The Housing Bubble

The ABQ area has pretty reasonable weather considering it is inland. The monsoons make the summers livable and the winters would not even be considered cold in the fall in Vermont. We have a good Latina governor but we still suffer from a left of center political climate.

“I saw an article that new mexico wants to make people work for their food stamps.”

Unfair!

Won’t that put working people out of jobs and onto food stamps?

Not if they are doing work that is not presently being done.

I saw an article that new mexico wants to make people work for their food stamps

This was Bill Clintons Failure…..working for food stamps and welfare is demeaning…….but what will really thin the rolls is to force them to sit in classes 20 hours a week and learn how to read write and speak English.

Then people will finally understand how much of a stranglehold Ebonics has on these people.

keynsian policies are working well.

unfortunately inflation is not growth.

And an increase in the size of the balance sheet is not inflation.

There is a strong correlation between it and future inflation.

That’s not inflation my friend. Learn the difference.

Why did you back down on China if my attacks were stupid? 6.5% GDP growth is not a collapse. You went to calling for a collapse to predicting that after reading my posts, guess they were not so stupid. You complaining about ad hominem attacks? That is all you have.

to=from

While a real-estate driven collapse in China seems like a plausible future development, I view the exercise of predicting whether and when it will occur as an activity on par with palm reading or fortune telling.

In other words, only charlatans or scam artists would pretend to be able to do this accurately.

Nobel Prize winner Robert Shiller is far more circumspect about the ability to predict China’s future economic picture than the HBB’s own ABQDan is.

China Asset Prices Stump Nobel Prize Winner Robert Shiller
2014/04/08 by Michael Cole
Robert Shiller at the World Economic Forum in Davos

Nobel Prize winning economist Robert Shiller, who correctly predicted the 2000 tech stock crash as well as the 2008 subprime crisis, was in China last week, and even one of the world’s great financial minds wasn’t sure what to think.

Shiller, who teaches at Yale University and jointly won the Nobel in 2013 for his analysis of asset prices, admitted difficulty in trying to figure out the real worth of assets in China. Speaking to the local press, Shiller (who is ranked among the 100 most influential economists of the world) said:

China is in such a rapid growth period, it is very hard to price assets when growth is at the high level. The future matters more, in a stable economy that is not going anywhere, you have a pretty good idea of what they are worth.

And when asked whether he thought the Chinese housing market would collapse in manner similar to the US during the subprime crisis, the economist who predicted the downfall of America’s housing market one year before Lehman fell apart again equivocated. “It could and I am not predicting it,” Shiller said of the possibility of China’s property bubble bursting.
…

What is he saying now not four months ago.

Btw it is interesting even back then he was hardly calling for a collapse.

Honest economists will admit the pointlessness of trying to predict the timing of future collapse events.

Then they have a pointless profession since that is what people expect from them. And there were certainly several economists that did predict the collapse of the economy. The left never likes to predict because their policies never work and they do not like to be reminded of that fact. If you can predict where a situation is headed then you do not understand the situation, it is as simple as that.

“The left never likes to predict…”

Everything in your world revolves around left-right politics, a paradigm which I find completely bizarre, but unsurprising, considering the black-white thought process at the source.

“…someone got 100k in free money to keep their home price high…”

I sure hope some economist gets around to conducting the study that documents how many $100K+ handouts were made in the wake of the Fall 2008 financial collapse. This free money for homeowners must be one of the largest wealth redistribution schemes in the history of the US, and deserves to be documented.

What are these free markets that you speak of? We haven’t seen them since at least 2008.

Note: This formula likely puts you in fly-over country.

China will do anything and everything to hide the truth. Their numbers make Enron look honest. Yet, one particular dunderhead here takes the government’s words as the gospel.

No I confirm with outside sources. No credible source is saying that China is not growing around 7% per year.

No credible source is saying that China is not growing around 7% per year.

I see you are already backpedaling away from your 7.5% growth prediction. I look forward to ongoing downward revisions to your growth “forecasts” right up until the point of collapse, when I expect you will take a long vacation from posting here.

We’ve seen it before from the likes of Slithers, EddieTard, etc.

I never said 7.5%, I said that is what they grew in the second quarter. You just try to nit pick while you miss the big point consistently. You folded on China like an accordion a week ago and now you are trying to get your manhood back. You went from China was going to collapse to it was going to grow 6.5% which is not a collapse by any standard.

I have consistently said above 7%, it can be as high as 7.5% but it will be 7% or above.

Actually, to avoid your nitpicking I said around 7%.

Which is a near a 50% decline from the Beijing Olympics peak…….and falling.

“You folded on China like an accordion a week ago and now you are trying to get your manhood back.”

I don’t remember folding or losing my manhood. I frankly am missing the connection between virility and repeatedly pointing out the inanity of your posts.

No credible source is saying that China is not growing around 7% per year.

Who cares anyway? How cares what “you” said, what “you” predicted? Do you think you are that important? China is a Commie environmental hellhole. You think economic growth is the end-all and the only factor that makes up a country’s worth? You are weird - a one trick simple thinking frad.

frad=fraud

If you won’t play the way that P-Dan wants you to play, then your penis will fall off. It’s true.

PS: PropagandaDan absolutely DID predict that China’s GDP would grow by 7.5% over the next year. Then he changed it to “7-7.5%”. Now it’s “around 7%”. The other day, he said that 6.5% was basically the same as 7%. I would call that backpedalling.

“Do you think you are that important?”

Delusions of grandeur are a sad state of existence.

mcdonalds got hammered with some bad meet in china.

Same store sales in the USA have been down 8 of last 9 months.

The food is too exspensive for the poor who dont cook.

Did you know they squeeze 10 burger patties out of a lb of ground beef?

The food is too exspensive for the poor who dont cook.
The poor who once went out to eat at McD’s, the only place they could afford, can’t afford it any more. Those who can pay for better stuff have gone elsewhere.
Read that both Kentucky Fried Chicken places in Flagstaff went out of business “unexpectedly” at the same time, very recently.

http://azdailysun.com/business/local/flagstaff-kfc-employees-had-no-advance-notice-of-closings/article_6f2ada10-1dff-11e4-bce6-0019bb2963f4.html

Actually, I have heard from more than one economist that the average Chinese is far richer than the official statistics since a lot of wealth is being hid from the tax collectors and a lot of Chinese are engaged in underground economic activities. Hence why someone would be buying a house outside of China with a suitcase of money,

The “amazing wealth” created by China is a chimera enabled by an estimated $25 trillion in central bank stimulus spending. I, too, could display an opulent lifestyle with a big enough credit card and endless can-kicking.

Just about everything you said is wrong. It was not the worse recession since the 1930s that is propaganda by Obama’s people to justify the poor recovery. We had a quick panic that ended quickly. The drop in GDP was not huge and it “ended” in June 2009. The problem is the Obama ‘recovery” is so weak you cannot tell the difference. China has no law like Carter forced on the nation to make banks give loans to minorities despite a history of not paying bills and no savings. There are no NINJ loans in China, there are 30% down payments and ten year loans. China is booming in many other areas of its economy housing and the HELOC loans was the only thing American has. The differences are profound and thus the situations hardly resemble each other.

While it technically might be deeper than 1973 or 79, 81-83, all of those economies had high inflation that limited government’s ability to fight the recession. There was not that problem this time. Reagan had to fight both high inflation and high unemployment.

Finally, most of the recession occurred during Bush II and was clearly ending on its own by the time Obama took office. Before any of Obama’s policies took hold we were in recovery.

Just to make it clear, what I am objecting to is any suggestion that Obama inherited an economy like the economy in the 1930’s a far deeper decline in GDP occurred then. I also reject as I said above that the economic challenges were more severe than the recessions in the seventies and early eighties since they were stagnation economies.

http://www.davemanuel.com/historical-unemployment-rates-in-the-united-states.php

they have addressed the problem of debt with more debt.

Yet as a percentage of their GDP their debt is less than our debt not even counting the unfunded liabilities we have and they do not. Additionally, their debt has gone to build factories our debt funded income transfers and the money is spent with a lot of it over in China a part of their massive savings.

‘There are no NINJ loans in China’

We should put a name to this position. Jingle uses it too. Let’s see, how about, “It’s 2014, not 2008.”

Uh, yeah. And your point is? The vast majority of foreclosures were prime loans. The vast majority of underwater houses in the US were acquired with prime loans. So what’s the common feature in tales of housing woe? Prices. Are house prices too high in China?

Why bother with predictions when you can’t even see what going on right now?

Ben, I see that china is having a housing correction. What I do not see is it causing china’s growth rate going below 7%. So what am I missing.

It was not the worse recession since the 1930s that is propaganda by Obama’s people to justify the poor recovery.

Bald faced lies have no bearing on economic reality. But they do cast doubt on your repeated assertions here that everything is fine with the Chinese economy.

‘china is having a housing correction. What I do not see is it causing china’s growth rate going below 7%. So what am I missing.’

China has a bubble. Maybe the biggest real estate bubble in history. There are several countries that also have bubbles and are directly tied economically to China. I don’t know how it’s going to end, but if I had to guess, very badly.

Why bother with predictions when you can’t even see what going on right now?

I’ve often pointed out her that the “best” predictions are those which “predict” something which is already happening but not widely perceived.

However, terminal blindness to reality tends to make this kind of prediction less viable than serving up a steady stream of blatant lies and propaganda.

“While it technically might be deeper than 1973 or 79, 81-83, all of those economies had high inflation that limited government’s ability to fight the recession.”

You can backpedal until you are blue in the face, but that won’t erase the revelations you have made here to prove to the entire world that you are either a liar or clueless.

Read this and educate yourself. (On second thought, never mind, as you seem to proudly enjoy putting your ignorance on public display here.)

It’s a died-in-the-wool Republitard trait…

Kenneth Rogoff, Professor of Economics and Public Policy at Harvard University and recipient of the 2011 Deutsche Bank Prize in Financial Economics, was the chief economist of the International Monetary Fund from 2001 to 2003.

AUG 2, 2011
The Second Great Contraction

CAMBRIDGE – Why is everyone still referring to the recent financial crisis as the “Great Recession”? The term, after all, is predicated on a dangerous misdiagnosis of the problems that confront the United States and other countries, leading to bad forecasts and bad policy.

The phrase “Great Recession” creates the impression that the economy is following the contours of a typical recession, only more severe – something like a really bad cold. That is why, throughout this downturn, forecasters and analysts who have tried to make analogies to past post-war US recessions have gotten it so wrong. Moreover, too many policymakers have relied on the belief that, at the end of the day, this is just a deep recession that can be subdued by a generous helping of conventional policy tools, whether fiscal policy or massive bailouts.

But the real problem is that the global economy is badly overleveraged, and there is no quick escape without a scheme to transfer wealth from creditors to debtors, either through defaults, financial repression, or inflation.

A more accurate, if less reassuring, term for the ongoing crisis is the “Second Great Contraction.” Carmen Reinhart and I proposed this moniker in our 2009 book This Time is Different, based on our diagnosis of the crisis as a typical deep financial crisis, not a typical deep recession. The first “Great Contraction” of course, was the Great Depression, as emphasized by Anna Schwarz and the late Milton Friedman. The contraction applies not only to output and employment, as in a normal recession, but to debt and credit, and the deleveraging that typically takes many years to complete.
…

Nothing in the post addresses the fact that Ronald Reagan faced both high inflation and high unemployment or the fact that peak unemployment was higher in 1982 than at the bottom of the last recession. Worse recession is much more a subjective determination than either you or Obama want to concede because it does away with the excuse for the worse recovery on record. People like Biden were talking about recovery summer by 2009 but we were and are stuck in 2% growth. Even worse, the next president whether he or she be a Republican or Democrat will be stuck inherit stagflation something only Jimmy Carter was able to achieve.

I also reject as I said above that the economic challenges were more severe than the recessions

Not even close. Under Reagan, USA’s industrial base was intact - before Repub supply side destroyed it. Under Obama this was not the case. Our industrial base has been structurally dismantled by worshiping TrickleDown policies first put forth by Ronald Reagan.

Yes, they all have Thomas Jeffersons waiting in the wings to be embraced by their adoring populations.

/Sarc off.

I’d like to see a version of Thomas Jefferson show up in our nation.

“I’d like to see a version of Thomas Jefferson show up in our nation.”

No free brown sugar for Thomas this time ’round.

“no free brown sugar…” I will take a cinnamon girl and het attitude tho.

“…demand is coming.”

Not nearly fast enough to keep up with supply! And if the two ever eventually align, watch out below for the construction slowdown that would entail.

a recent visit and how stunned by the wealth he saw.

His tour guide was likely valedictorian of the Potemkin school of Public Relations.

Good reference!

And we’ve recently had no shortage of Potemkin posts here, either.

Potemkin village
From Wikipedia, the free encyclopedia
Fireworks during a visit of Catherine II of Russia in Crimea.

The phrase “Potemkin village” (also “Potyomkin village”, derived from the Russian: Потёмкинские деревни, Potyomkinskiye derevni) was originally used to describe a fake village, built only to impress. According to the story, Grigory Potemkin erected fake settlements along the banks of the Dnieper River in order to fool Empress Catherine II during her visit to Crimea in 1787. The phrase is now used, typically in politics and economics, to describe any construction (literal or figurative) built solely to deceive others into thinking that some situation is better than it really is. Some modern historians claim the original story is exaggerated.
…

China’s Potemkin economy
By Satyajit Das
16 July 2014

Two views prevail when it comes to China’s debt crisis: pessimists are concerned about a catastrophic crash, while optimists predict a soft landing as gradual reforms correct the systemic issues.

The crash scenario is predicated on continuing increases in debt levels and over-investment, as policy adjustments are fatally delayed and authorities are ultimately forced to tighten credit aggressively, triggering failures in the financial system and a sharp slowdown in growth.

Weaknesses in financial structures exacerbate the money-market tightening, causing liquidity-driven problems for both vulnerable smaller banks and the shadow banking entities. The rapid decline in credit availability results in problems for leveraged borrowers, such as those in local governments and property sectors. The larger banks that are likely to benefit from the flight to quality are unable or unwilling to expand credit to cover the shrinkage from smaller banks and the shadow banking sector, due to risk aversion or regulatory pressures.

The deceleration in credit growth and liquidity results in lower levels of economic activity.

Foreign capital inflows that have enabled the central bank to provide liquidity to the financial system slow and then reverse. At the same time, capital outflows increase — especially from corporations, the politically well-connected and the wealthy — driving further contraction in credit.
…
In the short run, continued mal-investment and deferring bad debt write-offs will provide the illusion of robust economic activity, but households will discover over time that the purchasing power of their savings has fallen. Wealth levels will be reduced by the decline in the prices of overvalued assets and borrowers will find that their earnings and the value of their overpriced collateral are below the levels required to meet outstanding liabilities.

China’s Potemkin economy of zombie businesses and banks will create progressively less real economic activity. FA

Satyajit Das is a former investment banker and works as a consultant in the area of financial derivatives and risk management. He is the author of a number of key reference works on derivatives and risk management, as well as Traders, Guns & Money: Knowns and Unknowns in the Dazzling World of Derivatives.

If China “plans” on moving all the rural folk into the cities, then what is China waiting for? The empty cities are there. What is the problem?

who you gonna vote for this time around?

Nobody from the Establishment parties.

It’s notall with other people’s money. Some of it certainly seems like it would be with other people’s money. Taxes gotta be paid. However, there is more money-saving stuff in there than money-spending stuff.

Not even CLOSE to the definition of the word “progressive” that gets bandied about with abandon on this board.

Yet the same sheeple put on the hook for the bailouts will willingly bend over for the banksters when it comes election time and they install or retain the banksters’ Republicrat hired help.

China stepping up efforts to control social media
The authorities are always scanning for threats to their stability, made even harder by the language itself. Reading the sequence of numbers: 571, or in Pinyin, wǔ qī yī, aloud, sounds very close to a term meaning “armed/military uprising”, wǔ qǐ yì. “64″ can refer the Tienanmen Square protests of 1989. Chinese internet users play cat & mouse with the authorities this way.

Their currency reserves are US treasuries.

It almost seems like OCDDan is an agent of the Communist Chinese government, constantly making propaganda statements to bamboozle American readers into believing their 7.5% growth will continue forever, while ruthlessly attacking the American President as often as possible.

Is he with us or is he against us?

“Is he with us or is he against us?”

He sounds like a traitor.