Protest over falling home prices. We next?

this is a bit alarming but many will choose to ignore it. Its been years in the waiting as Chinas credit/property bubble kept growing and nobody cared. Its fine when the prices rise, but when the music stops, its not OK anymore. Same as us. This could be the start of a hard landing in China, and if that plays out, the huge rise in equities recently will be in jeopardy and commodities could get smacked too. This is prob the biggest threat on the radar for now as EU bought themselves some time with more financial engineering to stretch out leveraged rescue funds for GR, IT, and Portugal

chinese property prices can drop, it really doesnat matter because the story in china is 1.5Bn and growing people that are demanding goods and services.

I think the ramifications of the property bubble bursting in China have not been fully considered and are yet to play out. China has a huge rebalancing ahead and these things never play out gently.

China has the potential to have major problems - real estate bubble is only one. Currency and Human Rights (not in that order) could blow up at any time.

I disagree, it does matter when considering the euphoric expansion of credit associated with the property bubble. Its not one without the other. China has been trying to tame credit growth by stricter regulations on banks, but it has only started to show some effects now and those effects are starting to cause some social unrest. Its like us in mid 2007 before the spark became a fire. On this one, I do agree with riversider that the ramifications of declining credit/housing prices have not been fully considered yet. The effect on commodities alone IF/WHEN this does play out can ripple across the markets.

@ Urban

Fantastic Michael Pettis podcast

http://paul.kedrosky.com/archives/2011/10/michael-pettis-talks-china.html

Michael Pettis is a professor at Peking University's Guanghua School of Management, where he specializes in Chinese financial markets. He has also taught, from 2002 to 2004, at Tsinghua University’s School of Economics and Management and, from 1992 to 2001, at Columbia University’s Graduate School of Business.

Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987, when he joined the Sovereign Debt trading team at Manufacturers Hanover (now JP Morgan). Most recently, from 1996 to 2001, Pettis worked at Bear Stearns, where he was Managing Director-Principal heading the Latin American Capital Markets and the Liability Management groups.

That was pretty interesting, RS. Thanks.

Marco, What do you think happens to companies like CAT when the Chinese stop building unnecessary infrastructure and apartments?

They are doing the Chuck Prince until the pipa stops.

China's made no secret of its goal of emulating Germany and moving away from commodity style products that rely on low wages. So double whammy for a company like Caterpillar. They'll buy less heavy machinery but what they do buy will be domestically produced.

RS that is a rather amazing lecture. Explains why Jim Chanos is so adamant in his bearish position. And really explains why the wealthy in China want to invest their money in RE outside of China. Thanks for posting.

My pleasure. It's a shame you don't find such discussions on the major the major cable tv news networks. or financial networks..

Not going to read scary news anymore.

Get a fertile, easily-defended piece of land somewhere. Gather like-minded friends. Stockpile vaccines, antibiotics, weapons.

nyc10023
I am of a like mind.

Michael Pettis is an excellent cure for constipation.
I should have listened on the can.

Understood China is mis-allocating investment. This will be the hit China but short term we're not able to do stop it.
So why are we fighting it instead of benefiting from it. Case in point Solar. Instead of trying to compete with China's mis-allocation of investment dollars we should just buy the products until China blinks.

Also interesting how transferring wealth via interest rates away from savers is not a purely American phenomenon and is done across the globe. And it's usually negative.

Just happen to be in Hong Kong at the moment. The building next to my hotel has luxury residences being scooped up by the mainlanders for $4000 a square foot...in Tsimshian Sha Tsui non- the- less!

Sorry, that's Tsim Sha Tsui on Kowloon side.

FT put out a story yesterday that investment in the high speed rail network has ground to a halt and workers are not getting paid and machinery is sitting idle.

http://www.ft.com/intl/cms/s/0/a9337b06-fe20-11e0-a1eb-00144feabdc0.html?ftcamp=rss#axzz1c1izDneE

China’s high-speed rail plans falter

I do agree with riversider that the ramifications of declining credit/housing prices have not been fully considered yet. The effect on commodities alone IF/WHEN this does play out can ripple across the markets.

Yes, This is why not all commodities are a slam dunk here. Far from it. Industrial Commodities don't do well here. Gold on the other hand is a store of value this does well. Agricultural commodities are a much safer better than say Copper.

A shout-out to Street Easy on this thread. A month ago, I started a thread regarding protests (in NYC) on how it could impact real estate prices. I can't find that thread and am assuming it has been removed (censored?).

If this is right, could you kindly explain how this thread from Riversider about RE protesters is allowed to remain active, but my thread about protesters is missing?

thanks in advance for any clarity you can provide

http://streeteasy.com/nyc/talk/discussion/28340-any-impact-on-manhattan-real-estate

I googled "site:streeteasy.com lecker protests", it was the 3rd link.

In fact, I was the last person to post on that thread.

I think you owe someone an apology.

inonada - thanks for the post.

I see now that my mistake was to rely on the "streeteasy" search feature when I should have been using Google. Although why google finds the thread while streeteasy search does not raises other questions, it is not nearly as sinister as I originally concluded.

thanks again

No prob.

SE's search covers post text but not poster name, unless a poster's name is included in the text. Probably because querying, say, Riversider, would crash the server.

Google's search covers everything, so including site:streeteasy.com in a Google search is always more useful.

Thought some might find it interesting that there is an occupy style encampment below that HSBC bank building in Hong Kong protesting 3,000 job cuts that the company is making. No one is happy with the banks.

>No one is happy with the banks.

vs. 5 years ago when anyone could get a loan that they couldn't necessarily afford? That's when the banks were good, right?

yea-- they love banks when they give you the money.. paying them back just pisses people off I guess

Most global investors predict China will face a banking crisis within the next five years, paring their appetite for the nation’s shares and eroding confidence in its leadership, a Bloomberg Global Poll indicated.

Sixty-one percent of respondents said they anticipate a crash in the financial industry by late 2016, and only 10 percent were confident China’s banks will escape trouble, according to the quarterly poll of 1,097 investors, analysts and traders who are Bloomberg subscribers conducted Dec. 5-6.

Evidence of slowing growth in China -- including the weakest manufacturing performance in more than two years, falling home sales and ebbing export growth -- has stoked concern that non-performing loans will climb in the world’s second-largest economy. The risk is a legacy of a record 17.6 trillion-yuan ($2.8 t

rillion) lending boom unleashed by Premier Wen Jiabao in 2009-2010 amid the global recession.

http://www.bloomberg.com/news/2011-12-07/poll-investors-predict-china-bank-crisis.html

beware--riversider is a known liar.

a bunch of out-of-touch people here.

first, the 400 protesters in shanghai are flippers, and they want to be bailed out like AIG, you know they are crazy.

and, the human rights situation in china is in fact much better than in the united states, here in the US is a true police state

the way china handles currency and banking system is not the best, but smart enough not to be rib-off by the US, that's a big plus for the world

punk'd!!!

caonima,

Here in USA, the phrase is "ripped-off" not rib-off. If it were not for this mis-wording, I would never have guessed you were from China.

...caonima ... "a bunch of out-of-touch people here.
first, the 400 protesters in shanghai are flippers, and they want to be bailed out like AIG, you know they are crazy.
and, the human rights situation in china is in fact much better than in the united states, here in the US is a true police state
the way china handles currency and banking system is not the best, but smart enough not to be rib-off by the US, that's a big plus for the world"...

oh no, we already knew he was from china. his handle mean fuck your mom in mandarin.

it really does mean that, that's not a stupid made up lucille thing. although it does appear to have something to do chinese internet censorship and not so much fornication with the upstanding ladies who birthed and reared Streeteasy townfolk.

http://en.wikipedia.org/wiki/Grass_Mud_Horse

the way china handles currency and banking system is not the best, but smart enough not to be rib-off by the US, that's a big plus for the world.

So what are the Chinese that bot RE in Manhattan(if they did) going to do when their properties lose value? Throw a temper tantrum and protest? Good luck with that.

This is New York
real estate ONLY goes up in value in this town.
Where you been???
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EXCELCIOR!

Google caonima for more context on our friend.

falcogold1 ??

>So what are the Chinese that bot RE in Manhattan(if they did) going to do when their properties lose value? Throw a temper tantrum and protest? Good luck with that.

I'm a Chinese businessperson making fake toothpaste filled with lead, mercury, and dioxin instead of the more expensive stuff. I net $10 million after bribing local and party officials and poisoning my countrymen. Or, I counterfeit movies, or steal high speed rail technology.
I can keep my $10 million in China, and risk a tank showing up at my house someday or being taken advantage of by the guy who stole better movies or made worse toothpaste. Or, I can buy some real estate in New York City that is 20%, 30%, 50% overvalued, and when that New York City Real Estate goes back to what is "should be", I'll still have wealth, and a great place to go especially with Chuck Schumer's plan to permit foreigners who buy real estate here.

No tempertantrum here.