You Know You Love It, Baby!

There are many reasons that America should be grateful to President Obama. Here is a short list (read the entire article for much more)

1. The staggeringly high unemployment rate – 9.1%, not counting the Americans who have given up looking for work or who are underemployed.
2. The still-tumbling housing values, now worse than the Great Depression.
3. The inflation indicators, with uncounted sharp inflation in food and gasoline.
4. The debt and the deficit, now too big to even fathom without an advanced degree in mathematics.


5. The unfunded future liabilities –Social Security, Medicare and Medicaid, public worker pensions, and the like.

When the S&P downgrade is thrown into this cliff-hanging mix, our fiscal situation goes from bad to worse. _PJM

Before the Teleprompter Was the Toke-a-Prompter The author of the article linked above refers to Mr. Obama as the "Pass the Buck President." But if things get much worse, he may be forced to revert to being the "pass the toke president." Think about it: Someone who is high on marijuana is far less concerned about all the poor decisions being made on his behalf by his overlords in government, central banks, and crony-capitalist government-connected industry and labour unions.

If Mr. Obama were to legalise marijuana and make it freely available to everyone, Americans may not even worry about the fatal incompetence of America's coming Obamacare health care system, the breakdown of border integrity along the Mexican border, or the growing threat of collapse of the mainstream US economic system.

Marijuana is the answer to all of America's worries. And for those who worry more, rather than less, under the influence of marijuana, there are plenty of under-capacity mental institutions where they can be placed.

Mr. Obama has plenty of solutions up his sleeve. He is just getting started. He deserves at least 4 more years. You know you love it, America! Pass the toke, pres.

Global Economy: Problems, Problems, Problems

The North American and European investment markets are behaving as if they are oblivious to the way the global economic cookie is crumbling. They are due for a very rude wakeup call.

My basic sense is that we are at the end of one of the six or so major globalization cycles that have occurred in the past two centuries. If I am right, this means that there still is a pretty significant set of major adjustments globally that have to take place before we will have reversed the most important of the many global debt and payments imbalances that have been created during the last two decades. These will be driven overall by a contraction in global liquidity, a sharply rising risk premium, substantial deleveraging, and a sharp contraction in international trade and capital imbalances.

To summarize, my predictions are:

1. BRICs and other developing countries have not decoupled in any meaningful sense, and once the current liquidity-driven investment boom subsides the developing world will be hit hard by the global crisis.
2. 
   Over the next two years Chinese household consumption will continue declining as a share of GDP.
3. 
   Chinese debt levels will continue to rise quickly over the rest of this year and next.
4. 
   Chinese growth will begin to slow sharply by 2013-14 and will hit an average of 3% well before the end of the decade.
5. 
   Any decline in GDP growth will disproportionately affect investment and so the demand for non-food commodities.
6. 
   If the PBoC resists interest rate cuts as inflation declines, China may even begin slowing in 2012.
7. 
   Much slower growth in China will not lead to social unrest if China meaningfully rebalances.
8. 
   Within three years Beijing will be seriously examining large-scale privatization as part of its adjustment policy.
9. 
   European politics will continue to deteriorate rapidly and the major political parties will either become increasingly radicalized or marginalized.
10. 
    Spain and several countries, perhaps even Italy (but probably not France) will be forced to leave the euro and restructure their debt with significant debt forgiveness.
11. 
    Germany will stubbornly (and foolishly) refuse to bear its share of the burden of the European adjustment, and the subsequent retaliation by the deficit countries will cause German growth to drop to zero or negative for many years.
12. 
    Trade protection sentiment in the US will rise inexorably and unemployment stays high for a few more years.

_MichaelPettis_via_Mish

Here are the six key ideas that Mish is emphasising, out of Michael Pettis' analisis:

1. China Will Slow Much More than China Bulls and Commodity Bulls Think
2. 
   Non-food Commodities Take Big Hit
3. 
   Eurozone Experiment Ends in Breakup
4. 
   US Protectionism Takes Hold
5. 
   Deficit Countries Control Demand, Thus Have the Best Cards
6. 
   Disaster Hits BRICs

_Mish

If the BRICS are hit hard by blowback from the twin "debt and demography" crisis hitting the developed world, the panglossian investors of North America and Europe will be hard-put to find any rays of hope whatsoever.

As long as world leaders in the EU and the US are caught up in political correctness, welfare state dogma, and the faux environmental ideas of carbon hysteria and resource scarcity, they will be unable to make the necessary changes in course to free their economies from the twin curses of "debt and demography."

Until those crucial changes are made, the economic future looks bleak, globally.

Obama's Grand Green Jobs Strategy a Total Disappointment

Besides healing the planet and returning the rising seas to their natural beds, then-Senator Obama promised that his administration would create beautiful green jobs: well paid, stable, abundant jobs, unionized, with full benefits and making the earth healthier and the American people richer. As President, he stayed on message: even after the truther-enabling “green jobs czar” Van Jones left the administration, green jobs have been one of the President’s signature policies for putting the American people back to work. _GWPF_WalterRussellMead

Cranach: Garden of Eden (Wikipedia)
Something unexpected happened on the way to the Garden of Eden. Despite massive spending and stimulus, the green jobs revolution fizzled. Wind energy failed to meet expectations, as did solar. Electric vehicles were not ready for prime time, because electrical storage batteries are still 3 breakthroughs away from being up to the task. And the "smart power grid" is proving to be one more way that government and malicious hackers can monitor private activity, and shut it down.

Obama promised to create 5 million green jobs within ten years. Investors’ Business Daily has a list of that plan’s successes so far.

- On his recent jobs tour Obama stopped at a Johnson Controls plant in southern Michigan, which received $300 million in green grants and plans to create a whopping total of 150 jobs, at a cost of $2 million per position.

- Evergreen Solar Inc., which received unknown amounts of green stimulus funds on the hope that it would create “between 90 and 100 jobs” two years ago, filed for bankruptcy this week, $485.6 million in debt. Their Massachusetts plant once employed 800 people; in March it was replaced with a factory in Wuhan, China.

- Green Vehicles, an electric car “maker” in Salinas, California, took $500,000 from the city and almost $200,000 from the state but has failed to produce even one car.

- And as reported earlier on this site, Seattle was one of a handful of cities that received $20 million in federal grants as part of Retrofit Ramp-Up, a program designed to refit houses with more energy efficient materials. Unfortunately, as KOMO4 of Seattle reports, after more than a year “only three homes had been retrofitted and just 14 new jobs have emerged from the program.” _WalterRussellMead

As noted above, many of Obama's expensive green stimulus programs cost $1 million to $2 million per job. Unfortunately, these were largely make-work, administrative jobs, rather than the entry-level practical jobs as promised.

Federal and state efforts to stimulate creation of green jobs have largely failed, government records show. Two years after it was awarded $186 million in federal stimulus money to weatherize drafty homes, California has spent only a little over half that sum and has so far created the equivalent of just 538 full-time jobs in the last quarter…

The Economic Development Department in California reports that $59 million in state, federal and private money dedicated to green jobs training and apprenticeship has led to only 719 job placements — the equivalent of an $82,000 subsidy for each one. _NYT_via_WalterRussellMead

A very sad commentary on what was once considered a grand crusade. Read the entire article at the link above.

The ongoing Obama recession has not helped the green revolution take off, of course. But if you look at the green revolution as just one more way for Obama to divert government spending from the private sector, into the pockets of friends and supporters, the entire effort makes a lot more sense.

...green trends suffer when a listless economy sends old-energy prices into a rollercoaster spiral.

This possibility is reflected in the less-than-impressive growth in the “green jobs” sector, which was supposed to lift America out of the recent recession. The New York Times’ Bay Citizen project surveyed the field and found some rather disappointing numbers in job growth, job training programs and even something as simple as weatherization projects. _PopSci

Perhaps the green revolution was always just about appearances, and not about results, like so many other aspects of the current US administration. Just enough hoopla! to satisfy the rubes, without the need to accomplish anything productive.

In the eyes of such political machinations, it is enough just to get re-elected. If the news on the street is not as good as the public wishes, a great communicator can always make enough excuses, cast enough blame in other directions, and toss out enough goodies, to keep the plantation operating.

Adapted from an earlier article at Al Fin

Russian Society and Economy Suffering Under Putin

‘The country and society are seriously sick and may already be untreatable,” Gennady Gudkov, deputy head of the Russian parliament’s security committee, told the Komsomolskaya Pravda paper....

“The country is wallowing in corruption, theft, and hypocrisy, and all of this is reflected in incidents like the one in Tula,” he went on. “We need to understand very clearly that this is a reflection of the general symptoms of the degradation of the nation.”

...A recent poll by the Levada Center found that just over half of respondents believe corruption among the country's leadership is higher now than it was in the notoriously “lawless” 1990s. Almost 40 percent of respondents thought corruption was greater the higher you went up the political ladder, with 50 percent saying all officials were “equally” corrupt.

Polls also reveal an equal distrust of police, and with good cause. One of the clearest examples of the malfeasance of the country’s law enforcement agencies is the death of lawyer Sergei Magnitsky in a Moscow pretrial detention center. Magnitsky had uncovered massive fraud by police officials in the days before his arrest on trumped-up tax evasion charges and – as the Kremlin’s rights council has suggested – he was simply thrown into jail to die as punishment. _rian.ru_via_laRussophobe

Russia's economy is susceptible to fluctuations in the international price of oil. The Russian stockmarket is in a downward spiral, reacting to a recent fall in oil prices and ongoing economic troubles in Europe and the US. Capital continues to fly out of Russia at a high rate, with no end to capital flight in sight.

Russia's demographic collapse among its core population is continuing, as non-Russian immigrants continue to move into Russia, along with their higher birthrates. Russian crime is high, public health is poor, public spirits are low as are birthrates, and anyone who can get out is doing their best to do so, and taking their money.

The situation overall is quite dire, since the people of Russia have never known anything other than oppressive, corrupt, and incompetent leadership.

The Netherlands Finally Grows Aware of Multiculturalism Threat

Ms. Kuhlman has lived in the Slotervaart neighborhood for 36 years but says, “I no longer feel at home.” Built in the 1950s, Slotervaart is now about 60 percent immigrants or their children, most from Morocco or Turkey. Crime rates are high, especially among the second generation....Then she laughed bitterly. “He doesn’t work; I work. I work all shifts. I pay taxes. I work for them!”

Willem Stuyter, nursing a beer, broke in. “It’s already too late,” he said. “In 10 years this will be a Muslim state.” _NYT

The recent multicultural festivities in London may be added to the long list of reasons why the Dutch are feeling increasingly wary about creeping multiculturalism. And where the Dutch lead, much of Europe is likely to follow.

You know that the Dutch are getting serious about the coming war against the third world invaders, when their scientists are developing bullet-proof skin. Imagine the advantage in a firefight for any ethnicity possessing bullet-proof skin! Revolutionary.

Europe certainly needs something to knock it out of its twin funk of debt and demography. If core European populations would begin replacing themselves via higher birthrates, half their escalating economic problems would be solved. Many other problems could be solved by putting an end to the importation of future criminals and lifelong welfare recipients. You would think that this would be common sense, but in an era of political correctness, common sense has been largely stamped out.

Hope for the best. Prepare for the worst.

50 Years of the Most Lavish Welfare State Comes to This?

The mass criminality in the big cities is merely a speeded-up and concentrated version of life on most large estates – fear, intimidation, cruelty, injustice, savagery towards the vulnerable and the different, a cold sneer turned towards any plea for pity, the awful realisation that when you call for help from the authorities, none will come. _Peter Hitchens

At times like this, one must ask the question: what is the purpose of the welfare state? It seems as if the outcome of the welfare state is a helpless dependency on government handouts, and a growing resentment against the shrinking numbers who try to succeed on their own. This resentment against both authority and against those who actually work for a living, has grown so strong that it explodes into open violence from time to time.

All that is missing for it to grow into full-scale insurrection, is larger numbers of rotten members, and a catastrophic event of opportunity that could serve as the trigger for an all-out rebellion.

Just look and see how many shops are protected with steel shutters, how many homes have bars on their windows. This is not new.

As the polluted flood (it is not a tide; it will not go back down again)...washes on to their very doorsteps, well-off and influential Left-wingers at last meet the filthy thing they have created, and which they ignored when it did not affect them personally.

...The great majority of the looters, smashers, burners and muggers have not been arrested and never will be. Our long-enfeebled police were so useless at the start that thousands of crimes were committed with total impunity.

Now we know why they don’t call themselves ‘police forces’ any more. But they aren’t ‘services’ either, for they certainly don’t serve us or do what we want them to do, preferring to arrest us for defending ourselves. The criminals, who are cunning without being intelligent, all know this. They will wait for the next chance.

...The loping, smirking, shuffling creeps who eventually appeared before the courts were the ultimate losers – the ones who came late to the looting and who were too slow or too stupid to run before they were put in the bag.


Ransacked: Looters targeted many shops

And what courts they are. In the one I sat in last week, self-confessed thieves are courteously addressed by magistrates and clerks as ‘mister’ and asked politely to stand up or ‘accompany the officers’ back to the cells or – more often – out into the street on bail. In the part of the dock reserved for those already free on bail, nobody has bothered to clean up the scribbled and disrespectful graffiti.

Why should anyone respect or fear this chamber of indifference? The wall-hangings behind the magistrates are scruffy and scratched.

There is no sense of awe or determination or of much purpose. There is only a strong sense of going through the motions for the sake of appearances.

Nobody is directly punished for what he has done. Excuses must first be sought, and indulgence arranged where there should be cold rage. There will be ‘social inquiry reports’ and ‘youth offender teams’ who bustle smilingly in and out ready to start work on yet another ‘client’.

...the more encounters you have with our justice system, the less you fear it. A few ‘exemplary’ sentences – none of which will be served in full, or anything near it – will only help to spread the word that arson, robbery, violence, spite and selfishness are not punished here any more. Indeed these are the things we are now famous for around a world that once respected us.

And that is why we have many more nasty surprises waiting for us, here in The Country Formerly Known as Great Britain. _PeterHitchens

A welfare state might have survived if the UK had been sitting on a Saudi Arabia of light, sweet crude oil. But even Saudi Arabia is beginning to discover the follies of unchecked welfare-ism. The kingdom is also facing the threat of insurrection.

For the UK, the rebellion is coming from multiple directions. But every front of the coming rebellion will have been fed, watered, and kept alive by the welfare state.

Only 2% of Britain's Population Black? Seems Like More Somehow

Multicultural Events Across Britain
The UK Labour Party has been straining for many years to make the UK more multicultural. They are achieving this goal through having altered immigration laws to make it easier for penniless and uneducable third world immigrants to move to the UK, and receive generous public benefits paid for by UK taxpayers. The Labour Party assumes that a more multicultural UK will help them to achieve and maintain power, since a multicultural UK will be more dependent upon big government and public benefits.

According to Wikipedia the black population of England constitutes only around 2% - 3% of the total population. But as was seen in the multicultural events of the past week, when concentrated into sections of cities such as London, Manchester, Birmingham, etc. this mere 2 to 3 % can pack quite a punch. Imagine the impact of a 10% black UK on multicultural celebrations, or perhaps higher?

The UK police did little to dampen the enthusiasm of the events as they were unfolding, and the citizens who did step in to protect private property often suffered the consequences. If concerned citizens were not beaten or killed by the celebrants of multiculturalism, they were harassed by the police -- who may have been more comfortable confronting law-abiding citizens than standing up to multiculturalists.

As the growth of multiculturalism in the UK, Europe, North America, and Oceania continues, we absolutely will have to expect more jubilant street celebrations of this type throughout the developed -- but naive -- world.

What you just witnessed in the UK was indeed a party, compared with some of the events likely to be coming your way. This time, the anarchist left and the jihadist muslim populations were not ready to join in the party. Don't expect to be so lucky next time.

Hope for the best, but prepare for the worst.

London Police More Laid Back Toward Multiculties than Vigilantes Are

A man in his fifties was badly beaten up after apparently remonstrating with rioters who had set fire to a bin; he is now fighting for his life. Police are unable to identify him because they suspect his attackers stole his wallet and any other items which might have provided information about him.

There were reports of hooded youths barging into restaurants and making off with diners’ wallets and credit cards. We were told about gangs roaming the streets carrying rolls of toilet paper, which they doused in petrol and set alight under cars. As far as the rioters were concerned it was a party; for the victims it was a nightmare. _EturboNews

Image Source
London multiculturalists decided to take a relative break from their festivities Wednesday night, generally satisfied with the quality of celebration. London police have taken a "live and let live" attitude toward the multicultural activities of the week, but the ugly face of vigilantism may be peeking round the corner.

After four nights of violence, many are saying enough is enough and they will stop the looters themselves if the authorities cannot.

Police have warned that vigilantes are putting their own safety at risk and could make matters worse. The risks were highlighted by the death of three Muslim men run over by a car while protecting their area in the central English city of Birmingham on Tuesday. _NP

The police are clearly taking the high road here, and if the rest of Britain would only follow the lead of UK police forces, the multiculturalists will eventually wind down their celebrations in good time.

Some outsiders are trying to paint this multicultural holiday as some sort of "failure of multiculturalism," but it certainly seems that the multiculturalists are having it mostly all their own way. What are these critics on about?

The death of multicultural society and the economic crisis are to blame for the riots that have convulsed London and other British cities this week, head of the Russian upper house's international affairs committee Mikhail Margelov said on Wednesday.

"I think the events occurring in the English cities have at least two reasons. One is fundamental: it's the death of multiculturalism, a eulogy which the heads of Germany, France and Great Britain have recently delivered. The value of tolerance, or in other words the value of difference, has been accepted neither by 'indigenous' Europeans nor by immigrants," Margelov said. "The two sides merely tolerate each other. And patience is the kind of thing that runs out from time to time." _rianru

Crazy Ivan clearly doesn't know what he is talking about. There is very little standing in the way of similar multicultural celebrations due to take place across European cities generally. Multiculturalism is far from dead, despite what those crazy Russkies may say.

Australians are similarly critical:

AT the risk of being politically incorrect, is it possible that the current rioting in England is a result of embracing a multicultural society at a rate faster than the Anglo-Saxon community can cope with? If this is the case, are there lessons here for Australia? _TheAustralian

No, John, there are no lessons for you there in Australia. Just relax and enjoy. Multiculturalism is already there and growing larger and more festive every night while you are sleeping. Resisting only makes you look like an old fogie who is unable to change with the times.

PM Cameron has pulled thousands of extra UK Police to London from other areas, to observe the multicultural festivities from a distance. These extra police have convinced many multicultural celebrants to relax and perhaps take a night off. Others may decide to take their celebrations to other UK cities, outside of London.

Some observers are comparing the mass celebrations in London with the mass killings that took place recently in Norway. If Anders Breivik was celebrating his own brand of multiculturalism, that would put the Norwegian police in the role of the vigilantes -- who took the law into their own hands to stop Breivik's celebration. That just doesn't make sense. And only a handful of people have died in the UK celebrations so far, as opposed to several dozens in Norway.

No one knows what is in store for the happy multiculturalists of the UK in the coming days and weeks. But we can be fairly sure that these celebrations will continue to pop up in cities wherever multiculturalists take their light-hearted approach to living seriously. Perhaps next week, in your home town?

Fun-loving UK multiculturalists of the muslim persuasion are hoping to revive the festivities, and spice them up with something "really special." To each multi-culti, his own reason to party hardy.

Amsterdam Researchers Reveal US President Obama's Secret

US President Obama burst on the international scene as a political wunderkind, while still in his 40s. Having already written two autobiographies by the age of 45, Mr. Obama has clearly been on the fast track to power from the time he was elected to the Illinois Senate. And yet Mr. Obama had never actually accomplished anything substantial in his entire life -- certainly nothing worthy of two autobiographies nor warranting being elected to the most powerful political position in the world. What is his secret?

Narcissists rise to the top. That's because other people think their qualities -- confidence, dominance, authority, and self-esteem -- make them good leaders.

..."Our research shows that the opposite seems to be true," says Barbora Nevicka, a PhD candidate in organizational psychology, describing a new study she undertook with University of Amsterdam colleagues Femke Ten Velden, Annebel De Hoogh, and Annelies Van Vianen. The study found that the narcissists' preoccupation with their own brilliance inhibits a crucial element of successful group decision-making and performance: the free and creative exchange of information and ideas. The findings will be published in an upcoming issue of Psychological Science, a journal of the Association for Psychological Science.

... "The narcissistic leaders had a very negative effect on their performance. They inhibited the communication because of self-centeredness and authoritarianism." _SD

US President Obama is the narcissist's narcissist. Among all the world's narcissists, Mr. Obama would surely rank at the top. So in a perverse sense of logic, it is fitting that Obama has reached the world's top political ranking.

But for the people who must suffer from Obama's arrogant incompetence, the news is not so good.

The question is, are there enough Americans left with above average intelligence, awareness, and wisdom, to remove this narcissist among naricssists from a position of world power? If not, the doom we experience could rightly be dubbed, "The Revenge of the Narcissists."

London Braces for Fourth Night of Horrors, Violence Spreads to Other Cities

Rioting in England’s biggest cities spread further on Tuesday night, with the first trouble in Greater Manchester.

Stone-throwing youths confronted police at the Salford shopping precinct near the city centre and looted shops including Bargain Booze and a pawnbrokers.

Police in Liverpool, Bristol, Birmingham and Nottingham were braced for a second night of violence after shops were attacked and cars burnt. _FT

Rioting and mayhem is spreading across the multicultural parts of the UK, as a preview of coming attractions for much of the rest of the multicultural western world. Poorly considered immigration policies are beginning to bear a bitter fruit.

...city centres were also targeted with looting of shops including an Armani store in the Mailbox centre in Birmingham and a Tesco supermarket in Liverpool.

Shops shut early in Birmingham, Liverpool and Salford as police struggled to contain sporadic bursts of violence co-ordinated by mobile phones and Twitter.

After reports that some rioters were as young as nine, police called on parents to keep their children at home. Chief Constable Chris Sims of West Midlands police said some were “astonishingly young”.

...Shops in Birmingham and Bristol shut early on Tuesday for fear of further violence. West Bromwich, a town to the west of the city, saw a crowd of several hundred gather in the afternoon before police could disperse them.

In Toxteth, Liverpool, many youth and community centres closed and shops shut early. Andy Ward, assistant chief commissioner of Merseyside police, blamed a criminal minority for the violence. He said it would use CCTV images to track down offenders and asked for the public to send in any images taken of offenders.
_FT

Multicultural areas of western cities have always been the weak link of western civil society -- ever since these nations began importing uneducable, unassimilable third world migrants. When the human substrate of a culture cannot maintain the high levels of performance necessary for a high technology civilisation, the society begins to break down.

The ongoing UK rioting demonstrates how enthusiastically the multicultural residents of western cities will participate in the destruction of their host societies' infrastructure.

Be forewarned and forearmed. Hope for the best. Prepare for the worst.

Welfare States Must Choose Between Hard Landing and Crash Landing

The welfare states of Europe, North America, and Oceania, are growing old and unable to finance generous benefits to citizens. Hence the mounting crises of debt and demography which threaten to overwhelm these formerly prosperous and stable democracies.

America's multicultural crisis

Convulsions as the Welfare State Dies

How does a civilised society control its roving bands of young thugs?

It is becoming dangerous to go anywhere in multicultural cities -- either by day or by night. Roving bands of flash mobs may select you to make an example of, leaving you beaten, punched out, or worse.

Try not to go anywhere alone -- particularly in the city. But even in a quiet neighborhood you may be chosen to be a victim, for reasons which are not politically correct, and thus cannot be mentioned. Team up whenever possible, to watch each other's backs. Be careful out there.

The Deep Murky Mystery of China's Inscrutable Debt

The depth of China's debt problem is impossible to fathom. China's balance books are made intentionally inscrutable so as to allow the CCP to make almost any economic claims it wishes. But what is the truth, and why does the truth matter in the case of China's debt?

China’s own system is jammed with rotten debt held in off-balance sheet state enterprises. Its countryside is littered with eerie, empty ghost towns. And Moody’s Investors Service says last month that China’s local debt was understated by hundreds of billions of dollars.

Despite that, the People's Daily said S&P’s downgrade of the U.S.'s credit rating "sounded the alarm bell for the dollar-denominated global monetary system.” China owns an estimated $1.16 trillion in U.S. debt. China prints yuan to hold down its value so as to keep its exports dirt cheap. It then uses that extra printed currency to buy U.S. debt.

Here are estimates to keep handy as this debate rolls along:

*China’s debt-to-GDP higher than Portugal’s ratio: China likes to say its debt-to-GDP ratio is 17%. Not so fast. The respected Beijing-based research firm Dragonomics says it is 89% of GDP, worse than Portugal’s 83% of GDP, and the U.S.’s 79% by 2015. Stephen Green, China economist at Standard Chartered Bank, figures China’s total debt, including contingent liabilities, is 77% of GDP. China’s balance sheet is notoriously murky.

*China's local government debt understated: It may be 3.5 trillion yuan ($540 billion), bigger than its state auditor has estimated, Moody's said last month.

Moody's said it discovered more potential loans after it found discrepancies in figures given to it by Chinese authorities. China's central bank alone holds an estimated $1.16 trillion in debt, and the government has already increased credit in the system to a reported 200% of GDP.... _Elizabeth MacDonald

The leadership of the CCP is heavily invested in dysfunctional state-owned enterprises, and badly overextended regional banks. China's environmental collapse -- poisoned rivers, air, soil, food, consumer suplies etc -- lead to popular protest and demoralisation.

China's leaders must constantly be on guard against popular unrest and the threat of political schisms that might develop into fullscale insurrection. The popular perception of China as a stable nation -- politically and economically -- must be maintained at all costs, else all is lost for the monolithic dictatorship.