注册 登录  
 加关注
   显示下一条  |  关闭
温馨提示!由于新浪微博认证机制调整,您的新浪微博帐号绑定已过期,请重新绑定!立即重新绑定新浪微博》  |  关闭

谢国忠

谢国忠博客:只说出心中真相

 
 
 

日志

 
 
关于我

麻省理工学院经济学博士

个性介绍: 1960年出生于上海,1983年毕业于上海同济大学路桥系,1987年获麻省理工学院土木工程学硕士,1990年获麻省理工学院经济学博士。同年加入世界银行,担任经济分析员。在世行的五年时间,谢国忠所参与的项目涉及拉美、南亚及东亚地区,并负责处理该银行于印尼的工商业发展项目,以及其他亚太地区国家的电讯及电力发展项目。1995年,加入新加坡的Macquarie Bank,担任企业财务部的联席董事。1997年加入摩根士丹利,任亚太区经济学家,2006年9月辞去该职务。

网易考拉推荐

apocalypse soon / 謝國忠   

2008-07-22 21:27:55|  分类: 言论 |  标签: |举报 |字号 订阅

  下载LOFTER 我的照片书  |

Apocalypse soon / 謝國忠


The leverage pyramid supporting world property prices is unravelling, but it's not too late to sell.


Thetroubles at Fannie Mae and Freddie Mac, the US semi-government lendersthat hold or guarantee US$5.4 trillion of mortgages, have exposed theinnermost sanctum of the credit-cum-property world of the past decade.They have lent their semi-government credit ratings to dubiousfinancial products that purport to decrease financial risks byreshuffling the deck. While government money will bail them out, theywill cease to be the sugar daddies for Wall Street. The leverage bubblehas nowhere to hide; it will explode.



Rising leveragewas the tide that carried all asset prices upwards. In Hong Kong,London, Mumbai or New York, rising property prices became the reasonfor prosperity, and this prosperity was the rationale for the risingprices. As one Hong Kong tycoon told me, wealth begets wealth; peoplewho make money in the stock market buy property, people who make moneyin the property market buy stocks, and the happy story goes on and on.Yet, the free lunch was an illusion. Its engine was the debt pyramidgame.



The bricks for the pyramid were new financialproducts that purported to decrease risk for owning assets and, hence,required less capital for their purchase. The rising price trendvalidated the power of the financial innovations for several years. Infact, the rising trend was due to the belief in the new products thatcreated a demand boom for risk assets with debt financing. Like anybubble before, this one fell under its own weight. As a bubble grows,it needs proportionally more money to stay afloat. At some point, thereisn't enough to keep it rising. The ensuing rush for the exit reversesthe momentum. The way down is usually much steeper than the way up.



Risingoil prices are an accelerator for the downturn. Money is reallocatedfrom most bubble cities to oil exporters. The money reduction sucks theair out of the bubble. To fight the receding tide, central banks areprinting money to slow the descent. But more money leads to higher oilprices, sterilising the central banks' efforts. Further, high oilprices depress economies and decrease investor confidence. The centralbanks are fighting a losing battle against falling asset prices and arefuelling stagflation. The inflation will take years to cure. Thecentral banks are digging their own graves.



Investorsshould sell any asset that has benefited from rising leverage. Propertyis entering a bear market everywhere except among oil-exportingcountries. All else being equal, while inflation is good for property,the current price is already too inflated to be supported by inflation.While the consumer price index rises, property prices fall. At somepoint, the ratio of the two returns to the historical norm and thebubble is fully deflated. On that basis, property prices may fall byone-third globally, and by half in many "hot" cities.



HongKong's property market is triply vulnerable. First, the city's economydepends on its stock market. That is falling. Local speculators madebillions from mainland IPOs and they splashed out on luxury properties.The wealth spillover from the stock market boom was the driving forcefor the property market.



Expanding financial sectoremployment was another spillover. As investment banks expanded theirpayrolls on the dream of endless hot Chinese IPOs, many bankers gottheir big bonuses. But the hot IPOs of yesteryear are now underwater.Loss-bitten investors are not re-entering the market. Those bankerslucky enough to keep their jobs have no expectations of a bonus. Thisis definitely not the time to splash millions on a luxury property thatis actually a modest-sized concrete box.



Second, theUS Federal Reserve is likely to raise interest rates after the Novemberelection. US inflation is becoming entrenched. The Fed is caughtbetween financial and price stability. Every time it tries to soundtough on inflation, another financial explosion forces it to loosen themoney supply again, sparking more commodity speculation.



Nextyear, the explosions may cease and the Fed may be able to switch tofighting inflation: it may raise interest rates to 5 per cent in thesecond half of the year. As adjustable-rate mortgages dominate HongKong's property financing, the massive rise could hit investors orspeculators hard. The default rate could spike.



Third,China's economic cycle is turning down but inflation is staying up. Inparticular, Guangdong faces a serious downturn. Its export economy isbeing hit hard on rising costs and falling demand. What is happening toMacau's casino business shows how a lack of money in Guangdong couldaffect its neighbours. At the same time, inflation means that Guangdongwill charge Hong Kong more for its goods and services. Hong Kong willget less money from, but pay more to, its neighbour.



Thetriple squeeze may imply one of the worst years, next year, for HongKong property. During the current bubble, the mass market hasn'tinflated dramatically. The pain from the massive price decline between1997 and 2003, plus sluggish income, has prevented mass hysteria in theproperty market this time. Those with money to spare ramped up the"luxury" market. Citing negative real interest rates, too many people -mostly financial professionals who may lose their jobs soon - havemaximised leverage for property purchases in the past two years. Theprices at many well-known developments have tripled since 2003.



HongKong's luxury property price may fall by 50 per cent from its peak. Itis not too late to sell. An offer may be significantly lower than youexpect. But you should take it. The big fall is yet to come.



Andy Xie is an independent economist



  评论这张
 
阅读(581)| 评论(26)
推荐 转载

历史上的今天

评论

<#--最新日志,群博日志--> <#--推荐日志--> <#--引用记录--> <#--博主推荐--> <#--随机阅读--> <#--首页推荐--> <#--历史上的今天--> <#--被推荐日志--> <#--上一篇,下一篇--> <#-- 热度 --> <#-- 网易新闻广告 --> <#--右边模块结构--> <#--评论模块结构--> <#--引用模块结构--> <#--博主发起的投票-->
 
 
 
 
 
 
 
 
 
 
 
 
 
 

页脚

网易公司版权所有 ©1997-2017