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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: GST who wrote (109699)	3/9/2011 8:19:28 PM
From: russwinter	Read Replies (1) \| Respond to of 110194

Make sure you plug how local governments have gone nuts with land sales and speculation (rather than taxation)for their often ludicrous vanity projects. There are several bullet points from the If China's Busts Symposium I reviewed before. The funds involved with this land speculation dynamic are incredible and were deemed problematic even before any land price bust. wallstreetexaminer.com Sasha Gong (pg. 18) explains how land has been perceived in China, and controlled and owned by local government. Control over local government speculation has been meet with resistance. In 2009, land sales accounted for 1.6-1.9 trillion RMB, or more than half of their revenue. A reduction of land sales would greatly hamper China’s “growth.” An “anonymous senior Japanese official” (pg. 12) describes the local government’s role. So-called “loan platforms” were established as funding vehicles to obtain commercial loans. When Beijing mobilized a massive 4 trillion Yuan pump priming in 2008, it ordered local governments to bear one-third of the cost themselves, triggering a stampede. As of June this year, there are 8,221 platforms and their outstanding loan balance was 7.7 trillion Yuan, of which 20% to 25% are deemed “problematic” by the China Banking Regulatory Commission.