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The Music Just Ended: "Wealthy" Chinese Are Liquidating Offshore Luxury Homes In Scramble For Cash

Tyler Durden's picture




 

One of the primary drivers of the real estate bubble in the past several years, particularly in the ultra-luxury segment, were megawealthy Chinese buyers, seeking to park their cash into the safety of offshore real estate where it was deemed inaccessible to mainland regulators and overseers, tracking just where the Chinese record credit bubble would end up. Some, such as us, called it "hot money laundering", and together with foreclosure stuffing and institutional flipping (of rental units and otherwise), we said this was the third leg of the recent US housing bubble. However, while the impact of Chinese buying in the US has been tangible, it has paled in comparison with the epic Chinese buying frenzy in other offshore metropolitan centers like London and Hong Kong. This is understandable: after all as Chuck Prince famously said in 2007, just before the first US mega-bubble burst, "as long as the music is playing, you've got to get up and dance." In China, the music just ended.

But more so than mere analyses which speculate on the true state of the Chinese record credit-fueled economy, such as the one we posted earlier today in which Morgan Stanley noted that China's "Minsky Moment" has finally arrived, we now can judge them by their actions.

And sure enough, it didn't take long before the debris from China's sharp, sudden attempt to "realign" its runaway credit bubble, including the first ever corporate bond default earlier this month, floated right back to the surface.

Presenting Exhibit A:

Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland.

Said otherwise, what goes up is now rapidly coming down.

Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43 percent of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced.

 

The rush to sell coincides with a forecast 10 percent drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. Earlier this week, the looming bankruptcy of a Chinese property developer owing 3.5 billion yuan ($565.25 million) heightened concerns that financial risk was spreading.

 

"Some of the mainland sellers have liquidity issues - say, their companies in China have some difficulties - so they sold the houses to get cash," said Norton Ng, account manager at a Centaline Property real estate office close to the China border, where luxury houses costing up to HK$30 million ($3.9 million) have been popular with mainland buyers.

Alas, as the recent events in China, chronicled in minute detail here have revealed, the "liquidity issues" of the mainland sellers are about to go from bad to much worse. As for Hong Kong, it may have been last said so long ago nobody even remembers the origins of the word but, suddenly, it is now a seller's market:

Property agents said mainland Chinese own close to a third of the existing homes that are now for sale in Hong Kong - up 20 percent from a year ago. Many are offering discounts of 5-10 percent below the market average - and in some cases as much as 20 percent - to make a quick sale, property agents and analysts said.

Also known as a liquidation. And like every game theoretical outcome, he who defects first, or in this case sells, first, sells best. In fact, since panicked selling will only beget more selling, watch as prices suddenly plunge in what was until recently one of the most overvalued property markets in the world. And with prices still at nosebleed levels, not even BlackRock would be able to be a large enough bid to absorb all the slamming offers as suddenly everyone rushes to cash out.

The biggest irony: after creating ghost towns at home, the Chinese "uber wealthy" army is doing so abroad.

In a Hong Kong housing development called Valais, about 10 minutes drive from the Chinese border, real estate agents said that between a quarter and a half of the 330 houses are now on sale. At the development's frenzied debut in 2010, a third of the HK$30-HK$66 million units were sold on the first day, with nearly half going to mainland China buyers.

 

Dubbed a "ghost town" by local media, the development built by the city's largest developer, Sun Hung Kai Properties Ltd (0016.HK), is one of many estates in Hong Kong where agents are seeing an increasing number of Chinese eager to sell.

 

"Many mainland buyers bought lots of properties in Hong Kong when the market was red-hot three years ago," said Joseph Tsang, managing director at Jones Lang LaSalle. "But now they want to cash in as liquidity is quite tight in the mainland."

Perhaps our post from yesterday chronicling the crash of the Chinese property developer market was on to something. And of course, as also described in detail, should China's Zhejiang Xingrun not be bailed out, as the PBOC sternly refuted it would do on Weibo, watch as the intermediary firms themselves shutter all credit, and bring the Chinese property market, both domestic and foreign, to a grinding halt (something he highlighted in our chart of the day).

Meanwhile, the selling rush is on.

In a nearby development called The Green - developed by China Overseas Land & Investment (0688.HK) - about one-fifth of the houses delivered at the start of this year are up for sale. More than half of the units, bought for between HK$18 million and HK$60 million, were snapped up by mainland Chinese in 2012.

Because so much changes in just over a year.

"Some banks were chasing them (Chinese landlords) for money, so they need to move some cash back to the mainland," said Ricky Poon, executive director of residential sales at Colliers International. "They're under greater pressure from banks, so they're cutting prices."

 

In West Kowloon district, an area where mainland Chinese bought up close to a quarter of the apartments in many newly-developed estates, some Chinese landlords are offering discounts on the higher-end, three- to four-bedroom apartments they bought just a few years ago.

 

This month, a Chinese landlord sold a 1,300 square foot (121 square meter) apartment at the Imperial Cullinan - a high-end estate developed by Sun Hung Kai in 2012 - for HK$19.3 million, 17 percent less than the original price. The landlord told agents to sell the flat "as soon as possible," said Richard Chan, branch manager at Centaline Property in West Kowloon.

 

In the same area, a 645 square foot, 2-bedroom flat in the Central Park development was sold in just two days after the Chinese owner put it on the market at HK$6.5 million in what agents called the year's best bargain - the cheapest price for a unit of its kind over the past year.

Don't worry there will be many more bargains. Why? Because what was once a buying panic - as recently as months ago - has finally shifted to its logical conclusion. Selling.

"The most important thing for them is to sell as soon as possible," Centaline's Chan said. "In the past two weeks, those who were willing to cut prices were mainland Chinese. It is going to have some impact on the local property market, that's for sure."

Indeed. And once the Hong Kong liquidation frenzy is over, and leaves the city in a state of shock, watch as the great Chinese selling horde stampedes from Los Angeles, to New York, to London, Zurich and Geneva, and leave not a single 50% off sign in its wake.

The good news? All those inaccessibly priced houses that were solely the stratospheric domain of the ultra-high net worth oligarch and criminal jet set, will soon be available to the general public. Especially once the global housing bubble pops, which may have just happened.

 

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Wed, 03/19/2014 - 21:14 | 4570299 williambanzai7
williambanzai7's picture

As goes Hong Kong, so goes, Singapore, and London and New York and Vancouver and LA and...

Wed, 03/19/2014 - 21:16 | 4570311 sixsigma cygnus...
sixsigma cygnusatratus's picture

...Toronto, and Australia, and...

Wed, 03/19/2014 - 21:23 | 4570354 kaiserhoff
kaiserhoff's picture

Great Tyler.

  I can finally afford a crack house in Vancouver;)

Wed, 03/19/2014 - 21:37 | 4570422 i_call_you_my_base
i_call_you_my_base's picture

Not just any crack house, the best on the block!

Wed, 03/19/2014 - 21:52 | 4570482 fonestar
fonestar's picture

This probably won't effect fonestar in Canada though?

Wed, 03/19/2014 - 22:03 | 4570521 in4mayshun
in4mayshun's picture

Probably not. Because like gingers, Canadians have no soul and don't matter.

Wed, 03/19/2014 - 22:09 | 4570550 linniepar
linniepar's picture

Doooooom!

Thu, 03/20/2014 - 00:05 | 4571031 knukles
knukles's picture

Fuck the EU
And China

Thu, 03/20/2014 - 00:22 | 4571098 Freddie
Freddie's picture

Ho Lee Fuk

Sum Ting Wong

Thu, 03/20/2014 - 00:42 | 4571150 discopimp
discopimp's picture

Ho Lee Fuk

Sum Ting Wong

Never gets old!!!

Thu, 03/20/2014 - 02:14 | 4571311 National Blessing
National Blessing's picture

Zero Hedge has been predicting the death of China for a long long time.  It's starting to feel like Linus in the pumpkin patch.  Bitches.

Thu, 03/20/2014 - 02:32 | 4571338 TruthInSunshine
TruthInSunshine's picture

I just saw as of 2:30 est that China Mobile only missed revenue by a mere 6 billion.

Thu, 03/20/2014 - 03:06 | 4571395 AldousHuxley
AldousHuxley's picture

Same old US playbook from Japan days....stroke new money Asian ego so much with Fed money that they don't know what to do with it internally that they park the cash right back into overvalued foreign real estate, then let the pieces fall to reset to market value and new money becomes no money as the victims of the last ones holding the ponzi bag. By the time they realized that they have been  had, US has already moved on to the next hungry ex-community materially poor country and sell capitalism again starting with dictator backed industrialization....Vietnam?

Thu, 03/20/2014 - 04:31 | 4571457 tabasco71
tabasco71's picture

You're touching on a philosophy of mine with this comment - that the cold war was the result of the US 'doing it' to Russia in the 70's and them not liking the resulting fiasco.  So the question is will history repeat itself with China?  After the dust has settled, I suspect the next landfill large enough to bury 2-3 generations of Western debt is Africa... rest stop in Vietnam seems feasible

Thu, 03/20/2014 - 05:14 | 4571490 Occident Mortal
Occident Mortal's picture

Africa is the only remaining part of the world not saturated with debt.

 

Thu, 03/20/2014 - 06:43 | 4571564 negative rates
negative rates's picture

That's alright, cause the music is playing somewhere.

Thu, 03/20/2014 - 09:02 | 4571823 1000 splendid suns
1000 splendid suns's picture

Deflationary home prices, inflationary food prices.

Thu, 03/20/2014 - 10:10 | 4572077 GeezerGeek
GeezerGeek's picture

Now if only we all lived in gingerbread houses, we could save money by eating our residences.

Thu, 03/20/2014 - 10:13 | 4572098 Joe Davola
Joe Davola's picture

Mr Poon's trying to find the sugar now..

Thu, 03/20/2014 - 10:17 | 4572117 dontgoforit
dontgoforit's picture

Does that make them rich?

Thu, 03/20/2014 - 10:32 | 4572174 LFMayor
LFMayor's picture

just rich in culture.  You know, construction with cow shit, clitorechtomies, eating pygmies and screwing virgin pre teens to cure aids.

Thu, 03/20/2014 - 10:50 | 4572255 jeff montanye
jeff montanye's picture

"As for Hong Kong, it may have been last said so long ago nobody even remembers the origins of the word but, suddenly, it is now a seller's market"

the entire thrust of the article is that it is forced selling, aka liquidation.  that is not a sellers' market.  it is a buyers' market.  whose market it is is determined by who has the power to set the price.  wish the authors would read the comments and correct.

http://www.merriam-webster.com/dictionary/seller's%20market

Thu, 03/20/2014 - 10:57 | 4572290 NotApplicable
NotApplicable's picture

Like Tyler said, "it's been so long."

Everyone's forgotten the correct terminology!

Welcome to Bizarro World.

Thu, 03/20/2014 - 13:49 | 4573391 jeff montanye
jeff montanye's picture

"As for Hong Kong, it may have been last said so long ago nobody even remembers the origins of the word but, suddenly, it is now a seller's market"

the entire thrust of the article is that it is forced selling, aka liquidation.  that is not a sellers' market.  it is a buyers' market.  whose market it is is determined by who has the power to set the price.  wish the authors would read the comments and correct.

http://www.merriam-webster.com/dictionary/seller's%20market

Thu, 03/20/2014 - 10:09 | 4572073 GeezerGeek
GeezerGeek's picture

Rethink your philosophy. The Cold War existed long before the 1970s. Who was it that said "We will bury you?" Hint: not the U.S. And what, exactly, do you think the US was 'doing'? 

And it was the USSR at that time. Whose fault was it in your 1070s philosophy? Nixon? Ford? Carter?

Thu, 03/20/2014 - 04:47 | 4571467 Oracle 911
Oracle 911's picture

>>Vietnam?

Yeah this is the plan. But it will not work, because the Chinese gov will sink the US dollar.

Thu, 03/20/2014 - 05:40 | 4571512 Tall Tom
Tall Tom's picture

Do you really think that this is the first time we did it? Look at Japan in the 1970s and 1980s. In the 1980s all of the hype was that Japan was going to buy up America. All of those borrowed US Dollars went to Japan and Japanese Corporations. It fueld such a Bubble that the Nissei was trading at 40,000 and price of prperty in Tokyo was going through the roof.

 

Then what happened to Japan? Same fucked up game. It will be the same for China.

 

Now I am not writing this because I support it because I do not support fraud. Regardless of my desires it is what it is. Same as it ever was.

Thu, 03/20/2014 - 05:13 | 4571488 Tall Tom
Tall Tom's picture

No. I do not think that Vietnam is the next target. Close. I think that Burma is the next target. They shook off the shackles and are prime for the new Ponzi.

Thu, 03/20/2014 - 08:27 | 4571714 matrix2012
matrix2012's picture

AldousHuxley,

 

I wonder what size is the Vietnam to satiate next Ponzi scheme selling capitalism... hardly plausible. A few of Vietnam size may explain, but only one won't do.

Thu, 03/20/2014 - 02:37 | 4571345 soopy
soopy's picture

Yeah it fucking does.

Thu, 03/20/2014 - 00:23 | 4571111 old naughty
old naughty's picture

"As goes Hong Kong, so goes, Singapore, and London and New York and Vancouver and LA and..."

...and all tourist haven(s); and in fact, all residential housings.

If China has 65 million, how many we have on this over-priced planet? And how many after foreclosures !

Run to the exits !

Thu, 03/20/2014 - 00:30 | 4571130 Spitzer
Spitzer's picture

Vancouver

Vancouver

Vancouver

Vancouver

Vancouver

Vancouver

 

Thu, 03/20/2014 - 01:05 | 4571170 Element
Element's picture

BREAKING NEWS - MH370

Australian PM Tony Abbott has just announced in Parliament that an Australian AP-3C Orion may have located "credible" floating wreckage from aircraft about an hour ago.

They have notified Malaysia's govt:

http://www.smh.com.au/federal-politics/political-news/missing-malaysia-a...

 

They still need to get out there (Southern Indian Ocean west of Perth) with ships to verify it for sure. This will take days, unless they have a frigate with a heli and swimmer nearby already (or US Marines V-22 maybe as RAAF tankers could keep them refuelled).

Thu, 03/20/2014 - 01:08 | 4571202 The_Prisoner
The_Prisoner's picture

HMAS Success is on route. It should get there in a week, if the sailors could stop screwing each other out.

http://www.smh.com.au/national/its-hmas-sexcess-20100403-rkql.html

 

 

Thu, 03/20/2014 - 01:25 | 4571219 Element
Element's picture

Map of area:

http://a.tiles.mapbox.com/v3/davidtriggs.b8370eov/page.html#3/-4.65/67.68

 

UPDATE from ABC shows area properly.

http://www.abc.net.au/news/2014-03-20/raaf-en-route-to-possible-debris-f...

From twitter US naval aircraft is apparently reporting significant radar returns on the surface in the area. Several aircraft converging on site. Should be able to get some confirmation or otherwise soonish.

Thu, 03/20/2014 - 02:24 | 4571329 thestarl
thestarl's picture

I would'nt believe anything that came out of that stupid pricks mouth

Thu, 03/20/2014 - 06:44 | 4571565 old naughty
old naughty's picture

wait, let me get this straight...

you mean all authorities, no?

Thu, 03/20/2014 - 10:17 | 4572110 GeezerGeek
GeezerGeek's picture

It has now been long enough for a major player to fabricate and plant evidence to prove whatever diverts attention from reality. 

Thu, 03/20/2014 - 02:24 | 4571328 soopy
soopy's picture

Thanks for that insight. Now go crawl back under your rock in Edmonton and dream the fuck on.

Wed, 03/19/2014 - 23:13 | 4570828 BraveSirRobin
BraveSirRobin's picture

Doesn't matter. It's Bush's fault!

Wed, 03/19/2014 - 23:21 | 4570854 CheapBastard
CheapBastard's picture

So....apartments there worth less then $750k ... that were bought/flipped/transferred for over $3.5 million by Mainlanders will be gladly dumped for no less then..............................$$2.8 million....

 

What a deal!

Wed, 03/19/2014 - 22:07 | 4570538 disabledvet
disabledvet's picture

saw a beautiful beach house in Bali bought for bitcoin actually. Really amazing...keep up the fire fonestar. "damn peculiar" but you have my curiosity.

Wed, 03/19/2014 - 22:16 | 4570579 fonestar
fonestar's picture

Ah, you smell brilliance amongst salty surf my vet.

Wed, 03/19/2014 - 22:20 | 4570595 disabledvet
disabledvet's picture

it really amazes me. people really are buying things with this stuff.

Wed, 03/19/2014 - 22:22 | 4570615 fonestar
fonestar's picture

Yes, yes they are (fonestar included).  And this finally kills the inflationist's argument that nobody would spend a deflationary currency, only hoard the units.

Thu, 03/20/2014 - 01:28 | 4571238 Schmuck Raker
Schmuck Raker's picture

I have can now envision Utopia - "DisabledStar", or "VetFone".

Either way, the ultimate in third person gibberish, and reach-arounds.

Wed, 03/19/2014 - 21:56 | 4570498 TeamDepends
TeamDepends's picture

It would really be a shame if that bitcoin dude chimed in for no reason, you know...

Wed, 03/19/2014 - 23:25 | 4570877 wallstreetapost...
wallstreetaposteriori's picture

Too late.. the douche has been released...  Bitcoin is done for.  Satoshi is gay.  

Wed, 03/19/2014 - 23:49 | 4570986 fonestar
fonestar's picture

There are no gay Japanese like you have in America.

Thu, 03/20/2014 - 02:49 | 4571364 ebear
Wed, 03/19/2014 - 23:27 | 4570891 wallstreetapost...
wallstreetaposteriori's picture

Too late.. the douche has been released...  Bitcoin is done for.  Satoshi is gay.  

Wed, 03/19/2014 - 23:47 | 4570983 fonestar
fonestar's picture

fonestar.

Here, There and Everywhere.

Thu, 03/20/2014 - 02:06 | 4571297 Dasa Slooofoot
Dasa Slooofoot's picture

Like a fart in the wind...

Wed, 03/19/2014 - 22:08 | 4570525 AlaricBalth
AlaricBalth's picture

Here in Miami we are somewhat insulated from any Chinese induced real estate downturn due to a strong presence of Russian oligarch capital which will help to continue propelling our local real est........

Oh wait. Sanctions!!!!! Damn!!!! Never mind.

Wed, 03/19/2014 - 22:09 | 4570544 disabledvet
disabledvet's picture

wait till the Germans pull out too.
This thing is looking REALLY ugly.

Wed, 03/19/2014 - 22:25 | 4570629 booboo
booboo's picture

Germans don't pull out, they are left to freeze by Herr Fuhrer.

Wed, 03/19/2014 - 23:39 | 4570952 THX 1178
THX 1178's picture

Dang! A seige of Stalingrad reference. +1 for you good sir.

Thu, 03/20/2014 - 02:42 | 4571352 OldPhart
OldPhart's picture

Germans don't pull out, and they don't use lube...

As a Disney former Boss once told me, "Icth iz Germaine Vazilene..."

 

Wed, 03/19/2014 - 21:51 | 4570478 jcaz
jcaz's picture

Well, technically it would be a clack house.....

Thu, 03/20/2014 - 01:11 | 4571211 Midas
Midas's picture

ROR

Thu, 03/20/2014 - 02:30 | 4571335 soopy
soopy's picture

News flash funny guy, mainland Chinese can perfectly pronounce 'r', now go find another racial stereotype to mess up, asshat.

Thu, 03/20/2014 - 02:45 | 4571356 OldPhart
OldPhart's picture

Sum ting wong?

Why you no raff?  You have stick up you lass?  Make phony of azzents is tladition...you no honol tladition?!

Thu, 03/20/2014 - 03:44 | 4571426 soopy
soopy's picture

Wow, these reports really plumb the depths of the gene pool out of the woodwork.

Thu, 03/20/2014 - 11:58 | 4572753 StupidEarthlings
StupidEarthlings's picture

+1

At least make the jokes correct.

They don't pronounce "R" like an "L".  They do however pronounce "L" like "R".

Get it strait..or it aint as funny. 

 

Wed, 03/19/2014 - 21:52 | 4570480 BlindMonkey
BlindMonkey's picture

Million dollar mansion or crack house fixer-upper...you make the call!!

Wed, 03/19/2014 - 22:26 | 4570634 TheFourthStooge-ing
TheFourthStooge-ing's picture

.

"Some banks were chasing them (Chinese landlords) for money, so they need to move some cash back to the mainland," said Ricky Poon, executive director of residential sales at Colliers International.

The kids at school called him Dick.

Thu, 03/20/2014 - 00:07 | 4571041 knukles
knukles's picture

His nickname is Stinky

Thu, 03/20/2014 - 05:49 | 4571519 Tall Tom
Tall Tom's picture

Clean ...Clean Dick Clean Poon. Clean I tell you. Clean.

 

Given the choice between Good Poon and Better Poon I prefer Better Poon. There is no bad Poon. Nope. I never had bad Poon.

Wed, 03/19/2014 - 22:40 | 4570701 Seize Mars
Seize Mars's picture

kaiserhoff

It's not a crack house, it's a crack home

http://www.theonion.com/articles/its-not-a-crack-house-its-a-crack-home,...

Thu, 03/20/2014 - 05:53 | 4571526 Tall Tom
Tall Tom's picture

So let me see if I have this correct. Dick Poon is selling Crack House? (See above post by FourthStooging)

Thu, 03/20/2014 - 03:33 | 4571414 jaxville
jaxville's picture

I hope this leads to some sweet deals on Vancouver real estate. I aspire to somewhat more than a crackhouse but on a tool shed budget. Finally some good news from Red China!

 

  Can this also herald more realistic (higher) interest rates?

Wed, 03/19/2014 - 21:32 | 4570396 Soul Glow
Soul Glow's picture

Chicago....

Wed, 03/19/2014 - 22:15 | 4570575 monkeyboy
monkeyboy's picture

 

and Australia, and...

 

Well someone forgot to tell the schmuck that just bought this place for a $million bucks (well $1.047M @ hammerfall, not including any taxes, etc) in Melbourne (Preston to be exact about 10km from the CBD).

 

The property boom/bubble is well and truly going nuts in Oz...dumbfounded.

 

http://www.realestate.com.au/property-house-vic-preston-116030099

Thu, 03/20/2014 - 00:58 | 4570621 The_Prisoner
The_Prisoner's picture

Negative gearing laws practically ensure the ponzi will keep running unless there is an external event.

The resident Chinese in Australia are now leveraging up and buying several houses. Everyone wants to be a rentier.

In my opinion the straw that could break the camel back is the reduction in demand for rental property in inner cities caused by raising unemployment.

I know from a liquidator that in 2008 they were engaged to move in and put Mirvac under receiveship, but ANZ bank approached them and said that if they did that the entire market would unravel. For the non-Aussies out there, Mirvac is one of the biggest property developers here.

It is a hair-trigger.

Wed, 03/19/2014 - 21:17 | 4570317 Poor Grogman
Poor Grogman's picture

Sydney Melbourne
Australia
New Zealand
And

Wed, 03/19/2014 - 21:35 | 4570411 CPL
CPL's picture

West coast everywhere.

Thu, 03/20/2014 - 00:32 | 4571136 Max Cynical
Max Cynical's picture

Irvine, Newport Beach...look out below.

Wed, 03/19/2014 - 21:48 | 4570467 FredFlintstone
FredFlintstone's picture

Over-priced homes.

Wed, 03/19/2014 - 22:21 | 4570602 CPL
CPL's picture

Million dollar sheds in Vancouver don't happen by accident.

 

http://www.crackshackormansion.com/

Thu, 03/20/2014 - 00:33 | 4571140 macholatte
macholatte's picture

 

crack shack

great link

+10

Thu, 03/20/2014 - 09:31 | 4571920 shovelhead
shovelhead's picture

All I can say is Holy Shit!

Thu, 03/20/2014 - 02:49 | 4571365 OldPhart
OldPhart's picture

I'm in San Bernardino County, and I annually look at properties owned around our various plants via the tax assessors office.  You would not believe how much desert land is owned by Changs, Mings, Yows and Wongs.

Six years ago I scanned back around and there was about thirty square miles around one mine with those names.

Wed, 03/19/2014 - 21:19 | 4570329 EscapeKey
EscapeKey's picture

that's why i plan to buy in lower uncton

 

Wed, 03/19/2014 - 21:21 | 4570336 LetThemEatRand
LetThemEatRand's picture

The ghosts inhabiting the ghost cities are feeling pretty good right about now.  They were worried that the "livies" were going to come in and ruin the neighborhoods.

Wed, 03/19/2014 - 21:52 | 4570484 runswithscissors
runswithscissors's picture

...you didn't build that ghost city...uhhh

Thu, 03/20/2014 - 00:20 | 4571091 U4 eee aaa
U4 eee aaa's picture

Good thing they didn't get spooked

Wed, 03/19/2014 - 21:27 | 4570374 TheBoyPlunger
TheBoyPlunger's picture

It's been pretty much impossible to buy any decent house in the Seattle area unless you have all cash due to the Chinese speculators. Hopefully this bubble pops so residents of the area can actually buy houses again instead of them sitting empty.

Wed, 03/19/2014 - 21:44 | 4570444 yellowsub
yellowsub's picture

Don't worry, when teh bubble pops they can squat in there for free.

Wed, 03/19/2014 - 22:01 | 4570474 TeamDepends
TeamDepends's picture

Yep, them and Sasquatch Joe.

Wed, 03/19/2014 - 23:04 | 4570793 TeamDepends
TeamDepends's picture

Sasquatch Joe, oh never mind.

Wed, 03/19/2014 - 23:24 | 4570868 laboratorymike
laboratorymike's picture

My thought as well. People staying out of debt and keeping cash/PMs on the sidelines may be looking at the world's biggest 99% off sale.

Wed, 03/19/2014 - 23:34 | 4570928 TheReplacement
TheReplacement's picture

Please send them to New England.  I don't have a mansion but I'll sell it like one.

Thu, 03/20/2014 - 02:57 | 4571375 williambanzai7
williambanzai7's picture

Amusing and circular isn't it? Just watch what happens as all of Ben's hopium gets sucked back out of all those BRIC markets.

Wed, 03/19/2014 - 22:11 | 4570558 dow jones 20000
dow jones 20000's picture

Kiev? Moscow?

Wed, 03/19/2014 - 22:58 | 4570766 Buck Johnson
Buck Johnson's picture

China economic bubble is finally bursting and it's coming apart.

Wed, 03/19/2014 - 23:08 | 4570808 Quus Ant
Quus Ant's picture

I hope this doesn't mean they'll have to sell their gold to make ends meet. 

Thu, 03/20/2014 - 06:04 | 4571532 Tall Tom
Tall Tom's picture

They will sell paper before they will sell Gold. Unlike Americans they value Gold.

 

You had best hope that they do not sell Treasuries. Because when they dump the entire World will dump and that is the End Game for the US Dollar.

 

Then everyone in America will start wanting that Gold again. First the Deflation which is followed by the Hyperinflation when all of those US Dollars are repatriated.

 

I am really saddened that the West has failed to understand the mentality of Eastern Thought. With a One Half Standard Deviation in Intelligence Quotient above that of Americans it would be wise to find out what gives them such a profound and significant intellectual edge.

 

But what can I expect from the disadvantaged Western Thinker who is not even wise or smart enough to consider that?

 

Data garnered from "The Bell Curve"

Thu, 03/20/2014 - 09:34 | 4571929 shovelhead
shovelhead's picture

Maybe it's the melamine in the baby formula.

Wed, 03/19/2014 - 23:34 | 4570926 prains
prains's picture

none of this has actually happenend yet on a substantial level so for now it's still speculation. In the 80's the world saw Japan crater and it was felt around the world by the disappearance from all the ski hills and tour buses, hordes of purple ski suit wearing camera carrying Japanese. Never to be seen again. When multi million dollar condos are being plywooded over because of dereliction then I'll believe all the hype about an imminent chinese crash. For now we're still in the rumbling storm on the horizon stage.

Wed, 03/19/2014 - 23:36 | 4570939 TheReplacement
TheReplacement's picture

I remember that.  They were everywhere.  Great hordes of them.  Always with the cameras around their necks.  All the men had the same haircut and the certainly weren't the same as the ones you see on the intertubes today.

Wed, 03/19/2014 - 23:45 | 4570971 prains
prains's picture

do you remember how they were led around in giant packs like they were pre-schoolers being led to the pool. All that was missing was the rope tied around their waists LOL

Thu, 03/20/2014 - 02:53 | 4571373 OldPhart
OldPhart's picture

In the 80's they were going to eat our lunch, so to speak.  Little did we know we'd give our lunch to the Chinese instead.

Thu, 03/20/2014 - 08:29 | 4571716 Big Corked Boots
Big Corked Boots's picture

1988 - I remember seeing 6 of them in a brand new rented Lincoln Town Car, which to them must have felt like an aircraft carrier, playing bumper cars with taxis in NYC. They were shopping for real estate with my boss at the time. Lots of tribe members made out like bandits... twice... when they bought the buildings back for 40 cents on the dollar.

Thu, 03/20/2014 - 11:13 | 4572389 lotsoffun
lotsoffun's picture

sounds like goldman and rockefeller center.  brilliant

 

Thu, 03/20/2014 - 00:20 | 4571089 Dr. Bonzo
Dr. Bonzo's picture

Hey, is that your shot of The Arch in the article? I avoid that part of town. You know Deutsche, Goldman and JPM are in the ICC right? I'm always afraid if I run into a pack of bankers I might go on a strangling spree....

 

 

 

 

Thu, 03/20/2014 - 00:24 | 4571113 U4 eee aaa
U4 eee aaa's picture

Why risk getting yourself in trouble? Just lead them to the nearest ledge. They will probably jump off themselves these days

Thu, 03/20/2014 - 00:31 | 4571134 Freddie
Freddie's picture

Williamsburg in Brooklyn will not be affected.  The hipsters can make great art there and most hipsters worldwide dream of living there so it is all good.

http://nymag.com/nymetro/urban/features/10488/

Thu, 03/20/2014 - 08:32 | 4571721 Big Corked Boots
Big Corked Boots's picture

Williamsburg will return to its rectum-of-bklyn status when Mommie and Daddie's money runs out.

It's hard to be a 32 year old hipster with no means of support.

Thu, 03/20/2014 - 01:28 | 4571243 yellencrash
yellencrash's picture

What about the gambling island, and WYNN? Time for puts?

Thu, 03/20/2014 - 02:23 | 4571326 q99x2
q99x2's picture

Pittsburgh will not be part of this stampede. Of course no sane person would want to live in Pittsburgh anyhow. But who cares there's enough demand that even during the great bubble burst of 2007/2009 the prices didn't drop much in Pittsburgh. Of course they never went up much either. Oh I love that town.

Thu, 03/20/2014 - 08:32 | 4571724 Coldfire
Coldfire's picture

Hong Kong goes? It was bound to happen. I just signed a new lease in Mid-Levels. Got the break-lease clause though. So look out below in 12 months. Bwahahahahah.

Thu, 03/20/2014 - 11:19 | 4572426 Canadian Dirtlump
Canadian Dirtlump's picture

I'd like to see a cascading effect from vancouver to Toronto to Calgary and then out from there. This combined with Canada nuking the "buy a house get a passport" rule I dearly hope we get the fall out of bed event we need.

 

In London and the US I'd like to see wealthy Russians start doing the same.

Wed, 03/19/2014 - 21:17 | 4570303 29.5 hours
29.5 hours's picture

 

 

If it is true the mainland Chinese rich are selling more than they are buying then that is significant.

"Property agents said mainland Chinese own close to a third of the existing homes that are now for sale in Hong Kong"

 

 

Wed, 03/19/2014 - 21:35 | 4570312 TruthInSunshine
TruthInSunshine's picture

I'm at gastropub right now & can't stop checking ZH compulsively.

And all I have to say is BOOM GOES THE DYNAMITE!

This isn't a fire drill. Chinese are freaking out. I'd love to get feedback
from ZHers in mainland China or Hong Kong on this (I received feedback from Chinese nationals confirming this, more or less, who were in NYC this am).

Everything's being liquidated and the exit doors are narrowing rapidly.

So much massively leveraged & septic/toxic bad debt, so little avenues of recourse for creditors; so little Chinese Gov't can do trying to juggle toxic shadow debt, inflation & interest rate complex now being affected by external and internal forces.

Everyone will argue about this, but I wouldn't discount the possibility that the PBoC would rather prick the bubble fast & furious, take the hit, in an effort to limit the long-term structural damage to China's economy (unlike what Bernie & Paulson & Geithner and the Merry Gang of Criminals did back in the U.S. In 2008 through present).

Wed, 03/19/2014 - 21:36 | 4570412 Soul Glow
Soul Glow's picture

Interestingly China has not said a peep on the recent escalation concerning the new cold war.

Wed, 03/19/2014 - 22:03 | 4570522 Hephaestus
Hephaestus's picture

Soooo very quiet........ like thunder without the sound.

Wed, 03/19/2014 - 23:27 | 4570893 ILLILLILLI
ILLILLILLI's picture

What is the sound of Yuan Han thunderclapping...??

Wed, 03/19/2014 - 23:38 | 4570950 TheReplacement
TheReplacement's picture

Comment plus avatar = +1

Thu, 03/20/2014 - 00:47 | 4571161 Hephaestus
Hephaestus's picture

What is stopping the Chinese from pounding the Yuan into dust. Then dump all the western paper to buy Yuan  out of the "wong hands". Followed by a quick link of the Yuan to some commodity etc. detonating what is left of the US EU financials.  Pivot to some poor countries willing to take manufactured goods for resources to keep the workers busy and boom fuck the Bankers.

US is toast

EU is toast

China has the world with Russia as a powerfull ally. Of course China would never break any eggs to make an omlet.

1340 Late Yuan warfare and transition to Ming Dynasty 30,000,000 dead.

1616 Qing dynasty conquest of the Ming Dynasty 25,000,000 dead.

1851 Taiping Rebellion 20,000,000-100,000,000 dead.

1949 Mao Zedong era 49,000,000 - 78,000,000 dead.

In comparison America lost around 500,000 in WWII including coast guard guys. Look at those numbers! The Chinese do war on a scale that Americans just dont understand. This is for the world boys and girls so dont expect the "rules" to apply. China could do anything at this point and time. Debt jubilee, Banker beheadings whatever gets the Chinese ruling class on top is what you can expect. If a few hundreds of millions of Chinese have to suffer to achieve it that is acceptable. After all when they come out the other side of the shit storm and the US and EU are broken they will fucking OWN the world. They have started building aircraft carriers to project their power. They plan on using them after we tear ourselve to pieces fighting for scraps inside the USA. Pride goes before destruction, a haughty spirit before a fall. USA USA USA USA

Thu, 03/20/2014 - 08:39 | 4571736 Ranger4564
Ranger4564's picture

Generally agree with your theory.

I'll add that this might all be part of an orchestrated collapae of the global economy in the service of the Oligarchs. Any seemingly unilateral downturn is an illusion... the dollar is stronger today, but in the next few weeks, the dollar will be at the mercy of the IMF and the foreign nations. US may just be looking for a better position in that negotiation.

Also, this could be financial retaliation for Chinese support of Russia, so just give it to the weekend before everyone pats themselves on their backs, see i told you there was nothing to worry about, USA USA USA... same as it ever was, ponzi schemer numero uno... we won.

Don't be so quick to forget the Chinese and Russians and Indians have a lot of gold, and rumor has it China bought JPM and the FED, and you. To finance the US debt collapse, the US gave the Chinese a fund stream from the IRS, to your surplus value. Ah, the smell of Capitalism in the yellow red mourning.

Thu, 03/20/2014 - 00:26 | 4571118 U4 eee aaa
U4 eee aaa's picture

or how about lightning without the thunder

Wed, 03/19/2014 - 22:37 | 4570689 ArkansasAngie
ArkansasAngie's picture

Boy ... trying to collect from Mainland China might be a tad bit of a problem.

Wed, 03/19/2014 - 21:44 | 4570447 zionhead
zionhead's picture

Well I'm here on the ground, and everybody is talking about MH-370, and that it was a CIA operation.

 

Wed, 03/19/2014 - 22:44 | 4570713 SnobGobbler
SnobGobbler's picture

more like mossad, they have been too quiet for too long.

Wed, 03/19/2014 - 22:56 | 4570761 Philalethian
Philalethian's picture

Cleverly sneaks in one heck of a channel changing educational video that the world should see fast, like yesterday!

http://www.youtube.com/watch?v=68rMTRhqKok#t=216

Thu, 03/20/2014 - 00:21 | 4571093 TheReplacement
TheReplacement's picture

That speaks to what I've been saying and gives it a name.  It is frustrating when someone else can speak my thoughts so much more eloquently than I can.

Thu, 03/20/2014 - 09:55 | 4572014 shovelhead
shovelhead's picture

I think a reptilian is plugging up my toilet.

Wed, 03/19/2014 - 21:52 | 4570485 Redneck Hippy
Redneck Hippy's picture

Hmm. Yuan has dropped 1% below its most recent fixing to the dollar.  Margin calls seem to be imminent, and carry trades unwinding.  I'm not sure if it's bubble popping by TPTB or they just can't keep all balls juggling anymore.

Wed, 03/19/2014 - 22:12 | 4570565 disabledvet
disabledvet's picture

more like "juggling chainsaws." (I hear the behind the back manuver is a real crowd pleaser.)

Wed, 03/19/2014 - 23:24 | 4570872 NeverForgetSilver
NeverForgetSilver's picture

Is what Chinese government is doing also we want our government to do? Liquidate the bad debt and crash the bubble. China is the only country which is willing to get serious. I wish them good luck.

Thu, 03/20/2014 - 00:54 | 4570999 prains
prains's picture

TIS

there's way too much going on geopolitically for China to go down the liquidity rabbit hole. Yes their economy is a paper bullshit zit that needs popping but we're talking about the zeitgeist culture of "saving face". They will pull every dirty trick in the book to paper over this fiasco. Lets call it a friendly bet....... how about a bottle of Dalmore King Alexander III Scotch. If you're right and China flames out in 2014 I'll send you a bottle, if I'm right and it doesn't happen you send me one.......cost is $200 CAD

 

reply to confirm we're on

Thu, 03/20/2014 - 00:23 | 4571110 Dr. Bonzo
Dr. Bonzo's picture

I'm in Hong Kong and I haven't seen any sign of it yet. Real estate takes time though. Usually lags by about 6 months. I'll check with my agents and see if they are getting sell orders from clients. On the street looks about the same though. Same mindless peasants with their goddamned suitcases stuffing up the sidewalks, trams, busses, restaurants, subway with their mindless fucking shopping.

Thu, 03/20/2014 - 02:55 | 4571376 OldPhart
OldPhart's picture

What the Fuck is a GASTROPUB?!

Is that another name for a fern bar?

Thu, 03/20/2014 - 06:20 | 4571541 Tall Tom
Tall Tom's picture

 GASTOPUB...pub, bar, or tavern that offers meals of high quality

 

http://www.merriam-webster.com/dictionary/gastropub

 

FERN BAR...a bar or restaurant fashionably decorated with green plants and especially ferns

 

http://www.merriam-webster.com/dictionary/fern%20bar

 

Dictionaries are great. If you do not understand a term you can actually look it up. With the Internet available it is so easy.

 

You ought to use your time to do it as it just wastes my time.  No excuse for laziness.

Thu, 03/20/2014 - 09:58 | 4572027 shovelhead
shovelhead's picture

A bar and grille before gays moved in the neighborhood.

Thu, 03/20/2014 - 10:39 | 4572205 LFMayor
LFMayor's picture

LOL, you know, "gay" used to mean "happy" before the gays moved in, too.

Wed, 03/19/2014 - 21:18 | 4570318 Kreditanstalt
Kreditanstalt's picture

No one has yet made the connection between Chinese liquidity issues and the strangely slow, step-by-step 'orderly' dump in the "gold price" - before, during, and after both the ridiculous and meaningless FOMC statement and the Ukraine 'crisis'...

They sell copper, housing, iron ore futures...why not gold? 

Wed, 03/19/2014 - 21:24 | 4570355 Tyler Durden
Tyler Durden's picture

We made the connection yesterday in "What Is The Common Theme: Iron Ore, Soybeans, Palm Oil, Rubber, Zinc, Aluminum, Gold, Copper, And Nickel?"

Gold will most certainly get thrown out with the bathwater.

More in depth report coming tomorrow.

Wed, 03/19/2014 - 21:29 | 4570383 AllThatGlitters
AllThatGlitters's picture

Beat me to it.  Looking forward to this reporting to see what you have to say Tyler!

Wed, 03/19/2014 - 21:34 | 4570407 fonzannoon
fonzannoon's picture

What? So the last how many fed meetings where gold was just beaten to shit for the fun of it is different from today where the chinese...and their insatiable gold demand are now dumping physical gold....and of course physical gold supply and demand is affecting paper market prices....which did not seem to be affected by the chinese insatiable gold demand....

I fucking give up. As long as SPY does not get thrown out with the bathwater. Whatever.

Wed, 03/19/2014 - 21:41 | 4570434 Soul Glow
Soul Glow's picture

Gold is about to make the greatest move you will ever see.  Will it drop farther first?  Sure, why not?  It has just suffered to straight $20 down days, but so goes volatility!  The other day I wrote, "Who's ready for $20 daily swings?"  So what if you get a down move?  Buy more, because the coming months will see a drastic revaluation in gold.

Wed, 03/19/2014 - 21:45 | 4570453 Kreditanstalt
Kreditanstalt's picture

After a few days to a couple of weeks, gold will bounce rapidly - you can bet this action the past two days has not been the selling of real metal.

Wed, 03/19/2014 - 21:50 | 4570471 fonzannoon
fonzannoon's picture

thanks for the clarification kred. I don't really care about the price or where it goes anytime soon. The idea that the move down was because of chinese wealthy dumping the actual metal just blew me away. Especially on fed day when you know you are in for a $30 move down.

Wed, 03/19/2014 - 22:24 | 4570626 Soul Glow
Soul Glow's picture

Right?  Does anyone know anybody that was like, "Hey, I'm going to sell my physical gold - my bullion coins.  Today, on the first day of FOMC reports by one Janet Yellen, I'm going to walk down to my coinshop and sell a few gold ounces, because today seems like the day to sell."

Thu, 03/20/2014 - 02:57 | 4571380 OldPhart
OldPhart's picture

Been here for the silver push, then the gold push...

still no life in these dead, inanimate objects...

but I've kept buying, and will continue.

Wed, 03/19/2014 - 21:39 | 4570427 Soul Glow
Soul Glow's picture

Tyler?

Gold will most certainly get thrown out with the bathwater.

Tyler Durden??
Wed, 03/19/2014 - 21:42 | 4570438 fonzannoon
fonzannoon's picture

I'm not arguing with the directional call. I am laughing at the hilarity of it being tied to wealthy chinese dumping it and physical sales are affecting the paper prices....on fed day....the one day historically when you could count on a 2% drop....

But lets say wealthy chinese are dumping....who is buying?

Thu, 03/20/2014 - 01:42 | 4571271 Blue Horshoe Lo...
Blue Horshoe Loves Annacott Steel's picture

Chinese government or Russia.  lol

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