Keynesian Central Bank Craziness Causing Insane Asset Bubbles In Real Estate

If you’ve got a 50 million dollar house in London, New York, or Monaco things are looking pretty good for you. Of course they were already probably looking pretty good.  Funny how that works. It’s nice to have access to the Fed window.

Of course many of us in the real estate sub-tiers continue to see little or no growth in the price of our homes, Indeed, adjusted for inflation many people continue to lose money year over year.

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At This Moment: Chinese Banks Are Being Hammered, Real Estate in the Ultimate Crony Capitalist State is Ugly

We have for a long time writen about the property bubble in China. The Chinese real estate system is driven by decrees from Beijing which then tumble down to the local level. Prices are often tossed aside for political reasons. China wants “growth,” or did, at all cost, even if it required a huge misallocation of resources. Because the market has not been allowed to work in China, especially in the real estate sector, it makes sense to expect prices to eventually burst the dam.

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The largest real estate bubble (and maybe any other kind of bubble) in the history of the world. 60 Minutes examines the Chinese ghost cities.

This is a great example of why the government should never manage the economy. The more government manages, the more it will mess things up. Over time this is nearly always true. It is absolutely true in China.

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