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There's apparently no need to panic yet.
Andy Xie: China Asset Bubble Triggered By Long-term Low Interest Rate
Xie compared the current Chinese housing market to the Japanese housing market of the 1980s and 1990s and predicts China's stock and real estate markets will decline slightly in the fourth quarter of this year, with a large decline coming in 2012.
This doesn't let you completely off the hook. You'll still want to panic before others do.
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.
It's all in the timing.
Real Estate Newsletter Articles this Week: Existing-Home Sales Increased to
4.15 million SAAR in November
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At the Calculated Risk Real Estate Newsletter this week:
[image: Existing Home Sales]*Click on graph for larger image.*
• NAR: Existing-Home Sales Increase...
17 hours ago
8 comments:
Stag,
If ever there was an industry ripe for a class action law suit claiming mass gross negligence it's the financial services industry.
Jeremy Siegal is either an idiot or a shill. Perhaps both.
The argument for holding stocks for the "long run" is founded on a bed of lies.
In short, the financial services industry projects past long term returns into the future. Unfortunately, the CONditions that allowed 10% long term returns from stocks in the past are no longer present. That's a wee bit of a problem.
The world is quickly running out of greater fools. In the developed world, almost all collateral has been loaded down with debt. The ability to service debt has been exceeded.
The jig is up. Debt deflation is upon us. The wheels will fall off the stock market and the eCONomy soon enough. It might be fast and furious, it might be long and drawn out. Robbing the general populace by burdening them with unpayable debts founded on lies has CONsequences.
Bernanke and CONgress through a life preserver to Wall St. But Main St. is worse off than ever.
And just wait until Wall St. dingbats realize that the "printing money" put is a ruse.
mab,
I said, "It's all in the timing."
You said, "The wheels will fall off the stock market and the eCONomy soon enough."
Badum-ching!
The Dow lost 3.21% today after being down nearly 1,000 points.
"Ain't no rest for the wicked..."
That Borderlands intro song works on so many levels.
Now where did I put that Dow 10,000 hat at?
watchtower,
I love the Borderlands song during the credits when you finish the game.
I think I'll make that today's musical tribute!
Stag,
I hope that dude who posts here occasionally and talks about keeping his stops "tight" didn't get creamed today. This is the kind of freefall that runs right over stops.
I think the real damage is taking place in the debt markets though. Imagine the pain the inflation junkies that have been short the treasury markets are feeling. Long junk and short treasuries - Ouch!
TBT (ultrashort bond fund) was down 6% today. It's currently 32% off its 52-week high.
Some "sure things" just aren't as sure as others apparently.
The "obvious" trade pretty much can never work long-term in this economy, because the first people to do it leverage up.
If you've got 100 investors and the first guy leverages using 100-1, then there's nothing really left for the other 99.
Stag,
If you've got 100 investors and the first guy leverages using 100-1, then there's nothing really left for the other 99.
I've made that same point over at CR's blog many times. The purpose of ever increasing leverage is to steal the future. I think we've leveraged more than the future can deliver. Especially now that more and more people realize that their futures belong to others.
I've yet to hear a valid reason for allowing greater than 5 to 1 bank leverage. With history as a guide, 5 to 1 leverage created allowed higher real growth.
We have a ponzi system, that's why we need ever incresing amounts of leverage. It's a wonderful skimming operation for Wall St. - while it lasts.
mab,
Your comments are spot on to me, as usual.
Especially now that more and more people realize that their futures belong to others.
That's true in more ways than one.
We're in a downward spiral, just like Japan. We borrow from our children and our children borrow from us. Put another way, if we stop having children individually because they are expensive, then we can't push our country's future expenses onto our children.
Will kids drag you to the poorhouse?
Having a child is the greatest single predictor that a woman eventually will file for bankruptcy.
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