Show Notes: Zelensky and Game of Dire Wolves

CCP Buying up Stocks as a Scramble in Trade War

https://www.zerohedge.com/markets/beijing-unleashes-record-plunge-protection-buying-prop-stocks-avoid-signaling-weakness

Amid escalating trade tensions, the Chinese government has initiated significant stock purchases to stabilize its markets.

This intervention aims to prevent market panic and signal economic resilience to both domestic and international observers.

Analysts view this move as a strategic effort to bolster investor confidence during the ongoing trade war with the U.S.

Critics argue that such market manipulations may mask underlying economic weaknesses and delay necessary reforms.

Kyle Bass CCP Economy on Mainland

• Overleveraged Banking System: China’s banking system is about 350% of its GDP, significantly larger than the US system, which is around 1 times GDP (or 1.7 times including non-banks). Bass argues that this high leverage, combined with the relatively short history of advanced banking in China (since 2002), creates instability.
• Real Estate Crisis: Almost 40% of Chinese bank assets are tied to domestic real estate. With a 30-50% drop in the real estate market, Bass contends that the banking system is likely insolvent. He notes that local governments in China relied heavily on selling land to developers to meet their budgets, a practice that is no longer sustainable due to the real estate collapse.
• Demographic Crisis: Unrestricted speculation in real estate led to median housing prices in tier-one cities reaching 25 times the median income, making housing unaffordable for young people. This has resulted in a collapse in marriages and birth rates, with China’s birth rate falling to 1.2 births per woman, far below the 2.1 needed to sustain the population. Xi Jinping reportedly recognized the folly of this, stating in 2019 that “Financial Security is National Security”.
• Lack of Wealth Distribution: Despite significant GDP growth over the past 17 years, investing in China’s largest public index (Shenzhen Shanghai 300) resulted in a loss of a third of the investment, contrasting sharply with the gains in the US market over the same period. Bass suggests that “investing in communism has never worked in the long run”.
• Architectural Structural Flaw: Bass believes there is a fundamental structural flaw in the Chinese economy, making hopes for a turnaround a “Fool’s errand”. He estimates that the equity in their banking system is around two trillion RMB, suggesting that a significant amount of printed money would be needed just to fill the hole caused by the real estate crisis