Lakewood90712
Thinks s/he gets paid by the post
- Joined
- Jul 21, 2005
- Messages
- 2,223
Are they going down the ski slope again ?
I would be willing to guess that investors thought the economy was going to grow 8% -10% yearly. So investors went for it driving up prices. When it became obvious the economy was not growing that fast , the selling pressure started.I wonder why the Shanghai stock market rose so quickly...
No one ever seems to ask why it is rising so fast, but when it falls quickly, all the questions arise.
The wild swings in the Chinese market sure aren't the result of lack of government intervention. Quite the opposite.That and the fact that there needs to be better protections in place so the markets don't have these wild swings from day to day.
Apple executives say that going overseas, at this point, is their only option. One former executive described how the company relied upon a Chinese factory to revamp iPhone manufacturing just weeks before the device was due on shelves. Apple had redesigned the iPhone’s screen at the last minute, forcing an assembly line overhaul. New screens began arriving at the plant near midnight.
A foreman immediately roused 8,000 workers inside the company’s dormitories, according to the executive. Each employee was given a biscuit and a cup of tea, guided to a workstation and within half an hour started a 12-hour shift fitting glass screens into beveled frames. Within 96 hours, the plant was producing over 10,000 iPhones a day.
“The speed and flexibility is breathtaking,” the executive said. “There’s no American plant that can match that.”
When an Apple team visited, the Chinese plant’s owners were already constructing a new wing. “This is in case you give us the contract,” the manager said, according to a former Apple executive. The Chinese government had agreed to underwrite costs for numerous industries, and those subsidies had trickled down to the glass-cutting factory. It had a warehouse filled with glass samples available to Apple, free of charge. The owners made engineers available at almost no cost. They had built on-site dormitories so employees would be available 24 hours a day.
I found a documentary that answers my questions above, about how the booming ghost towns and real estate bubble developed in China.
The order from the Politburo is to grow the economy, and the easiest way for provincial governments to deliver on that marching order is to build. Land was taken from farmers, and sold to developers. The poor banking system and lack of investment avenues steered people's life savings into the hand of the developers, who promised 30%/yr interest on the loans. The developers could afford to pay that interest, because the apartments they built were appreciating hugely. Many of the apartments were purchased for flipping, not for living in. A small and quite spartan apartment in Beijing could go for as high as 77x the average annual income, the equivalent of $2.5M in the US with its median wage of $32K in 2005.
So, the personal savings of the Chinese population was piled up in these empty high rises that were built and sold as investments, while much of the people still live in squalor. All this building explained the demand for steel, copper, cement until the commodity prices crashed recently.
This house of cards is tumbling down, and we will not see the end of it for a while.
Cool ear rings........The following video by a traveler shows the quality of construction quite alarming.https://www.youtube.com/watch?v=MCmC9Un8Vy8
I do not think these ghost buildings have electric and water, although the wiring and plumbing should be in when they are built. But with a generator and a cistern, you could be self-sufficient, just like Charlton Heston in The Omega Man.
You want too much! Coffee shops, restaurants, and grocery stores all stocked up just to serve a single customer, you?