Money and Finance
- Prem Watsa's 2013 Shareholder Letter - Fairfax Financial
Link to: Prem Watsa's 2013 Shareholder Letter Signs of speculative excesses are everywhere – even though the U.S. economy is still very tepid. The world might muddle through as it did in 2013, but the grand disconnect between stocks and bonds, and...
- Prem Watsa's 2011 Shareholder Letter - Fairfax Financial
We continue to fully hedge our common stock portfolios as our concerns about the United States discussed in our 2010 Annual Report persist, and have been magnified by the financial crisis in Europe, including the underlying austerity programs, and the...
- Is China's Housing Bubble About To Burst?
In China, house prices in most cities have fallen as government policies aimed at cooling the property market start to take effect, prompting fears from some economists that the house price bubble is bursting. Martin Patience reports from Beijing where...
- Government Policies Cool China’s Real Estate Boom
Thanks to Andrew for passing this along. SANYA, China — China’s nationwide real estate boom became so manic last year that many would-be buyers camped in tents on the sidewalks of this tropical island city to be at the front of the line when condominiums...
- Building Boom In China Stirs Fears Of Debt Overload
WUHAN, China — In the seven years it will take New York City to build a two-mile leg of its long-awaited Second Avenue subway line, this city of nine million people in central China plans to complete an entirely new subway system, with nearly 140 miles...
Money and Finance
Robert Huebscher interviews Vitaliy Katsenelson
Paul Krugman wrote about China in his New York Times column last Monday. That’s a topic that you have researched closely. He said that "China’s story just sounds too much like the crack-ups we’ve already seen elsewhere," referring to the financial crisis in the US and the Japanese lost decade. Do you agree with his assessment?
Yes. You can draw a lot of parallels between the Japanese and US real estate bubbles. But China’s bubble is much larger; it spreads beyond residential real estate to commercial real estate, the industrial sector, and infrastructure. Also, though there were government fingerprints on the US and Japanese real estate bubbles, the Chinese real estate bubble was directly and entirely caused by the Chinese government.
The Chinese bubble has been inflating for years. It should have popped during 2008 recession. But China fire-hosed a stimulus equal to 12% of its GDP into its economy and was able to keep the bubble growing.
When is it going to pop? It has already begun. You see sales volumes and prices plummeting at double-digit rates in second-tier cities.
I agree with Krugman’s assessment. What perplexes me is why the Nobel Prize-winning economist wrote this column now, when the problems he describes are plain for all to see, and not a few years ago. You’d think he would have been alarmed over the consequences of monstrous government intervention in an economy the size of China’s. But perhaps Krugman, who describes himself as a liberal economist, secretly hoped that the Chinese government would be able to manage the economy better than the free market.
Yes. You can draw a lot of parallels between the Japanese and US real estate bubbles. But China’s bubble is much larger; it spreads beyond residential real estate to commercial real estate, the industrial sector, and infrastructure. Also, though there were government fingerprints on the US and Japanese real estate bubbles, the Chinese real estate bubble was directly and entirely caused by the Chinese government.
The Chinese bubble has been inflating for years. It should have popped during 2008 recession. But China fire-hosed a stimulus equal to 12% of its GDP into its economy and was able to keep the bubble growing.
When is it going to pop? It has already begun. You see sales volumes and prices plummeting at double-digit rates in second-tier cities.
I agree with Krugman’s assessment. What perplexes me is why the Nobel Prize-winning economist wrote this column now, when the problems he describes are plain for all to see, and not a few years ago. You’d think he would have been alarmed over the consequences of monstrous government intervention in an economy the size of China’s. But perhaps Krugman, who describes himself as a liberal economist, secretly hoped that the Chinese government would be able to manage the economy better than the free market.
- Prem Watsa's 2013 Shareholder Letter - Fairfax Financial
Link to: Prem Watsa's 2013 Shareholder Letter Signs of speculative excesses are everywhere – even though the U.S. economy is still very tepid. The world might muddle through as it did in 2013, but the grand disconnect between stocks and bonds, and...
- Prem Watsa's 2011 Shareholder Letter - Fairfax Financial
We continue to fully hedge our common stock portfolios as our concerns about the United States discussed in our 2010 Annual Report persist, and have been magnified by the financial crisis in Europe, including the underlying austerity programs, and the...
- Is China's Housing Bubble About To Burst?
In China, house prices in most cities have fallen as government policies aimed at cooling the property market start to take effect, prompting fears from some economists that the house price bubble is bursting. Martin Patience reports from Beijing where...
- Government Policies Cool China’s Real Estate Boom
Thanks to Andrew for passing this along. SANYA, China — China’s nationwide real estate boom became so manic last year that many would-be buyers camped in tents on the sidewalks of this tropical island city to be at the front of the line when condominiums...
- Building Boom In China Stirs Fears Of Debt Overload
WUHAN, China — In the seven years it will take New York City to build a two-mile leg of its long-awaited Second Avenue subway line, this city of nine million people in central China plans to complete an entirely new subway system, with nearly 140 miles...