Over the last year, sales of Chinese property stocks are down almost 25%. To put this in perspective, this is worse than 2008 when sales fell by ~20%. China also cut interest rates on $5.6 trillion of mortgages with their HY real estate index down 80%+.

China’s real estate market is beyond recession territory.

https://nitter.poast.org/KobeissiLetter/status/1733919267249160345#m

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The Shanghai Composite Fell Nearly 2% After Moody’s Cut Its Outlook on China’s Credit Rating

Since June 2023, China has seen all of these events: 1. Evergrande files Chapter 15 bankruptcy 2. Largest tax cuts since 2008 announced 3. Interest rates lowered on $6 trillion of mortgages 4. Unexpectedly cuts rates by most since 2020 5. Bank run begins at Bank of Cangzhou 6. Banks cut deposit rates for the 3rd time this year 7. Government plans another new stimulus package.

2024 is going to be a volatile year.

https://nitter.poast.org/KobeissiLetter/status/1733618866662600831#m

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According To Apollo, The Debt-to-GDP Ratio In The US Is On Track To Hit 200% Within The Next 15 years

Less than 20 years ago, the Debt-to-GDP ratio was just ~50%. The current Debt-to-GDP ratio in the US is at 120%, nearly 2.5x what it was prior to 2008. To put this in perspective, even in World War 2 the Debt-to-GDP ratio peaked at 106%, below current levels. 2024 will be the first year with over $1 trillion in interest expense.

Market strength despite a plethora of headwinds has been incredible. The question for 2024 is what happens to the labor market? A weakening labor market will have implications from stocks to housing to rates.

What’s the long-term plan here?

https://nitter.poast.org/KobeissiLetter/status/1733881727695663371#m