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China's Housing Problem In One Chart
The one problem with every Ponzi scheme is that it must constantly grow, in both demand and supply terms, for the mass delusion to continue. The other problem, of course, is that every Ponzi scheme always comes to an end.... which may have just happened in China where as the chart below shows, as of this moment at least, the supply side to the Chinese housing ponzi (and recall that in China the bubble is not in the stock market like in the US, but in housing) has slammed shut.
Source: BofA
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If you can't wait for a tsunami or earth quake to unbuild some housing, you need to find some other method, ummm???
I think there will be an earthquake over there... but not a natural one. This chart is a little misleading tho... last january was an outlier the other way so y-o-y it will skew it the other way.
Slightly OT: http://www.youtube.com/watch?v=rB0Le3oM1b8 -- BLAME IT ON THE RAIN ... this is THE song for earnings season.
All I hear about is the Chinese buying land over here, even in Detoilet. Can't they drop a dime on some prime real estate in their own back yard? Start an adopt-a-peasent program or something.
Jeez, do I have to think of everything? Another problem solved.
/sarc
I'll trade some real estate for teen and twenty something daughters ... they get a twofer ,, gain real estate , lose dowry expense ..
Sum ting wong?
Don't worry, all numbers are subject to review and summary alteration.
They only use mark-to-make-believe statistics, so this should be fixed by mourning.
Wi Tu Hi
Aw yu goad bewong tu us !
If the USD/CNY continues beyond the critical level of 6.20, it will be interesting to see if the Chinese will sell their supplies of gold. Was it just another commodity to them? Was it individuals or institutions buying the gold?
Goad no ruv mi rong time!
In fact, this is a nice, testable hypothesis:
-If gold was bought by the Chinese either as a hedge or part of a scheme to build a metal-backed currency, and then their economy starts tanking, they should buy more of it or at least not sell.
-If gold was bought as just another commodity to unlock the carry trade, and then their economy starts tanking, they should sell.
Confucius say, "Man kicked in scrotum left holding the bag."
A Chi-con in every pot..I says.
RIPS
When push comes to shove I think the Chinese will prove to be better printers than the FED.
They already are.
I am rather hopeful that they will learn from Iceland and Russia. Default, clear out the malinvestments and move on. I believe they can survive 2-4 years of a down economy as the rubble is cleared out. I doubt they will be able to survive a Japan style 20 year doldrum economy without a political uprising.
a state run economy is and will forever be about saving themselves and the oriental culture's prime motivation is always to "save face". They will never admit wrong doing or even come close to doing the right thing for the populace or their country, in the end it will all be about themselves...........sound familiar??
Not to mention, the Japanese at least were making some great products for their day … consumer electronics, cars, videogames, etc. and they were in demand here. The Chinese make a lot of stuff but mostly it is just cheap and plentiful, not world-beating, and where it is world-beating like iPhones, it it’s not theirs. They are going into their debt hangover without some of Japan’s advantages. I don’t think they’ll go broke but I don’t see how they are going to escape the middle-income trap.
So the state will start giving away housing to their people? Where have I seen this all before?
Detroit
They'll give away the ones they don't bulldoze. Good idear Obama - broken windows for everyone!
The China housing problem is that there are too darn many. The solution is to raze them to the ground and build moar.
Sorry I was channeling Krugman for a moment there. I don't know what came over me.
Too darn many Chinese? You're solution seems rather extreme, but it may fly at the CPC headquarters.
In China they require 60-70% down payments. Any housing crash will not set off a huge debt tsunami like it did in the USA.
I'd be curious how many 1st, 2nd, 3rd, etc. liens there are on properties. God knows copper is pledged to too many parties, even after it's been sold in some cases. Fraud is rampant.
Per capita home ownership rate is around 200%. I think you may underestimate the potential pitfalls.
70% for a second house. The min downpayment for the first home is 30%.
...and there it is. Cheers, iLiquid.
try inverting the chart like they do at BLS
Someone is betting for Chinese Real Estate Default....HSBC ?
How do you get a negative 30% housing starts...it should just drop to 0...you cant undo housing starts....
If there were 1000 last month and only 700 this month that equates to a drop of 30%.
you should have left him in the dark
breaking news! Belgium to buy all the distressed homes in China. problem fixed
When the time comes, buy FXP, inverse ETF of FXI (China Large Cap). Don't hold it too long, inverse ETFs slowly decay when nothing's going on.
In that case, counterparty risk could destroy the seemingly profitable short trade. When things go seriously bad, capital control will be imposed and the cross-border ETF will not be able to track the underlying.
ho -e-chit we be fuked
Bad weather in China?
Stocks pinned at highs ahead of a Fed decision that has implications of not just the economy but one of war. The Fed's policy is a driving force behind Nation-States in the east who are tired of such policy.
LMFAO!!!!! Yep, that`s pretty bad!!!!!! LMFAO!!!!!!
Jaw dropping ... here it comes ...
China is maybe an example which shows that investment in housing is motivated by their cultural obsession to own house before even getting married (something impossible in many of the developed Western democracies). In the last housing report from Toronto,we can see that people are still crazy about entering into the housing market, even though there were mayor problems in 2012, and prices have not been corrected well enough. So we are witnessing a decrease in sales, while the prices are substantially gone up again. To conclude, it is really a strange world we live in.
"even though there were mayor problems in 2012"
Freudian slip, I assume.
Awesome!
Recieved a bag off stones in the mail today and a note. Dont forget the windows lv Mr K.
I am confused.
Here is what the Party will do:
Extend/pretend, holding the door open as long as feasible for the inner circle to get aboard the lifeboats bound for Elysium - meaning, selling out, moving their cash to, par example, HKG or SNG or to the still-cheap RRE markets of desirable portions of the US of A. The more sophisticated will put on their short positions;
Do the Stop and Drop on the non-insider, struggling new middle class. The hand-to-mouth mouthbreathers not even figuring in the equation;
Blame it on Weiguoren (Lit., 'Outside people' - malign foreigner influence).
The Party sees the People as children to reward and punish. They can depend on the Chinese populace to absorb the pain - and they will, until they won't - but that may be generations away from uprising and by that time the Party members won't be around. They will use the military and police (not a whit of difference) to control the populace while they sell out.
If they really wanted to get very nasty they could EMP the grid and plunge the country into total dark; come back in five years and see who's left alive. And take over control all over again.
Here's how fucking stupid americans are http://www.youtube.com/watch?v=vuUp0Np7lX4
Maybe related to this http://www.theatlantic.com/features/archive/2014/03/the-toxins-that-thre...