If there is going to be a recession then...

michaelscott · Apr 9, 2007

Actually, the building of skyscrapers usually means that we are at the end of the business cycle and that a recession is looming.

Go back and look at the dates when major buildings were completed.

Quote from hels02:

Because the demand is still there. I've mentioned before, I was in China last summer and the building is STAGGERING. I mean jaw dropping staggering.

In 7 cities, every single one with no exception was covered with tower cranes as far as the eye could see. Each Chinese city had probably as many tower cranes up as most populous US STATES have in the entire state. Out of my hotel window in Beijing, facing only 1 direction... I counted 25 tower cranes within the smoggy view, all working above the 15th-20th floors...

The view was the same from Xian... deep in China's heartlands, almost to the Gobi desert. Tower cranes.. EVERYWHERE.

I could not even imagine before going there that building could progress at such a rate... not in one area, but every single region of a nation that size. I wonder if the US EVER had so many tower cranes or simultaneous building in our 200 year history. You have nooo idea what is coming...

There will be no reduction in demand for materials for years. There's been a shortage in the US of concrete, because China was buying it all, to the point that many US builders were RATIONED on how much concrete could be bought for a period of time. I believe China cranked it's own production on concrete over the last year or 2.

China of course would be hurt badly by any recession in the US... they finance our economy right now, and vice versa. All that deficit and debt... you don't think it takes place in a vaccum? They LEND us money so we can SPEND it with them. The end result being they get richer and we get poorer... and we just do not realize it. Or realizing it, we do nothing about it because we can't.

Exactly like foreclosing on someone's home leaves the bank with a house that cannot be sold. So they lend more in the form of interest abatement or whatever.

I don't think the market is going to crash and burn imminently, but when it comes, it's probably going to be bad. Materials however will likely hold up better than other sectors, and everyone knows it, which is why it keeps growing.
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Triple X · Apr 9, 2007

Quote from michaelscott:

Actually, the building of skyscrapers usually means that we are at the end of the business cycle and that a recession is looming.

Go back and look at the dates when major buildings were completed.
More...

Yes, that's true for the U.S., but China is a new phenom. This is a once in 1000 year event. China is rapidly expanding, AND the USA, Europe, etc. are all relocating not just manufacturing, but R&D and high level design work, as well as back office operations. Also, bear in mind that Chinese schools have begun to teach English, and in 5 years, they will probably surpass India in terms of corporate outsourcing. Despite what Bush would tell you, this is going to be very bad for the US economy.

michaelscott · Apr 9, 2007

Petronas Tower Completed in 1997

1997 East Asian financial crisis

http://en.wikipedia.org/wiki/Asian_financial_crisis

Quote from Triple X:

Yes, that's true for the U.S., but China is a new phenom. This is a once in 1000 year event. China is rapidly expanding, AND the USA, Europe, etc. are all relocating not just manufacturing, but R&D and high level design work, as well as back office operations. Also, bear in mind that Chinese schools have begun to teach English, and in 5 years, they will probably surpass India in terms of corporate outsourcing. Despite what Bush would tell you, this is going to be very bad for the US economy.
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Pa(b)st Prime · Apr 9, 2007

Quote from michaelscott:

Actually, the building of skyscrapers usually means that we are at the end of the business cycle and that a recession is looming.

Go back and look at the dates when major buildings were completed.
More...

It's been a pretty reliable sentiment indicator.

It's incredible how many skyscrapers and old stadiums were finished from 1928-30.

hels02 · Apr 9, 2007

That's the thing... they aren't finished. Those are the partial constructions.

They are still clearing ground in many cases, the airport modifications in several cities have not even broke ground yet.

None of this construction will be completed for at least another 3-5 years.

AND... Beijing Olympics in 2008, don't think they'll hit a recession before that.

silk · Apr 9, 2007

But remember, going form 10,000 cranes building to 9,000 cranes building is 10% negative growth for the construction industry and 10% drop in construction jobs. Also would lead to a 10% drop in demand for steel copper ect.

So just a slight slow down to China's insane growth rate would feel like hitting a big pothole.

Maybe.

deviltrader · Apr 10, 2007

Quote from Triple X:

Yes, that's true for the U.S., but China is a new phenom. This is a once in 1000 year event. China is rapidly expanding, AND the USA, Europe, etc. are all relocating not just manufacturing, but R&D and high level design work, as well as back office operations. Also, bear in mind that Chinese schools have begun to teach English, and in 5 years, they will probably surpass India in terms of corporate outsourcing. Despite what Bush would tell you, this is going to be very bad for the US economy.
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Chinese schools have taught english for many years - they didn't just begin. Further, HK grade schools have taught english for decades. Why now would China surpass India in corporate outsourcing? As a matter of fact, many countries teach english (Japan, many places in Europe). Filipino children speak english more fluently than Indians, but why is India the leader in US outsourcing? There's a lot more to it than communication skills.