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View Diary: Ben Bernanke Says He's Sorry, And He Won't Do It 'Again' (220 comments)

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  •  Funny that, China maybe under the microscope (4+ / 0-)
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    panicbean, xaxado, Badabing, Areopagitica

    After the Dueling Dubai diaries yesterday, I was thinking where other high priced real estate may be in a similar state of disrepute:

    From October 09:

    The two bubbles building in Hong Kong

    That trend is the boom in Hong Kong property. You may well have read about the world record price just paid for one apartment: HK$439m (US$57m) or HK$71,280 per square foot for the '68th floor' in a new prime development in the Mid Levels district of the city. (The building is actually on the 39th floor – floor numbers considered unlucky are routinely skipped in China.)

    The buyer is anonymous, but is believed to be from the mainland, making him or her the most high-profile example of a trend that's pushing up luxury residential prices in the city: the new millionaires and billionaires of China snapping up top addresses in their country's richest region.

    The high prices being paid are causing some alarm about a possible property bubble. In an effort to cool things down, the Hong Kong Monetary Authority, the territory's de facto central bank, has just cut the maximum mortgage for properties above HK$20m to 60% of the property's value, from 70% before.

    So while the boom in luxury property is due mostly to easy conditions on the mainland, a similar rebound in lower-end property owes much to easy money in America. Low US rates trigger low rates in Hong Kong, making mortgages more affordable and pushing up the price local buyers can afford to pay. As the chart below from Reuters shows, the slump in prices last year has now been almost completely erased.

    This isn't just about enthusiasm for China; the Hong Kong dollar peg makes the Hang Seng highly sensitive to ebbs and flows in global liquidity, and thus it's an obvious way to trade them. When the Fed is pumping money into the global system, traders go long the Hang Seng – hence the melt-up in late 2007 as the US slashed rates at the start of the credit crunch.

    Hong Kong's sensitivity to ultra-easy central bank policy elsewhere flags up what will be a very big issue for Asian governments over the next few years. China and the rest of emerging Asia is likely to begin tightening policy once the recovery solidifies. But what about the Western world? One look at data as bleak as US unemployment reinforces my view that monetary policy there is going to stay loose for a very long time.

    A jury consists of twelve persons chosen to decide who has the better lawyer. Robert Frost

    by bamabikeguy on Sat Nov 28, 2009 at 08:26:27 AM PST

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    •  Asian investments (3+ / 0-)
      Recommended by:
      panicbean, Badabing, bamabikeguy

      The program – known as the City of Dallas Regional Center – is a citywide adoption of a federal immigration program that trades green cards and the promise of permanent residency for investments of $500,000 or $1 million.

      According to Natinsky, hundreds of investors – particularly from China but also from Mexico, South America and elsewhere – are lining up for the chance to get in.

      The investment program is complex and governed by strict federal immigration and customs rules that determine who gets in and who's kept out. The process of clearing investors can take months.

      Under the program's rules, investors who put up $1 million can invest anywhere in Dallas. Investors who put up $500,000 must invest in areas where unemployment is 50 percent higher than the national average.

      And every investor's contribution must create at least 10 permanent jobs. So if 10 investors put up $10 million, their project has to directly or indirectly result in 100 new jobs.

      "The required presence of health professionals did not make interrogation methods safer, but sanitized their use" Physicians for Human Rights

      by Catte Nappe on Sat Nov 28, 2009 at 08:41:06 AM PST

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