[ocrenter]

[quote=FlyerInHi]

I tend to think of China as several “countries” within one. There are modern parts, rural parts, etc…

I don’t really see a 2008 global recession starting in China. Our banks and European banks don’t have exposure to Chinese debt that fueled those ghost town developments. Maybe an S&L type crisis within China.

Hong Kong is interesting. Even after the handover to China, real estate in HK kept on escalating. Now the most expensive in the world ppsf, I believe.[/quote]

China is essentially multiple countries disguised as (or forced into) a singular nation. Multiple languages that would otherwise be national languages are instead termed “regional dialects” to minimize their status and importance. The ethnic diversity within China varies as widely as the entirety of Europe. When it comes to its economy, tier 1 cities and coastal provinces are essentially near par with the Asian Tigers, with some of the inland provinces as poor as the Central Asian “stans,” with everything else somewhere in between.

We are already seeing significant hit on the commodities with the China slowdown. with so much Chinese money flowing out into international real estate, if that outflow stops, what happens to the real estate markets that are exposed to Chinese money?

We may not see global recession, but China is plugged in enough to cause significant changes.

[ocrenter]

[quote=flu]

Maybe this week, we’ll see how things went over the weekend with the other team we’re counting on. If not, workload should drop off significantly towards the end of October. I have about 5-6 weeks of vacation I’ve scheduled thereafter.[/quote]

let’s plan for something in the late October timeframe.

[ocrenter]

[quote=Escoguy]2015 data point: 22 Trillion:

http://nationalinterest.org/blog/the-buzz/45-trillion-reasons-why-china-cant-challenge-america’s-14087

But need to acknowledge that even with the short comings, there is still a lot of money that can come here and will, even if it comes in unevenly.

A few billion here, a few billion there.

I remember going to Hong Kong in 1994 when they were saying Americans were coming late to the party, yes there was a downturn after that but the boom a few years later made it looks like a great time to invest.

If you have a long enough time horizon, even a pull back doesn’t need to hurt.[/quote]

That’s for sure. China is a developing country with a lot of developing yet to be done. Especially in its vast interior. When compared to developed economies, there is always more money to be made in developing economies, as a general rule. To suggest China is stagnating forever and growth is coming to an end would be foolish. Just demographically, China will become the largest country economically within a few more years. I have no doubt about that.

That said, the current trend suggests a crash. But they’ll bounce back, overall long term horizon is good.

Kinda like our Great Recession and crash 8 years ago. Everything pointed to an immediate crash, but long term prospectives on the US of A was good.

[ocrenter]

The church next to my office just got solarized. They actually had tiles removed. With tiles reinstalled around the PV panels at the end.

[ocrenter]

[quote=flu][quote=AN][quote=ocrenter][quote=flu-redux][quote=The-Shoveler][quote=flu]

Carlsbad now.[/quote]
Wow, close to my end of town.

Living or just working?

Carlsbad has grownup a lot in the last 10 years, kind of spilling over into the surrounds as well.[/quote]

Working, though the thought of getting a second home has crossed my mind.[/quote]

well at least you are going against traffic.

gonna be difficult to arrange a lunch get-together then…[/quote]There’s always Carmel Valley as a place in the middle.[/quote]

True. On one day each week, we’re required to take a 3 hour “recess” after lunch. I usually take that time to run on the beach. But I don’t mind driving a little bit to meet for lunch. Getting to RB though was tough. Last time I dropped my car off for a recall, it took me like 1hr 30 minutes one way.[/quote]

Carmel valley or Serranto Valley would work on a Friday for me.

[ocrenter]

[quote=flu]Yes, and you know what’s happening right? All the slightly weaithier ones (including the ones that made an honest business) are quickly trying to move their assets to Europe, the U.S. and Canada. Because when the crapper hits the fan, anyone that is wealth(ier) is a sitting target by the government.[/quote]

very timely WSJ article:

http://www.wsj.com/articles/china-capital-outflows-bubble-below-the-surface-1474357050

[img_assist|nid=26028|title=chinese capital outflow|desc=|link=node|align=left|width=466|height=351]

[ocrenter]

[quote=CA renter]OCR, very interesting about the different regions having mandates for a particular growth target. Why is the government so hell-bent on forcing unsustainable growth? Where did they think all the people would come from? And how did they think that rural farmers would have the money to pay the kind of prices being demanded for some of these homes? It makes no sense to me. [/quote]

because continued growth gives the government its legitimacy. after all, the people must be willing to allow for the lack of political progress and lack of basic human right, and the reason for that willingness is the trade off of rapid growth.

if you look at countries like S.Korea and Taiwan, political progress and democratization started roughly at the level of economic growth point already achieved by Chinese tier 1 cities such as Shanghai and Beijing and Tianjin. But if you poll citizens of these cities, most will not favor democratization at this time because they still believe staying with an authoritarian government will bring them faster growth.

That belief system will be challenged very quickly when that rapid growth is no longer the reality.

[ocrenter]

[quote=flu-redux][quote=The-Shoveler][quote=flu]

Carlsbad now.[/quote]
Wow, close to my end of town.

Living or just working?

Carlsbad has grownup a lot in the last 10 years, kind of spilling over into the surrounds as well.[/quote]

Working, though the thought of getting a second home has crossed my mind.[/quote]

well at least you are going against traffic.

gonna be difficult to arrange a lunch get-together then…

[ocrenter]

[quote=flu][quote=earlyretirement][quote=ocrenter]https://youtu.be/nGHmk4UeK_w

starting at 10:30, footage of fraudulent loans using fake documentations and inflated sales price reminiscent of our own bubble from 10 years ago.[/quote]

Thanks for sharing ocrenter! That video brought back memories from our own housing mess. There will also be a day of reckoning for China and unfortunately we’ll probably feel it here in the USA as well.

Great seeing you today at lunch. We have to do that more often![/quote]

….And you guys don’t even bother to remember to include some of us… Thanks a lot….. 🙂 J/K….. I’m kinda way out yonder now…..[/quote]

Way out in yonder? Where are you now? I thought you were in RB?

[ocrenter]

[quote=CA renter]That was a very fascinating — and depressing — video, OCR. People have been discussing China’s ghost cities on housing bubble blogs for quite a few years, and I had read that they had slowed/stopped building these cities and that people had begun to move into them over the past few years. From this clip, it looks like that’s not the case.

It’s surreal to see how investment has been so grossly misallocated around the world. We have an oversupply on so many levels, yet we are continually told that we need more debt and more expansion.

I’ve been watching commodity prices over the years and found the price of copper to be rather telling.

http://www.nasdaq.com/markets/copper.aspx?timeframe=10y

We desperately needed to deleverage after the dot.com bubble, and again after the housing bubble, but the central bank(s) didn’t allow that to happen. When it finally implodes, it could get ugly. IMHO, 2008 was just a preview of what can happen. Currency markets could get interesting going forward.[/quote]

Thanks CAR, that is quite an interesting graph.

The way I look at it, China is overwhelmingly export dependent, specifically to the US and EU. After the global melt down, they were slowing down as well. But to keep pace with their predicted 7% GDP growth, they started their own money printing endeavor.

The way China is structured, Every city and province are given a predicted GDP growth rate that they will need to meet. If a governor or mayor doesn’t meet that target, there goes his political career. So somehow, every municipality meets that magical 7% predicted growth rate. The best way to achieve this of course is to build. And if there’s no money then you simply borrow. Once the buildings are constructed, then they need to be purchased by flippers, who also need borrowed money.

Someone mentioned the Chinese gov will somehow get people into these buildings. That would only happen after a complete financial meltdown and the state simply takes over ownership of entire ghost towns wholesale.

Maybe that’s their plan all along?!!! After all, they planned to use cheap and dirty coal, fully aware of the environmental catastrophe in stored. But figuring they’ll be rich enough to clean it up and rich enough to use renewables moving forward. Substitute cheap and dirty coal for cheap and dirty credit, and it all makes sense.

[ocrenter]

[quote=flu]Yes, and you know what’s happening right? All the slightly weaithier ones (including the ones that made an honest business) are quickly trying to move their assets to Europe, the U.S. and Canada. Because when the crapper hits the fan, anyone that is wealth(ier) is a sitting target by the government.

So, no, this isn’t simply like the 80ies when Japan heavily invested abroad. There definitely is that going on too. But I think for a lot of people, there is an interest to have a “get the hell out of the country” plan.

Planned economies are great….. as long as you are the beneficiary of it and the government doesn’t decide to turn around and make you the scapegoat….

Maybe you haven’t noticed but there has been certain cases in which hedge funds/investment groups in China had shorted the market, only for the government to come back and confiscate those profits and jailed certain fund managers. Some say it was because of inside trading. Others say, it was just a way for the government to claim down on those bearish on the market.

Investing in China is the wild wild west right now. Some CEO’s on the board are shorting their own company stock! No conflict of interest there (end sarcasm)

Vancouver did interesting recently. They passed a 25% tax on home purchases by non-citizens I think. And you know what happened? Drove up real estate prices in Seattle, WA.[/quote]

Yup, I can totally see RE prices here heading for a correction when the Chinese money dries up. Problem here is China is so opaque there’s no way to reliably track this thing.

[ocrenter]

[quote=earlyretirement][quote=ocrenter]https://youtu.be/nGHmk4UeK_w

starting at 10:30, footage of fraudulent loans using fake documentations and inflated sales price reminiscent of our own bubble from 10 years ago.[/quote]

Thanks for sharing ocrenter! That video brought back memories from our own housing mess. There will also be a day of reckoning for China and unfortunately we’ll probably feel it here in the USA as well.

Great seeing you today at lunch. We have to do that more often![/quote]

Haha, total Deja vu moment when the realtor offered to find someone to write the income verification letter for $25 followed by an offer to inflate the sales price so the buyer can obtain 100% financing.

Yes, great meeting up, awesome ride in the MX!

[ocrenter]

[quote=The-Shoveler]Not saying its not weird, its just they have near TOTAL control and the ability to cover almost anything up they want or pave it over with freshly printed money.[/quote]

That I do agree with, they do have near total control and ability to cover up anything they want. That is true. You saw how even everyday pollution magically disappear during major events too. 😉

[ocrenter]

[quote=The-Shoveler]Nope IMO anyway.

The thing they did not say is that CHINA IS THE BANK.

The tier one cities are doing fine.

The bad loans will be covered up IMO.

Also I was amazed (I saw it my self) If the Gov says there will be 15% inflation next month, there will be 15% inflation next month.

Money will be printed, problems will be paved over IMO anyway.[/quote]

That’s like saying NYC, LA, SF, Chicago are doing fine so everything will be ok.

Don’t you think it is a bit weird that if the gov says 15% inflation there will be 15% inflation? kinda like how their 7% projected growth are always matched by 7% growth rate? That’s some super awesome projection!

[ocrenter]

[quote=meadandale]

I don’t think battery storage for the grid will ever be feasible unless costs come WAY down. They seem to be focusing on things like compressed air and other more mechanical methods of converting electricity back into stored energy rather than storing as electricity directly. The mechanical methods tend to be cheaper and have much higher cycle lifetimes.[/quote]

Battery storage will be part of the solution, just like the turbine solution you mentioned. Then there’s the timed incentive for charging as well with the gradual increase in EV percentage of overall fleet.

https://www.ft.com/content/a703e24a-8d4f-11e5-8be4-3506bf20cc2b

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