patrick.net

I am grateful for the British rule in Hong Kong, without which Hong Kong would have remained a no-name, poverty-stricken fishing village in China. Without Hong Kong's investment in China as a head start, there would have been Pearl River Delta, the largest labor-intensive manufacturing base in the world.

British may have screwed up India and Pakistan, but they have done more good to the Chinese than not. If not for the British, most of the treasures sitting in the British Museum would have been destroyed in the Cultural Revolution. The most promising cities in China today are all ports that were built by British colonial powers, which obviously didn't intend to be nice to the Chinese in the first place. The sad truth is, Chinese are even less nice to themselves compared to the colonial rulers.

ps,

You've made me so happy! Sometimes I think I (okay, and a bunch of fussy garden writers) am the only person who remember Kingdon Ward existed. :P I don't hypenate because I still think of it as his middle name. Also, hypenation is too much in vogue nowadays, so I avoid it for all my Edwardian/Georgian crushes.

I do agree that the Europeans with their 19th century "great games" and Americans with their anti-Communism efforts, has created a very messy legacy in SE Asia, Africa, and Central Asia. However, I will still remember them romantically.

Owneroccupier,

The Germans also left some excellent beer factories in the Shandong Peninsula. I'll go so far as to say that the Japanese were instrumental in the development of post-war Taiwan. ;)

astrid,

the sad historical fact for me is, more military troops, men and women, were slaughtered in the civil war struggle between the KMT and the communists (1945-1949) than Japanese soldiers killed on Chinese soil in the preceding Sino-Japanese war (1937-1945), many times over.

Where were the Chinese when China was invaded by the Japanese? Busy in-fighting, busy hiding, busy preserving their own military power, so that they could duke it out AFTER the Americans took care of Japanese.

And then, AFTER the Americans and Japanese were gone, Mao's great leap forward, aka the Great Famine and the infamous series of revolutions, killed even MORE Chinese than in the civil war. If there is one art that the contemporary Chinese have perfected, it is called killing their own kind, intentionally or unintentionally.

@Steven, Your wage will be roughly what you would get elsewhere. HaHa is full of shit. The only differential in the BA comes in the form of "intangibles", the GREAT weather and the amazing diversity of culture, and of course the food. money? Forget it. Unless you are like the other 1.4 million BA googlaires .

Owneroccupier,

I agree. Going back a little further, does anyone in China even remember the countless millions died in the Taiping Rebellion. But the Mainland Chinese government would much rather emphasize the barbarity of the English and the Japanese.

My father told me about the time in the 1970s, he was visiting some Anhui mountain (I don't think it was Huang Shan, possibly Jiuhua Shan). He met a monk there who escaped from a village in Northern Anhui around 1960. The monk told him that everyone else in the village literally starved to death. There were many villages who were wiped out, to the rest of China, these places just vanished. It's really unfathomable...but everyone in China still refer to it as the "three years of natural disaster", as if there was indeed something natural about the disaster of egotism, ignorance, and bureaucratic callousness that caused the death of tens of millions.

The really sad thing is that no young Chinese person seem to remember that. Even people in my parents' generation suffer amnesia about the bad things that happened under Mao. There is a whole generation of young urban dwellers who cannot conceive of food coupon books and going hungary. Most I meet can't even conceive of a vacation hotel without running hot water...it's a crazy world.

OwnerOccupier -

maybe you can't say, because of the connections to Falun Gong of the publication and the nefarious Chinese Secret Police, and disassociation may be the best policy, but if you can, what is your opinion of the Epoch Times?

They seem to run some very interesting pieces on impending economic doom in China, in much the same way Patrick.net has been pointing out the housing bubble to people who didn't want to listen until recently, even though it was becoming very obvious.

Do you think the Epoch Times is at all accurate in the factual elements backing up some of their non-falun gong related news pieces?

I found this recent story to be an example of the disturbing but all to frequently reported worldview of supposedly highranking but maniacal chinese leaders:

http://www.theepochtimes.com/news/6-4-23/40724.html

Is this accurate? What I mean is, how big of a grain of salt should I be taking when reading this publication, because even leaving falun gong out of it, the Epoch Times constantly makes the political and military leaders of China out to be as kooky as a bunch of North Korean Il Duces.

Thanks for any reply...;)

astrid,

it will be absurd to assume that contemporary Chinese are born a defective race, what I always want to pursue, after I am done with my professional life, is to do a very academic research on how resource per capita, nutrtion and food intake impacts individual behavior, which feeds into the culture itself.

If you read the books and remarks of Confuscious, or any Chinese philosophers of the time before the unification of China under the Emperor Numero Uno (Qin), their ideas and thoughts were so ahead of their time and somehow similar to what Jesus Christ preached, which led me to believe that all civilizations have a common goal. Just that some civilization became devastated by the environment.

Just to give an example. In the most creative time of the Chinese history, prior to Qin, Chinese were actually Sashimi eaters. Sashimi was a Chinese invention. Chinese stopped eating Sashimi, and fish subsequently due to waterway pollution around the Yellow River region. Then recently I read some research paper by a British guy arguing why British and Japanese' fish diet has given both of them an edge in brain development. I think there is something to it.

To me, Chinese dumbed down a lot ever since they got on eating pork. There must be a valid reason in some religions that pork is a forbidden part of the diet.

tsusiat,

FLG is entirely BULLSH*T. Nobody in China take them seriously, and the founder is a scam artist.

They got so famous thanks to the stupid Chinese government who gave them far more credibility than they deserve. I won't read epoch times, because it just exaggerates the darkside of China with NO objective analysis at all.

I am only interested in finding out the truth, be it positive or negative, about any country, including the one where my ancestors come from. I would say the most objective economic analysis about China comes from Andy Xie, a top Morgan Stanley economist stationed in Hong Kong. You can find his pieces at the MS site along with Roach's.

Owneroccupier,

I'm more optimistic than you are. Perhaps because of necessity, because my family and many other people I love live there.

I don't think the Chinese are a hopeless race. I think their recent history and historiography simply enhances some of their meaner qualities. Every culture has their darker moments. Remember how badly the English Cockneys were perceived? Or the Irish immigrants in America? Hopefully, as the Chinese people mature into the modern world (touch wood), they will become a "better" people.

The Chungqiu period and the Warring States period was indeed an amazing time for new ideas. However, I don't think that creativity completely went away, it just got subverted into a mainstream bureaucratic culture. The government did an amazing job of coopting the upper strata of society. The upside is that the Chinese created a lasting culture that lasted more or less for two thousand years. The downside is that it is hidebound and backward looking.

There are some excellent anthropology studies of Chinese village life from the 1920s/30s and late 1970s onwards. It's unfathomable how little resources the average Chinese peasant have to live on.

Owneroccupier-

thanks for your reply. I have no interest in Falun Gong, however, since I can't speak or read Chinese, I have no way of knowing if "interviews" are literal or creative translations or mere fabrications.

I find the dogged anti CCP tone of the Epoch Times kind of enjoyable, and have to say my bigest question has always been, how much of what is said by any Chinese news organization or official is legit and how much is BS, on any side of any issue, whether Xinhua or Epoch Times, same/same.

Culturally, how much has the old Sun Tzu/Machiavelli deviousness of these corrupt mandarins shone through is I guess the question?

I'm not really interested in economic analysis as much as "political" analysis. This is because of my impression that economically, China is as much of a paper tiger as can be, given the fact individuals there are still getting incredibly wealthy.

So whatever is going to happen, certainly I wonder how much can be known by people like us, and how much is disinformation?

I guess I believe something can be known, or Jerry Yang wouldn't be capitualting and helping his compatriots maintain control.

Just a little rant... ;)

tsusiat,

I second Owneroccupier's opinion about FLG. It was a stupid money making gimmick (think Scientology) that attracted a little too much heat from the Chinese Central government.

It's very difficult to get a coherent picture of what is happening in China. Xinhua and Renmin Daily can be useful for gauging the Central Government's intentions. Western reports are occasionally useful, but they tend to have a poor understanding about how China works. There are some interesting reporting done on the local level, but nothing that can give an overall picture of what's happening in China. You really have to be there and see with your own eyes, and rely on people who live and breath this stuff daily. A lot of critical information is passed informally as gossip.

There is a way to get facts on the ground, if you're very friendly with a very highly placed Chinese official...however, that is speaking purely in hypotheticals.

Thanks for your reply Astrid,

okay, I'll phrase it again, my real question is about "Chinese" reporting, how much of what is reported is literal?

For example, if a British paper reported events in France, and comments by a French general, probably they would be translated pretty well, 'cause lots of people in Britain speak French (not just french people now living in Britain).

With reporting on stuff in China, if I see so and so said such and such, how likely is it to be a literal translation and how likely is it to be hyperbole or BS?

Can anyone suggest a publication in which the translated comments or speeches could be reasonably expected to be accurate, from a political or current events point of view?

The reason I ask is, I think listening to what people are saying is a good place to start gauging what is happening, and I believe what is happening in China is important for the world to pay attention to right now.

Thanks.

tsusiat,

Well, the Chinese government could just censor whatever it doesn't like. I can't comment directly, but I assume that the major Hong Kong and Taiwan newspapers do a decent job of reporting China's happenings; there will be censorship and biases, but that's even the case in America, albeit to a lesser extreme.

I would just get my China news from the Economist, their reporting was pretty good back when I was still reading it.

Just don't get your info from the Epoch Times. It's absolute shite.

ps,

Ha! Brillant pin down of nomad. The regulars have all developed quite the online personality for themselves.

I guess I'll have to read the Flashman books now. ;)

tsusiat,

for economic facts about China, read Andy Xie from Morgan Stanley, you won't find a better source than him. He can peel through the bullsh*t and go straight to the facts. Someone may find him touchy feely at times, but that is the way things are in China. However, he is always early in making his calls.

For political stuff, read Far East Economic Review, which I believe you can get through your DJ subscription along with WSJ, Barrons etc.

But the real good stuff that gives you a good glimpse of state of affairs in China unfortunately is all in Chinese which is not translated. HK and Taiwan tend to have better perspective because mainland Chinese, even without the presence of censorship, tend to be over-optimistic about their situation, due to an inferiority-induced-superiority complex.

There used to be a Shanghai-born reporter at NYT who wrote many pieces about China, I forgot her name, but I think she is doing law school right now. I like her piece because she is very objective, yet compassionate without losing sight of the big picture.

Far Eastern Economic Review
http://www.feer.com/

despite its name, it's actually more politically focused.

Owneroccupier,

thanks for the tips.

Was looking at Epoch 'cause they actually print it and I saw a copy by chance in the one square block chinatown in Victoria where I buy my daily coffe.

So I went to the web-site, noted it has a political agenda but also printed numerous purported quotes from numerous CCP functionaries which were a bit scary, to say the least

I don't doubt there is tons of great objective writing about China in Hong Kong and Taiwan, but what I need is something in English.

My department store Japanese is as far as I am ever likely to get in asian languages, so an english language source for Chinese news is a necessity for me.

I will check out the Far Eastern Economic Review as suggested.

ps-

thanks!

The Housing Crash appears to be in full swing this morning with foreclosures picking up briskly (nice, nice) along with property tax delinquencies. The effect of the ARM reset is as punishing and brutal as promised and then some. Just visited C/L for the Portland area and the "lease w/option" offerings are in full spring time bloom. They are now scrambling for attention by offering "flat appreciation" models at today's prices going out 24 to 36 months. That's just how much they care about you!

The "lofts" in Portland now offer 1 year free HOA fees with a pay option ARM that's cheaper than rent! (As if 15 years of tax moratoriums aren't enough).

Let's all have a crashriffic day!

SQT,

Just doing my part to spread the good word about Crash City! I realize that I can be a little snide but so many of the articles I've read over the last few weeks seem to have this "anatomy of a crash" tone about them it just seemed appropriate. Gone are the days of spirited debate regarding the validty of a bubble, we've moved suprisingly swiftly to "what will the crash mean to you" phase. Notice though that mainstream articles always distance the sinner from the sin. "Some people that got IO mortgages". "Some people that overpaid" etc. etc.

That should read, "You people that got pay option ARMs". "You people that "won" the bidding war". I suppose though that the authors prefer to leave well enough alone b/c "those" people know who "they" are.

My cleanoffer account is generating between 5-12 new listings per week for my narrow search set (Mill Valley/Corte Madera/Larkspur). This time last year the new inventory rate was perhaps 1-3 new listings per week.

Prices are coming down slightly for the upper part of the range, but there are a surprising number of lease-options now that I look at it. And a lot of price-reduced (but I take this with a grain of salt, they're "reduced" from what they thought they should have appreciated to, which is still too high).

Excuse my ignorance, but is it possible for a buyer to refinance every couple of years to get a “teaser rate”? Never paying the note off.

Eventually the buyer would be in excess of loan-to-value unless the home appreciates faster than the transaction costs associated with the refis. These costs would include penalties associated with early repayment (which happens in refis) that usually accompany teaser-rate deals. The lenders aren't quite all that stupid.

Randy H/George,

That's my quandry. Prices have gotten so out of whack just saying "reduced" isn't necessarily descriptive. Reduced? Reduced from what? Reduced from "make mine a dream retirement" to "I'm o.k with playing at a public course retirement"? Who was it that said, "Making someone elses retirement, one mortgage payment at a time". Classic!

goober,

The hard reality that Randy H describes doesn't mean there aren't those that haven't tried! They're called "serial re-financers" and we can joke about it but it's one (of many) reasons I dumped my mortgage backed securities.

George,

I've seen desperate pleas on Criagslist where a homedebtor will advertise their situation by saying "I need to re-fi and skip two mortgage payments" with regularity so at least they think of it as some sort of temporary fix.

George,

While not nearly as dramatic we've seen similar builder/investor discrepancies here as well. I noticed over the weekend a DR Horton ad that showed some new floorplans at BELOW $100/sq. ft! For those specuvestors who's cost basis is significantly higher there really can be no exit strategy.

George,

Is it possible that our "recipe" for the crash was flawed from inception? Nearly everyone all along has said *interest rates*. Rates this, rates that banging on the drum until our ears were ringing. Since we were given very region or even neighborhood specific excuses as to why each area was "special" could it not be that each crash is "tailored" or personalized for each area?

George,

"if this were just a normal market with excess inventory"

You seem to imply that it's anything but "normal". So in your mind interest rates aren't near the factor that they've been played up to be? I agree! Besides how many people really qualified for the mid 4's anyway? Or timed it that well? Just the "bait" was enough to draw borrowers out of the woodwork just to see if they had a shot at those rates! We all have friends that are at whatever the rock bottom 30 yr. fixed is at that day anyway. I'd love to see data that shows what percentage of U.S mortgages are at 4%! FIXED that is.

I believe our region specific "recipe for disaster" is as follows:

1. Undeniable dependence on CA markets state of health.

2. Major employers leaving and not being replaced.

3. Erosion of employee benefits ultimately impacting "affordability"

4. Overbuilding

5. Buyer/Consumer faitgue

6. Interest rates

George,

My point exactly! Where are the "bragging rights" of having a 3.875% 30 year fixed if you overpaid for your home by 30-50%? As Patrick is fond of saying, "You can always renegotiate your loan package, you can't renogotiate the price". So for many, it's just too late. In Boston, DC and FL "just listing the damn thing" isn't looking like a very viable option either.

One of the issues you address in your comments is that the builders seem to be just fine putting the same floorplan for on the market for $121,215 cheaper than some investor. Undoubtedly investor greed is a large part of that formula but it does shoot holes in the "it's the materials" and "it's the land" song and dance we've been fed the last 5 years doesn't it?

Before we sold to become bubblesitters in spring 2004, we had a 30-year fixed at 4.25%, with about 60% equity in the home. We could have stayed there forever with that payment had we not needed to move for other reasons. We refi'd quite a lot, but we always did so with zero or trivial fees and only when we could put even more equity in during the refi. (We were always careful to only take classic, standard, no-penalty fixed-rate loans) I wasn't bubble-aware really at that point so I didn't realize that most people were doing the opposite -- taking equity out. When we sold the buyer overpaid and his mortgage was about double what we were paying, yet I doubt his income was much different.

George,

HARM has been focusing on the "it's a land bubble" for some time. I agree! In the end I guess a 2 x 4 costs what a 2 x 4 costs so I have no real issue with the legitimate explanation of concrete facts as they apply to building expenses. I don't grudge a builder a reasonable profit for a lot of hard work. From what you've described though regarding the "tippity top" of the market I refuse to be held accountable as a buyer b/c the builder has grossly overpaid for his lots! Some of the lots in one of our "up scale" subdivisions can go from 90K to 200K. That's a land bubble.

Randy H,

Well that's your basic conservative mid-western upbringing showing again! Imagine that, putting equity INTO a home. What a novel concept. I will say (we sold DEC 2003) that we were very bubble aware. Perhaps regular and enviable appreciation are the norm in the BA, certainly not for Oregon! For our home to have doubled in value during our 10 years there (much of it since 1998/99) was a total aberration. With mill closings and a growing environmental movement home values had actually been on a steady decline since the mid/late 1980's.

newsfreak,

Yes, I believe that the bigger builders buy on a national contract and that prices are well negotiated in advance. I've had a number of clients and friends that were lumber brokers over the years. However; smaller players probably wouldn't have access to this end of the distribution chain.

New Thread: Shiller’s Prediction (1 year on)

George,

Can you copy & paste your last comment to the next thread. It is directly on-topic for that discussion.

Thanks George, and your very sapient comment is well placed at the beginning of the thread where everyone will read it.

John Haverty Says:

Haiku on the Asian Self Hater:

Racist self loathing
Oriental Cheetah man
A stealth troll is he

________

Ha, haaaaaaaaaaaaa! That's friggen' outrageous!

Oh, man.

Dude!

newsfreak,

I checked zillow and the current tax on this house is under 2K a year, that means it was bought for 10-15% of its current price. There's plenty of concessions to wring out of the greedy selller yet.

Owneroccupier,

Thanks for your Andy Xie rec, he has some very interesting things to say.