About Craig Tindale

CEO in the software and technology industry qualifications economics and computer sciences well read on Minksy, Marx, Fisher , Schumpeter , Veber and dozens of of others

Australia’s Econ­omy is a House of Cards

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By Matt Bar­rie & Craig Tin­dale.

I recently watched the fed­eral trea­surer, Scott Mor­ri­son, proudly pro­claim that Aus­tralia was in “sur­pris­ingly good shape”. Indeed, Aus­tralia has just snatched the world record from the Nether­lands, achiev­ing its 104th quar­ter of growth with­out a reces­sion, mak­ing this achieve­ment the longest streak for any OECD coun­try since 1970.

Aus­tralian GDP growth has been trend­ing down for over forty years
Trad­ing Eco­nom­ics, ABS

I was pretty shocked at the com­pla­cency, because after twenty six years of eco­nomic expan­sion, the coun­try has very lit­tle to show for it.

China’s Con­crete Bub­ble

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Chi­nese con­struc­tion keeps trend­ing down with Sany the worlds sixth largest heavy machin­ery maker report­ing a rise in profit of 5.4% in the same quar­ter as a blow out in receiv­ables of USD $1.39  bil­lion  and cash reserves falling by USD $535 mil­lion  . Sany is clearly book­ing prof­its on 100% financed machin­ery while pro­vid­ing zero trans­parency on credit risk  and delin­quency . If the GFC has taught the world any­thing. then 100% ‘no money down” ven­dor finance should ring alarm bells. This all started about about 3 months ago when Zoom­lion started to aggres­sively financ­ing heavy machin­ery for any­one that wanted to sign up

The Red Ice­berg

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The Fall of the Com­mu­nist Dynasty and The Loot­ing of China touched on the wide­spread fraud that has become appar­ent, both in main­land and US listed Chi­nese com­pa­nies. I also showed that an extra­or­di­nary num­ber of the Com­mu­nist Party and the mil­i­tary cadre  had mas­sive unex­plained wealth, with the Top 70 record­ing a net col­lec­tive worth of over $80 bil­lion. This week Bloomberg  was banned by the Chi­nese gov­ern­ment for report­ing the incom­ing pres­i­dents fam­i­lies assets at over $367M.

As Xi climbed the Com­mu­nist Party ranks, his extended fam­ily expanded their busi­ness inter­ests to include min­er­als, real estate and mobile-phone equip­ment, accord­ing to pub­lic doc­u­ments com­piled by Bloomberg.

The Loot­ing of China by the Klep­tokap­i­tal­ist Bour­geoisie Road­ers

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As I set out in The Fall of the Com­mu­nist Dynasty, and a HT to John Hempton’s piece within which he con­tends that the entire Chi­nese econ­omy is a Klep­toc­racy , this week we have news from Cit­ron Research who reports that  Ever­grande Real Estate Group Ltd is ‘a decep­tion on a grande scale’ .

Cit­ron quote ;-

Ever­grande who ranks among the top 5 Chi­nese prop­erty com­pa­nies. Our analy­sis and pri­mary research reveal that: 1] Ever­grande is insol­vent; and  2] Ever­grande will be severely chal­lenged from a liq­uid­ity per­spec­tive. The Company’s man­age­ment has applied at least 6 account­ing shenani­gans to mask Evergrande’s insol­vency. Our research indi­cates that a total write-­down of RMB 71bn is required and Evergrande’s pro forma equity is neg­a­tive 36bn.’ 

A cul­ture of mania: a psy­cho­an­a­lytic view of the incu­ba­tion of the 2008 credit cri­sis

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In his recent paper enti­tled A cul­ture of mania: a psy­cho­an­a­lytic view of the incu­ba­tion of the 2008 credit cri­sis ,  Pro­fes­sor Mark Stein devel­ops a the­o­ret­i­cal frame­work around the notion of a manic cul­ture, com­prised of four aspects: denial; omnipo­tence; tri­umphal­ism; and over-activ­ity.

A series of major rup­tures in cap­i­tal­ist economies were observed and noted by those in posi­tions of eco­nomic and polit­i­cal lead­er­ship in West­ern soci­eties,” he said. “These rup­tures caused con­sid­er­able anx­i­ety among these lead­ers, but rather than heed­ing the lessons, they responded by manic, omnipo­tent and tri­umphant attempts to prove the supe­ri­or­ity of their economies.”

The Macro­eco­nom­ics of Chi­nese klep­toc­racy

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John Hemp­ton from Bronte Cap­i­tal expands on the theme of  sys­temic chal­lenges cur­rently fac­ing the Chi­nese econ­omy that we touched on last week with The End of the Com­mu­nist Dynasty

The Macro­eco­nom­ics of Chi­nese klep­toc­racy China is a klep­toc­racy of a scale never seen before in human his­tory. This post aims to explain how  this wave of theft is financed, what makes it sus­tain­able and what will make it fail. There are sev­eral China experts I have chat­ted with – and many of the ideas are not orig­i­nal. The syn­the­sis how­ever is mine. Some sources do not want to be quoted.

The Pool­room week end­ing 30th Sep­tem­ber 2011

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A wild fort­night of tur­bu­lence in the exotic world of finan­cial…


Sharp drop for econ­omy, IMF warns (http://www.theage.com.au/business/sharp-drop-for-economy-imf-warns-20110920-1kjn6.html)

, The Age, 20 Sept

First and fore­most, the IMF has down­graded GDP fore­casts, ‘warn­ing of a new global reces­sion that would hit com­mod­ity prices and drive mil­lions world­wide into unem­ploy­ment.’ Now sug­gest­ing growth to be “anaemic” in advance economies (1.6%). ‘How­ever, this assumes Euro­pean pol­i­cy­mak­ers con­tain the cri­sis in the euro area periph­ery, that US pol­i­cy­mak­ers strike a judi­cious bal­ance between sup­port for the econ­omy and medium-term fis­cal con­sol­i­da­tion, and that volatil­ity in global finan­cial mar­kets does not esca­late’ the fund said.