China's Yuan Drops Most In A Week As Property Developers Tumble
Submitted by Tyler Durden on 03/25/2014 22:55 -0400
When we left China last night, it was all shits and giggles that bad news is great news and a Chinese stimulus plan will be here any minute to save the day. Having realized the sad fact that is not going to happen (as we explained here most recently) and the specter of banks runs looming, this evening's session has seenproperty developer stocks tumble - retracing all of last night's losses - the Yuan plunges by the most in a week back above 6.2150. Copper is holding in for now at the magic $300 level but corporate bond prices are falling once again (worst run in 4 months).
The Yuan is dumping at its fastest rate in a week...erasing all the hope-strewn gains from yesterday
Property Developers are taking it on the chin...
And it's no wonder, as Bloomberg notes...
Chinese developers' gross margins declined by a weighted average 294 bps last year.Most developers have forecast a recovery. Further declines in prices could present a threat....Chinese developers that have reported 2013 results have set an average 2014 sales growth target of 16%, about half last year's 30% rate. This is likely recognition of a need for better inventory management and of a more challenging sales environment. Developers will also probably curb construction because of slowdowns in some tier two and three cities....Longfor Properties summed up the attitude among major Chinese and Hong Kong property developers in its company filings... ."In 2014, the Group's key operating focus will be inventory clearance and cost control... For the coming 6-12 months period, we wil strive to reduce the leve of unsold inventory, hereby gradually improving our sale through rate."
But apart from that... China's fixed and the world economy will be back to normal as soon as the US weather clears up...
|By: DSWright Tuesday March 25, 2014 11:18 am|
As the world watches Ukraine, the US establishment press pumps out pieces on the horrors of contemporary Russia. Meanwhile, the perilous situation for press freedom in China degenerates further. Unlike Russia, China has gone head first into neoliberalism making partnerships with many prominent Wall Street firms like JPMorgan, which apparently has dissipated the more venomous criticism from the US media establishment.
In 2012 China blocked access to the New York Times website after the paper ran an expose about Chinese officials and now Bloomberg News is having it’s own crisis over push back from the Chinese government on reporting political corruption in the country. Have you heard about it ?
Ben Richardson has resigned from Bloomberg News after 13 years to protest editors’ handling of an investigative piece reported from China – a story that the bosses feared would get them expelled from the country…
Richardson, who was an editor at large for Asia news (he edited the enterprise stories and columns), writes in an email: “I left Bloomberg because of the way the story was mishandled, and because of how the company made misleading statements in the global press and senior executives disparaged the team that worked so hard to execute an incredibly demanding story.”
Richardson says the “threat of legal action” hangs over his head for speaking out about Bloomberg’s capitulation to the Chinese government so he merely affirmed the truth of other stories on the subject and publicly confirmed that the reason he resigned was the treatment of the story on corruption in the Chinese government.
Correspondingly, JPMorgan’s top Chinese Banker, Fang Fang, will be leaving his post thanks to aninvestigation into JPMorgan’s hiring practices in China. The investigation revolves around the charge that JPMorgan is under investigation for participating in the bribery of Chinese government officials.
JPMorgan Chase & Co’s chief executive for China investment banking, Fang Fang, will leave the firm, according to an internal memo – a departure that comes amid a probe of JPMorgan hiring practices in Asia. The Wall Street Journal, which first reported Fang’s departure, said he had emerged as a key figure for U.S. authorities as they investigate whether the investment bank violated bribery laws by improperly hiring the relatives of well-connected Chinese officials…
Fang has strong ties to the Chinese government, having been appointed to the Chinese People’s Political Consultative Conference in March 2008 for a five year term. Other firms that have come under scrutiny for their hiring practices in Asia include Citigroup, Goldman Sachs and Morgan Stanley.
That’s a lot of money on the table, for the media too. So it would seem that the Chinese leadership won’t face the same scrutiny as those in Russia. It’s just business.
It seems journalists of all backgrounds have a choice in China – ignore political corruption or report the truth and pack your bags.