weehingthong

The China Cycle has come for Tesla https://t.co/RqKmU7IVcD pic.twitter.com/IIu2iXZL68

— Noah Smith 🐇🇺🇸🇺🇦🇹🇼 (@Noahpinion) September 7, 2024

World Bank halts paid advertising on X after CBS News finds its promoted ads under racist content https://t.co/2YoPPoNSI7

— CBS News (@CBSNews) August 23, 2024

Elon Musk’s $44 billion Twitter purchase ranks as worst deal for banks since the financial crisis: WSJ https://t.co/sk7cW5pF3P

— MarketWatch (@MarketWatch) August 20, 2024

pic.twitter.com/ZpJP10ZBQZ

— simonthong aka kitty poo (@KittyPo80176717) August 20, 2024

Per Fortune, Twitter's revenue has collapsed by approximately 84% since Elon's takeover. https://t.co/TmjMb4cy1h

— Roshan Rinaldi (@Roshan_Rinaldi) August 17, 2024

BERNSTEIN: “.. Tesla has lost share in all geographies, in both xEVs and EVs. Share loss has been most acute in North America.

“.. We don’t believe that $TSLA will be able to regain share or grow materially until it launches all new, lower priced offerings – likely only in 2026… pic.twitter.com/hNm9JExTcF

— Carl Quintanilla (@carlquintanilla) August 16, 2024

Elon Musk under pressure to sell billions in Tesla stock to rescue X. Tesla investors are very concerned. His repeated outbursts against advertisers have dried up the main source of revenue for the loss-making X.

X might go bankrupt if they cannot figure out monetization. pic.twitter.com/86aHgfDG52

— RΛISINI ライシニ (@raisini) August 15, 2024

In two years X ad revenue has fallen from 661 million to 114 million. pic.twitter.com/DZ08aFPelK

— Staff Sergeant Johnson (@Colonel_Myway) August 28, 2024

Alf, CIO, Macro Hedge Fund. https://t.co/dPMyAKll7Q pic.twitter.com/cQ1UEKohNg

— simonthong aka kitty poo (@KittyPo80176717) August 16, 2024

Let's take a step back.

China joined the WTO in the early 2000s and benefitted from a wider access to global markets where they could leverage their internal competitiveness (read: low salaries) to gain shares – and they did.

But the inevitable demographics decline…

2/ pic.twitter.com/sR47pXgTcf

— Alf (@MacroAlf) August 15, 2024

Between 2012 and 2016 the Chinese corporate sector took on most of the burden as companies tried to lever up their business models and expand operations in the West.

But the second phase of the credit binge was driven by Chinese households.

Why?

4/ pic.twitter.com/s7bYtDM6LS

— Alf (@MacroAlf) August 15, 2024

Lever up a lot, buy houses, prices go up, finally feel involved in the Chinese ‘’wealth creation’’ process.

Property now account for over 60% of Chinese households net worth versus 23% in the US.

And that’s all fine until it’s not.

6/ pic.twitter.com/g9aBvH8x2E

— Alf (@MacroAlf) August 15, 2024

The concrete risk is triggering the biggest balance sheet recession of the last few decades.

When house prices start dropping, this hits the balance sheet of highly indebted households and developers causing them to sell properties to repair their balance sheets.

8/

— Alf (@MacroAlf) August 15, 2024

With rates dropping in China while 10-year Treasury yields still hovering around 4%, interest rate differentials could widen further.

The pressure on the CNY is building, and China is trying to defend the currency but a few cracks are appearing already.

10/

— Alf (@MacroAlf) August 15, 2024

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— Alf (@MacroAlf) August 15, 2024

Chinese bank credit to the real economy is contracting. With bond yields at 21st century lows. Balance sheet recession. Population declining. China is the new Japan. https://t.co/yMu3uH7lCi

— Spencer Hakimian (@SpencerHakimian) August 15, 2024