Bank (SNB) suddenly and unexpectedly removed the EURCHF price peg ... View our fast-updating and interactive economic calendar for important events and releases that affect the forex, stocks and commodities markets. The real-time Economic Calendar covers economic events and indicators from around the world, including the US, the UK, Canada and Australia, and is automatically updated when new data is released
Speculative Forex , commodities, indices, bonds etc... traders are very well informed and follow market sentiment. In the following tutorials I'll expand on ... Published on Oct 28, 2015. ... 95% Winning Forex Trading Formula - Beat The Market Maker📈 - Duration: 37:53. ... How Long Calendar Spreads Work (w/ Examples) ... Bagaimana Membaca Forex Calendar atau News Di Forex Factory - Duration: 7:48. TFS Price Action Trading 31,759 views. 7:48. Forex Basics - Lot Sizes, Risk vs. Reward, ... Published on Jan 12, 2015 Understanding the importance and learning to interpret an economic calendar is central to trading successfully, something all beginning traders need to master. Learn how to use the Forex Factory economic calendar in this tutorial. _____...