Beijing went through a building boom before the 2008 Summer Olympics that filled a staid communist capital with angular architectural feats that grace the covers of glossy design magazines....By Rodman's calculations, 500 million square feet of commercial real estate has been developed in Beijing since 2006, more than all the office space in Manhattan. And that doesn't include huge projects developed by the government. He says 100 million square feet of office space is vacant -- a 14-year supply if it filled up at the same rate as in the best years, 2004 through '06, when about 7 million square feet a year was leased.
What makes this boom-and-bust cycle different from those in the West is that there is no private ownership of land in China, making local governments de facto partners in the real estate industry, which earn huge fees from leasing and transferring land.Huang Yasheng, an economist at the Massachusetts Institute of Technology, traces the blame for the bust to the Chinese Communist Party and its reluctance to allow a true market economy."The lack of land reform fed into the real estate bubble and now it's coming back to haunt them," said Huang, author of "Capitalism With Chinese Characteristics," published last year. "There should have been more checks and balances on the ability of the government to acquire land."
The government spent $43 billion for the Olympics, nearly three times as much as any other host city. But many of the venues proved too big, too expensive and more photogenic than practical.The National Stadium, known as the Bird's Nest, has only one event scheduled for this year: a performance of the opera "Turandot" on Aug. 8, the one-year anniversary of the Olympic opening ceremony. China's leading soccer club backed out of a deal to play there, saying it would be an embarrassment to use a 91,000-seat stadium for games that ordinarily attract only 10,000 spectators.The venue, which costs $9 million a year to maintain, is expected to be turned into a shopping mall in several years, its owners announced last month.
Louis Kuijs, a senior economist at the World Bank in Beijing, said a lack of government supervision of the real estate industry tempted developers to build only for the luxury market and to ignore the mass market."If you think demand is endless for anything you build and you have just 200 square meters of land, you will build high-end apartments to make the highest profit," Kuijs said.
To its credit, the government recognized in 2007 that the real estate market was headed toward a bubble, economists say. In an attempt to make real estate more affordable, restrictions were introduced on ownership of second homes and on foreign home buyers. But the measures came too late, accelerating the crash of an already weakening market.
And China?
Now we have the delicate China question. That is a complicated, touchy question.
The reasons for China to hold dollar-denominated assets no longer exist, for the most part. However, the desire to have a weaker currency is everybody's desire in terms of stimulus. China recognizes that the exchange-rate peg is not as important as it was before, because the idea was to make its goods competitive in the world. Ultimately, they are going to have to go to a domestic-based economy. But they own too much in the way of dollar-denominated assets to get out, and it isn't clear exactly where they would go if they did get out. But they don't have to buy more. They are not going to continue to want to double down.
From the U.S. point of view, we want a devaluation. A devaluation gets your pricing in line. When there is a deflationary environment, you want your currency to go down. When you have a lot of foreign debt denominated in your currency, you want to create relief by having your currency go down. All major currency devaluations have triggered stock-market rallies throughout the world; one of the best ways to trigger a stock-market rally is to devalue your currency.
But there is a basic structural problem with China. Its per capita income is less than 10% of ours. We have to get our prices in line, and we are not going to do it by cutting our incomes to a level of Chinese incomes.
And they are not going to do it by having their per capita incomes coming in line with our per capita incomes. But they have to come closer together. The Chinese currency and assets are too cheap in dollar terms, so a devaluation of the dollar in relation to China's currency is likely, and will be an important step to our reflation and will make investments in China attractive.
On Wednesday, UAW President Ron Gettelfinger predicted there would be no wage cuts as part of the union's concessions to GM and Chrysler. Gettelfinger argued Toyota's workers actually make $2-per-hour more than UAW workers, if you count bonuses....\ from Mickey Kaus at Slate.
Hollywood's Sundance Kid is hurting poor people.
So say some East Coast ministers and conservative activists, who took to the streets in front of a downtown Salt Lake City theater on the eve of Robert Redford's Sundance Film Festival to accuse the actor of holding down low-income Americans with his opposition to oil and gas drilling near national parks in Utah.
The protesters, led by the Congress of Racial Equality's national spokesman Niger Innis, suggested Redford should "relinquish his wealth" and live like a poor person. They complained that the filmmaker's anti-drilling stance could lead to higher energy prices for inner-city residents, forcing them to accept a lower standard of living.
The clergymen prayed for Redford "to see the light" and linked his environmental activism with racism.
"The high energy prices we're going to see this winter are essentially discriminatory," said Bishop Harry Jackson Jr. of the Hope Christian Church in Beltsville, Md., chairman of the High-Impact Leadership Coalition, a petroleum industry advocate.
A month ago, Redford, a trustee of the National Resources Defense Council, voiced support for a federal lawsuit aimed at blocking the Bush administration's "morally criminal" attempt to auction 103,000 acres of scenic redrock desert for oil and gas drilling near Arches and Canyonlands national parks and Dinosaur National Monument.
NAME REDACTED reports: In 19 days 984 Palestinians killed by
NAME REDACTED QassamCount: 9 Hamas rockets hit
not to make fun of a serious situation....oh hell, yes I am making fun of this:
Beer count: Red A has gone 15 minutes without a beer. Please donate your facebook status to rectify this alarming situation
CQ-1A-3 Genuine Leather Safety Suitcase
Can hold over USD1.5 million with 30KV electric shock
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I added the red highlight to the word "schleping."
