China shows WHO is boss?

[touchring]

Re: China shows WHO is boss?

Now that the idea of becoming gloriously rich through real estate "investment" has been ingrained in the national psychology, it'll be near impossible to control the bubble. Even the fear of losses is probably gone because everyone there can see how the authorities reacted, and how fast they were able to restart property market inflation after the last price decline. I'll bet there are lots of punters in that market that are certain the government "won't let property prices go down". The Chinese are human, and humans have an amazing ability to find creative methods around new rules that stand in the way of the "instant wealth" they are certain they deserve.

That will be possible in Dubai, but do you actually know how Chinese people gamble? The very moment they think that their government is not going to clamp down, prices will start doubling every 8 to 12 months, affordability will jump from 80 years to 160 years in less than a year, it will be nothing that you have seen in the Middle East or Europe.

[GRG55]

Re: China shows WHO is boss?

That will be possible in Dubai, but do you actually know how Chinese people gamble? The very moment they think that their government is not going to clamp down, prices will start doubling every 8 to 12 months, affordability will jump from 80 years to 160 years in less than a year, it will be nothing that you have seen in the Middle East or Europe.

I grew up on the west coast of Canada, in Vancouver, which has the second largest Chinatown in North America [after San Francisco]. I have some perspective of the Chinese penchant for gambling...

And I agree with you...it's one of the reasons I don't think the Chinese authorities can control the bubble without bursting it. Coming off scaring themselves silly the last time they tried to cool the economy, and it backfired on them, they are most likely to err on the side of extreme caution.

The reports I am reading out of China indicate that just the talk the authorities may tighten has been enough to light off a frenzy of land purchases by developers and home purchases by punters.

The whole thing reminds me of Japan circa 1988/89, with it's much vaunted MITI-managed economy, 100-year residential mortgages, and people the world over rationalizing utterly idiotic property valuations in the cities there [I recall one report of the Imperial Palace grounds in Tokyo being valued for more than the entire State of California at the time]. China is not there. Yet...

This is going to be fun to watch...:p [I wish I had a front-row seat like you do!]

[touchring]

Re: China shows WHO is boss?

The whole thing reminds me of Japan circa 1988/89, with it's much vaunted MITI-managed economy, 100-year residential mortgages, and people the world over rationalizing utterly idiotic property valuations in the cities there [I recall one report of the Imperial Palace grounds in Tokyo being valued for more than the entire State of California at the time]. China is not there. Yet...

I think there's still some differences between China today and Japan in the 80s. For one, modern Japan isn't a 100% sovereign nation, and besides CCP can do whatever it likes since it does not have to win an election. The CCP can and has the power to burst the bubble if it wants to.

[bill]

Re: China shows WHO is boss?

besides CCP can do whatever it likes since it does not have to win an election. The CCP can and has the power to burst the bubble if it wants to.

yep
http://www.scmp.com/portal/site/SCMP...ies&s=Business

Shanghai, Guangzhou move to cool red-hot property market

Peggy Sito Jan 01, 2010

Shanghai and Guangzhou are the first cities to respond to the central government's efforts to restrain sizzling house prices, announcing a withdrawal of incentives for home purchases and tougher measures against developers hoarding land....

[Jay]

Re: China shows WHO is boss?

If China wants to maintain the peg, and US keeps printing, the money has to go somewhere. The US needs to print a lot more and hence room to run for Chinese domestic asset appreciation. To the moon Alice!

[GRG55]

Re: China shows WHO is boss?

I think there's still some differences between China today and Japan in the 80s. For one, modern Japan isn't a 100% sovereign nation, and besides CCP can do whatever it likes since it does not have to win an election...

Neither did MITI [now METI]...;)

The CCP can and has the power to burst the bubble if it wants to.

So does the Fed...but it didn't...:p

The "last time", just a couple of years ago, the CCP did try to burst the bubble. And lo and behold it worked just a little too well. And what was the result? The very same CCP "blinked" and sanctioned property purchase incentives just barely one year ago, which was like using aerial tankers to pour gasoline instead of fire retardant on a still smouldering forest fire.

touchring, we both know that Asians in general, and the Chinese in particular, do not like to leave their money lying around in bank accounts. They much prefer to own something, anything, that keeps their money "working" for them. The government simply cannot afford to be "too successful" chasing money out of the property sector...and once again I will contend that after their most recent heart-stopping experience popping an incipient property bubble, the Chinese authorities will tread very cautiously this time. Yes, they could make a "mistake" and have a serious accident [as could the Fed or any of the other Central Banks as they try to withdraw monetary stimulus], but I am increasingly certain that the China property bubble has the best chances of being allowed to run its course and it won't end until it finally exhausts itself, like all really good bubbles.

[Jay]

Re: China shows WHO is boss?

... and it won't end until it finally exhausts itself, like all really good bubbles.

And it is fueled by Fed printing. That is quite a leash to run on.

[touchring]

Re: China shows WHO is boss?

Yes, they could make a "mistake" and have a serious accident [as could the Fed or any of the other Central Banks as they try to withdraw monetary stimulus], but I am increasingly certain that the China property bubble has the best chances of being allowed to run its course and it won't end until it finally exhausts itself, like all really good bubbles.

Yes, that might be possible, but again, we won't be able to know for sure what the CCP will do. Remember, the CCP is guided by its own principles, and not the conventional values the West is familiar with.

Take for example the case of Akmal Skaikh misadventure in China. It does not matter to the CCP if he has bipolar disorder or any sort of mental disorder, unless he has totally gone nuts, talks to the chair, table, talks to people that don't exist, doesn't bath himself, you know what i mean.

The CCP wants to send the message across to drug lords, even if you send crazy people or Brit or American drug couriers over, we'll execute them.

Last, anyone of you traveling to China or any Asian countries with capital punishment for drugs, please remember, do not help anyone carry their baggage through the customs, and remember to padlock your bags. It doesn't matter if you know what you're doing, once you're caught red handed with that stuff, you're done. In Singapore, more than 14 grams of heroin, a small sachet, will invite the mandatory death penalty. In China, they allow up to 49 grams.

[Jay]

Re: China shows WHO is boss?

Last, anyone of you traveling to China or any Asian countries with capital punishment for drugs, please remember, do not help anyone carry their baggage through the customs, and remember to padlock your bags. It doesn't matter if you know what you're doing, once you're caught red handed with that stuff, you're done. In Singapore, more than 14 grams of heroin, a small sachet, will invite the mandatory death penalty. In China, they allow up to 49 grams.

What happens if you have 48? The lash and a cold wet cell with a hairy roommate?

[touchring]

Re: China shows WHO is boss?

What happens if you have 48? The lash and a cold wet cell with a hairy roommate?

Some clues here.
http://tim.z.infzm.com/2009/04/01/an...death-in-jail/

For one, you won't need to put yourself on diet.