Evan Osnos relects on Huang Nubo’s purchase of 75,000 acres of land in Iceland.
There comes a moment in every economic boom—whether it was the Texas oil boom in the seventies or Japan’s surge in the eighties or the Silicon Valley bubble of the nineties—when things get a bit weird. In retrospect, people like to point out that signs of overreach were always there, but of course they aren’t until they are. It’s hard to know how China’s Iceland moment will look someday: Will it be simply a quirky milestone on the continued ascent? Or will we look back on the last days of summer, 2011, as the moment when the ball reached the apex of its arc and paused, weightless for a moment, before beginning its fall?
To read more visit: www.newyorker.com
Iceland defied the EU when its banking crisis hit and let its banks default. While Greece, Ireland, Portugal, Spain, and Italy will continue to suffer under their current and upcoming nationalized debts, Iceland paints a rosier economic picture.
Iceland, where a 2008 banking implosion left bond investors trying to recoup $85 billion, can now boast a lower risk of default than the average for the European Union. The central bank signaled this month it may continue to raise rates to support the currency as the U.S. and the euro area resort to emergency easing to keep their economies afloat. Iceland’s rate rise comes as investors are turning to emerging markets to tap into faster growth rates and lower debt levels.
The Icelandic krona strengthened for a second day, rising 0.3 percent to 113.14 per dollar as of 9:33 a.m. London time.
To read more visit: www.bloomberg.com
Muddy Waters appears to have been correct about Sino-Forest fraud.
Canada’s top securities regulator on Friday accused a Chinese forestry company of fraudulently inflating its revenue and exaggerating the extent of its timber holdings.
The regulator suspended trading for 15 days in shares of the company, Sino-Forest, which trades on the Toronto Stock Exchange. But its directive came amid some confusion. The Ontario Securities Commission at first took the very unusual step of ordering five directors and officers of Sino-Forest to resign — only to rescind that demand just hours later.
To read more visit: www.dealbook.nytimes.com
Much has been made of CO2 emissions contributing to global warming by trapping greenhouse gasses. New NASA figures are running counter to that assumption.
The satellite observations suggest there is much more energy lost to space during and after warming than the climate models show,” Spencer said in a July 26 University of Alabama press release. “There is a huge discrepancy between the data and the forecasts that is especially big over the oceans.”
In addition to finding that far less heat is being trapped than alarmist computer models have predicted, the NASA satellite data show the atmosphere begins shedding heat into space long before United Nations computer models predicted.
The new findings are extremely important and should dramatically alter the global warming debate.
Yet another article on China’s unsustainable Kenysian polocies and rising inflation.
“Inflation in China hit a 34-month high of 5.5 percent in May, and economists think it rose even higher in June. Let’s not forget, either, that China is a communist country and the government shades realities to the positive side. All economic growth figures and inflation figures should be adjusted in a more negative direction. Thus, China’s true inflation rate is probably running at about 7 percent — a dangerous figure for such a large country with wage-growth imbalance. Global food prices are rising and China needs a lot of food. Housing costs are rising, also. But wages are not growing that fast throughout the country to keep up.
To read more visit: www.ibtimes.com
Canada’s housing bubble is close to bursting according to Capital Econcomics.
“Housing valuations have lost all touch with fundamentals and household debt is at a record high,” economists at the economic research consultancy Capital Economics say in their most recent Canada Economic Outlook, issued Wednesday.
“Our fear is that, with the housing bubble now close to bursting and commodity prices retreating, Canada will go from leader to laggard.”
The report predicts a fall in house prices by as much as 25 per cent over the next three years.
To read more visit: www.cbc.ca
Publicly traded Chinese companies appear to be having some serious reporting issues. Instances of fraudulent reporting have been popping up as of late and the fraud risks for Chinese stocks on US exchanges is becoming clear.
That’s what’s so depressing, disturbing and disorienting about the fraud recently uncovered at Longtop Financial Technologies (LFT, news). The company’s books were audited by Deloitte, and Longtop still managed to lie about the $332 million in cash it claimed on its balance sheet.
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And it gets worse. Since March, more than two dozen companies based in China have disclosed auditor resignations or accounting problems, according to the U.S. Securities and Exchange Commission. The SEC has launched a task force charged with examining accounting at overseas companies listed in the United States.
To read more visit: www.money.msn.com
Home prices in the US are still falling years after the real estate/credit bubble burst. When house prices correct under a government and bank industry sponsored boom it takes a generation before values recover. Canadians should take note since our own government relaxed lending rules, reduced risk to banks, and all at a time of emergency low interest rates.
Prices are back to their 2002 levels, according to the Case-Shiller National House Price Index out yesterday. “The national index fell 4.2 per cent over the first quarter alone, and is down 5.1 per cent compared to its year-ago level,” David Blitzer, the chairman of the Index Committee at S&P Indices, said. “Home prices continue on their downward spiral with no relief in sight.”
To read more visit: www.independent.co.uk
Gord Goble of the Vancouver Sun provides a current look at the state of the real estate market. He argues against predictions by those with a vested interested that real estate always goes up and that it’s simply different here.
Wrong. Dead wrong. In Scottsdale, Ariz., a palatial home in a stunning setting currently runs one quarter the price of Joe’s crack shack. In the Okanagan, where valuations are off 25 per cent from their 2008 highs, lakeview beauties priced sub-$450,000 languish on the market for months at a time. In Chilliwack, where you can buy a brand new view house for less than $350,000, and more recently in Abbotsford, listings have exploded and price reductions are commonplace, yet few are buying. In British Columbia’s's north, in Squamish and Whistler, and on Vancouver Island, real estate is not doing well.
To Read more visit: http://www.vancouversun.com/
China’s Real Estate Bubble could be starting to deflate. A collapse in the Chinese economy would have serious ramifications for natural resource based economies such as Brazil, Australia, and Canada.
Beijing News, citing data from Housing and Urban-Rural Development Commission on the house and released disturbing figures in recent days: the price of new homes in the capital fell by 26.7% in a month. Over the past year prices fell by about 10%. Purchases decreased by 50.9% in one year and 41.5% in March alone.
To read more visit http://www.speroforum.com/
