stock market was up today...

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Very informative discussion about the looming real estate and demographic issues in China as well as a discussion about the "fugazi" economy we are holding on to here in the US.

 
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#14,007
Rasputin_Vol said:
Very informative discussion about the looming real estate and demographic issues in China as well as a discussion about the "fugazi" economy we are holding on to here in the US.

Click to expand...


They’ve overbuilt their housing supply by about 100-200%. When we had a RE bubble we only had about a 5-10% excess. When the CCP allowed their population to own real estate, the people started owning 2nd and 3rd homes as investments. China has the fugazi economy. We just have a deficit to knock out so that the debt can trend in the other direction.
 
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#14,008
Thunder Good-Oil said:
They’ve overbuilt their housing supply by about 100-200%. When we had a RE bubble we only had about a 5-10% excess. When the CCP allowed their population to own real estate, the people started owning 2nd and 3rd homes as investments. China has the fugazi economy. We just have a deficit to knock out so that the debt can trend in the other direction.
Click to expand...
And, aren't Chinese constrained in what they can invest in? So housing became a default store of wealth.
 
#14,009
#14,009
Thunder Good-Oil said:
They’ve overbuilt their housing supply by about 100-200%. When we had a RE bubble we only had about a 5-10% excess. When the CCP allowed their population to own real estate, the people started owning 2nd and 3rd homes as investments. China has the fugazi economy. We just have a deficit to knock out so that the debt can trend in the other direction.
Click to expand...
I would be curious to know where you got that number from. How many extra homes does that come out to be? 500k? 1million? 6 million?
 
#14,011
#14,011
Rasputin_Vol said:
I would be curious to know where you got that number from. How many extra homes does that come out to be? 500k? 1million? 6 million?
Click to expand...

Per Fortune, enough space for 3 billion people.

finance.yahoo.com

How many ‘vacant homes’ does China have right now? A former statistics official has an eye-opening prediction

China’s housing oversupply is far worse than previously reported, the country’s former statistics bureau deputy head says.
finance.yahoo.com finance.yahoo.com

They cited Reuters:

www.reuters.com

Even China's 1.4 billion population can't fill all its vacant homes, former official says

China's property sector, once the pillar of the economy, has slumped since 2021 when real estate giant China Evergrande Group defaulted on its debt obligations following a clampdown on new borrowing.
www.reuters.com www.reuters.com
 
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#14,012
#14,012
Thunder Good-Oil said:
Per Fortune, enough space for 3 billion people.

finance.yahoo.com

How many ‘vacant homes’ does China have right now? A former statistics official has an eye-opening prediction

China’s housing oversupply is far worse than previously reported, the country’s former statistics bureau deputy head says.
finance.yahoo.com finance.yahoo.com

They cited Reuters:

www.reuters.com

Even China's 1.4 billion population can't fill all its vacant homes, former official says

China's property sector, once the pillar of the economy, has slumped since 2021 when real estate giant China Evergrande Group defaulted on its debt obligations following a clampdown on new borrowing.
www.reuters.com www.reuters.com
Click to expand...
3 billion people? Are you serious? You really believe that?
 
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As of the end of August, the combined floor area of unsold homes stood at 648 million square metres (7 billion square feet), the latest data from the National Bureau of Statistics (NBS) show.

That would be equal to 7.2 million homes, according to Reuters calculations, based on the average home size of 90 square metres.

That does not count the numerous residential projects that have already been sold but not yet completed due to cash-flow problems, or the multiple homes purchased by speculators in the last market upturn in 2016 that remain vacant, which together make up the bulk of unused space, experts estimate.

"How many vacant homes are there now? Each expert gives a very different number, with the most extreme believing the current number of vacant homes are enough for 3 billion people," said He Keng, 81, a former deputy head of the statistics bureau.

"That estimate might be a bit much, but 1.4 billion people probably can't fill them," He said at a forum in the southern Chinese city Dongguan, according to a video released by the official media China News Service.
 
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Meanwhile, Rick Santelli...

30 Year Yields Hit Highest Since 2007 One Day After CNBC's Santelli Suggests 10 Year Could Go To 13% | ZeroHedge

ZeroHedge - On a long enough timeline, the survival rate for everyone drops to zero
www.zerohedge.com www.zerohedge.com

"In the grand scheme of things I think rates are going higher," Santelli says.

"We have a lot of potential room to the upside," he says, drawing a chart of bond technicals. "Worst case scenario, where are Treasury rates going to go? 10 year I'd say in the next seven years you should be able to see 13.5% or 14%."

"If you want to know where inflation is taking markets and why, just look at government spending. Vigilantes have new horses and they are riding and I really do think that is the answer. We are spending too much, we are not learning to cut back."

"I think we're out of control as we approach a $2 trillion deficit and this is the market's way to get Washington's attention," Santelli adds.
 
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Regardless of the exact capacity, if there's a big bubble, all it takes is for prices to start falling for there to be trouble.
 
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#14,016
Velo Vol said:
Regardless of the exact capacity, if there's a big bubble, all it takes is for prices to start falling for there to be trouble.
Click to expand...
That would be the market correcting itself. We should be hoping their real estate bubble bursts and prices correct themselves. It doesn’t appear that the Chinese are wanting to intervene or bailout these bag holders, either.
 
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#14,017
Rasputin_Vol said:
Meanwhile, Rick Santelli...


"We have a lot of potential room to the upside," he says, drawing a chart of bond technicals. "Worst case scenario, where are Treasury rates going to go? 10 year I'd say in the next seven years you should be able to see 13.5% or 14%."
Click to expand...
The Fed won't watch interest rates go anywhere close to that.
 
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#14,018
#14,018
Rasputin_Vol said:
3 billion people? Are you serious? You really believe that?
Click to expand...

It isn’t 3 billion units. And I’m more likely to believe it since it was reported by Fortune and Reuters. Peter Zeihan believes the estimate as well.

You have to go with estimates since the CCP isn’t going to release the actual data. But they have huge empty or unfinished housing developments littering the landscape.
 
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#14,019
#14,019
Rasputin_Vol said:
As of the end of August, the combined floor area of unsold homes stood at 648 million square metres (7 billion square feet), the latest data from the National Bureau of Statistics (NBS) show.

That would be equal to 7.2 million homes, according to Reuters calculations, based on the average home size of 90 square metres.

That does not count the numerous residential projects that have already been sold but not yet completed due to cash-flow problems, or the multiple homes purchased by speculators in the last market upturn in 2016 that remain vacant, which together make up the bulk of unused space, experts estimate.

"How many vacant homes are there now? Each expert gives a very different number, with the most extreme believing the current number of vacant homes are enough for 3 billion people," said He Keng, 81, a former deputy head of the statistics bureau.

"That estimate might be a bit much, but 1.4 billion people probably can't fill them," He said at a forum in the southern Chinese city Dongguan, according to a video released by the official media China News Service.
Click to expand...

You highlighted 7.2 million UNSOLD HOMES. That doesn’t account for how many Chinese would be living in each one and more significantly that only a fraction of empty units would be on the market. When the Chinese people have few alternative investment options and are buying 2nd and 3rd properties as investments they aren’t as likely to then sell them. Unsold homes also wouldn’t include homes under construction or projects that are committed to being built.
 
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#14,020
#14,020
Thunder Good-Oil said:
You highlighted 7.2 million UNSOLD HOMES. That doesn’t account for how many Chinese would be living in each one and more significantly that only a fraction of empty units would be on the market. When the Chinese people have few alternative investment options and are buying 2nd and 3rd properties as investments they aren’t as likely to then sell them. Unsold homes also wouldn’t include homes under construction or projects that are committed to being built.
Click to expand...

This is correct. The Chinese have painted themselves into a corner here.
 
#14,023
#14,023
Thunder Good-Oil said:
It isn’t 3 billion units. And I’m more likely to believe it since it was reported by Fortune and Reuters.
Click to expand...
I never said it was 3 billion units.

Rasputin_Vol said:
3 billion people? Are you serious? You really believe that?
Click to expand...

Tell me, from the article you posted, how in the hell do you get to 3 billion people with 7 million units (according to your article) and plus however many million more that they claimed were built, but not completed? Especially when you have a nation that has close to a 1.0 birth replacement rate and families are still struggling to have more than one child.

Make the math add up.

That would be equal to 7.2 million homes, according to Reuters calculations, based on the average home size of 90 square metres.

That does not count the numerous residential projects that have already been sold but not yet completed due to cash-flow problems, or the multiple homes purchased by speculators in the last market upturn in 2016 that remain vacant, which together make up the bulk of unused space, experts estimate.
Click to expand...
 
#14,024
#14,024
Velo Vol said:
Regardless of the exact capacity, if there's a big bubble, all it takes is for prices to start falling for there to be trouble.
Click to expand...
Trouble for who? I've already said that you can expect prices to fall/deflation. But I want you to specifically name who will be hurt by this happening.
 
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#14,025
Thunder Good-Oil said:
You highlighted 7.2 million UNSOLD HOMES. That doesn’t account for how many Chinese would be living in each one and more significantly that only a fraction of empty units would be on the market. When the Chinese people have few alternative investment options and are buying 2nd and 3rd properties as investments they aren’t as likely to then sell them. Unsold homes also wouldn’t include homes under construction or projects that are committed to being built.
Click to expand...
I know I did. It still doesn't matter. How many times does 7.2 million go into 3 billion?

For s^^ts and giggles, lets assume there are 30 million unsold AND incomplete housing units. How many people per unit does that equal?
 
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