Scientists glued to huge Technicolor screens at NASA’s super-secret facility buried deep undergound somewhere were startled by a huge blip earlier this week. For years their super computer had been less accurate than the Malaysian government’s radar system. After getting over the initial shock that it works, they discovered what appears to be a large hole opening up over China.
For many of the analysts working at Western investment banks, this confirms what they have been shouting about in recent weeks. China is doomed, and will be swallowed up whole, possibly taking the world economy with it. The evidence is clear: Exports are plunging, investment is disappearing, consumers are not spending and The Great Smog is getting smoggier.
Digging deeper (forgive the pun) there are further examples. China experienced its first onshore bond default late last week that could lead to a “Lehman/Bear Stearns/Enron/Bearings/Generic Western Financial Scandal” moment. The Shanghai Stock Exchange suspended a troubled bond this week, and more stories of flailing financial products made their way into the papers.
Things are so bad here that Panasonic said it will offer pollution payments to staff sent to work in China. This is in addition to the robot housewives and Special KTV gift cards already handed out in neatly folded expat packages. Activist investor William Ackman won’t stop going on about how nutrition and weight loss company Herbalife is running a massive scam in the country, which he reportedly claims is making the Big Hole even bigger.
For anyone who still doesn’t believe, here is solid proof of the impending doom. Beijing is going to put any Party member suspected of corruption under supervision and stop them from leaving the country. Leaders know the end is coming. Ironically, that means no officials will be able to get out, not even the corruption supervisors. Still, that hasn’t stopped state-owned Cosco Pacific and China Shipping from buying a port in Hong Kong to transport senior cadres too scared to fly over the South China Sea for fear of their plane getting lost.