저자: Kevin · 외국인
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중국 경제가 디플레이션 악순환과 부동산 위기로 2008년보다 심각할 수 있다고 주장. 소매·기업 파산 증가, 임금 디플레이션, 공식 데이터 은폐 우려를 근거로 듦. 일본 Nikkei 사례처럼 장기 침체 가능성을 언급하며, 중국 노출 기업(테슬라 매출 22.7%, 애플 18.9% 등)과 원자재(BCOM) 하락을 근거로 제시. 블랙스완 가능성은 언급하나 확정 아님. 중국 익스포저 축소를 고려한다고 밝힘.
다듬은 글
well holy smokes there's a chance China could just be collapsing in front of our eyes at least economically and don't use my words here for it just look at some of these previews Here China shutters more than 1 million restaurants as economy Withers okay that's just one of them and these are characterizations that are popping up everywhere they're just getting worse and wor worse and worse here's one from the times where they say why is it so hard for China to fix its alien economy a real estate collapse has many consumers cautious and businesses wary as China confronts a crisis unlike any other since it opened its economy to the world now keep in mind they opened their economy to the world 40 years ago so in other words this is potentially the worst economic crisis in China in 40 years I mean consider this as well China's real estate stocks you thought it was bad when the companies started plummeting and tanking back in 21 and 22 oh no no no no the problem has just gotten worse and worse and worse look at that you had some enthusiasm crash you had enthusiasm crash you had enthusiasm crash every dip has just been followed by more and more pain the real estate crisis in China is now Now worse than what we saw in 2008 which is insane because that was a real estateel catastrophe a global financial crisis so what the heck is going on and what is all of this pain going to mean for America and I think that's really what's important to look at here because one of the things that you're getting is almost on a daily basis I'm seeing article after article after article about how China is falling apart not just those that you just saw but even what China is known for their manufacturing industry going broke and now overc capacity is leading to Soaring bankruptcies and so we have to consider wait what could this mean for our dollas in the United States is Kevin Kevin just just give it to a straight is is it going to be okay well let's figure it out because it ain't going to be okay for some but for others yeah maybe let's see which side you're on so first of all China just reported some crazy deflationary figures and the problem with deflation is that Supply chains are so freaking loose after covid that there's really no way to stimulate these Supply chains because China is like a manufacturing economy Okay cool so let's let's think about it this way for a moment let's say you run a factory that could make 10,000 of these then CO's hit Co hits and all of a sudden there's Global demand for 20,000 of these over that same period of time and you're like I need no I need more manufacturing space so you build an add-on to your manufacturing facility you buy more Machinery you hire more people now you're like all right it's 2024 we're ready to make 20,000 cups of you know over what period of time call it a month and uh now all of a sudden you look at orders and the orders coming in aren't 10,000 15,000 20,000 no none of those they're like 2 ,000 and you're like bro I just expanded and overbuilt yo government let me get on my China device and go yo government please bail me out I need some help okay so the government's like oh we should bail him out and so what do they do here's some money so you could expand your factory and create more jobs so then you go expand your factory and hire more people and you're like all right government I have done the deed I have expanded capacity even more now instead of being able to manufacture 20,000 mugs I can do 30,000 and the government's like oh that means you can do it even cheaper which in other words continues what's now being referred to as the deflationary Doom Loop in China in other words because you have a manufacturing country when the government the Communist Party of China decides to stim ulate all they're really doing is creating more deflation so this is like a horrible Loop that they're in to the point now well listen to this we are now at the fifth we're now expecting the fifth quarter in a row of deflation in China on a GDP Factor based on the last inflation reads that we just got and one of the biggest drivers of deflation that you're seeing in China is a big warning to America it's wage defl see incomes have been sagging so much in China because as soon as those manufacturers say crap you know we got too much Machinery we got too much capacity here the first thing they do is lay off and then what happens is people start panicking because they're like bro I need to pay my mortgage or I need to pay my rent or whatever so they offer their labor services for a fraction of what they were willing to earn previously just to be able to have some form of income wage deflation perpetuates this deflationary snowball then you get households that spend less because they expect prices to continue to fall corporate revenues fall more corporate layoffs companies start going bankrupt because more people then when there are layoffs spend even less now you have salaries that are literally down 10% since August of 2022 think about that like people's pay went up like crazy during the pandemic at least a lot of people's hopefully yours was included in that if if not you know hey we'll consult with you over at stock hack.com to make sure you can make some more money go check out our financial advisory wealth business service at stock hack.com we're opening up uh October 1st it's going to be amazing uh but anyway in a survey of over 300 Executives in China the survey results showed the weakest growth in labor costs since Co and now people are starting to refer to what's happening in China as oh my gosh this is going to be like Japan you remember what happened to Japan let me just put it this way you know how people are like oh buy the dip on the S&P 500 and don't worry about it like you know all the macro news and all that stuff doesn't matter okay well let's Google The Nay 225 this is the Tokyo Stock Exchange average of you know 225 of their uh largest Securities and so what do you end up with oh okay all right you know what's the oneyear return oh 11% that's great that seems a lot like uh you know what You' get in the S&P 500 oh okay all right fine what about the fiveyear oh it's up 64% Kevin what are you complaining about okay well let's go out to Max and let's look at 1989 in 1989 which is I mean think about this this is like 33 years ago more than that it's like 35 years ago 35 years ago folks 35 years ago the stock market the the k225 was higher than it is today so if you bought the dip in 1989 you might just now be break even it's crazy uh so anyway now now think about that in the meantime like if people are making this comparison that China could turn into Japan then this is really bad like what's next well the first thing that's next is that China starts trying to prevent economists from talking about deflation this actually started happening I think it was the financial times deflation Economist China I'm pretty sure if you look that up you will find uh that um the financial times reported that China told Economist whatever you do do not report on negative news like deflation we want you to avoid talking about that now that's really interesting because I then looked at what the economist had to say about that and the economist suggested wait a minute wait a minute if we start trying to control the narrative then what'll end up happening is we'll end up like the Soviet Union where at first you can lie to people at first you could tell them the data is good when it's not oh yeah GDP is 4% when you're lying through your teeth and you know it's not but what happens when the market is no longer able to properly react to real data well the market stays propped up on fugazi and when the market stays propped up on fugazi then all of a sudden the leaders in this country start going ha see our charades working and then they start going cool so uh you know we're the leaders of the country what's uh what's the real data and all of a sudden the economists are like we don't know because you lied about some of the original data so we don't know what we're comparing to and then all of a sudden the bottom falls out and you're like why did Soviet Union collapse well it's one of the reasons all of a sudden wow when you take control of an entire economy via author authoritarian means what a surprise it all collapses here it is Financial Times August of last year is when they started doing this Chinese authorities are putting pressure on prominent local economists to avoid discussing negative Trends such as deflation as concerns Mount about beijing's ability to boost a flagging recovery in the world's second biggest economy oopsies well guess what covering it up didn't work and now you have the weakest core CPI in 3 years and now you literally have a former Central Bank governor of the Chinese Communist Party say that's the um um People's Bank of China saying uh rooting out deflation has become a top priority oh so now yall are starting to admit you made a little oopsy dupsies remember back in the day China gave you know during Co China gave like $500 of consumer stimulus to Consumers while the United States provided the equivalent of like 55 to six $5,500 to $6,000 so like 10x the stimulus China doesn't stimulate their consumers they stimulate their job providers but that just leads to more deflation and probably malinvestment by keeping bankrupt manufacturers open now on one hand it's probably good for manufacturing costs to go down but there is that deflationary Doom Loop you have to consider so let's think for a moment about the good the good is that maybe if manufacturers are competing for more work it's now cheaper for Apple to manufacture in China it's now cheaper for Tesla to manufacture in China great if it's cheaper to manufacture there you could build cars there or build phones there export them to other countries and great you don't have to go to IND or you know Taiwan or some other country just do it in China because it's gotten so freaking cheap to do it there this whole idea that oh D globalization is going to cause inflation bull crap I've been saying it for years reglobalization and it'll be even cheaper than it was before because you'll face deflation that's exactly what you've got right now because the financial times calls demand lackluster oh it's much more than lackluster confidence in China's economy is crushing in China to the point where consumer confidence is at the same levels that we saw when Co hit and stayed down during the entire real estate crisis you haven't seen any like heartbeat over here it's like a flatline it's bad foreign companies called China's policymaking unpredictable unfair or uninvestable per The Economist foreign direct investment in China is at the worst level on record down at least 30% year-over-year in just the first 7 months of 2024 and declining and it's already been declining it's pretty bad and some policy makers in China say China has just killed long-term confidence on China now some say well China's at least trying to loosen laws for entrepreneur to try to stir up demand but they could just flip-flop again remember what they did during the co lockdowns lockdown lock down hey everybody can go open everything's fine oh no that kind of stuff can happen with regulations as well in fact some say that's what started the the real estate crisis in China you know you had this uh this uh uh incentive from the government to just keep building real estate whether it was profitable or not so companies were taking on debt on debt on debt on debt they were selling properties that weren't built yet and so you were getting these poorly built properties because they were already sold the builders didn't really have an incentive anymore to do a great job and then all of a sudden China's like you know we don't like how much debt you all have cranks them down with the three red lines policy and oh my gosh we created a real estate collapse what yeah wow China messing with your free market oh what free market anyway so how could potentially a depression a deflationary recession or whatever you want to call it whatever it ends up being affect America well think about this first of all if it gets so bad like initially we think oh this could be good for manufacturers because you can make things cheaper which basically means if you have deflation in China you're actually probably exporting deflation to America so you have more uh deflation here because our import prices are lower this is good H if you have a recession in China you might also have commodity prices decline which if you look at the bcom index which is just the Bloomberg commodities index for you know what's going on with commodity prices if you go year-to dat dude Rock freaking bottom year-to date we're at the lowest level of commodity prices year-to date lowest level in the last one year and quite frankly we're at the lowest level of commodity prices since about August of 2021 so this either signals that you're going into a recession or it signals that China's in a freaking recession or Worse both so uh now again Commodities could be a good thing in other words commodity prices coming down oil prices go down gas is cheaper for us In America which hopefully stimulates consumer demand in America hopefully uh you get you know lower cost of goods sold again at companies like Tesla but what happens when those factories just still can't make a buck in China and they go bankrupt well now all of a sudden you could actually instead of having really loose Supply chains you can tighten Supply chains again basically what you open up the risk to is some form of a Black Swan now I'm not trying to Doomsday here suggest that there's definitely going to be a Black Swan but when you have this sort of crisis of companies going bankrupt in China there's a possibility that these Chinese companies have to dump whatever assets they have those could be american-based assets like treasuries stocks various corporate bonds you name it you could get even more of a liquidity crisis companies or businesses that made investments in China lose money there so they have to free up money elsewhere could be bad for crypto assets across the board it doesn't really matter what it is people are trying to get out of China but this also creates an issue because the people who are still trying to hang on like the business owners or the companies or the Executives that have assets elsewhere might have to dump those so pain in China can be felt and rippled throughout the entire world again we don't want a Black Swan to happen but it can and China could be what causes it now it's unlikely to be a carry trade style speculative crash like we had with the Japanese uh um Yen uh here you have the Yuan also the ren mini as the currency system the um the black swans though not just Market volatility which you can get from these companies dumping less again the carry trade I think still a possibility though Supply chains failing but you could also just get debt failures and cascading debt failures so when companies that owe money can't make their payments anymore because they're going bankrupt now all of a sudden certain financial institutions that were lenders could go BK and that could trickle over it's very complicated to say exactly who gets hit but here's some examples of companies that have a lot of money coming from China and these are just some examples you could generally look at this yourself uh and and evaluate for yourself how companies you might be investing in are exposed but I think it's very interesting to know that 22.7% of Tesla's Revenue in 2023 came from the Chinese market so yes it's nice to have cheaper manufacturing ability in China but if you're also in a position where you know nearly a quarter of your revenue is coming from China that's not as great now Nvidia used to have about a quarter of its Revenue coming from China but that's that's now substantially declined because of the air Russian export control restrictions limiting some of their ex a lot of their exports to China at least for the greatest chips they go through other countries now and get black market smuggled 18.9% of Apple revenues come from China and 8% of Starbucks Revenue comes from China but 30% of their stores are in China that's because over the last 3 or four years they made a big bet on doubling the number of stores they have in China thinking that they'd be able to sell Starbucks American coffee in China but with a million restaurants going bankrupt in China so far just in 2024 people like oh oh no no no no I'm not buying Starbucks I'm going to go buy luckin coffee or something cheaper in China why buy Starbucks American brand when you could get it for a fraction of the cost it's just freaking coffee and the Starbucks Coffee ain't that good anyway when you could get that somewhere else now I know they're trying to shove the Chipotle CEO in over there but good luck that's all I got to say about that one Nike's got about 15% of their revenue in China caterpillar about 5 to 10% of their revenue in China maybe more they're a little less clear in it but usually you could just find this information in the annual reports for these companies so I'm a little bit nervous about China and I'm tempted to decrease my EXP exposure uh to Chinese markets you know broadly because I'm I can't bet I've I've said for years I'm not going to bet on the Chinese consumer I don't know China that well but what I do know is based on what we're seeing even coming from China now is that it's probably a lot worse than we think and I'm not going to be the person to speculate that the hints that we're getting that it's worse than we think or wrong and it's actually better than we think so I'm going to stay away from the China a place uh now again I feel bad because you know like I I think Baba is selling at a huge discount maybe it's already priced in a lot of that pain it's a very inexpensive company but that's only assuming that its growth holds up based on the LIE of the Chinese data that we might be getting what if the Chinese data is so wrong that we're getting that the growth numbers are actually way worse for GDP and therefore future growth expectations for Alibaba uh and you know so JD or whatever some of these other companies are actually way worse teu than the others I mean we already saw some of the reports come out like teu was a freaking disaster uh you know what happens at that point when the real data comes out and people are like oh my gosh we've been misled these aren't companies that are actually growing they're actually shrinking I mean you you here I'll open up the week chart here really quickly on the uh uh the company working uh Teemu it's still not at a low here but look at this decline you just recently had here I mean you just recently went from 150 bucks down to 92 and that's just because some of the data is starting to show up in earnings well what happens when all of the data of this pain shows up are these going to be even lower like what we saw in the 2022 stock market sh sell off in America except now with real Chinese data who knows but there are things that I'm watching anyway these are my thoughts if you have questions about how this how to position your portfolio and get actual Financial advice make sure to check out stock hack.com we are offering real Financial advice and Consulting it's flat fee it's not like we're going to bill you every 15 minutes that you're talking with our financial advisers this is my office my staff and I talk to my team about everyone's scenarios and we're working together to make sure that you've got a balanced portfolio whether it's U balancing stocks and real estate stocks bonds and real estate you're trying to figure out how to positioned your family for retirement or wealth make sure you get a licensed financial adviser on your team learn more over at stock hack.com we're launching that service come October 1st and hopefully you'll be able to hear from us a little bit before that as well thanks so much for watching the video we'll see you in the next one goodbye folks Financial
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