Gordon Johnson, CEO, and Founder of GLJ Research joins Zer0es TV to explain the deep connection between the construction and real estate bubble in China, and commodities like coal, iron ore, and steel. If China follows through with its posturing around Evergrande and truly plans to reign in speculation in their real estate market, new construction and the industrial commodities associated with that construction are likely to plummet. Johnson highlights areas in the macro data like steel output and housing starts where we are already starting to see this trend play out, the longer-term playbook he would like to see develop to confirm his thesis, and a few specific equities and markets that he thinks are most at risk should his view play out.
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