An excellent recap Alex. I cannot help but look at Japan and the lost decade(s) that were a result of the collapse of the property bubble there in the late 1980's and think that the idea China's banks will recover any time within the next 10 years, let alone by the end of the decade, are propaganda perpetrated by the CCP to demonstrate the alleged strength in their economy. As well, I cannot help but look at the fact that the Chinese people were led to believe that property investment was the key to their own savings and retirement process, and now so many are under water that any idea the Chinese consumer will increase spending significantly just because the government is allegedly going to pump some money into the economy is completely incorrect.
Yes, we’re still living in an era where we believe that fiscal and monetary stimulus will eventually lead to a mechanical increase in lending. How much more evidence do we need to see that this almost never works?
And I agree with you, I’m not the type to make bold bets, but I’d say that China’s banking system will struggle more and more in the coming years, especially since housing remains at the core of its economy. The silver lining, at least for now, is that China’s housing problems are still contained, we’re nowhere near another 2008.
An excellent recap Alex. I cannot help but look at Japan and the lost decade(s) that were a result of the collapse of the property bubble there in the late 1980's and think that the idea China's banks will recover any time within the next 10 years, let alone by the end of the decade, are propaganda perpetrated by the CCP to demonstrate the alleged strength in their economy. As well, I cannot help but look at the fact that the Chinese people were led to believe that property investment was the key to their own savings and retirement process, and now so many are under water that any idea the Chinese consumer will increase spending significantly just because the government is allegedly going to pump some money into the economy is completely incorrect.
Yes, we’re still living in an era where we believe that fiscal and monetary stimulus will eventually lead to a mechanical increase in lending. How much more evidence do we need to see that this almost never works?
And I agree with you, I’m not the type to make bold bets, but I’d say that China’s banking system will struggle more and more in the coming years, especially since housing remains at the core of its economy. The silver lining, at least for now, is that China’s housing problems are still contained, we’re nowhere near another 2008.