Chinese investors are holding their collective breaths to see if the banking crisis predicted two years ago by renowned Chinese economist Li Zuojun will come to fruition in the next couple of months. Li's astounding accuracy in predicting China's economy has led to him earning the nickname "China's most successful doomsayer."
Though far from perfect, a lot of what he said here rings true. But the
interesting insight is that he forecasts that the incoming regime will
want to take its lumps early, in 2013, so as to minimize blame ("it was
the old crew's fault") and maximize praise for subsequent recovery...
He notes three other drivers (aside from this political one) including
external flows and credit expansion, and fears social instability should
the status quo be maintained...
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Goodbye housing (non)recovery… except for those private
equity-cum-landlord firms and offshore oligarchs who pay all cash of
course. “The 30-year fixed mortgage rate on Zillow(R) Mortgage
Marketplace is currently 4.38 percent, up fifty basis points from 3.88
percent at this time last week. The 30-year fixed mortgage rate hovered
between 3.82 and 4 percent late last week, before spiking up near the
current rate over the weekend. This represents the highest rate on Zillow Mortgage Marketplace since July 2011.”
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