I’m relation to the bond I do t think it’s singnalling anything - it’s happened many times in the past and even when the property market was going up- end of the day all bond investors will be paid back- the chances of arrears is why there were 4 declining rating assigned to the four classes of bond holders in the bond and all will be repaid
I agree though that Many are still over leveraged in property here in Oz - I haven’t seen the value for years
Notwithstanding the above , I saw the other media you are referring to in relation to China slowing - or actually it says China growth to plummet to 2 percent in a decade—- that again is a sensational headline
Just to think about that statement - something similar came Out about how greece years ago , some said collapse in Greece would pull down Euro and Eu - but the facts were China growth every 3 months at the time was creating a new greece every 3 months- but I digress
LETS LOOKS AT THIS HEADLINE STORY
China growth to plummet to 2 percent in a decade - you agree that sounds bloody dyre
Growth target is 6-6.5 this year
Let say China grows only at 6 and falls in growth 1 percent a year to 2 percent within 5 years - twice as bad as this dyre “ plummet” prediction making the rounds in that big story
Some maths
Let assume China Economy is Worth 1000
End of first year it’s worth 1000x1.06
Next year 1000 x1.05
And so on until 2 percent growth at end of 5 years
At end of 5 years economy worth 1216 - so over 20 percent of what it is today- huge
Ok now
Let’s assume it then has a huge meltdown with debt bubble and capital losses of a whopping 5 percent per year over the next two years
So year six and 7 - 5 percent- monster prolonged crash
So 1026x-.95 = 1155
Next year .95= 1097
So falling even more rapidly a year than predicted- adding in pricing in a monster crash of negative 5 percent growth for 2 years by me
The economy is still 1097!!!!!!
Nearly 10 percent larger than what it is today!!!!!!!!! And that’s after pricing in a clear out of debt bubble on my Math
Headline is overblown -
For interest - If you used Their stories implied half a percent fall in growth in China per year till it reaches 2 percent- then put in my crash for 3 years negative growth of 5 percent each year
it’s still still approx 1120—- even higher than the above model for a faster “ plummet “
