<<Is China really slowing down!?>>
Hello pezz, this week’s report: to answer your question, No. But america is, again slowing down, and so China does a hiccup, but should soon be go go go again, once america sees the light of quantitative easing, part two, and appreciates the wisdom of purchasing power dilution, part three, and ad infinitum, until ad nauseam
(i) Regarding China labour, I mentioned Message 26687876 , from which we must conclude, while tragic, China labour, even in foxxconn’s case, is better off on the psyche amongst those most affected, than usa general society, even amongst the fortunate users of foxxconn products google.com ;
(ii) Gold’s future looks bright, because the next layer, still plenty smart money Message 26681639 is starting to engage even as more substantive usa institutions Message 26687787 are starting to opt-in;
(iii) In the mean time, I am amazed by the news flow in my in-tray, that in america the absurdities continue to pile up, above obama and beyond palin
pajamasmedia.com
JULY 16, 2010
YOU CAN’T MAKE THIS STUFF UP: To Protest Hiring of Nonunion Help, Union Hires Nonunion Pickets: Jobless Recruits Get Minimum Wage ‘To March Around and Sound Off’. online.wsj.com
Meanwhile, here’s a scene from Knoxville. The 21st Century labor movement: Not much labor, not much movement.
To which my reaction must be, and I quote myself, labour disputes can also be outsourced to china, if wishing to engage with one party state that works, or contracted to india if wanting to embrace multiparty nation, or
better still, for more efficiency at accomplishing nothing, outsourced to china to be subcontracted to india, to deal with the worst of both one party state and multiparty nation
(iv) And so ”i remain bullish on china, hong kong, and gold, therefore platinum, and so i remain bearish on the rmb, usd, and equity markets” Message 26690066
And this below, just in in-tray, from USA expatriate visiting family in Knoxville on summer holiday, where the family is in biz that includes real estate development, and I quote, ” Discussed local office/retail development that is now 60% occupied. Yet some 45% of investors failed to meet at least the last 2 capital calls. The problem is that the loan on the development is full recourse to the investors.
I suggested diluting / forcing out those that were in breech and to refinance to a new loan with no recourse. Surely with 30% equity, you could get a non-recourse loan on the balance with 60% occupancy? No way. 40% equity? No way. Banks are simply unwilling to make any real estate loans of any type that do not have full recourse back to the borrower. Insurance companies maybe. But the fact is that banks are unwilling to lend on any terms that are not very onerous to the buyer. And the tenants in the new building are all very high quality tenants with 5-10 year leases...
I asked about forcing out the investors that haven't paid up on the capital calls, and the lawyer is afraid that they might counter-sue for infringing on their "minority rights." What an insane country when you can be in default and feel that you could win a lawsuit. They're hoping that they can get it 80+% filled and then sell out at a profit, at which time they'll pay up on their delinquent payments as it would pay to do so. But until that point in time, they'll simply stay in default as they have other fires to fight as most are very over-leveraged elsewhere.
Asked about another friend who usually was aggressive, especially with leverage, and asked how he was holding up. No one knew of course, but suspected that he was probably in default, but that the bank didn't want the development property, so that they are playing "pretend and extend." Given that East Tennessee is much more conservative than most of the US, that means that the banks are no way out of the woods yet, and neither are many of the "perceived rich." I suspect that many that projected an image of being "well-off" were merely "well-leveraged."
The vacancy rates here are such that it will take "many, many years" for things to fill up. Bad news for a very long time for construction firms, architecture firms, etc.....
(v) Leading me to suspect that 2008 q4 to 2009 q1 was neither the warm-up nor the rehearsal, but just the much less formal practice run.
Cheers, tj |
