Saturday, 19 August 2023

Special Update 19/08/2023 China’s Tofu Dreg Massive Property Bust.

Baltic Dry Index. 1237 -10         Brent Crude 84.80

Spot Gold 1889             U S 2 Year Yield 4.92 -0.02   

August 20, 1939 Zhukov starts his counter offensive in the Battles of Khalkhin Gol, defeating the Japanese Army, in what was really the start of World War Two.

In the stock casinos, rising concern that the 2023 stock mania is over. With bad times coming, smart money is slowly starting to move out of risky stocks into bonds and money market funds.

 

Nasdaq falls a fourth day in a row, notches longest weekly losing streak since December: Live updates

UPDATED FRI, AUG 18 2023 4:41 PM EDT

Stocks closed Friday’s session with weekly losses, as Wall Street’s August struggles continue.

The Dow Jones Industrial Average added 25.83 points, and was roughly 0.07% higher to close at 34,500.66. The S&P 500 was lower by 0.01%, finishing at 4,369.71. The Nasdaq Composite slipped 0.2%, ending the session at 13,290.78.

Keysight Technologies shares lost nearly 14% on the back of a disappointing earnings report. Deere and Estee Lauder also fell about 5.3% and 3.3%, respectively, after announcing their earnings. Shares of major tech companies,including MetaAmazonMicrosoft and Alphabet continued their decline for the week.

The Dow ended the week lower by 2.2%, its worst since March. Meanwhile, the S&P 500 fell 2.1% and registered a third straight week of losses, a streak that hasn’t happened since February. The Nasdaq Composite shed about 2.6%, tumbling for a third consecutive losing week — a first since December.

“I feel like the markets are rethinking their optimism from July, where we had the soft landing narrative,” said Michelle Cluver, senior portfolio strategist at Global X ETFs.

---- The 10-year U.S. Treasury yield on Thursday rose to its highest level since October 2022. The upward movement came a day following the release of the Federal Reserve’s July meeting minutes, which suggested further interest rate hikes could be ahead as inflation concerns remain.

However, yields eased from their highs on Friday, with the rate on the 10-year Treasury roughly 5 basis points lower at 4.25%.

Investors have key developments looming in the approaching week, including commentary from Federal Reserve Chair Jerome Powell at the central bank’s Jackson Hole annual symposium. Traders will also have an eye on chip powerhouse Nvidia as it issues earnings.

Stock market today: Live updates (cnbc.com)

Stock markets face a ‘perfect storm’ as high rates and China fears bite, analysts warn

Stock markets were hit with a “perfect storm” this week, as concerns over a Chinese economic slowdown and persistently high U.S. interest rates rattled global sentiment.

Hong Kong’s Hang Seng index closed Friday’s trade in bear market territory, down 2.1% on the day and almost 21% from its January highs, after embattled Chinese real estate giant Evergrande filed for bankruptcy protection in a U.S. court. This led to broad declines for shares across Asia-Pacific.

The pan-European Stoxx 600 index followed suit, down 1% on the day and more than 3% for the week, while U.S. stock futures pointed to another lower open on Wall Street.

The Dow Jones Industrial Average was on track for its worst week since March, and the S&P 500 and Nasdaq 100 were both heading for a third consecutive week of losses.

The Dow closed Thursday’s trade below the 50-day moving average — typically a bearish signal for investors — for the first time since June 1.

“Whether it’s the brewing crisis in the Chinese property market, the surge in U.S. bond yields on fears rates will stay higher for longer or the big drop in U.K. retail sales, things are starting to look a bit ugly out there,” AJ Bell Investment Director Russ Mould said by email.

More

Stock markets face a 'perfect storm' as high rates and China fears bite, analysts warn (cnbc.com)

Next, the real China. Rising economic and property collapse, sometimes including actual building and subway collapses. Deflation spreading.

Worse, before China stopped reporting the official figure on youth unemployment in June, it had hit a high of 21 percent. One in five unemployed. The real figure probably higher. So where will the new first time property buyers come from, and in what numbers to rescue and sustain a crisis hit property sector?

To misquote Earnest Hemmingway, “how did China’s property companies implode? Two ways. Gradually then suddenly.”

Below, why China’s property boom is never coming back. Tofu Dreg construction.  Without a property boom, the wider Chinese economy starts to collapse. The property sector makes over 30 percent of China’s official GDP, but that undercounts the shadow banking sector that’s heavily dependent on China’s property sector.

Yuan anyone? A flat in a Chinese built high rise?

 

China’s No.1 Real Estate Company in Crisis, 900K Units Left to Rot & Trillions in Debt

Approx. 17 minutes

China’s No.1 Real Estate Company in Crisis, 900K Units Left to Rot & Trillions in Debt - YouTube

 

Tofu Dreg Constructions Are Life-Threatening!

Approx. 12 minutes.

Tofu Dreg Constructions Are Life-Threatening! - YouTube

100m Tall Apartment Tower Wobbles, Why Tofu Dreg Projects Are Everywhere in China?

Approx. 17 minutes.

100m Tall Apartment Tower Wobbles, Why Tofu Dreg Projects Are Everywhere in China? - YouTube

 

Massive Pay Cuts for Civil Servants in Shanghai, The CCP Is Looming Crisis

Approx. 17 minutes.

Massive Pay Cuts for Civil Servants in Shanghai, The CCP Is Looming Crisis - YouTube

No Business! Food & Drink Sector Dying! OVER 500K Restaurants Shut Down in 2023

Approx. 14 minutes.

No Business! Food & Drink Sector Dying! OVER 500K Restaurants Shut Down in 2023 - YouTube

China’s Flood Waters Wash Up a Nasty Truth

Approx. 8 minutes.

China’s Flood Waters Wash Up a Nasty Truth - YouTube

CCP’s Only Solution to the Flood: Faking and Putting on a Show

Approx. 17 minutes.

CCP’s Only Solution to the Flood: Faking and Putting on a Show - YouTube

Global Inflation/Stagflation/Recession Watch.   

Given our Magic Money Tree central banksters and our spendthrift politicians,  inflation now needs an entire section of its own.

Is this time different, they ask below? Yes!!!. The China property boom has just gone poof! Tofu Dreg exposes the CCP as Emperors with no clothes.

How much worse can China's economic slowdown get?

HONG KONG, Aug 15 (Reuters) - China's economic activity data for July, including retail sales, industrial output and investment failed to match expectations, fuelling concern over a deeper, longer-lasting slowdown in growth.

THE DEMISE OF CHINA'S GROWTH HAS BEEN MISTAKENLY FORECAST BEFORE. IS THIS TIME DIFFERENT?

Activity data has been missing forecasts since the beginning of the second quarter, with the weakness raising worries that China's economy is coming closer to a crunch point.

It would not be for the first time.

Alarm bells over growth rang during the global financial crisis in 2008-09 and during a capital outflow scare in 2015. China came out of those with a shock boost to infrastructure investment and by encouraging property market speculation, among other measures.

But infrastructure upgrades have created too much debt, and the property bubble has already burst, posing risks to financial stability.

 

Given China's debt-fuelled investment in infrastructure and property has peaked, and as exports are slowing in line with the global economy, China only has one other source of demand to tinker with: household consumption.

In that sense, this slowdown is different.

Whether China bounces back largely depends on whether it can convince households to spend more and save less, and whether they will do so to such an extent that consumer demand compensates for weaknesses elsewhere in the economy.

WHY ARE ECONOMISTS FOCUSING ON HOUSEHOLD DEMAND?

Unlike consumers in the West, Chinese people were left largely to fend for themselves during the COVID-19 pandemic and the revenge spending spree that some economists expected after China re-opened never took place.

But household consumption, as a percentage of gross domestic product (GDP), was among the lowest in the world even before COVID, with economists identifying it as a key structural imbalance in an economy relying too heavily on debt-fuelled investment.

 

Economists blame weak domestic demand for subdued investment appetite in the private sector and for China sliding into deflation in July. If it persists, deflation could exacerbate the economic slowdown and deepen debt problems.

The imbalance between consumption and investment is deeper than Japan's before it entered its "lost decade" of stagnation in the 1990s.

HOW BAD CAN THE SLOWDOWN GET?

The July activity data has prompted some economists to flag risks that China may struggle to meet its growth target of about 5% for the year without more fiscal stimulus.

That is still much higher growth than many other major economies will see, but for one that invests roughly 40% of its GDP every year - about twice as much as the United States invests - it remains a disappointing result.

There is also uncertainty about China's appetite for large fiscal stimulus, given the high levels of municipal debt.

Stress in the property market, which accounts for about a quarter of economic activity, raises further concern about the ability of policymakers to arrest the decline in growth.

Some economists warn that investors will have to get used to much lower growth. A minority of them even raise the prospect of Japan-like stagnation.

But other economists say many consumers and small businesses may already feel economic pain as deep as during a recession, given youth unemployment rates above 21% and deflationary pressures weighing on profit margins.

More

How much worse can China's economic slowdown get? | Reuters

Tofu-Dregs Subways Collapse in China: Many Large Pits, Tens of Meters Deep, With Water Surging

 

Approx. 18 minutes.

Tofu-Dregs Subways Collapse in China: Many Large Pits, Tens of Meters Deep, With Water Surging - YouTube

 

Covid-19 Corner

This section will continue until it becomes unneeded.

Due to today's LIR length, no update this weekend. Normal service, (probably,) next weekend.

 

Technology Update.

With events happening fast in the development of solar power and graphene, I’ve added this section.

CATL claims its superfast EV battery charges at 400 km per 10 minutes

Loz Blain  August 17, 2023

The Chinese company launched what it calls the "world's first 4C superfast charging LFP battery," the Shenxing, at its 2023 product launch event. With a total range over 700 km (435 miles), it's also designed for exceptional performance in freezing conditions.

CATL is the world's biggest EV battery manufacturer, selling packs, cells and technologies to a range of global OEMs including BMW, Daimler, Honda, Tesla, Volkswagen and many others, including most of China's biggest automakers.

----Sheer size and capacity is one way to alleviate range anxiety, but the new Shenxing battery attacks from the other direction, promising to charge up so quickly that a flat battery will be no more of an impediment than a flashing fuel light.

To safely pump electrons in at that crazy 4C rate, CATL has designed a "fully nano-crystallized lithium iron phosphate cathode material to create a super electronic network, which facilitates the extraction of lithium ions and the rapid response to charging signals."

"Fast ion ring" technology has been deployed on the graphite electrodes, creating more metaphorical freeway lanes and shortening travel distances for the lithium ions as they travel toward and away from the active surfaces. And a new "superconducting electrolyte formula" reduces viscosity, helping ions move charge more rapidly.

CATL says the battery will charge from 0-80% in 10 minutes, unlocking up to 400 km (249 miles) of driving range in a single, very quick stint on a fast charger. That's at normal temperatures; take things down below freezing to -10 °C (14 °F), and an 80% charge using built-in battery heating will take you 30 minutes. The company says that low temperatures won't affect the battery's ability to deliver its full power to the wheels if needed.

Weirdly, the company hasn't provided other critical information as yet, like specific energy by weight, or the total capacity of the pack – although to deliver that impressive 700-km range, it'll have to be somewhere around 80-100 kWh, depending on the overall efficiency of the car and pack.

CATL says it expects the Shenxing battery to be in mass production by the end of 2023, but is yet to nominate which OEM's EVs we're likely to see it appear in first.

CATL claims its superfast EV battery charges at 400 km per 10 minutes (newatlas.com)


This weekend’s music diversion.  Johann Friedrich Fasch again, this time trying out his considerable skills with a lute. Approx. 14 minutes. 

Johann Friedrich Fasch - Concerto per liuto in re minore FWV L:d 2

Johann Friedrich Fasch - Concerto per liuto in re minore FWV L:d 2 - YouTube

This weekend’s chess update. Approx. 12 minutes.

There Can Be Only One! || Praggnanandhaa vs Arjun Erigaisi || Fide World Cup (2023)

There Can Be Only One! || Praggnanandhaa vs Arjun Erigaisi || Fide World Cup (2023) - YouTube

No maths update this weekend. This weekend, the anniversary of the climax of Khalkhin Gol.  Russian victory over Japan.

Battles of Khalkhin Gol

----August: Soviet counterattack

With war apparently imminent in Europe, and to avoid fighting a two front war, Zhukov planned a major offensive on 20 August 1939 to clear the Japanese from the Khalkhin Gol region and to end the fighting.[41] Zhukov, using a fleet of at least 4,000 trucks (IJA officers with hindsight disputed this, saying he instead used 10,000 to 20,000 motor vehicles) transporting supplies from the nearest base in Chita (600 km (370 mi) away)[7] assembled a powerful armored force of three tank brigades (the 4th, 6th and 11th), and two mechanized brigades (the 7th and 8th, which were armored car units with attached infantry support). This force was allocated to the Soviet left and right wings. The entire Soviet force consisted of three rifle divisions, two tank divisions and two more tank brigades (in all, some 498 BT-5 and BT-7 tanks),[42] two motorized infantry divisions, and over 550 fighters and bombers.[43] The Mongolians committed two cavalry divisions.[44][45][46]

In comparison, at the point of contact, the Kwantung Army had only the 23rd Infantry Division, which with various attached forces was equivalent to two light infantry divisions. Its headquarters had been at Hailar, over 150 km (93 mi) from the fighting. Japanese intelligence, despite demonstrating an ability to track the build-up of Zhukov's force, failed to precipitate an appropriate response from below.[47] Thus, when the Soviets finally did launch their offensive, Komatsubara was caught off-guard.[47][48] To test the Japanese defences prior to their main assault on 20 August, the Soviets launched three aggressive probing assaults, one on 3 August and the others on 7/8 August. All three were disastrously thrown back, with around 1,000 combined dead and several tanks knocked out on the Soviet side compared to just 85 Japanese casualties.[49] 

----Zhukov decided it was time to break the stalemate.[43] At 05:45 on 20 August 1939, Soviet artillery and 557 aircraft[43] attacked Japanese positions, the first fighter-bomber offensive in Soviet Air Force history.[53] Approximately 50,000 Soviet and Mongolian soldiers of the 57th Special Corps attacked the east bank of the Khalkhin Gol. Three infantry divisions and a tank brigade crossed the river, supported by massed artillery and by the Soviet Air Force. Once the Japanese were pinned down by the attack of Soviet center units, Soviet armored units swept around the flanks and attacked the Japanese in the rear, achieving a classic double envelopment. When the Soviet wings linked up at Nomonhan village on 25 August, they trapped the Japanese 23rd Infantry Division.[32][54][55] On 26 August, a Japanese counterattack to relieve the 23rd Division failed. On 27 August the 23rd Division attempted to break out of the encirclement but failed. When the surrounded forces refused to surrender, they were again hit with artillery and air attacks. By 31 August, Japanese forces on the Mongolian side of the border were destroyed, leaving remnants of the 23rd Division on the Manchurian side. The Soviets had achieved their objective.[56]

The Soviet Union and Japan agreed to a cease-fire on 15 September; it took effect the following day at 1:10 pm.[32][57][58]

 More

Battles of Khalkhin Gol - Wikipedia

 

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