If the govt. keeps interfering in market prices.... In time ....the govt....will have to own it all.... Capitalism....the people own it.... Socialism/Communisim....the govt. owns it.... How does one wish to wake up the next day.....? Knowing that one will never own anything....just working for the govt....????? Or Waking up....having a shot at owning something....???? The China....and now the US Economy .... ARE SOMEWHERE IN BETWEEN....????
Not that far from it already. When more than 50% of one's earnings go to one government entity or another, isn't one already "working for the government"? And that's what's wrong with the "free ice cream" platform Obama used to dupe the public.
................................................................ 1000000% CORRECT.... And guess who is at risk....and who is not ???? Which is even better for the govt... What a great business....YOU take the risk....I get the profits.... And I the govt. never have to conjure up the means to produce.... YOU do.... And its cows in the cow pasture.... It owns them all....no matter which pasture they graze.... And knows that as long as there is grass.... Some will grow.... But now the govt. is further reducing its grass acerage..... But wants to grow ????? Expects its cows to produce more with less ???? And further restrict how cows walk around the pasture.... UTTER NONSENSE !!!!!!!!!!!!!!!! ................................................................... Exactly why.....I have been adamant about a 10/5 C tax only ......
And another story about the ever growing housing bubble. Im sure it will be ignored just like every other asset bubble. Will the China property bubble pop? By Jaime FlorCruz, CNN Beijing Bureau Chief December 30, 2009 -- Updated 0909 GMT (1709 HKT) Click to play China's economic bubble STORY HIGHLIGHTS * Beijing real estate prices have breached 50% over the past year, six times the country's 8.3% GDP growth * Economist: China's real estate and stock markets are a "bubble" that will burst when inflation accelerates in 2011 * Others say rapid urbanization creates more room for growth in the property market Beijing, China (CNN) -- When Crystal Zhang decided to buy a house last August, it seemed like a no-brainer. For years, she had been spending a big chunk of her salary renting a studio apartment in Beijing, where she works as a mid-level executive in a multinational company. But her landlord kept hiking the rent, so she found a second-hand apartment and plunked 640,000 RMB (nearly US$100,000) as 52 percent down payment for a new home. She now lives in a cozy, one-bedroom flat and sets aside 25 percent of her monthly salary to pay for mortgage. "I hope to pay all up in five years," says Zhang. "By then I can start making some other investments." Zhang, 30 and single, is one of the fortunate ones. The upwardly mobile professional has ample disposable income--and a good sense of timing. In just five months since she bought her 85-square-meter apartment, it has already appreciated by 38 percent. "I'm glad I bought this one when I could still afford it, even though its price was already high," she said. "Now the price is ridiculously high." In big cities like Beijing, the red-hot real estate market has seen prices raise more than 50 percent the past year -- six times the country's total economic growth rate. According to Shanghai Uwin, which tracks housing prices in China's richest city, average new apartment prices in the Pudong district soared by 57 percent to a record $4,061 per square meter, while overall prices in the city rose by 26 percent to $2,434. Andy Xie, former Morgan Stanley chief economist for Asia, believes that China's real estate and stock markets are a "bubble" that will burst when inflation accelerates in 2011. "China's asset markets are a Ponzi scheme," Xie told Bloomberg. "Property is heading for one huge bust that will take a year and a half to unfold." Even some real estate developers are getting anxious. Zhang Xin, CEO of SOHO China, agrees that the soaring prices are unsustainable, breaking ranks with other real estate tycoons. "When one gets fat, you need to cut weight" she told Forbes recently. "But this is like you haven't started losing weight yet and food is coming again." Other analysts also see a bubble, at least in terms of affordability. "Even Chinese government statistics point to real affordability problems, with the income-to-price ratio in Beijing hovering at 1:22, when the IMF and the UN say the ideal figure is 1:3 or 1:4," said Ashley Howlett, head of China construction practice for Jones Day. "The fact is that the average people cannot afford to buy apartments in Beijing or other major cities." Not all analysts share Xie's dire prognosis. Real estate bosses, and some economists, think there is still room for growth, assuming that China's rapid urbanization will continue. Mei Jianping, professor of finance at the Cheung Kong Graduate School of Business in Beijing, believes that, "under the current low interest rates, the bubble is unlikely to burst, unless we have another crisis like last year or inflation suddenly surge. "China is unique in the sense that there is nowhere for the middle class to put their money, low interest rates are low, equity markets are highly volatile, and corporate bond markets are small," Mei said. "So putting money in real estate is not all irrational." The fact is that the average people cannot afford to buy apartments in Beijing --Ashley Howlett, Jones Day Beijing Irrational or not, many factors have created this exuberance in China's property market. Massive bank lending over the past year, part of Beijing's stimulus package, has found its way into real estate speculation. Low bank interest rates have encouraged other forms of investment and make mortgages cheap-prompting a mindset that "we might as well buy an apartment than leave the money in the bank". Fear of inflation also makes investment in real estate attractive. Limited investment options make buying a house a preferred choice. One poll conducted by Tencent website revealed that most of the 360,000 respondents agree that "happiness is closely related to owning a home." If China is facing a bubble, will it end up like the U.S. did in 2008? Probably not, many experts say. Says Howlett: "The major difference between China and the US and the UK is the lack of 'sub-prime' lending and low gearing. There also remains a strong demand." Mei Jianping agrees: "The bubbles are all inflated during low interest rate environment. The difference is that China is still growing and interest rates are expected to stay low for a while due to slow recovery." Beijing cannot afford a collapse in the housing market as it is one of the pillars of China's economy. The property sector, analysts estimate, accounts for about a quarter of all fixed-asset investment in China and about 10% of national employment. "The main way a bursting of the real estate bubble would hurt China is if it causes a sharp drop in real estate development, and thus a sharp drop in employment and the business activities of industries that feed the real estate sector," Howlett said. Ashley thinks the government and the banks would probably continue to actively support the real estate sector to avoid such a scenario. "This is not an economy where price signals decide business decisions," he said. New home-owner Crystal Zhang remains optimistic of her investment. "The bubble won't burst," she said, citing measures that Beijing introduced recently to prevent a U.S.-style crash in home prices. "Whenever the bubble is about to burst, there will be measures taken to stop it."
Ok. Let's put together a list of possibly vulnerable Chinese lenders, residential home builders, etc. Shortable US ADRs preferred.
given the % of down payment Chinese buyers ante up, they're not going to be walking away like in the US where 5% down was common, followed by a 110% LTV 2nd! when you have 50% equity from the get go, even a 50% bubble piercing drop will leave buyers with still way too much skin in the game to walk away. ergo, i don't see lenders getting into trouble who make mortgage loans. my question is more one of who is on the hook for all these loans that people got to buy everything from copper to garlic and stockpile it. not sure what LTV ratio they use for garlic speculation...
Wow that many in articles about China's RE bubble posted by BuyLow's brother, its surely NOT a bubble.
I'd like to ask Obama what 'yes we can' actually meant and stood for during the election. And how that slogan has been translated since.......