Aggregated Awareness

From the South China Morning Post (SCMP) & the Fitch rating agency via Zerohedge.com comes a headline that you won't see in the mainstream media. Period.

Whenever the Chinese property bubble bursts, and ALL bubbles eventually do, this will have far reaching ramifications, for all of China's trade partners but especially for Australia...

And Treasurer Swan believes Australia's Terms of Trade will reach greater heights than has already happened, on the back of even higher than current iron ore & coal prices (even though prices for iron ore have dropped about 36% in the past 2 months), enough to bring the Australian Federal budget back to surplus by 2012-2013?

Somehow, the words: "You're having us on" comes to mind...

Firstly, Fitch's report can be summed up in a few words: China understates new loan numbers into the Chinese economy in the 1st half of 2010. Secondly, SCMP quotes Yi Xianrong, an economist at the Chinese Academy of Social Sciences as saying "...noted estimates from electricity meter readings that there are about 64.5 million empty apartments and houses in urban areas of the country, many of them bought up by people wagering on a constantly rising property market..."

Excerpt: "...from Fitch, which in a report released today titled Informal Securitisation Increasingly Distorting Credit Data, uncovers that China has in fact been massively underrepresenting the actual amount of new loans in the first half of 2010, courtesy of precisely the kinds of securitization deals that blew up half of our own banking system...

...Yet this data pales in comparison with disclosure from a recent article in South China Morning Post, in which an economist at the Chinese Academy of Social Sciences noted estimates from electricity meter readings that there are about 64.5 million empty apartments and houses in urban areas of the country! This number is five times larger than the roughly 12 million in total US public (3.89 million) and shadow (8 million as estimated by Morgan Stanley) home inventory available currently. Forget Stephen Roach - China is covertly funding and creating a housing bubble that is at least 5 times as big as that of the United States. We leave it up to you to imagine the consequences of that particular bubble's bursting..."

Source...