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Ken Rogoff: "China Property Market Collapse Starting"

Tyler Durden's picture




 

Tomorrow morning Bloomberg TV conducted an interview with Ken Rogoff in Hong Kong (the same way you land in New York before you take off in London via the now defunct Concorde) in which the Harvard professor recently made famous for his words of caution that overlevering sovereigns always eventually leads to economic slow down, financial collapse, and ultimately bankruptcy, warned, when discussing China real estate, that "you’re starting to see that collapse in property and it’s
going to hit the banking system." With this coming days ahead of the massive Agri Bank of China IPO, it is interesting just how much influence the person who has been warning all along that the world is headed on an unsustainable path will finally have, now that the permabullish cackle of the MSM punditry has finally been discredited as futures are about to reenter triple digit reality. Oh yes, and score one for Jim Chanos, and all those who have long been warning about the inevitable Chinese bubble pop. Additionally, in discussing the suddenly prevalent topic of perpetual
stimulus, and particularly envisioning Paul Krugman's thesis that the
world will end unless another couple of trillion are thrown into the
fire of irresponsible deficit spending, Rogoff says "I couldn't disagree more... Just to keep drinking bottles of aspirin because you are worried you are going to get a headache, or it is going to turn into a migraine, it's too much prophylaxis."

Full clip although none of this is news:

 

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Mon, 07/05/2010 - 23:05 | 453751 spekulatn
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Great stuff TD.

Mon, 07/05/2010 - 23:38 | 453797 Survivor Rat
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I think it should be TDs since there are obviously many people posting under the name Tyler Durden. I agree with the sentiment. This is the best reporting on the web. 

 

If you find something interesting send it to tips@zerohedge.com they'll post it if its good, but they'll edit the crap out of it and not give you credit. Small price to pay for the greatest compilation of relevant financial information on the web.

Tue, 07/06/2010 - 00:24 | 453834 Nolsgrad
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credit is given where credit is due noob

Tue, 07/06/2010 - 07:41 | 453989 MarketTruth
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+1  Sent in two tips and BOTH times got credit. Of course it has to be very good/breaking news and not just the same ol' same ol'.

Tue, 07/06/2010 - 00:40 | 453846 Augustus
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The collection of financial information is superb.  It is when they stray into some of the nonsense conspriacy theories or well blowouts ending the world that they lose sight of what makes it a superior blog.  In any event, this is another good catch for good commentary and thanks.

Tue, 07/06/2010 - 03:25 | 453940 jeff montanye
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yes.  which nonsense conspiracy theories were referenced?  the public record is damning enough.

Mon, 07/05/2010 - 23:15 | 453764 tom a taxpayer
tom a taxpayer's picture


He who will not economize will have to agonize.
Confucius
Chinese philosopher & reformer (551 BC - 479 BC)

Mon, 07/05/2010 - 23:18 | 453770 bigdumbnugly
bigdumbnugly's picture

you sure that's not a jesse jacksonism?

Tue, 07/06/2010 - 00:44 | 453852 Temporalist
Tue, 07/06/2010 - 06:57 | 453978 Ted K
Ted K's picture

If there is too much price inflate, you must capitulate.

Bernanke will raise the interest rate, when he is done with the masturbate.

----Legal Pundit Johnny Cochran?????

Mon, 07/05/2010 - 23:18 | 453771 Cursive
Cursive's picture

I don't think more debt is a prophylaxis.  Rogoff is just another Keynesian.  Better than Krugman, but not the solution.  Debt avoidance and debt default are the prophylaxis.

Mon, 07/05/2010 - 23:29 | 453786 bull-market_3.0
bull-market_3.0's picture

I disagree. He's not Keynesian. He's only advocating stimulus if the system gets really bad. 

Paraphrased:

"don't down bottles of aspirin because you are worried about a headache but use fiscal tools if the situation warrants it."

Also, he's studied 800 years of financial crises, so it seems to me that if he believes easy money practices are the most sufficient way of dealing with this problem, then it probably is. Not because he's Keynesian, but because in 800 years of financial crises, that is what he came to the conclusion of. Not necessarily stimulus, but definitely not austerity measures.

Great Post TD. Really bringing the double dip into question.

Tue, 07/06/2010 - 00:42 | 453848 ThreeTrees
ThreeTrees's picture

he's studied 800 years of financial crises, so it seems to me that if he believes easy money practices are the most sufficient way of dealing with this problem, then it probably is

I disagree that his studies lend any further weight to his analysis.  Bernanke's studied the Great Depression more than the vast, vast majority of people and, well...

What matters is the framework,  Bernanke's is broken and Rogoff is only dipping his toe into real Economics when he starts talking about debt-fueled bubbles and deleveraging.  Enough of the trees, it's time to study the forest.

And saying things like "it doesn't necessarily mean we're about to go negative-it's possible, but I wouldn't say that's at all a baseline case," is pussyfooting around the issue.  That's like saying, "It probably won't rain tomorrow.  It's possible!  But we average more sunny days a year than rainy ones, so it probably won't rain."  Puh-lease.

Tue, 07/06/2010 - 02:33 | 453921 bull-market_3.0
bull-market_3.0's picture

To be fair you make a very good point that Bernanke studied the Great Depression at length.

I agree he is playing both sides to an extent, but the future is a function of probabilities. If you watch the clip, he certainly leans heavily one way but mentions the other side so that you know his view is not a 100% conviction. Sort of like how investment advisors will recommend a stock but then proceed to indicate all the risks associated with it. He would look like a fool if he did not acknowledge the possibility of a double dip. Nevertheless he clearly sees it as a low probability event.

In any case the argument for a double dip is still clearly in the air. Further, the argument of loose monetary policy or austerity is also in the air. Frankly, I don't know if Europe (austerity/conservative monetary policy) or America (loose monetary policy/inflationary "defaults") will be better off in the long run and I am open to listen to anyone's argument why Austerity / Default is a better option.

For all the hate on Loose Monetary Policy on ZH, I have yet to see an article that genuinely presents an argument why austerity / defaults would be better for the long term viability/competitive advantage/growth of a country. I welcome any links to articles, TD posting an actual article, or any comments / responses to this post that argue that side. (The media is filled with Pro Keynesian economics and I hear all their arguments. I'd like to hear the other side.)

Tue, 07/06/2010 - 07:23 | 453983 New_Meat
New_Meat's picture

Can I get me a one-handed economist here? - Ned

Tue, 07/06/2010 - 00:59 | 453872 Temporalist
Temporalist's picture

Give me a break he sounds like Blankfein with his "recessions happen every 5,6,7 years" bullshit.  They happen using the bubble/crash economics of the past 70 years but they could be avoided.

Mon, 07/05/2010 - 23:18 | 453772 bull-market_3.0
bull-market_3.0's picture

This is very interesting. He's saying the probability of a double dip is very low. 

I guess we can say good bye to those Dow 6000 hats.

Tue, 07/06/2010 - 00:53 | 453869 dnarby
dnarby's picture

...And put in an order for those GOLD $45,000.00 hats.

They can't pump this sucker w/o forcing liquid fund$ into gold, which will force a COMEX default and...  Whoosh!

Mon, 07/05/2010 - 23:18 | 453773 Misean
Misean's picture

"Just to keep drinking bottles of aspirin because you are worried you are going to get a headache, or it is going to turn into a migraine, it's too much prophylaxis."

Guy thinks the recovery is on the way, and we need to worry about other issues.  He's as blinkered as the rest of the money printers.

Mon, 07/05/2010 - 23:22 | 453777 Mitchman
Mitchman's picture

An unintended but highly ironic BP propaganda commercial before the Rogoff interview.  The most interesting comment is on the "moribund" European banks which unfortunately he did not get the chance to expand on. 

Mon, 07/05/2010 - 23:23 | 453781 spekulatn
spekulatn's picture

most interesting comment is on the "moribund" European banks which unfortunately he did not get the chance to expand on. 

 

 

To be continued, I'm sure.

Mon, 07/05/2010 - 23:21 | 453778 Muir
Muir's picture

...and these people intend to run off
billions of dollars of this currency.

- They wanna obliterate their debts.
- What debts?

Well, all these countries, Shel, they
all owe billions of dollars to the West.

They can never pay it back.
They're too poor. You know that.

Their only hope is worldwide inflation,
but it has to be a huge one.

I mean, so big that paper money's not
worth anything. You use it for wallpaper.

 

...and there's trillions of extra dollars,
francs and marks floating around?

You've got a collapse of confidence
in the currency.

People are gonna panic. There's
gonna be gold riots, atonal music...

...political chaos, mass suicide.

Right? It's Germany before Hitler.
You can see that.

Jesus, I don't know
what people are gonna do...

...when a six pack of Budweiser
cost $1000oo.

That'll be awful.

_

Mon, 07/05/2010 - 23:27 | 453785 zen0
zen0's picture

looks like I picked the right year to quit drinkin'

Tue, 07/06/2010 - 03:36 | 453942 dogbreath
dogbreath's picture

good thing I invested in that little ol still.  lol

Mon, 07/05/2010 - 23:22 | 453779 CrockettAlmanac.com
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Tomorrow morning Bloomberg TV conducted an interview...

 

Hello, Billy Pilgrim.

Mon, 07/05/2010 - 23:22 | 453780 tmosley
tmosley's picture

I don't think I will be "scoring one for them" just yet.  I'm not invested in China one way or the other, but I'm not sure that property in China is at the same level of bubbliciousness that it is and was recently in the US, given the % down requirements (30% for first home, 50% for second).  It seems to me that at worst, prices just stop going up, or stop going up so fast.

I would index the rise in property values in Chinese cities to the rise in property values in US cities on the Eastern seaboard as the US industrialized.  I don't have any numbers to reference, but as with all things industrializing, the numbers would look like a bubble to people outside of the "game changing" frame of mind.  Prices might get out of hand, but they aren't going to collapse by mroe than the 30-50% down payment requirements.  People aren't going to be walking away to the extent that they have in the US.

But then, I could be totally wrong.  I haven't done my homework to the extent that I do in any sector (usually, I research for at least 3 months, more often a year before I put in more than 1%) before commiting any significant portion of my portfolio.

Mon, 07/05/2010 - 23:40 | 453800 Muir
Muir's picture

U.S. = Champagne Bubbly "froth." (courtesy of Mr. Geenspan)

China = "I am the Walrus"

Mon, 07/05/2010 - 23:52 | 453809 First There Is ...
First There Is A Mountain's picture

30-50% (I haven't personally seen the 50% figure bandied about) down goes a long way towards mitigating the fallout of a housing collapse, but a Housing Price to Income Ratio in excess of 20 in some areas should give everyone reason for pause . . . They may indeed be plunking down a significant down payment, but any real weakness in the economy will expose those home prices as exorbitant to say the least, and therefore, entirely unserviceable.

No one will be in a hurry to drop jingle mail on a property in which they are so heavily invested, but I believe they will simply be forced to walk away as a function of unreasonable debt service given falling wages (which is an almost certainty with their largest trading partners screaming for "austerity"). Just my .02 . . .

Tue, 07/06/2010 - 00:47 | 453858 Augustus
Augustus's picture

The property market is about the only investment available for wealthy Chinese. Much of the empty stock is paid for. If it does have a 50% LTV loan is is still not wiped out in a decline.

It was a while ago when I read that the average income of an URBAN Chinese worker is $9 a day. those people are still trying to own a Vespa or an air conditioner. A decline in housing prices will affect them the same as a downturn in the prices of Monet paintings would affect a mechanic in DeMoine.

Tue, 07/06/2010 - 00:55 | 453870 dnarby
dnarby's picture

"The property market is about the only investment available for wealthy Chinese."

...About the only. 

About, yes indeedy.

Tue, 07/06/2010 - 00:55 | 453871 dnarby
dnarby's picture

...

Tue, 07/06/2010 - 01:04 | 453877 First There Is ...
First There Is A Mountain's picture

Am I to assume, then, that you're talking about wealthy Chinese speculators who have snapped up large numbers of apartments in areas like Guangzhou, Shanghai, Shenzhen, Beijing, etc in the hopes that they would forever appreciate? If that's the case, don't you think there are more parrallels between their housing market and ours (minus the no-doc liar loans of course) but with some similarities in that many Americans leveraged to the hilt to acquire 3,4 or even 5 homes?

I don't doubt that many of those units are paid for, but that doesn't guarantee that they won't depreciate dramatically. Not sure if the Chinese treat their homes as ATMs, but if so, there are certainly repercussions for declining home values. Furthermore, don't you think many besides the Chinese upper crust is getting in on the "housing boom"? I was in China in early 2007 and I got the impression that far more "peasants" were getting a piece of the action than you've suggested here, and I can only assume lending got considerably more liberal since then. Still, 30-50% down beats the hell out of a janitor and receptionist stepping into a $350K McMansion on combined $60K.

Tue, 07/06/2010 - 03:17 | 453937 Circumspice
Circumspice's picture

$60k on a $350k house ain't half bad compared to what some people were putting down. And in some areas of the country the monthly payments (mostly pretax; 6% = $1700/mo) were doable for couples with two low-income jobs. I'm not saying it's the best loan out there, but if all the subprime loans were to two people with jobs putting around 20% down, we wouldn't have been in the mess we were in.

On the other hand, banks in the Bay Area would let you get away with 10% down, and then you could go across the street and get a HELOC for the remainder. Some people literally had nothing down. Banks like Countrywide would let you make 1% minimum payments and then just defer the interest. I moved to SF in early 2007, and asked someone why in God's name they would make loans like that. They responded, "Well, even if they can't make the payments, their home will still go up in value and they can sell it."

Now that's bubblicious.

Tue, 07/06/2010 - 07:13 | 453982 DudleyDoRight
DudleyDoRight's picture

That is the lesson the regulators imparted to the industry when they allowed Fleet bank to go on its rapacious lending tear in the south in the early to mid-1990s.  The regulators did not care that Fleet was making loans to people that could not repay.  Rather, everything was hunky dory as long as loan LTV was 50% and HPA kept rising.

Thus it seems to me that a consumer protection agency is necessary for systemic stability.

Tue, 07/06/2010 - 10:13 | 454101 First There Is ...
First There Is A Mountain's picture

Sorry - should have been clearer. Meant to say combined $60K income . . .

Mon, 07/05/2010 - 23:25 | 453783 HCSKnight
HCSKnight's picture

Everyone should watch this video, one will learn a lot more about ZH's penchant for Chicken Little headlines than reflecting what was said...

 

Mon, 07/05/2010 - 23:44 | 453802 zhandax
zhandax's picture

Key BS indicator on the front end, "in our book"

Mon, 07/05/2010 - 23:44 | 453804 Eric Cartman
Eric Cartman's picture

Krugman is such a fool. Doesn't say much about winning the Nobel Prize. Than again, the reason he won the Nobel Prize has nothing to do with this global economic disaster. It's like winning a pie eating contest and then thinking you are so great with food that you're gonna give nutritional advice. 

Tue, 07/06/2010 - 03:19 | 453939 Circumspice
Wed, 07/07/2010 - 04:06 | 456180 Eric Cartman
Eric Cartman's picture

lol... he looks ready!

Mon, 07/05/2010 - 23:57 | 453810 williambanzai7
williambanzai7's picture

There are four places Chinese men like to put their money...

Horse racing

Real estate

Stocks

Mistresses and massages

In that order

Draw your own conclusions

Tue, 07/06/2010 - 01:37 | 453897 Temporalist
Tue, 07/06/2010 - 03:30 | 453941 williambanzai7
williambanzai7's picture

Gold is number 1 for the women. The men like to buy it for their mistresses.

Tue, 07/06/2010 - 00:20 | 453832 Spitzer
Spitzer's picture

This chick has a unique accent, she ends the last syllables of her words so quickly.

Tue, 07/06/2010 - 00:34 | 453840 dehdhed
dehdhed's picture

i think i heard her say once that she's canadian

Tue, 07/06/2010 - 02:00 | 453907 Spitzer
Spitzer's picture

bs, really ? I just assumed that she never crossed the pond

Tue, 07/06/2010 - 00:44 | 453854 Jim_Rockford
Jim_Rockford's picture

Kind of like Marla in the trillion dollar pyramid?

Tue, 07/06/2010 - 00:42 | 453849 Akrunner907
Akrunner907's picture

Real estate prices have to slide........This a near zero cost for the economy because a lot of it will be absorded by loses in paper equity.  It will not be all painless, but it will allow income levels to support the coming taxes.  Of course that is only if the wheels don't come off the cart....

Tue, 07/06/2010 - 00:44 | 453855 Caviar Emptor
Caviar Emptor's picture

On the subject of Double Skinny Dip: We're still deep in the ooze so it's not technically a second dip. It's a depression. NBER was wise not to call an end to the first "dip": Employment, real GDI and GDP have not returned to pre-recession peak.  

On China property market: A huge often unstated question still hanging is whether the physics of real estate are the same in a state planned and controlled economy. Technically they could order people to buy property. They could dictate prices. However China has demonstrated more adherence to market physics since the collapse of the USSR (right around when Fed monetarists and Wall Street led the US into a more centrally planned economy). In a laissez faire system, there would be huge booms and busts. Best guess? The answer will lie somewhere in between. Just as we here in the US have intervened repeatedly to avert market forces and support real estate prices, so may they do the same. 

Tue, 07/06/2010 - 02:58 | 453934 Ragnar D
Ragnar D's picture

In a laissez-faire system, there would be business cycles--expansions and contractions.

It is the central planners' trying to avoid the contractions that gives us bubbles and depressions.

Tue, 07/06/2010 - 01:15 | 453888 Mark Beck
Mark Beck's picture

Where's the beef? I feel cheated. Can I get that time back please.

The only real consistant theme was negative debt effects on financial sector performace. Real estate price decline, and relience on equities.

So what are the effects of a loss in financial sector confidence on equities? What is the FED response?

Mark Beck

Tue, 07/06/2010 - 01:37 | 453898 Alethiometer
Alethiometer's picture

http://www.youtube.com/watch?v=H1iR2Wi3u5o&feature=player_embedded#!

 

Someone is getting a nasty voicemail from Bernake & Co. for breaking ranks on popular reviews for Keynes' Tomb on Magic and Sorcery.  C'mon Rogoff!  Get on board for the big win dude!  FED is just doing this so they can publish reports using "sextillion" instead of the incredibly boorish billions & trillions rhetoric. 

Tue, 07/06/2010 - 01:41 | 453899 Temporalist
Temporalist's picture

I wish I could buy a home in China near one of these areas:

http://www.chinahush.com/2009/10/21/amazing-pictures-pollution-in-china/

Tue, 07/06/2010 - 01:52 | 453904 DoctoRx
DoctoRx's picture

Krugman won the Nobel for the same reason Obama won it.  Politics.  Both men have abiding faith in the power of the US Govt to do good things.  It's a shame they're wrong.

Tue, 07/06/2010 - 03:41 | 453943 Sudden Debt
Sudden Debt's picture

America can't afford it's last chance for inflation. And that must come from china. If their real estate where to colapse, it's all over for us.

Tue, 07/06/2010 - 03:58 | 453944 badgerman67
badgerman67's picture

There is vacant property all over Asia its not just China. Purchased off plan on spec for "investment purposes", built and vacant. Check out some of these buildings, there are NO LIGHTS at night.  In some cities and buildings 20% occupancy would be considered good.  Plug that in your pro forma.  Rented 1 year out of 5 if you are lucky.  In any other economy it would be considered a non performing asset.

As for only the wealthy participating in real estate that is simply not true.  The participation has been much greater in this cycle.  Saying its only wealthy Chinese, Thai, Malay, Vietnamese etc... is not accurate.  There is a herd mentality everywhere and Asia is no exception.  No doubt most people know someone that made a "fortune" on their investment condo.  Realized or on paper it does not matter.  So they bought one because everyone makes money in real estate and it only goes up.  Here is an interesting anecdote.  Friend of a friend owns a car free and clear, she wants to take out a loan on the car to use as a down payment to purchase a condo.  WTF!  Sounds like some of the stories I heard in LA in 04-06'.

As long as you are buying they are building.  On to the next development.  These guys will not stop even when there is doubt as to if the buyers will show up.  They will rationalize the risk.  Markets will improve by completion date, our project is better, we will reduce costs and offer a better project.  Forge ahead, develop or parish.  There is your tipping point.  Eventually someone gets left with out a chair when the music stops.  Where is the greater fool?  It's these developers and buyers on the margin, deep into the cycle,  that have failed to identify their exit strategy.  Its everywhere not just China, Bangkok, Ho Chi Minh, Jakarta, the list goes on.  Singapore with their sub 3% rates that roll every 3 years.  Can you spell disaster in the making.  You can buy a lot of home when rates are sub 3%.

In China the 50% down for a second home only started early this year.  Last year they discounted mortgage rates for first time buyers better known as a teaser rate.

Any of you that live in Asia have no doubt seen the Capitaland commercial, "50% of the buyers in China buy all cash".  Assuming thats true, I would be more interested to know how may purchased all cash on their initial transaction and then went for a cash out refi to purchased the next condo, or two.  If the real estate is not leveraged maybe the business is.  All that lending the last two years found its way to inflation and it appears ultimately it found its way to real estate.

When they stop building here there will be a lot of wealth tied up in an illiquid investment with high transaction costs.  Will these chinese exporters feel like spending with these paper losses and exports still down.  What of the newly unemployed construction workers, brokers, mortgage brokers, etc....  Real estate employs quite a few people in Asia.  Since face is more important than ROI in asia most will not sell until they become forced sellers.

Tue, 07/06/2010 - 04:23 | 453949 VK
VK's picture

+ Chinese condo! Real estate prices are 12-13x median income in Beijing and Shanghai. It's ridiculous. Also lots of the vacancies are a result of the fact that Chinese like to buy new homes and not 'used' ones. If someone has lived there before it's price goes down. It's a spectacular bubble, one of many across the world. When these burst, there is no turning back.

Tue, 07/06/2010 - 07:52 | 453993 primefool
primefool's picture

Agree. The rationalizations are always rolled out during every bubble. I remember Dubai realestate would never go down - because all the vast oil wealth in the region would keep bidding it up. All the soccer stars and movie stars would always want to buy a house in an artificial island built in the shape of a world map. Sure - how did that work out?

Same in Asia - mortgage rates at 1.5% - essentially free money. developers buying their own units to prop up markets. Of course evryone is buying for "all cash" - so why the hell are mortgage rates so low? Asia is the 21st century growth story - buy buy buy. Sure.

Tue, 07/06/2010 - 05:07 | 453959 Oh regional Indian
Oh regional Indian's picture

As we watch liquidity sloshing all over the world, now in this commodity, now in this real estate, now in this sector...whatever, it's always good to remember who is the ringmaster and how they can stop the music whenever they want.

Even simple minds would conclude without a hair of doubt that China was always a bubble. 10% YOYOYOYOY.

Infinite Growth= Misguided or criminal optimism

But, of course, in this bigger picture, in this unique time, all dem bubble's will bust wid bombs.

Geo-Politics took over from geo-finance as THE prime-mover sometime after September 2008.

Once that is clear, working backwards is easy.

ORI

http://aadivaahan.wordpress.com

Tue, 07/06/2010 - 06:15 | 453973 dogbreath
dogbreath's picture

I will comment to my own post.  how high can gold go with this kind of stupidity. 

Tue, 07/06/2010 - 07:12 | 453980 Miles Kendig
Miles Kendig's picture

Ken Rogoff is so polite.  Stimulus is just another word an addict might use when referring to their medicine. 

Tue, 07/06/2010 - 08:16 | 454002 Sqworl
Sqworl's picture

Hi Miles...let's consider that they just voted not to impose property taxes on RE..they only tax transaction...:-)

Tue, 07/06/2010 - 07:57 | 453996 primefool
primefool's picture

Asia is now the leading economic bloc in the world - you see. because .. they invented ... well everything - you see....like for instance - Electricity... no Wait... like cars -- no wait - computers ... no wait a minute ... Internet ... hmm No... packaged consumer goods.... no no .... TV? .. Hmmm NO. Wait a minute .. did they not invent air-conditioning ? Hmmm NO.

So What the hell? They did'ny invent Anything? Surely..... Dont call me Shirley.

Tue, 07/06/2010 - 12:51 | 454572 dogbreath
dogbreath's picture

Who junked this.  It was funny.

Tue, 07/06/2010 - 07:59 | 453998 primefool
primefool's picture

OK OK - Well the Asians did invent propert speculation - right? Hmm NO.

Tue, 07/06/2010 - 09:50 | 454039 dantes1807
dantes1807's picture

I think China will suffer the same fate at the US. Most Chinese cannot afford all of this property. It is owned by developers and a concentrated group of wealthy investors. In the end, someone must buy all these condos to live and use. Where are the real buyers?

Tue, 07/06/2010 - 10:49 | 454197 Anarchist
Anarchist's picture

The goal of the Chinese government is to move hundreds of millions of peasants from the countryside into major urban areas. All the "excess" housing will have future tenants at some point in the future. Now if the Chinese government cannot create enough jobs near the urban centers, there will be bigger problems than empty apartments.  

The US on the other hand has more housing than people. There is also a major decline in many jobs that are never coming back. Similar problems exist in Israel where there is more housing than Israelis and there is a forecast of a decline in jobs. Of course the US taxpayer is on the hook for those problems.  

Tue, 07/06/2010 - 18:09 | 455575 Rip Toff
Rip Toff's picture

Rogoff was quite adamant that there are moribund banks in Europe and they are in denial regarding their health, isn't this the same Stateside where the denial is made more palatable via the FASB changes?

 

Fri, 08/20/2010 - 10:26 | 532738 herry
herry's picture

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Sat, 02/12/2011 - 02:02 | 955288 shawnlee
shawnlee's picture

The US on the other hand has more housing than people. There is also a major decline in many jobs that are never coming back. Similar problems exist in Israel where there is more housing than Israelis and there is a forecast of a decline in jobs. Of course the US taxpayer is on the hook for those problems. 70-536 \ 70-448 \ 220-702 \ 650-568 \ 1z0-051

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