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View Diary: Housing Bubble 2.0: This time it really is different (200 comments)

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  •  In the case of China, it is so obvious that (11+ / 0-)

    a big crash is coming.

    You see those documentaries about ghost towns in China? Cities full of empty high-rises and vacant office and commercial buildings?

    Someone owns every one of those. I know people who have bought as many as ten houses in China as an investment. Those houses are empty. The people who actually need housing are unlikely to buy or rent them. Either they are too poor to afford it, or the ghost towns are not close to where they can find work. Not even the owners live in one - they are here in California, living in rented apartments!

    Those houses will never have any real value. The only value they have is bubble. It will burst and burst badly.

    •  China (15+ / 0-)

      China has an even bigger problem of over-production. It's so large that it has forced down marginal prices on consumer products all over the world.
         But it has also left countless factories in China that can't turn a profit, not to mention loans they can't pay back.

       I've read that some of the reason for this is because the central control of the government, which tells its local governments that their performance will be measured by economic growth.
         The regional governments influence the banks to give out loans to build sh*t that no one needs, but the building produces economic activity that the regional government needs.

      None are so hopelessly enslaved, as those who falsely believe they are free. The truth has been kept from the depth of their minds by masters who rule them with lies. -Johann von Goethe

      by gjohnsit on Tue Dec 03, 2013 at 01:30:57 PM PST

      [ Parent ]

    •  They can presumably return to Marxist orthodoxy, (2+ / 0-)
      Recommended by:
      ActivistGuy, JVolvo

      … and re-emphasize the reality of "use value" (people can live and work in the unused buildings, even if it doesn't "pay" for the original investors to let them do so) as opposed to the artificial convention of "market value."

      The Dutch kids' chorus Kinderen voor Kinderen wishes all the world's children freedom from hunger, ignorance, and war. ♥ ♥ ♥ Forget Neo — The One is Minori Urakawa

      by lotlizard on Wed Dec 04, 2013 at 01:13:02 AM PST

      [ Parent ]

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