Editor’s Note: Did you know the Great Depression wasn’t triggered by a U.S. stock market crash? Most of that history has been lost to mainstream talking points over the last 80 years, but in reality, as Martin Armstrong has noted, the catalyst was a collapse in Europe. This information is important as you read the following report from ZeroHedge.com below, because at this very moment China is entering a massive credit crisis and according to Kyle Bass, the man who not only predicted the crash of 2008 but profited handsomely from it, all hell is about to break loose. With China being one of the largest economies in the world, there is a real possibility that the contagion may soon spread to Western markets, which may explain why corporate insiders are unloading their stocks like there’s no tomorrow.
China’s credit system expanded “too recklessly and too quickly,” and “it’s beginning to unravel,” warns Hayman Capital’s Kyle Bass.
Crucially, Bass notes that ballooning assets in Chinese wealth management products are another sign of a looming credit crisis in the nation.
“Some of the longer-term assets aren’t doing very well,” Bass said on Bloomberg TV from the annual Milken Institute Global Conference in Beverly Hills, California. “As soon as liabilities have problems – meaning the depositors decide to not roll their holdings – all hell breaks loose.”
The wealth management products, or WMPs, have swelled to $4 trillion in assets in the last few years, he said., on a $34 trillion banking system…
“think about this – in the US, our asset-liability mismatch at the peak of our subprime greatness was around 2%! … China’s mismatch is more than 10% of the system.”
Must Watch simplification of the next stage of the credit cycle in China…
“Some of the longer-term assets aren’t doing very well,” Bass said on Bloomberg TV from the annual Milken Institute Global Conference in Beverly Hills, California. “As soon as liabilities have problems – meaning the depositors decide to not roll their holdings – all hell breaks loose.”
The wealth management products, or WMPs, have swelled to $4 trillion in assets in the last few years, he said., on a $34 trillion banking system…
“think about this – in the US, our asset-liability mismatch at the peak of our subprime greatness was around 2%! … China’s mismatch is more than 10% of the system.”
Must Watch simplification of the next stage of the credit cycle in China…
Via: Zero Hedge
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Let it crash,,,, who cares!
Have you people forgotten
that when the Mayflower landed 50% of us died within the first winter???
Life is hard. Civilizations take hundreds of years to build and a few decades to destroy.
China plays the long game. Their government is communist, and to them, money is a tool, and not viewed as the end-all-be-all, like here. They have greatly increased their material position in the last 30 years, since they absorbed America’s manufacturing capability.
They can survive an economic crash far more easily than what’s left of Western Civilization. They might even be ready to allow a crash of sorts, it will allow them to expand militarily. This may somehow play into the current Korea issue.
“Their government is communist, and to them, money is a tool, and not viewed as the end-all-be-all, like here. ”
While the Chinese government IS communist and money a tool to manipulate the economy; the economy itself is comprised of billions of transactions every day by hundreds and hundreds of millions of INDIVIDUALS.
To these individuals money is not so much a “tool” anymore, as it is a measure of wealth, and assets, status symbols. Much of the country has so much debt fueled cash they don’t know what to do with it: much to the chagrin of the Canadian Real Estate market.
The WEST has deliberately corrupted China’s population with a prosperity never seen before except in the “Gilded Age” … and on a MASSIVE scale … moving now into the third generation, to create CAPITALISTS and foment revolution to replace the Communist Party with a multi-party system: a “NWO Democracy” as it were, to be manipulated by the Uber Rich.
Panic can overtake the masses there easily, [much more easily than in the USA for example because fully half of the USA is not participating in the prosperity that exists for the top third] once the dominos start to fall.
Bass has his pulse on the Chinese market. Someone here told this community YEARS AGO that a global crash was more likely to start in China or Europe, than in the United States.
Yeah, it’s in the archives. 🙂
Great. We’ll give you the I Told You So Medal. Nobody has time to look in the archives.
Eisen JustMe,
Good points both of you. I have been to China. Amazing country, amazing people. I have no doubt about their ability to ascend. Saw it with my own eyes. They have that whole Confucius work ethic thing going. Look at the Chinese immigrants here and elsewhere… Lots of success stories. Again, really interesting and wonderful people.
Not that they don’t have their problems. Communist govt for one. Overextending for another: during my two weeks there, I never saw the sun for the smog. Throat hurt the whole time, eyes watering, serious pollution.
But speaking of over extending, I trust Kyle Bass’s assessment. I’ve been seeing that for years. Shanghi exploded from 4 story hovels into world class metropolis in 5 years! WTF!? How does that happen? And the ghost cities? Yeah, they got millennia of perspective and long range vision but I’m still scratching my head.
Kyle Bass was the guy who convinced University of Texas to put their money in gold and store it in Texas. Smart guy. When he talks, I listen.
Cheers,
Slap Happy
FUCK YOU CHINESE CCP TROLL GARBAGE!!!
Well said “JustMe”…..you have framed it very well.
I disagree. While China is structured now as a leader in the global manufacturing sector, without the vast resources of the West’s consumerism (Europe and the United States), China has only a fraction of their existing market supporting their production machine. Although there are a billion Chinese, there isn’t enough middle class over there to support their over inflated bubble.
When the West falls economically, China follows it over the edge of that cliff because they are so tightly tethered to us, both as a supplier and as a creditor.
“Although there are a billion Chinese, there isn’t enough middle class over there to support their over inflated bubble.”
Not true.
China has more than 300 million individuals in the “middle class” with disposable income; and hundreds of millions more supporting the overall economy, much like the Wal Mart Snap population.
Many of these individuals are shopkeepers with dress and beauty salons, not just manufacturers; others import specialty items from S Korea through their Online Stores.
With robots now taking Chinese jobs, and an overheated, over leveraged housing market, revolution there may not be a generation away. Contemporary China has never experienced a recession, let alone a depression.
It will be ugly. They will freak out. 🙁
Some say the stock market affects only the rich people.
Many people thought the same thing in 1929.
Watch the video of Chinese boiling a dog . And tell me you wouldn’t mind them moving next door? We must realize we have mortal enemies? Evil is there. Let it thrive or destroy it?Are we guilty for exterminating evil?If you can’t tell the difference between evil and good you are evil? Isn’t it obvious? Hard choices? Exterminating evil is a hard choice?we see them we hear them . Different countries different cultures? F U How much evil should we tolerate? Zero tolerance? Or let them have their fun? Stand before God and explain your self? I bet he will be pissed. And the smoke from your torture will rise for eternity.
@Traitor Hator……
Uhm……did you not ever learn the difference between a question mark and an exclamation point?
Hmmm….Traitor Hator
Chinese boil dogs…….Americans subjugate and slaughter entire nations in the name of “freedom & democracy”.
Who do you think God would be more pissed of at?
Here’s a tip……go phuck yourself.
Even better…..get a passport and do some travelling around this planet.
Go see what your government has done to innocent people who only ever wanted to live their lives free of a phucking brutal, bastard regime like the US Military Industrial Complex.
People like you, with your views, give the rest of America a terrible name……IT’S CALLED BRUTE FORCE & IGNORANCE.
If America does indeed get Nuked, which I do not want……but if it does, hopefully it will land RIGHT ON TOP OF YOU.
Subjugate and destroy entire nations? Name one wonderful nation full of wonderful people we have destroyed? Do you not see how these people treat their own ? Watch the Steve Gurn video. Torturing an innocent animal is the same as killing people that would saw your head off because your a different religion? The American military has been fighting Muslems who were kidnapping castrating and selling our children since the shores of Tripoli. Innocent people who only wanted to live their lives? They are sawing our heads off.You get a passport and go to a Muslem country and start talking and see what happens. Then we can watch you get your head sawed off. Brute force and ignorance? Who’s doing the head sawing. If you can’t see the difference between us and them you are them. And hopefully I will get to land right on the top of you.
It’s Muslim….learn to spell son.
Secondly, US may have acted “nobly” in the past, but that doesn’t describe the US today, nor does it excuse the US government from sticking it’s phucking military jackboot on the throat of the world and then acting as if it is some patron saint of justice & liberty.
By the way…..NEVER forget 911……and who did it.
INSIDE JOB…..and shows the pathetic mindset of those that lead your government.
You need to understand what’s going on son. Don’t like heads being sawn off? Nor do I.
But I know why it is happening……because YOUR nation wants to rule the entire planet and people who have had their lands decimated, friends & family obliterated and hope shattered, are fighting back anyway they can.
THINK.
You seem to ignore that most of the worlds people wouldn’t even be alive or civilized today if not for the United States and all it has accomplished and done for the world.
Why do you think everyone from there want to come here instead of everyone from here wanting to go to there?
Amerikans boil shrimp, pigs, mussels, lobster alive. So…?
So stay out of “Amerika”.
You certainly aren’t needed or wanted here, and someone may decide to boil you alive if your claim about pigs is true.
Soooo pass the melted butter !!! 🙂
I love shrimp!
Another guy claiming he predicted the 2008 crash. Well whooptie shit. Tell me the winning
Powerball numbers for this Saturday and I will really be impressed.
Bass has some solid creds and you gotta hand it to him for putting his money where his mouth was – article from 2008 – before broader markets crashed – he had already cashed in big:
https://www.dmagazine.com/publications/d-magazine/2008/april/cashing-in-on-subprime/
“Compound interest is the eighth wonder of the world.”
Albert Einstein
__
Einstein’s observations are correct but the law and the Feds are favoring/protecting the bankers over the populace. Legalized theft! Millions of retirees are being ripped off with low interest bearing accounts while the money changers charge exorbitant interest rates to lend money.
Louisiana Eagle ?
when CDs paid 6-8% we could live and not spend the nut. with no when else to make $$ other than the stock market, when it blows this time, another setback for the entire 99%. they have played us exactly the way they wanted. I’m ready as can be and hope the same for everyone. really sad what has happened to amerika.
He also called it “The most powerful force in the universe.”
What if the Chinese ruled the world? Are you insane? Or just a masachist? We would be installing suicide netting on every building? Most would rather die? Submit to the authority of the state? An orderly society? Government employees wanting more? Sounds great? We’re does it end?
@Traitor Hator…..
Flunked elementary school grammar, didn’t you?
Have you even been to China, you imbecile?
Watched the video of Chinese boiling a dog. It’s payback time ? And all the tax money our gov. Has spent on defending us from evil . Well now its time. Got no problem with getting dirty. At what lengths will we go to stop this? Will God deem our actions as in humane. Would he deem these people as good? Does he want us to accept them ? Or as soddom and Gomorrah due our duty? Do we tolerate evil or exterminate it? Such a hard choice? We might get our hands dirty. Whiping the money changers from the temple was an act of violence. And we can’t have that?
With all the gold and silver China has they aren’t going any where.
NO CRASH> We keep hearing it is going to happen here, but has it????
Sgt.
Plus there access and accumulation to minerals of which they are stacking deep.
China’s a big country with lots and lots of people.
I wonder what their per capita gold holding amount to in comparison to the same in the other countries?
When China, Russia and Iran return to pre 1971 values and price oil in gold don’t you be anywhere near a Wall street sidewalk sarge. Be bodies falling like rain.
The dollar will crash burn before the yuan.
Oct 1, 2016 RISE OF CHINA – China’s Yuan / RMB Joins Elite Global Reserve Currency Club
Currency’s entry into IMF basket a milestone in long march to international acceptance Renminbi joins U.S. dollar, euro, yen, and British pound in SDR basket Change represents important milestone for IMF, SDR, and China Move recognizes and reinforces China’s continuing reform progress.
https://youtu.be/rflIS_J6WRw
The Chinese aren’t Vikings. They are not coming over the Pacific in shipping containers. If they go anywhere, it will be to their West. Hence, the stronghold on the roof of the world, Tibet… and the nifty little road they’ve been working on for years, snaking towards the “stans”. The Chinese system has actually discouraged the rise of despots in recent times. It’s more of a rule by committee scene than the personality driven cult of Mao that was prevalent at the onset of the secluded China.
Elite Chinese need to keep the people somewhat happy to retain their position. Lots of lonely guys in China. A crash is not the least of their problems, but the demographic mess caused by the one child policy is coming back to bite them now. And, I’ll say- not only China has this man without a woman problem… so does much of the Muslim, European world’s young men. You don’t start a family when you are unemployed usually. Add to this, the unrealistic expectations of beauty foisted upon women by the plastic examples that the media puts forth around the world… I mean, what man wants a normal looking woman nowadays? She has to look like Cameron Diaz or Beyonce, or she’s not appreciated. This group is too busy looking at porn, or trying to “find” themselves to ever have a chance at passing on genes or value systems. Then, you have the antifa schmucks who seem to never have to show up for a job, but they perpetually have a skateboard in their hands to bash people’s heads in. They are terrified of children… they see them as little aliens. Can’t drag a lick of humanity out of themselves to conceive of the value of the loving nuclear and extended family… that, my friends is something the Asians have us beat in right now. The Mexicans too. So, they may have their problems, but their core family values have gotten them and are going to get them a long way. Lack of marriageable women in China is a BIG deal.
2isone, good post.
Too many young men in a society has historically led to wars.
Not a good sign…
The Chinese have always been silent about their plans. You can bet that when they think they have the advantage, they will push it.
Bass was NOT alone, all traders in the stock market were cashing-in.
In 2007, the iminence of the impending crash was overwhelmingly EVIDENT. So, while the last Florida condo flippers were about to be the last suckers, the professional traders were selling BIG TIME. I was one of the sellers.
This time, however, THERE WILL BE NO WINNERS.
We all go down!