forget real goods for a second whats US exposure to Chinese financial markets like I have the impression china is fairly isolated from global financial markets and most of this stuff is interior but I also have no real evidence of this
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Replying to @eigenrobot
we're all intertwined at various levels, almost like a fractal.
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Replying to @keyfob256 @eigenrobot
which is to say, there's a lot of play and give for smaller market movements, but if one market has a financial crisis the others will be affected. (May not crash, but they may require heavy govt intervention to prevent doing so. Where intervention usually == money printing)
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Replying to @keyfob256
I mean I was at the Fed in 08 trying to think about whether there are any systemically important firms that would go belly up sort of a China Syndrome it would for sure be bad generally esp in real goods but wondering about contagion specifically
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Replying to @eigenrobot
Well... 1st, China real estate is like a bizarro-world exaggeration of what was depicted in The Big Short. There's some reasonable reasoning: hypothetically, US & China have similar land masses and China has 4x as many people. And, "they aren't making any more land"
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Replying to @keyfob256 @eigenrobot
But there's the whole "ghost cities" phenom as well as frequently horrible building practices (so I've been led to believe)
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Replying to @keyfob256 @eigenrobot
But I always go back to market crashes being mostly a loss of confidence. Will there be a loss of confidence in real estate there, and can the govt overcome that somehow if there is one. I think a sharp pullback is possible, but hard to envision a complete crash
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Replying to @keyfob256 @eigenrobot
The contagion might take the form of pull back in foreign investment (i.e. buying real estate in the US), in order to scoop up..... Ok now that I've typed that, I question my sanity here
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Replying to @keyfob256 @eigenrobot
A stranger thing to think about is the possibility of capital flight from the China markets, which might actually drive ours up.
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I was wondering about that wonder if they clamp down with capital controls. that would be interesting
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Replying to @eigenrobot
didnt they recently do some clampdown on bitcoin? (which is a much better way to move "money" between countries than typical foreign exchange)
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Replying to @keyfob256
yeah I think they did. very interesting point. hmmm.
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