Anyone watch 60 Minutes last night?

[diverdog]

They did a segment on the Chinese real estate market. To say China is sitting on a time bomb would be an understatement. When that bubble burst it is going to be bad....really bad. Generational savings will be lost and I think it destroys the Chinese middle class and possibly the government. They have entire cities that are ghost towns. The amount of over building is staggering. One of the big reasons is that the Chinese government does not allow people to invest outside of China. So the average investor has poured all their money into real estate in the hopes that it will keep growing. I just pray to god that they have not leveraged the borrowing or this could be devastating on a global scale.

http://m.youtube.com/#/watch?v=9PqFFIpppsI&desktop_uri=%2Fwatch%3Fv%3D9PqFFIpppsI

http://blogs.marketwatch.com/thetell/2013/03/04/chinas-top-real-estate-ceo-sees-housing-bubble-hopes-leaders-can-fix-it-report/

[cleller]

That must have been a re-run, because I think I've seen it, and it was scary. Imagine the other things going on there that the Chinese government is able to censor.

I've also seen stories about the government building new superhighways right alongside high speed rail lines. Highways that no one drives because either they don't have cars, of the rail is so much faster. Add in the problems with pollution, food, water. They'll have a big hiccup sometime.
I guess they do have one factor in their favor. Someone makes decisions there.

[BermudaSooner]

So wait....there is a problem when we let the government make all finacial decisions rather than private enterprise? Hmmmm.

[KantoSooner]

Okay Diver, now let me double down, so to speak, on the situation in China. The real estate bubble is big and dangerous and growing. Now look at the valuations on the Shanghai and Shenzhen stock exchanges. Scared enough? Now add to that the fact that those companies on those exchanges? 100% of their books are utter fabrication and fantasy. Not a single word in any of their financials has more than a nodding acquaintance with objective reality.

And here's the zinger: the banks are in on it, too. Not the big international banks directly, but the local banks. And guess who owns a lot of the paper issued by the rotten local banks? Yes. The Big International Banks.

Why hasn't it fallen yet? First, and foremost, because China is still a money making machine. So long as the music plays and you dance in circles, who cares how many chairs have been pulled off the floor? It's only when the music stops that you notice you don't have a place to sit down. Second, a lot of the banks and companies whose books don't make sense are owned by the princelings and princesses of the country. And Momsie and Dadsie in their offices of the government and People's Liberation Army are not too motivated to pressure the auditors to go check them out.

China will ultimately survive. Too many smart, hard working people for it not to. But, when the wheels fall off here in the not too distant future, it's going to be pitchfork and torch time in the streets for a few months.

[StoopTroup]

Over valued mud shacks?

[KantoSooner]

StoopTroup, neither you nor I could touch so much as the earnest money on a nice apartment in Shanghai these days. The last time I was there, I went to a cocktail party at the residence of a local computer chip service company owner. 21st floor, 8,000 ft2, three balconies, two of which had hot tubs, yadda, yadda, yadda.

And this guy had been a service tech working for a California equipment maker when I first met him in around the late 1980's.

There has been some serious coin made in China iin the last 30 years.

[soonercruiser]

Diver,
You could have gotten this story on FOX last year.
THere was a 2 hour special - I believe it was Stossel or Baier .
Oh! That's right...you wouldn't watch FOX to get any news...

2006
http://www.foxnews.com/story/0,2933,187831,00.html

2010
http://www.foxnews.com/world/2010/05/27/chinas-moves-sap-housing-bubble-cool-prices-turn-bull-market-bearish/

2010
..later part of this story..
http://www.foxnews.com/opinion/2010/01/08/liz-peek-china-war-obama-economy-iran/

[soonercruiser]

Some other FOX New clips on the Chinese housing bubble...

http://video.foxbusiness.com/v/4306167/us-risk-factors-of-chinese-real-estate-bubble-/
http://video.foxbusiness.com/v/4319339/chinese-real-estate-markets-impact-on-macau-casinos/

[soonercruiser]

StoopTroup, neither you nor I could touch so much as the earnest money on a nice apartment in Shanghai these days. The last time I was there, I went to a cocktail party at the residence of a local computer chip service company owner. 21st floor, 8,000 ft2, three balconies, two of which had hot tubs, yadda, yadda, yadda.

And this guy had been a service tech working for a California equipment maker when I first met him in around the late 1980's.

There has been some serious coin made in China iin the last 30 years.

Apartment!!???
How's about the price of parking?

[StoopTroup]

StoopTroup, neither you nor I could touch so much as the earnest money on a nice apartment in Shanghai these days. The last time I was there, I went to a cocktail party at the residence of a local computer chip service company owner. 21st floor, 8,000 ft2, three balconies, two of which had hot tubs, yadda, yadda, yadda.

And this guy had been a service tech working for a California equipment maker when I first met him in around the late 1980's.

There has been some serious coin made in China iin the last 30 years.

I'd like to mention that I do work for an Airline that is linked with One World. Many of us have taken trips to China and returned Home. Matter of fact...a really good friend just spent 2 weeks in Shanghai. We've had many discussions about it.

When China took over Hong Kong....many changes in people's lives occurred.

I was also actually alive when Richard and Pat Nixon went to China. My Parent's have been there as well.

Now....I'd like to also mention that the Mud Shack thing was just a joke.

I guess I could name drop as well but I know that Thank God I don't live under the rules they do in China.

That said....everyone in China has a Condo with two Hot Tubs now?

[KantoSooner]

Sorry about taking the mud shack thing too seriously. My comments were not meant as self-aggrandizement but to underline that a whole lot of money has been generated and more has been borrowed in China in the last 25-30 years and that it's connected to us and that a whole lot of it has no foundation.
When it falls, there's goiing to be an almighty 'thump'.
Cheers.