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So I found this flyer on the ground outside my office tower a couple days ago...

...and it left me, not unexpectedly, with a vague sense of sadness, shame, and even a little anger.

Throughout the financial crisis, foreign buyers -- Canadian, Middle Eastern and Chinese among others -- have been coming on trips to the US to buy real estate.  And that number is increasing:

According to a report released Wednesday by the National Association of Realtors, foreign clients spent about $41 billion in U.S. housing in the 12 months ended in March 2011. Individuals with visas to stay for more than 6 months purchased an additional $41 billion. Taken together, that’s about 8% of the total U.S. housing market.

In particular, the number of Chinese investors in US property has been on a big upswing:

According to a survey by the National Association of Realtors, Chinese buyers accounted for 9% of foreign home purchases in the 12 months ended in March of both 2010 and 2011. That's up from 5% in 2009.

But something has shifted of late.  More foreign buyers are now becoming owners of distressed properties, as the above flyer reflects.  These are bank repossessed properties being sold in batches, sight unseen to Chinese buyers.  These aren't properties the buyer is going to live in, as note the investment return statistics and that all of the properties are 'guaranteed tenanted', whatever that means.

What is interesting is that more international buyers are going downmarket. The NAR says in the latest year 45% of the international sales were under $200,000. That share is up from 28% in 2007.

In fact, there are now whole communities in the United States whose current real estate market is relying on Chinese foreign buyers:

Take Cupertino, Calif., for example. Sales of existing single-family homes in Cupertino rose 21% in the first quarter from a year earlier, largely due to an influx of Chinese shoppers who are making huge cash purchases.

Home ownership has long been regarded as part of the American dream, and certainly many Chinese people are also seeking opportunities to immigrate (or at least have the possibility of an 'escape' plan should things go awry politically and/or economically in China) or to provide education options for their children.  But when I see flyers like these, with patriotic stars and stripes being used to sell what is left of someone else's American dream at a pittance to someone else who decides to buy five of them at a go, I'm a little sick to my stomach.  

I remember as an exchange student long ago in the late 80's a discussion I had with one of my Chinese friends about adoption.  She thought it was terrible that American couples were adopting Chinese babies, despite the fact that the kids were unwanted, abandoned, and would doubtless have much better lives ahead of them.  I couldn't quite get my head around why.  "Because we should be able to take care of our own," she said, "we shouldn't have to rely on parents in other countries to do it for us."

I think I understand a bit more now about what she meant.


There are an incredible number of benefits to being an expatriate these days.  The Hong Kong/China economy is robust, my kids are growing up bilingual, and we as a family are closer than ever given the multicultural experiences we share on a daily basis.  

One aspect of this lifestyle that is usually bitched about by American expats, however, is the tax situation.  In Hong Kong the income tax rate tops out at about 16% or so, which is a big draw for people, since most nations allow their expatriate workforce to be taxed under the laws of the location in which they work.  The United States has a global taxation policy, which alongside a number of treaties with different countries, "no matter where you go, there you are", paying US taxes.  

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A quick summary of events:

On December 30th, diesel oil was discovered gushing into the Wei River, a tributary of the Yellow River, China's second longest waterway and a key source of potable water for the country's northern population.

The diesel oil (estimated to be about 150,000 liters worth) came from a break in a pipeline owned by China National Petroleum Corporation.  Initially press reports said that CNPC claimed a third-party construction outfit caused the break, but more recent reports quoting government officials say the rupture occurred during a CNPC test of the pipeline.

Over the weekend, cleanup teams on the Wei River dug diversion channels and put in a number of floating dams to prevent the oil from flowing into the Yellow River, and they set up several testing stations downstream.

Yesterday (Monday), diesel traces were discovered at the dam in Sanmenxia, a city of 2.2 million located 100 kilometers downstream from the confluence of the Wei and Yellow rivers.  The dam has since been shut down and cities further downstream alerted to the possibility that their main source of drinking water has been contaminated.

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Warning:  I have a cold.  One of those hacking cough colds where you tend to leave piles of used tissues with unmentionable substances in them on the bedside table.  Part of this cold includes me waking up in the middle of the night to cough, and once awake, habitually checking the news.  So no, maybe I shouldn't have checked Bloomberg at 3am, but I did.  And I read a single line in a single story about retail store closings that freaked me out and pissed me off so much that I needed to vent about it somewhere.

The line in the story was this:

Probably 50,000 stores could close without any effect on consumer choice, Gregory Segall, a managing partner at buyout firm Versa Capital Management Inc., said this month during a panel discussion held at Bloomberg LP’s New York offices.

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Come off it already.

CNN is continuing its ridiculous effort to maintain some semblance of drama in what by most accounts will be an Obama electoral college and therefore presidential victory by reporting this latest line of bullshit:

McCain is keeping the race close in Ohio.
(CNN) – Pennsylvania may be slipping from John McCain’s grasp, but the Republican nominee is keeping the race close in the neighboring battleground state of Ohio – a state that no successful GOP presidential contender has failed to win.

CNN's new Ohio poll of polls shows Barack Obama leading McCain by three points, 49 to 46 percent. Five percent of the state’s voters were unsure about their presidential pick.

WOW...a three point margin.  That's mighty close, huh?  Wait a second, though...our guy is still in the lead.  In fact he's in the lead in a state that was won by Bush in both 2000 and 2004, so how's that again?  McCain is losing by three points in Ohio and he's 'keeping the race close'??

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There are a couple of key diaries today, including this one by eugene and this one by wmtriallawyer that discuss how best to use the widening margins Obama currently enjoys in the polls.

But it was this comment by kismet in one of the diaries that struck me as diariable (jeez is that a word?) in its own right:

It seems like in the run-up to this election, especially if he truly pulled in $100M this month and holds a crushing lead in the polls, Obama needs to be spreading a "pull the D lever and give me the help I need in Congress and in the states".  If I go out canvassing for O, I'd like to be able to hand supporters a nice Obama-branded card that says something like "it's not just important to vote Obama, it's Obama, Perdue, Hagan, Kissell/Taylor/Watt, etc."

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Mudflats takes one for the team by attending both the Democratic and Republican rallies competing in Anchorage yesterday...

Once again, there were duelling rallies here in Anchorage today.   The McCain-Palin rally was held in the just-completed Denaina Convention Center in downtown Anchorage.  The Obama rally was held outside, just a couple blocks away, at the Delaney Park Strip, also in downtown Anchorage.

Okay none of the tickets are actually in town campaigning, so you figure that the homegirl Palin would at a minimum be able to get her crowds on?  Not so much....

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From Bloomberg...

China Approves Short Selling, Margin Lending to Develop Market

Sept. 26 (Bloomberg) -- China's cabinet agreed to let investors buy shares on credit and sell borrowed stock to help develop Asia's second-largest market after prices and trading volumes slumped, an official familiar with the plan said.

The State Council signed off on a China Securities Regulatory Commission plan submitted this month to allow margin lending and short selling, said the official, who declined to be identified as he isn't authorized to speak on the issue.

The Chinese are learning fast, folks.  The past weeks have simply confirmed suspicions that they've had for awhile:  that China can no longer rely solely on other capital markets around the globe to provide the liquidity needed to support growth in their economy.  They've got to start doing it themselves.

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Sorry for the short diary, but just want to keep this at the top of people's minds...the scale of this disaster in Sichuan and elsewhere in China is only now beginning to unfold.  The latest headline on (Chinese language site) is that across 8 provinces/municipalities there are over 9200 confirmed dead and an estimated 500,000 structures collapsed.  

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Hopefully this diary will become moot in a 24-48 hours as either Hillary or the superdelegates come to their collective senses and do the right thing.  But hey, if she wants to keep going, then she wants to keep going, and the least Barack can do is give her the best run for her money possible in WV.  So what's going on in WV with the Obama campaign, you ask?   Stop whining and get in the car...

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I travel a reasonable amount in China for business, and I speak Mandarin.  Some of my most enjoyable recent conversations have been with local taxi drivers ferrying me to/from airports in Beijing or Shanghai.  But last week I had a conversation that reminded me just how incredibly vast is the chasm between the haves and the have nots in the second largest economy in the world.

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Ok, in the interest of full disclosure let me say that I've seen this subject covered here in part but not exactly with the point that I want to make.  Which is simply this:  Hillary's election strategy hasn't ever cared about 50 states, heck she hasn't even cared about the majority of the states.  She also frankly doesn't care about proportional awarding of delegates during the primary process within most states.  

In fact, it seems that Hillary has never cared about anything other than winning the majority of the popular vote in the big ticket electoral vote states so as to take all in November.  That's it.  That's why she was so unprepared for the battle she's fighting now, but given her continued insistence on 'significant' states vs. 'boutique' states, it may still be the argument she inevitably uses to swing superdelegates in her direction should this primary season go all the way to the convention.

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