Did China just blink?

[Mega]

http://www.bloomberg.com/news/2010-1...is-points.html

did the FED win a game of Brinkmanship?

Mike

[ThePythonicCow]

Re: Did China just blink?

http://www.bloomberg.com/news/2010-1...is-points.html

That looks to be it, Mega. Gold and the stock indices gapped down this morning.

[jk]

Re: Did China just blink?

25bps. i'm overwhelmed.

china has instituted a variety of measures over the past several years aimed at containing their property bubble and rising inflation. they've always backed off before doing any serious damage, and before having any serious effects beyond temporary sell-offs in the shanghai market.

[we_are_toast]

Re: Did China just blink?

Officials have in recent weeks extended curbs on property, including tougher down-payment requirements and more restrictions on home loans, in a clampdown after record price gains this year. The central bank raised the reserve requirements for six banks for a two-month period, three people with knowledge of the matter said last week.

EJ
The pattern of asset price inflation, deflation, and reflation that held between the US and Japan may hold true for China: first the stock market bubble goes, then money pours into real estate, the government encourages it, then about two years after stocks crash housing crashes. If that holds for China, then they're right about there.

http://www.itulip.com/forums/showthr...hlight=crashes

[touchring]

Re: Did China just blink?

25bps. i'm overwhelmed.

china has instituted a variety of measures over the past several years aimed at containing their property bubble and rising inflation. they've always backed off before doing any serious damage, and before having any serious effects beyond temporary sell-offs in the shanghai market.

the chinese govt is losing credibility as the bubble keeps growing, regardless of measures. once the people believe that whatever policy they implement can't curb inflation, the only solution left is to wreck the market using a sledgehammer.

[GRG55]

Re: Did China just blink?

the chinese govt is losing credibility as the bubble keeps growing, regardless of measures. once the people believe that whatever policy they implement can't curb inflation, the only solution left is to wreck the market using a sledgehammer.

Politicians never knowingly or deliberately "wreck the market". The bubble always bursts because the final blowoff speculative frenzy exhausts itself, and people finally start to come to their senses. I see no reason why the Chinese real estate bubble won't follow the same pattern...which is why it could pop tomorrow, or it could go on for quite some time yet as the government behaves as jk described above - alternating between touching the brakes and then taking their foot off the pedal as they fear getting into an uncontrollable skid. As we discovered in California, Florida, Arizona, Ireland, Spain, Dubai, and all manner of other jurisdictions, there's just no reliable way to forecast the timing of these things...

[touchring]

Re: Did China just blink?

Politicians never knowingly or deliberately "wreck the market". The bubble always bursts because the final blowoff speculative frenzy exhausts itself, and people finally start to come to their senses. I see no reason why the Chinese real estate bubble won't follow the same pattern...which is why it could pop tomorrow, or it could go on for quite some time yet as the government behaves as jk described above - alternating between touching the brakes and then taking their foot off the pedal as they fear getting into an uncontrollable skid. As we discovered in California, Florida, Arizona, Ireland, Spain, Dubai, and all manner of other jurisdictions, there's just no reliable way to forecast the timing of these things...

Major Chinese cities have just banned families from buying more than 1 apartment. The next step will probably be a ban from owning more than 1 apartment! Kind of a reversion to the Mao era when 1 family owns only 1 apartment.

Can a bubble survive when there is no more market left?

http://www.businessweek.com/news/201...me-buying.html

[GRG55]

Re: Did China just blink?

Major Chinese cities have just banned families from buying more than 1 apartment. The next step will probably be a ban from owning more than 1 apartment! Kind of a reversion to the Mao era when 1 family owns only 1 apartment.

Can a bubble survive when there is no more market left?

http://www.businessweek.com/news/201...me-buying.html

Come now, you don't really think that ban, or any of the other rules that the government brings in, will be anything other than marginally influencial do you?

I don't imagine it will be very difficult at all for creative Chinese minds to figure out a way to "redefine" one family and get around that rule...and if needed bribe an official or three to look the other way. After all to get rich is glorious.

[touchring]

Re: Did China just blink?

Come now, you don't really think that ban, or any of the other rules that the government brings in, will be anything other than marginally influencial do you?

I don't imagine it will be very difficult at all for creative Chinese minds to figure out a way to "redefine" one family and get around that rule...and if needed bribe an official or three to look the other way. After all to get rich is glorious.

Not many ways as far as I can see:

1. Divorce the wife - the mistress will be very happy - NO GO.

2. Get my 15 year old son a wife - what if the "wife" pledges the property to the loan shark and runs away - NO GO.

3. Bribe the official? Easier said then done for the ordinary home buyer, China is not India or Indonesia where you could give bribes for everything from getting out or into the country without a passport, or getting the police to overlook a crime.