The Chaser Report - Solving The Housing Crisis With Modern Warfare

Episode Date: October 17, 2023

War! Hmm! Yeah! What is it good for? Fixing China's economy apparently. Dom and Charles discuss China's economic crisis and how a cheeky war might fix both their economy and Australia's housing crisis. Hosted on Acast. See acast.com/privacy for more information.

The Chaser Report is recorded on Gatigal Land. Striving for mediocrity in a world of excellence, this is The Chaser Report. Hello and welcome to The Chaser Report with Dom and Charles. Hello, Charles. Today, I want to talk about the housing crisis. You love this, don't you? Yes. Not the misery that so many of us have trying to buy or even rent out.

You love it when a massive overseas property conglomerate goes belly up. We've already talked, I think, a couple of times. about Evergrand, the massive Chinese company that built a whole bunch of ghost cities and then had to abandon them, there couldn't be anything even bigger, could there? This is four times worse, Dom. Four times worse. Stay with us. So, Don, this housing crisis is about too much housing.

Are you serious? There's a place where there's too much housing? We've talked about this before, but it's China. Yeah, yeah, I remember. The ghost cities, they built these massive skyscrapers. in the middle of nowhere because it was tax benefits to do so and then no one ever moved to the end of them the exact opposite of what we need in Sydney yes that's a little bit old that story that's the ever grand story we covered it first if you've been following

china in the last year you would know all about it because basically the chase report got there first yeah we broke it yeah we broke it wide open I mean it's actually it's funny because it's heading towards liquidation there's a liquidation date for ever grand on October the 30th so it may actually completely collapse so it should have It's been called Grand until October 2023. Yeah, okay. This one is called Country Garden. Country Garden.

And it is way bigger. It is four times bigger than Evergrand. I just want to just ponder what a brilliant name country garden is. Evoking, you know, sort of a pastoral scene, a picket fence. Yes. Something small and pretty. Charles, did their properties look like? Did they build lots of thatched village houses throughout China with, you know,

honeysuckle and roses? Well, it is true that they far more than Evergrand moved into country. areas. Like, their whole thing was we're going to build in very rural and regional areas. But the things that they were building were not so much country gardens as fucking skyscrapers. They're currently in the middle of building 3,000 massive apartment blocks. 3,000 blocks. 3,000 separate blocks of like, I don't know, hundreds.

Oh, thousands, tens of thousands in each 3,000 blocks. So the problem that they face is about a month ago, like literally. about 25 days ago, they had very small bond payable, $15.4 million. Ah, sure. 15.4 million dollars. Now, peanuts. They have $187 billion. That's $187,000 million worth of debt, right?

So a $15 million, I did the calculation. It's like having a $600,000 mortgage on your home. Yeah. And somebody saying to you, oh, can you pay me back that $50,000 you owe me? That is the direct amount of money it's comparable to. too, right? Beck and Rich, can you pay back the 50 bucks? You know what?

But, so, Country Garden, 25 days ago, that 50 bucks was due. And, you know, the way things are amongst the global elites. Sure. They always give, you know, 30 days grace period with these bond payments. You would. You know, oh, you don't have the $15 million today. Well, as long as you stump it up within the next 30 days, it'll all be fine. The point is, that's about to expire.

Like, that expires this week. When they can't stump up the 15.4 million. they immediately go into default, which means that all $187 billion of their debt becomes immediately repayable. Oh my God, do you don't pay the drop in the ocean? And the entire rest of the debt becomes, wow, that's not good. Now, so you think, look, $187 billion in debt,

that's a nothing burger, really, compared to Evergrand was like $335 billion. Sure. So 187, you're going, surely they can manage that. It's just like they shuffle a few things around, maybe, I don't know, cancel Netflix. The Chinese government can just help them out, surely. Yeah, exactly. The problem is, though, the what has become apparent is that perhaps the reason why they're less indebted than Evergrand is because they pre-sold a lot more apartments than Evergrand.

So the debt only shows $187 billion, but they also presumably owe people a whole bunch of unbuilt apartments. Yes, they owe. people 3,000 mega apartment blocks that they haven't built yet. Wow. So the liabilities are actually vastly more than Evergrand. Well, yes, but in fairness to them, they were much better at running the Ponzi scheme than Evergrand ever was. Like, you know, their balance sheet looked a lot better for a much bigger concern.

Like, in some ways, they ran it eight times better. But the thing is, there's nothing wrong with a Ponzi scheme per se, Dom. Well, I'm not sure ASIC would agree, but yeah. Until, no, until. But if you can keep shuffling the money. Yes, until the money runs out. Like, if you can keep selling more and more and more staff, then they should be totally fine, right?

The problem is, their sales have plunged 81% this year. Now, what I'm fascinated by is, why haven't they plunged 100%? A few people are like, well, you know, what, I reckon I could pull this out. It's a bargain. It's like, I mean, it's bigger than anything here. I was going to say, it's like Meritan or something, suddenly announcing they don't have any money. And then you're going, oh, yeah, I'll prepay for that Meritan apartment, but it's not. It's like Merriton and Bunnings and McDonald's and Quondas and Westfield all bundled up

because it's 30% of the economy. Like, Country Garden was the biggest player in the property development sector. The property development sector contributed 30% to the GDP. And I'm not astonished when you think of the sheer size, all these mega cities that have been built. And it's quite funny, Charles, because you know what they needed. I mean, if only that had a state-run economy, if only that had central planning, they wouldn't have built too many apartments. Well, it's funny you should say this, Dom, because that has been the government's approach. Let's find out more in a moment. The Chaser Report, less news, more often. Okay, so everyone, everyone is saying,

surely the Chinese government can't just let this fall over. I mean, there comes a point where you're too big to fail. Yes. When you become like, pickering in the Australian comedy industry. Yeah. You just have to keep going. You just fail upwards. There's more shows. More shows and more shows.

That's right. But the thing is, President Xi Jinping has been on record pouring scorn on the US for their system where they have a whole lot of too big to fail institutions. Like he is scathing about what the US did during the GFC, right, when they... They're basically... They bailed out the automakers and stuff. They're bailed out of the bank.

They basically poured so much money to the banks that they... essentially owned most of the banks. Yeah, Goldman Sachs and so on was completely funded. And so he's in a little bit of a pickle because this whole scheme has been part of Xi Jinping's plan to sort of stay at arm's length from the economy and let the economy do what the economy does. I mean, this is the whole logic of capitalism, right? That if you fuck up your company, it goes under and generally speaking in the West,

the people behind it don't tend to go to jail. It's like, oh no, whoops. We stuffed up. Let's start another startup. up, you know, tomorrow. Think of Alan Bond. So in the last week, stocks, I think, have plummeted. Well, the stock markets plummeted by 14% since the beginning of the year,

but they've been going pretty badly this week. Guess who's been buying the banks all this week? The banks in China that are exposed. Yeah. Gold and Sachs? The Chinese government. The Chinese government. The Chinese government.

The main institutions that are exposed to all this fucking dead are the Chinese banks, right? So the Chinese bank, like, if they all just collapse, then the banking system will collapse, which means everything will collapse. Like, we don't know what happens with banks collapse. Isn't it the case that without banks, everyone would be dancing in the streets and frolicing through fields of tulips and basically they'd be happy. If all the banks disappeared tomorrow, we'd be living in a utopia. We didn't have to pay any debt anymore.

Yes. If all the records of banks was wiped out overnight, well, it would be so lovely. It would be like in ancient Egypt, wouldn't it? Remember, they used to, every 50 years they'd have a debt amnesty and they'd wipe everyone's debt. What a good idea. I think that we're coming up to about 50 years. Or in the communist days when no one really owned property or anything. Yeah, the good days.

You couldn't even own your own apartment, which is given to you by the government. The government owned everything. What a better system that was. Well, that is sort of what's happening now, which is so the government is bailing out the banks. They're bailing out all the local governments, which is, again, something that the US government during the GFC, because all the municipal bonds started going. We talked about last time the fact that this was being driven by all the kind of local councils wanting prestige projects for their particular province or area, wherever it was,

and putting their money into these big investments. So Xi Jinping's going to have... But more importantly than that, they were charging tax to these property developers to build the projects, and that was their main source of revenue to pay things for, like, health care and pensions, right? So, in essence,

Everground and Country Garden were funding what welfare there is in China. In fact, in one way, you could say that for the past decade or so, China's entire social infrastructure has been funded by a massive Ponzi scheme. So the government's plan looks almost identical to the US. It's basically becoming the US circuit 2008. Xi Jinping would have such massive egg on his face, having been so critical of the US, and then doing the exact same thing. Gosh, voters will punish him horribly at the next election, won't they?

He must be quaking at the thought of being voted out. Well, this is the thing, right? Yes, he can't be voted out. But what everyone's saying is these sorts of things, like if you have an orderly wind down, that is going to take decades to be absorbed by the system. So they're just going to end up with massive, massive government debt. And everyone's going to have to just lump lower standards of living to pay for this debt that has been accrued by these property developers.

Right. So the average person in China, bearing in mind that China for decades now has been the stability has been sustained by basically the Chinese government. Okay, no political rights, no freedom, but delivering a higher standard. living to all the citizens. Yes. So if the standard of living goes backwards, maybe people won't be so happy with the Chinese Communist Party anymore.

Yes, but I have a solution, Don. So massive instability. Massive instability. And a global recession, potentially. Yes. Well, and the Chinese recession. So China have said, oh, we're going to go by at least 5% this year. And there is no way that is going to actually turn out to be true. But fortunately, here is Charles, one of his patented economic solutions.

Yes. Architect of Global Harmony, what have you got? After I've said this, you will. have to admit that it would work. Well, I'll go and buy shares in country gardens right away, if I have any money. So this is the solution. What China needs is to pump prime the economy. Pump prime the economy.

They've got to pump around the economy. What is the best way to pump prime in the economy? Jobkeeper. Well, yes, actually. But for the big problems like this, global war. Oh, of course. What a great idea. Massive, massive war.

You give lots of money to the military industrial complex. Yes. And they build a bunch of stuff. Yes. Full employment. Everyone has stuff to do. But also everything that you're building gets immediately destroyed. Yes.

Because it's like arms. Because it's used up straight away. And so it's not like you're then left with a whole lot of productive resources that you have to utilize. You can just build more stuff. Like it's the perfect destroyer of supply. Yeah. So what they need to do, Charles, is figure out a way to turn empty apartment buildings into munitions. Can you strap a rocket engine to those things and fire them at your enemy?

Well, no. Because actually I've got a better plan, which is, I think, to help China, what we need to do is invade China. They've got the houses. They've got millions of houses. We need millions of houses. We do need the houses. They need to have a reason to build more munitions and things are bad. We can say, come at us.

And then as they're coming at us, they'll realize that we've got Ben Robert Smith on our side. They'll go, oh, fuck, no. I was wondering what you do about the massive imbalance between Australia's tiny military. And the more than a billion people in, isn't it the people's Liberation Army The largest organisation in the entire world with a force of literally millions of soldiers? Yeah, but Ben. It's very interesting. And it works for everyone.

Albo's a bit on the skids. He could be a war leader. He can become a war leader. Everyone gets re-elected in a war. Biden? Oh, yeah. He'll be in for a war. You know who it would work best for this whole scam of yours?

Who? Taiwan. No one's invading them anymore. They're too busy war with Australia. Surprise attack from Australia. Yeah, no one just sitting there going, okay, thank you for taking up all the heat of us for a little while. They'll probably go about having a lovely time.

So the future war between Australia and China, I can't see any flaws in that. No, it's sort of a flawless solution. But Charles, if we're at war with China, isn't there a good chance that either our munitions will destroy these apartment blocks that we want due to the skill of our army? Oh, yeah. Or that will move them down under and then China will destroy.

Look, I think you can discount the first scenario We're going to be destroying much at all I mean, if we are on the receiving end of a nuclear war Because one doesn't usually pick fights against nuclear powers But they're not going to do nuclear But if there are nukes all over Australia We wouldn't need houses anymore We'll all be dead

It'll solve the housing crisis Oh yes Well I'm sure the RBA would be on board with that Demand distraction, that's what their current policy is, yeah Couldn't we just cut a deal Anyone in Australia who needs a house just goes and lives in one of these apartments in China. Yeah.

What would be the downside? Well, I'd vote for that. I mean, they wouldn't be able to vote for it. No, there's an empty city. They're empty city sitting there, right. We could make them Australia. We could have, you know, English. Yeah, and they could guarantee, you know, two systems.

Oh, one country two systems. Yeah, we could keep all of our economic and political rights. A bit like Hong Kong. Yeah. That would have been a renege on that. Australia could become the Hong Kong of the South. Wow. I don't think I'm going to win a Nobel Peace Prize for that plan,

but I'm pretty sure I will win a Nobel Prize for economics or maybe for physics when they do the next version of the atomic bomb there you go another problem masterfully solved here on the Chaser Report

our gear is from Road with part of the Ocona Class Network we'll catch you tomorrow See ya