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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (61396)	2/22/2010 1:16:54 AM
From: Hawkmoon	Read Replies (4) \| Respond to of 217679

btw, you cannot have a bubble without leverage You can if you're using that overpriced RE as collateral on outstanding loans, and that was the ENTIRE POINT of that article I posted for you (if you'd bother to read it). feer.com And again, I will admit that reducing property taxes in the US would probably prove a major boom to restoring there deflated values. I certainly hated the annual personal property taxes that states like Virginia would assess on all real property (cars, boats.. etc). But homes are money pits. They require maintenance, even if sitting empty, due to exposure to the elements. They have to be insured against theft, fire, flood, and other acts of god .. etc The nation’s real estate and stock markets are a “bubble” that will burst when inflation accelerates in 2011, former Morgan Stanley chief Asian economist Andy Xie said in an interview in Hong Kong today. But don't believe an American "white devil" like me.. Listen to one of your fellow Chinese citizens: “China’s asset markets are a Ponzi scheme,” said Xie, now a Shanghai-based independent economist. “Property is heading for one huge bust that will take a year and a half to unfold.” Home prices in 70 major Chinese cities, including Shanghai, rose 5.7 percent from a year earlier in November, the fastest pace in 16 months, according to government data. The property market was a prime driver of the economy’s 8.9 percent growth in the third quarter. bloomberg.com I recall Hank Paulsen making the inanely STUPID comment about the US markets finally recognizing that "home prices don't go up forever".. Yet, here you are making the opposite argument. And yes.. you can have bubbles without leverage.. The Tulip bubble was achieved without leverage. Sure.. leverage makes those bubbles pop faster, but they can still happen. would still be sitting nicely oin the bank, What's the equivalent "FDIC" coverage in a Chinese bank? If I plop a million in a US bank and it fails, I've just lost $750K. Presumably the seller of that Chinese real estate is deploying it somewhere else. And if that somewhere else is vulnerable to a collapse in RE prices, he's just as screwed as if he actually still held the property. Bear in mind something else.. China's effective stimulus (compared by GDP) was more than THREE TIMES what Obama undertook. THREE TIMES!! What happens when that liquidity is drained from China's capital markets? Stop blowing into the balloon and the balloon will eventually deflate. Hawk