Asian Financial Crisis

[airplaneridesrfun]

With the high Real Estate prices, low interest rates, and large sums that have been borrowed in Real Estate throughout Asia; surely others can see parallells leading up to the next Asian Financial Crisis. A bathroom attendant who just paid 6 million for a property can't pay the mortgage in 5 years when rates are 5%. He won't be able to sell it, because it is now worth 3 million. What does he do? DEFAULT. It isn't just a US phenomena.... in fact, the US mortgage crisis was mild compared to the future Asian crisis..... yes, I know, the HKMC will take care of it all. Right. Thoughts? more importantly, the China crisis will be a new beast to tackle as small and medium size banks go bust.

[boxjockey]

I think you need to delve a little deeper into the topic. Have you seen what the average deposit is on property now in Hong Kong? How about percentage of salary to service a mortgage? While prices are indeed high in Hong Kong, they are going to keep heading higher for at least the medium term. With the newly announced QE in the US, it is going to set up the perfect storm for HKG real estate prices to continue rising. The US is not going to raise interest rates in the next 12-18 months, as they are dealing with very significant deflation concerns, and the last round of stimulus is going to have minimal effect. Because of this, the HKD is going to continue to devalue, as it is a slave to the US$. Now, add on top of this that HKG has a strong growth rate, low unemployment, and relatively strong inflation on the horizon, and you begin to see what may unfold. I'm not saying that in the long term HKG property will continue this trend, I believe just the opposite. I do however believe that you are going to see an awe inspiring rise in property values here in the next 12-15 months, it has already begun. I have my property for sale, for a ridiculous sum, as I believe in the advice that when everyone is buying, SELL!

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[EXEZY]

Ben Bernanke: Impeach Me - I'm A Damned Liar - MarketTicker Forums (http://market-ticker.org/akcs-www?singlepost=2245666)

Guest Post: Let Them Eat Mud Pie | zero hedge (http://www.zerohedge.com/article/guest-post-let-them-eat-mud-pie)

[Air Profit]

...funny how short memories are? I remember in 96' when prices were rising at an absurd rate (much like now...). The usual comment was 'must buy now because it will be 10% higher next month'.... We are witnessing the final stages of the next mega-bubble. The last time this happened prices crashed 67% (yes...that is not a misprint), (an example: friend bought at $6.2.....ended up at $2.5...!!). . HK is setting itself up for a crash of epic proportions.....but of course people will only believe what they wish to believe...either way. My guess is the next collapse will exceed the previous percentage. The US economy is heading for a tragic fall, as no economy can truly recover when the real unemployment rate is close to 17% percent. Housing in the US continues to fall (another 1.2% last month). The only indicator of where this is going is the price of gold. It continues to set new highs almost daily. That is telling you where this will end....and it won't be good. Good luck to all....we'll need it. :hmm:

[boxjockey]

Airprofit,

I agree with you 1000%. I also believe we are headed deep into bubble territory WRT Hong Kong property, but I don't believe the ride will end for another 12-24 months. This is precisely why I have my property for sale, and there are people viewing virtually every day. I think you are right when you say good luck to us all, we are indeed going to need it!!

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[superfrozo]

I agree with you all 10,000% more than anyone else agrees with you. After all, that's what makes us pilots such wealthy financial experts: our prescience combined with our innate understanding of all things economics related.

Why else would we be p!ssing and moaning about our latest failed Thai restaurant venture at 4AM body clock time whilst crossing the Pacific?!?!

:E

[Air Profit]

....superfrozo.....guess you didn't buy gold huh...?? :rolleyes: (...oops, look at that...ANOTHER new all time high...over $1400/oz today..!) :ok:

[cyrex]

ummm the market is not going to drop anytime soon when you still have LOADS of mainlanders buying property in CASH... this is the difference between now and 97... sad....:ugh:

[stillalbatross]

Totally agree things look bad and the company needs to be sensible about this and put aside cash. I am completely opposed therefore to any 13th month or ex gratia payment, I will be giving it back. And urging the AOA to put forward a motion asking that any pay rises or additional drain in salary payouts are completely unaccceptable and should be vigorously opposed in the current economic climate.

No doubt you were all thinking the same.

[boxjockey]

Stillalbatross,

Of course we were all thinking the same, as it was brought up numerous times in this thread.....oh, wait, it wasn't. I have an acronym for you; FUPM. Look it up!! :8

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[EXEZY]

The Chinese buying property with cash will end when their major export market the US dries up due to the latest bout of quantitive easing, which will set in motion the next major downfall.
How on earth is the QE2 measure going to affect the real economy when QE1 never. You're on cloud cuckoo land if thinking that China is immune from American economic weakness, when the US farts China listens, look at the latest downgrading of the US treasuries by China from AA to A*, this is a sign of things to come, China will gradually replace US debt with the only safe haven commodity which is Gold and Gold only. The days of the dollar being the worlds reserve currency are over, with the lunatic Ben Bernanke printing dollars like no tomorrow to bail out his mates in the big banks, this is not going to end well I can assure you.
Trouble with Hong Kong is it doesn't resemble the real world in any shape or form, we've all come here to escape reality in one form or another and now I feel like a major reality check is in order!

Mark Fisher Slams Bernanke: "QE Is Going To End Bad...This Is Going To Be The Bubble Of All Bubbles" | zero hedge (http://www.zerohedge.com/article/mark-fisher-slams-bernanke-qe-going-end-badthis-going-be-bubble-all-bubbles)

[EXEZY]

If you want to know how it's going to pan out, and you can extract yourself from the soap opera that is CX, then READ THIS.

Guest Post: How Hyperinflation Will Happen | zero hedge (http://www.zerohedge.com/article/guest-post-how-hyperinflation-will-happen)