China faces the biggest property default on record as credit curbs threaten to break the housing boom, leaving a string of "ghost towns" across the country.

The Chinese newspaper Economic Daily News said Xingrun Properties, in the coastal city of Ningbo, is on the brink of collapse with debts of $570m, mostly owed to banks. The local government has set up a working group to contain the crisis.

"As far as we know, this is the largest property developer in recent years at risk of bankruptcy," says Zhiwei Zhang, from Nomura Securities.  "We believe that a sharp property market correction could lead to a systemic crisis in China, and is the biggest risk China faces in 2014. The risk is particularly high in third and fourth-tier cities, which accounted for 67% of housing under construction in 2013."

Yu Xuejun, the banking regulator for Jiangsu province, says developers are running out of cash. This risks undermining land sales needed to fund local government entities. "Credit defaults will definitely happen. It's just a matter of timing, scale and how big the impact is," he said.  The charts below tell the story.

Might as well start with the belly-laugh of the week.  Who is this?



It's the President of France, Francois Hollande.  The pic was taken Tuesday (9/03) during his visit to a school in Denain, a city in northern France, and put online by AFP (Agence-France Presse, the government owned & operated news agency).  It instantly went viral and has all France in hysterics.

AFP pulled it within hours, issuing a "mandatory kill" order to its outlets not to publish it, as it damaged the "dignity" of the president.  Too late.  President Imbécile is now Hollande's nickname for millions of Frenchfolk.

Don't you wish all of America could laugh at Zero that way?  This week we may be on the verge of your wish being granted.  And not just America, but most all of the entire world.

Measures that slow the economy block better solutions



Should Americans be spending more on public security, or less? After a week of two horrific events, the Boston Marathon attack and the Texas fertilizer-plant explosion, most would probably answer the above question by saying, “We’re not spending enough.” Such an emotional response is not surprising particularly after seeing the highly competent and courageous response of the police, firefighters and medical first responders.

On Friday, I received an email from a friend asking the question, “Did it make sense to close down half of Massachusetts for a day to capture one 19-year-old suspected terrorist? No, unless he was part of a bigger cell which was the unknown for the police. Did the huge redeployment of law enforcement resources for the week to catch the perpetrators result in more nonrelated terrorist murders or auto fatalities (or perhaps even fewer)?”

One occasionally hears the comment that “we should spend whatever is necessary” to stop terrorism. It sounds good, but on reflection, it makes no sense, and here's why...

As we start Labor Day Weekend, we've had the weirdest week of a weird summer.  What's good about it is that it is shining a klieg light on Zero's Anti-Midas Touch - that everything he touches turns to merde.

The trigger for this is Zero's playing Hamlet over Syria.  There is a cacophony of voices on the Left and the Right screaming at him.  Both ultra-leftie Dennis Kucinich and conservative fire-breather Ralph Peters are going apoplectic that he might attack.  The New York Times is advising him, on the other hand, to "Bomb Syria, even if it is illegal."

The most thoughtful and balanced voice is Newsweek's Ken Pollack, who advises: Go Big or Stay Home.  He dispassionately gives the case for, and for not, intervening.  His conclusion is Napoleon's: "If you start to take Vienna, take Vienna" - but the odds are high that Zero will do something half-fast, an inconsequential purely face-saving attack that will make the entire situation worse than ever.

The Anti-Midas Touch in action.

My own view is that Assad and his brother Maher - who ordered the poison gas attack - should be specifically targeted by cruise missiles and killed.  I agree with the Wall Street Journal's Bret Stephens that Zero should target the Assad brothers personally as he did Bin Laden.

Yet we can trust Zero not to do the right thing.  The good news will be that whatever screw up he does, everyone will be mad at him for it.

The success of the Reagan-Thatcher era has been quickly erased

The great tragedy of our time is that so few know economic history; thus we have been doomed to repeat the mistakes of a generation ago, and millions suffer.

By the late 1970s, many viewed Britain and the United States as in terminal decline. The United Kingdom had been rotting for decades. The empire had been lost, and Britain began to look more and more like a Third World country as incomes stagnated and inflation soared.

Then, along came a remarkable lady, Margaret Thatcher, who said “no” to the status quo and through incredible toughness, ability and just plain smarts turned around Britain.

On this side of the Atlantic, the United States was also in despair. Real incomes had stagnated, inflation seemed to be out of control, and the establishment political class had little idea of what to do. President Carter referred to the country as being in a “malaise.” Out of the American West, a savior, Ronald Reagan, rode into Washington and turned around the nation.