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China Home Price Slump Sends Iron Ore Plunging To 2009 Lows (-50% In 2014)
Iron Ore prices crashed below the critical $70/mt level overnight, lows not seen since the bottom in 2009, as China's home prices fell for the second month in a row, accelerating losses. Average property prices across China dropped 2.6% YoY in October (a bigger drop than September's 1.2% YoY slip) with only 1 out of 70 cities seeing any positive price change (Zhengzhou +0.2% MoM). What is perhaps most entertaining is the 38.6% YoY rise in new home starts China just experienced - the biggest jump ever - as the first sign of demand (or hint from PBOC that they would 'help' with mortgages) and supply floods the market. The 'market' appears not to believe the hype.
China home prices continue to slide...
With 69 of 70 cities seeing falling prices...
Source: @M_McDonough
And that led to more weakness in Iron Ore (and copper) prices...
which is ironic because the Chinese homebuilders went crazy in October increasing new home starts by 38.6% YoY in October...!!
That will not end well.
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RE is local.......... that's what I'm told by the NAR
Hah!
Just ask the Aussie raw materials producers what their books are looking like. One of the coal companies has gone to short weeks!
EPS in OZ gonna take a beating!
But of course as all my buds in the equity management side of the ledger say, "It's already discounted"
uh huh
China fooled the world!
http://www.planbeconomics.com/2014/05/how-china-fooled-world-documentary...
"This Video Does Not Exist"
So solly, Hugs, PLA Unit 61398
Location! Location! Location!
rocation, rocation, rocation!
Due to easy credit from the carry trade stupid Kiwis have bid the price of housing up to the point they can no longer afford to live in houses. I’m investigating investing in a large shipment of Russian army surplus tents that they can pitch on a muddy piece of land that I can’t get anything to grow on. Viva the shitty little fascist milk republic of New Zealand.
I left, you can too, increase the IQ in both countries......hang on a moment...I just worked that out!
There has never been a better time to buy iron ore.
I can see you like this pile of iron ore. However, I should advise you that a nice couple that I met earlier today will probably be putting in an offer later today.
.... and by the way, it's already been used as collateral to take out loans from 5 different banks.
Oh no! But we had are hearts set on this pile of iron ore!! Can you show us another pile? We need a pile of iron ore before the baby comes. Help us!!
Now, if all the bills of lading and warehouse receipts traveled through the City, a veritable Empire could be bigger than old Teapot Dome itself!!
Booyah, as JC (Jim Cramer, not Jesus Christ) would say.
The other JC doesn't get involved in banking. Lloyd be praised!
Though the other JC wasn't very fond of moneychangers either.
The iron ore has been used as collateral before it's even been dug out of the ground. The lenders are hoping that they will be repaid when the miner sells the ore to China, but I suppose at the end of the day they could just take possession of the entire mine/s.
The iron ore has been used as collateral before it's even been dug out of the ground. The lenders are hoping that they will be repaid when the miner sells the ore to China, but I suppose at the end of the day they could just take possession of the entire mine/s.
I tried ordering iron ore on Ali Baba but the minimum order was 23,000 MT. If I place my order where do I store it?
ur backyard or basement....
Oh, just take a receipt. No messy storage problems.
Just store it in the front yard of iron (wh)ore magnate Gina Rinehart.
Macau a bust?
I'm getting the same "I'm not so impressed any more" feeling about China that I started to have about Japan in the late 80s. I think they're 10X as fucked up as we are but with an economy 1/3 our size.
In the 80's I did a lot of business in Japan. This was when that Japanese guy was writing those books about the invincibility of the Japanese people and their economy, etc.
I never understood that crap, as every major bank, money manager and insurance company into the bowels of which you walked had rooms that looked like a genetically malformed offspring of the workers' paradise from Metropolis and the warehouse sized rooms of row upon row of bean counter desks from a 50's movie with calculators on them and everybody in the corporate same color jacket, pants and tie. And all the women in uniforms doing exercises in the morning in the hall ways with stoopid assed grins on their faces.
No.
Way too fucked up
There is no way under the sun that the inscrutable Chi-nee can account for what goes on in the country.
GDP?
Count what?
It's fucked.
Believe me.
"It's fucked.
Believe me."
I do.
Think that's not gonna help?
huh?
Throw in the worst winter in years and race riots all over the country (Free the Ferguson 5 million) and ya gotchyerself a real humdinger!
And maybe Ebola could resurface.
(Think the news been muzzled? Not heard fuck all about anything about it. And if God Forbid, Obie resigns, Biden becomes predident)
Lots of little things aren't getting reported, like TB and Mumps making a comeback and all those trains that dear uncle Warren is using to haul oil is reaching a saturation point as far as traffic congestion will allow. Little bits and pieces of the avalanche are starting to move a bit.
I don't wish to sound mean spirited here Tyler, but the comment section on your web site is typically the most brilliant one can find anywhere on the web. I fear the problems these new adds are causing your readers may be running off some of your best assets.
Blessed are the ignorant for they are propping up economic activity where others fear to tread. And in Australia at the moment there seem to be many many ignorant people judging by the way they are bidding on houses and buying units off the plan.
The Chinese buyers have well and truly propped and inflamed the property prices but that does not mean they are smart. It only means they have money and that they want to get out of China.
Australia is a Fool's Paradise.
Actually it's a paradise full of fools.
Come join us. In the land of the blind the one eyed man is king. You never know, we might make you our treasurer or something, like we did this guy: http://en.wikipedia.org/wiki/Mike_Nahan
Here Down Under, "Everybody" has at least one Investment Property ("IP"), and THE Number One TV Show seems to be Selling Houses Australia (along with all the other usual stuff - celebrity cooks / sportspersons / politicians / wannabe politicians).
Everyone's in hock up to the eyeballs (new cars / big boys toys / extensive and costly holidays), and one's "property" is generally regarded as quite the ATM - all the major lenders are oh so keen to "refi" at the drop of a hat.
So much for Abbot's "responsible lending practices" ideas - when this particular bubble pops the fallout will be pretty biblical, since this time China won't be there to buy up all the "dig it up and flog it off" material that passes for an "economy" here.
Australia - the "Disaster waiting to happen". When it does, "we're all cactus, Mate" seems appropriate!
Well said. I've got my popcorn ready. Total mass delusion.
Can't disagree with anything you've said. However, the reason I still 'believe' in Australia is because it really is the land of plenty. We have enough resources here to more than look after ourselves.
At the moment it's simply easier and cheaper for us to import all our goods. If our currency collapses and noone wants our ore anymore, then we will go back to making our own stuff. We're not Africa.
Australian wages are far too high for them to be gklobally competitve.
They pay check out girls $18 an hour.