China and House Prices

The Big Brew Man calls it like it is…
How come Brewskie et. al. knows the truth about this dump but our ‘leaders’ do not?

From the king of Beers – Brewskie
“Holy shit! And I complain about Congress’s revolving door practice between politics and lobbying, or D.C.’s 40,000 registered lobbyists.
$90 billions dollars of big-bad, haughty, self-aggrandizing worth. That’s roughly the accumulated worth of China’s 70 richest legislators. Didn’t you say roughly 90% of China’s billionaires are connected to the CCP?
http://www.bloomberg.com/news/2012-02-26/china-s-billionaire-lawmakers-make-u-s-peers-look-like-paupers.html
Also, the profit on land price per footage is declining – big time. Consider:
Yangtze River Delta region: 16.7% in 2011 vs. 44% a year earlier
Pear River Delta region: 33% in 2010; 12.% last year.
Bohai Sea region: 7% last year vs. 29.4% just the year prior.
Midwest Region: a drop of 20.5% in profit from 2010.
http://www.theepochtimes.com/n2/china-news/land-led-decline-in-chinas-housing-markets-190323.html
Also according to the post:
“December statistics show that out of the twenty three cities that are followed by the Soufun website—China’s leading real estate Internet portal, housing prices have declined in all cities but one. Among them, ten fell more than ten percent from their highs in 2011.
Shanghai experienced the largest drop in housing prices, declining 18 percent from its high in February 2011, followed by Wuxi at 15.1 percent, Shenzhen at 14.3 percent, and Chongqing at 13.3 percent. Beijing fell 10.9 percent. The only city among the twenty three cities that did not fall is Kunming, which actually rose 22.7 percent in December compared with January 2011.
Still Too High
Even though housing prices in Shanghai dropped the most, prices remain extremely high in some areas and refuse to adjust. In the Jiali Huating area, located in the inner circle of Shanghai, the average price for apartments of the second phase project is as high as 120,000 yuan/sq meter as of Jan. 27, 2012. (source: jialihuating.soufun.com) The apartments are in high rise buildings. At the current exchange rate of 6.3138 yuan/dollar, the average price is equivalent to $1,766/square foot, which is 17 times as much as for the average housing price of $101.3/square foot in the United States. (The average U.S. house cost $242,300 in October 2011, and the average size of a U.S. house was 2,392 square feet as of 2010.)”
Finally, we all know the local reds are neck-deep in doo-doo debt, and because of the drying real estate market, revenues are drying up than desert water, and they’re fretting about repayment schedules; which has brought the banks in for negotiations. The the local govs.long-term hope that will sail them through? Fresh economic growth to blow in bucks. With declining real estate and everyone expecting GDP declines, the local govs are sounding more and more like Greece and the EU: merely kicking the can down the road.
http://www.marketwatch.com/story/china-local-governments-may-dodge-debt-deadlines-2012-02-26
You and the King keep up the good work; pass the fabulous word.

Chinese Living from www.Puddingandchopsticks.com

Here is a good post from http://www.puddingandchopsticks.com
The author is also a bad-assed photographer and has some pimp football pics. Anyho, the guy is talking about a typical Chinese scene …instead of editorializing, I’ll let you take a look ( I am pasting an excerpt from the middle of his post, but go check it out in its entirety. The author is talking about sitting next to a Chinese woman and how the locals act.)

From here : http://www.puddingandchopsticks.com/2012/02/25/little-babies/

“…Up until now it was all in Chinese. My Chinese is getting good enough to where I can eaves drop, which I find fun. No one thinks I can understand so I get all the juicy bits.
After qq it was a phone call to a guy who is a foreigner. I heard his voice for a second and could tell right away he wasn’t from China.
Ok so this is a little bit of a coincidence. Is it because I just happen to be sitting next to her while she talks in horrible English to a foreigner, or is she calling him to show off to me?
I bet the latter. It happens more often then you think. Especially because in this area not many people speak English. Now if I was in Beijing in the foreigner district and had Chinese girl seating next to me speaking English I wouldn’t be writing home about it. But this is a Podunk city in the country so; it’s a little weird.
And just to paint a picture, this girl has an iPhone 4, a Nikon D3000, and a bunch of other expensive things all spread out over her table. Obviously to show everyone that she has money….
…Oh and to justify titling this post little babies. She acts like a child. Playing with her phone, acting bored out of her mind, pouting, etc. Think valley girl from Cali with a ton of money.”

China and Spying

Our friends from China are stealing us blind
excerpt:
Of all spies ” only ten involved individuals who stole to benefit a foreign entity. In these ten cases, all of the individuals worked as either a scientist or a computer engineer.
Males committed nine of the ten incidents. Of the nine cases that identify citizenship, five
insiders were naturalized U.S. citizens, and four were foreign nationals. Of those nine individuals, seven were
Chinese and two were Taiwanese. One of the Chinese individuals was a naturalized Canadian citizen. Five of
the cases involved at least one accomplice who was also an insider, and at least two of those accomplices
shared the same country of origin as the primary insider.”

from here
http://www.cert.org/archive/pdf/CyLabForeignTheftIP.pdf

On China’s Impending Collapse

Here comes the truth, from the Brew-man, a guy who knows more about China than OBO and Biden together…
From Brewskie

“Quality Chinese products fall in the realm of quality Sigmund Freud theories: a few diamonds buried deep, if you’re willing to dig through endless cow dung or Canadian tar sand goop. Actually… one wouldn’t even find fool’s gold buried deep here.
What’s going on with the Chinese? Well, a few gurus are getting nervous. I’ve always felt a few top apples knew the shit was going down, but were too weak-spined and cowardly (or greedy: as in enjoying the trip) to steer a different course. A senior government economist warns about the can of worms China’s opening:
http://articles.economictimes.indiatimes.com/2012-02-22/news/31086917_1_hard-landing-china-economy-senior-government-economist
“A property sector downturn and slumping global demand may knock China’s economy into a hard landing in 2012, a senior government economist told Reuters, putting more pressure on Beijing to speed up economic reforms and to open up the market.
The economy is not just slowing but is also haunted by over-investment that could constrain Beijing’s options, said Shi Xiaomin, vice president of China Society of Economic Reform (CSER), a Beijing-based think-tank.
“A hard landing of the economy is possible this year as slackening domestic and external demand pushes (full-year) GDP growth below 8 per cent, probably even to 6-7 per cent,” said Shi.
“More worrying is that such a slowdown is going hand in hand with a sharp decline in the overall economic efficiency.”
The world’s second-largest economy may even slip into a period of deflation late this year or next year, he added.
Shi is an adviser to the government, specialising in reform. His think-tank is under the under the National Development and Reform Commission, China’s top economic planner.
[…]
But Shi warned that a downturn in property investment, which accounts for an eighth of gross domestic product (GDP), as shrinking land sales hit local government revenues, possibly forcing them to default on loans.
China’s banking regulator has issued guidance to banks to roll over some of their loans made to local governments to ward off a potential wave of defaults.
China cut banks’ required reserves on Saturday to support the economy that is widely expected to slowing this quarter for a fifth consecutive quarter. The market consensus is for full-year 2012 growth to have slipped to 8-9 per cent.
“But monetary policy cannot solve structural problems,” Shi said.
REFORMS STALLED China’s reforms were launched by former leader Deng Xiaoping in 1978 and gained steam after China’s entry into the World Trade Organisation in 2001, propelling the country’s break-neck growth in the past three decades, Shi said.
“Unfortunately, reforms have almost come to a standstill in recent years, especially concerning the monopoly,” Shi said.
State-owned firms have staged a come-back as they received the bulk of Beijing’s massive spending, sparking criticism that “the state advances and the private sector retreats”.
“There are growing calls for reforms, but such discussions are restricted to the academic circle,” said Shi, who was among economists who helped draft China’s reform plans in the 1980s to steer its transition from a planned economy.
Shi said “vested interests” — state giants in oil, power, railway and banking — are the biggest obstacle to reforms.
Premier Wen Jiabao has repeatedly called for accelerating reforms to help sustain economic growth, but Shi reckons that “stability” will be the watchword for the Chinese Communist Party ahead of its leadership transition in late 2012.”
What we know: Central CCP lords want local laddies to build crappy affordable homes. What’s different? They want the debt-riddled local lords to front up the $320 billion needed to snap them together.
http://www.reuters.com/article/2012/02/23/us-china-economy-property-idUSTRE81M0CX20120223
Alas, the European soap opera saga never ends. I’ve been aware they possessed larger problems than the US since late ’08; remember me stating I predicted America’s implosion+aftermath in ’04 (unfamiliar newbies: I’ve also been forecasting China’s baby crap to splatter on the shit fan by ’13 or ’14). Europe, as China’s biggest export market, is a monster concern for China. Three dudes – Michael Novogratz, Jamie Zimmerman and the esteemable Jim Chanos – lament of the euro’s fate, saying it’ll be a “liability currency for years; Jim even believes some countries, including Greece and Portugal, will leave the EU.
Jim, as always, left several tasty nuggets on Europe, plus China;
http://www.bloomberg.com/news/2012-02-23/novogratz-says-euro-liability-currency-for-years-as-chanos-expects-exits.html
Chanos said he is shorting, or betting against, Chinese developers and banks, as well as financial-services, machinery and cement companies. Chinese lenders don’t have enough capital to offset bad loans as economic growth slows, he said. He is also wagering against Australian and Brazilian mining companies, which sell commodities to China. In a short sale, an investor borrows a security and sells it, expecting to profit from a decline by repurchasing it later at a lower price.
“The government is now acknowledging it’s going to have to defer repayments of lots of loans,” said Chanos, who predicted the collapse of Enron Corp (ENRNQ). in 2001. “It’s just unprecedented, whether it’s infrastructure, manufacturing, residential real estate, commercial real estate. Everything now is going into over-supply over there.”

Cracking a Smile in China- Chinese Woman and Plumbers Butt

China, the land of class and civility, is a fun place to visit. Where else can you watch old Chinese men bring the hurt to the face of their wives in front of the Beijing bus station, and no one lifts a finger to help (actually saw this).

Aside from this, there is always the pleasant site of those who view sidewalks as toilet facilities, and of course the Beijing spit orchestra.
Here is a photo of another Chinese treat, the classy Chinese woman. Chinese women are as well known for their ability to hurl phlegm at mach one, while yanking the ear of their little one child burden and then screeching. This breed of human possesses the singular ability to simultaneously repulse as well as fascinate the casual onlooker….

classy chinese woman

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