Posts
The Stock Market
May 23, 2010
China’s Stock Market Has Become a Poor Man’s Casino: Andy Xie
May 24 (Bloomberg) -- A bartender at my neighborhood pub recently asked me how the Shanghai stock market was performing. I said it was at about 2,600 points. He jumped and said, “No! The Communist Party wouldn’t let that happen.”
He spent the next 10 minutes trying to convince me that the Communist Party would make the market rise to 8,000 in the next three to five years.
Real Estate
May 13, 2010
Bubble, Bubble, China's in Trouble
Ms. Wang, the wife of a successful Beijing businessman who gave only her surname, has purchased four homes in recent years. There's the apartment she and her husband live in, and three others they hold as investments. All three are vacant; she's making no attempt to rent them out. No property taxes are assessed in China, and so there's no financial penalty for simply buying and holding. The rental market in Beijing, in comparison to the red-hot real estate market, is fairly weak, and besides, renting out those apartments -- putting them to use and risking some wear and tear -- could diminish their value. So they remain pristine and empty.
Gold
May 17, 2010
Canny investors in China sense a storm is coming and they are taking shelter in gold. There is a sense of urgency in the crowds packed...
Canny investors? Packed crowds? Where have I heard that before? Stocks, real estate, gold... it's all good... until it isn't.
November 6, 2007
Savvy Chinese Know Exactly When Bubble Will Burst!
Zhu Qiuxia, for one, is not worried about a bubble. The power grid worker has put all her savings into shares, and is planning to keep them there until the Olympic Games next year, when she plans to put her original principal back in the bank and continue to speculate with the profit she's made.
Oops.
Lawler: Early Read on Existing Home Sales in March
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Today, in the Calculated Risk Real Estate Newsletter: Lawler: Early Read on
Existing Home Sales in March
A brief excerpt:
From housing economist Tom Lawl...
2 hours ago
2 comments:
Well, I for one am not getting this. Buying houses and keeping them empty? There are entire cities in China with no residents! The largest mall in the world? Completely vacant.
This is the worst kind of property speculation. And frankly I don't see how it's going to end well.
And now they're all rushing into gold? Thinking that it can only go up in value. Right, just like housing prices. Assuming it does, what are you going to do with it, buy more empty houses, thinking they'll only go up in value too?
It's insane. I have a friend who lives and works in Shanghai. We talk on Skype regularly. About two years ago, he said he was thinking about selling his house, could pocket $300,000 doing so. I told him to take the money and run, and he did, moved into an apartment.
About a year later, he said he should have waited, because he could have gotten an additional $100,000. I told him, yeah, or you could keep waiting and get nothing when the whole bubble bursts.
China is an export-driven economy. But with all the calamity in Eupope, its largest trading partner, and economic uncertainty around the globe, I find it difficult to understand how China is going to maintain its exaggerated GDP growth. By buying gold and building more empty houses?
Nothing makes sense anymore.
GawainsGhost,
China is an export-driven economy. But with all the calamity in Eupope, its largest trading partner, and economic uncertainty around the globe, I find it difficult to understand how China is going to maintain its exaggerated GDP growth. By buying gold and building more empty houses?
That does seem to be a head-scratcher. *shrug shoulders*
Real estate bubbles must end. There is no choice. Eventually real estate simply becomes unaffordable.
Stock market bubbles must end. Eventually investors realize they are paying $100 for 1 penny of earnings. At some point somebody has to question it.
Oil bubbles must end. Eventually investors realize that consumers can no longer afford it. Once consumers can't afford it, the game is over.
Gold bubbles don't really have to end I guess. Gold could go to $1 million an ounce and it wouldn't necessarily affect me one way or another. Gold is always affordable. The only thing that really changes is how much you get for your money. At $1 million an ounce, you'd be getting a microscopic bag of gold dust. Perhaps that's enough for the true believers. Who really knows?
I can say that I'm not paying $15,000 a pound for gold ($1,000 per troy ounce). I won't even generally pay $3 a pound for food, and without food I'd actually die! ;)
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