Canada housing bubble pops...

[awake]

The Austrian Business Cycle strikes again... Even Paul Krugman chimed in with customary praise for Canada's iron clad banking system...lol. (http://www.financialpost.com/news/Home+sales+tumble/3405783/story.html)

Krugman eulogy (http://www.thestar.com/business/article/848276--canada-s-more-humane-society-saved-economy-krugman)

[Austrian Econ Disciple]

YouTube - A Tribute to My Favorite Blogger (http://www.youtube.com/watch?v=NzdhKM5o1V8)


Obligatory.

[kkassam]

Canadian real estate bubble officially pops (http://westernstandard.blogs.com/shotgun/2010/08/canadian-real-estate-bubble-officially-pops.html)

[awake]

Watch as the ATBC plays out; re-verifying it as a true theory.

[djdellisanti4]

Those poor, poor Canadian bastards... I feel bad for them, yet at the same time they might learn something and be better for it.

[ibaghdadi]

My wife has a cousin in Toronto who just lost her job. She's an MBA who used to be a senior executive in an HR company.

[michaelwise]

China's mega housing bubble is popping too. They have 65 million empty housing units, the largest mall in the world empty, and ghost cities no one has ever lived in. I love watching the complete and total world wide economic collapse.

[american.swan]

China's mega housing bubble is popping too. They have 65 million empty housing units, the largest mall in the world empty, and ghost cities no one has ever lived in. I love watching the complete and total world wide economic collapse.

How is China's housing bubble bursting? You can't buy a house in China unless you have 30% of the price in cash. Secondly, you can't buy a second home for "renting" unless you have 50% of the purchase price in cash. Now, that seems to me to be a very different animal than what the USA with teaser rates experienced.

Maybe it is bursing...but I haven't heard about it.

[ibaghdadi]

China's mega housing bubble is popping too. They have 65 million empty housing units, the largest mall in the world empty, and ghost cities no one has ever lived in. I love watching the complete and total world wide economic collapse.

Yup, it's bursting, and it's gonna be a big mother of a crash.

Keep in mind, however, that China has tremendous productive capacity and a positive savings rate and whatever crash may happen, they can reasonably recover.

Much like America's problem is that it over spent, China's problem is that it over lent to someone who can't pay back. China's losing all that money. And when US recession turns into a currency crash, China will go through a period of confusion, perhaps even a steep recession, trying to figure out where to sell their products.

But soon enough they'll figure - hey! We can buy them! And they'll be fine.

The same can't be said for America, though.

[ibaghdadi]

Now, that seems to me to be a very different animal than what the USA with teaser rates experienced.

It is a different animal because it's been fed differently. In the US, the Fed sent a false signal to the economy by dropping interest rates and sending everyone on a lend, build, and buy frenzy. That's what caused the bubble.

In China, the government has far more control over the economy than in the US. The government had huge surpluses and used them to construct huge developments, even complete cities. That's their bubble.

In the end, price has to drop to match up with current supply vs. demand.

[ClayTrainor]

Sounds like the right time for me to buy a house might be coming soon. :D

[aennycarey]

An expected increase in supply of homes on the market now will bring stability in prices and in some cities, we will see prices and unit sales decline towards the end of the year. This should not be construed as a serious correction, but rather a natural reaction to the market peaked early in the year.