Thursday, November 12, 2009

Hey buddy, can you spare a city?

Ran across this on my daily blog troll.  I posted a while ago video by Hugh Hendry showing an empty skyscraper in China.  This video completely trumps such small matters as a single building, here's an entire city.... empty!

I spent some time on Google maps and found satellite photos of empty Ordos.  Wow. Scroll around and you will see just how big the place really is. Notice the new construction with no cars on the road or parked at the homes.   From the shadows it appears around noon time so you'd think there would be some activity, right?

I think there is a little bit of malinvestment going on in China.  When the populous does not have valid and efficient uses for their capital they end up buying apartments in empty cities.  Makes the chinese pig farmer hoarding copper look entirely rational, eh?   Like America property prices only go up in China, right?

Here's an article by the westerner interviewed in the video.

If this isn't a blatant example of a bubble, I do not know what is.  When this bubble finally bursts the world wide ramifications will be tremendous.

ht: zerohedge


  1. I love the traffic cop standing in the middle of the road... by himself!

    Anyone thinking the bubble over there won't burst need only look at the dozens of empty unsold or only minimally sold subdivisions in the southwestern US - with tumbleweeds and copper thieves as residents.

  2. Bubbles are great trades until they burst.... The Chinese govt has a lot of money and lots of reasons (1+ Billion) to try to keep their GDP going.

  3. this is of a fundementally different character than what we've seen in the US. things are rarely this black and white, and especially not in china. I sum up a lot of my view on China in today's post on my blog- you might find it of interest:

  4. While I agree history is not repeating itself, it is rhyming. :) I think the Chinese consumer has the same perspective on housing that the US consumer had for years; housing prices can only go up long term.

    If you look deeper you will see home prices in China are ridiculously overprices relative to the rent vs. loan cost. It is cheaper to rent some of these places than it is to borrow the money for the location. The homes don't 'rent roll' (I don't have sources handy, but they are out there in internet land)

    Your web site address is wrong. I couldn't go to it.

    How is the US market different than the Chinese market?

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