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

To: Hawkmoon who wrote (61596)	3/1/2010 12:38:10 AM
From: TobagoJack	1 Recommendation Respond to of 217619

not immune, just that whatever shall happen in china would be cyclical in nature, and whatever else happens elsewhere except india and brazil, may well be structural in effect and i am saying you cannot believe on the one hand china rent is too high, buildings are empty, landlord is not making money, renters cannot afford to pay, workers do not have enough work, and there is a labour shortage and seeing that you apparently do simultaneously believe in all of the above, i find it highly amusing, as i do stratfor

To: Hawkmoon who wrote (61596)	3/1/2010 5:41:07 AM
From: TobagoJack	Read Replies (2) \| Respond to of 217619

just in in-tray and out send-tray player 1: Questions: Is this why consumer spending has remained relatively strong? Is this why people have been able to pay down their non-mortgage related debt? Is this why Fannie & Freddie are getting whacked so bad in regards to earnings - that we the taxpayer are subsidizing non-payers who continue to live rent-free in the homes? Any thoughts? From Alana Semuels at the LA Times : Many borrowers in default stay put as lenders delay evictions Throughout the country, people continue to default on their home loans -- but lenders have backed off on forced evictions, allowing many to remain in their homes, essentially rent-free. Several factors are driving the trend, industry experts say, including government pressure on banks to modify loans and keep people in their homes. And with a glut of inventory in places like Southern California's Inland Empire, Nevada and Arizona, lenders are loath to depress housing prices further by dumping more properties into a weak market. Finally, allowing borrowers to stay in their homes helps protect the bank's investment as it negotiates with the homeowners, said Gary Kirshner, a spokesman for Chase bank, a major lender. "If the person's in the property, there's less chance for vandalism, and they're probably maintaining the house," he said. player tj: dunno about what be happening in america, but am now in beijing and had tea with one with insight on china regional and municipal stats and people who survey such re the strange case of "china suffering from labour shortage", the man had some comments - in recent hu jin tao speech, the man counted 50+ times hu uttered "must accelerate transition to new economic growth model" - hu also mentioned that china failed within past 2 iterations of 5-years plans, glaringly, in area of increasing energy efficiency per gdp - survey done re "where has all the labour gone", and apparently, the inland/rural developments has gotten to a stage whereby folks are starting businesses in all trades nearer where they call home, to be able to earn less but result in lot more DISCRETIONARY AND DISPOSABLE income, enjoy better family life, afford good enough schools for the kids, and so shout "stuff that coastal job" - the central bosses are supposedly happy about the developments, believing the cheap labour and cheap capital era of past 25 years should give way to still cheap labour, as inexpensive capital, and dirt cheap intellectual capital's dawn if indeed such is the picture, meaning if indeed what had happened along china coast is now progressing to china everywhere, then chanos' trade may not work out so well cheers end quote

To: Hawkmoon who wrote (61596)	3/3/2010 7:48:05 PM
From: elmatador	1 Recommendation Respond to of 217619

highlights and offers a little bit of additional perspective on the issue of construction over building. seekingalpha.com

To: Hawkmoon who wrote (61596)	3/10/2010 11:04:11 AM
From: elmatador	1 Recommendation Read Replies (1) \| Respond to of 217619

Debunking the myth of a China collapse By Jing Ulrich Published: March 10 2010 15:48 \| Last updated: March 10 2010 15:48 Global sentiment towards China’s economy and asset markets has turned from exuberance just a few months ago to overriding concern about the side-effects of last year’s remarkable credit growth. A number of commentators have warned of credit excesses and an over-investment bubble, which they say could bring economic turmoil. Critics have also pointed to China’s Rmb 4,000bn stimulus programme and last year’s 33 per cent surge in new bank lending as obvious hallmarks of excess liquidity and a lowering of lending standards. Some have raised concerns about hidden debt risks among local government investment entities, while media reports of Chinese “ghost cities” and empty commercial property are cited as evidence of local excesses. The worst-case fears concerning the property market are based on a layer of truth and we have previously highlighted the untenable nature of price increases in some big cities, as well as the possibility that last year’s boom was partly fuelled by misdirected bank loans. However, there are crucial differences between China’s property markets and those of the US or Dubai. Unlike the dramatic increase in household leverage that precipitated the US sub-prime crisis, Chinese household debt amounts to approximately 17 per cent of GDP, compared to roughly 96 per cent in the US and 62 per cent in the eurozone. Homebuyers in China are required to make minimum downpayments of 30 per cent before receiving a mortgage, and at least 40 per cent for a second home. Although price increases in the Chinese residential market appear rapid (over 20 per cent in 2009), such headline figures cannot be viewed in isolation. Over the past 5 years, urban household incomes grew at a 13.2 per cent compound annual growth rate, compared to an 11.9 per cent CAGR in home prices. Pockets of overheating can be found in some regional markets: in Beijing, Shanghai, Shenzhen and Hangzhou, for instance, prices outpaced income growth by more than 5 percentage points over the same period. But this can be seen as a symptom of new urban wealth being put to speculative use rather than the profligate use of leverage. The combination of excessive leverage and mortgage securitisation were at the epicentre of the US sub-prime crisis. Both these factors are absent in the Chinese context. The commercial property sector has inspired just as much concern, with prices rising 16 per cent in 2009, despite low rental yields and prime office vacancy rates as high as 21 per cent and 14 per cent in Beijing and Shanghai, respectively. Yet occupancy and rental rates have started to pick up for prime properties. The crux of the problem with the Chinese real estate sector is that property is seen by the country’s investing class as a store of value, within an economy that offers its citizens limited investment options. I share many of the concerns about flawed incentives and overheating in the property market – but even if prices were to correct, this would not trigger the devastation that might arise in an over-leveraged economy. Policymakers are clearly concerned about the risk of asset bubbles and the threat that excessive speculation could drive prices beyond affordability for average homebuyers. The government is weighing the potential value of introducing a national property tax and, in the meantime, has re-imposed a business tax on homeowners who resell their properties within two years. The perennial ups and downs of China’s property sector arise from the fact that the country’s closed capital account and underdeveloped capital markets leave its citizens with few investment options. Investment interest in residential property has fuelled a mismatch between the stock of higher-end apartment buildings and mass-market need for affordable housing. This imbalance must be resolved by spurring the development of affordable housing – currently one of the government’s big policy initiatives. A more recent warning issued by some China bears is that of hidden debt risk among Chinese local government investment companies. Official estimates of the total outstanding loan balance for such investment entities exceed Rmb 6,000bn – or roughly 20 per cent of GDP – a figure that has been criticised by some as being too low. According to one report, the worst case scenario from hidden borrowing by local investment intermediaries is a large-scale financial crisis around 2012. Looking ahead, while certain local administrations might struggle to service debt, the magnitude of public sector debt risks do not appear as severe as some have suggested. Many observers are concerned that China’s economy has grown too rapidly, and are ready to point to pockets of overcapacity as proof of an imminent system-wide collapse. While some areas of the economy do deserve closer monitoring, there is little to support the sceptics’ views of an imminent crisis. Jing Ulrich is managing director and chairman of China equities & commodities at JPMorgan