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A series of land sales have set record prices since August, with realestate developers ramping up their competition for the best plots in the biggest cities. Part of it may simply be that few Chinese see any real alternative to realestate as a way of saving. China Rich in Reserves. Pettis Replies.
Business banks: Banks that focus on mid-sized businesses and commercial realestate. Translated into plain English, asset sensitive means margins expand when the Federal Funds rate increases, as the interest income from assets on the balancesheet increase faster than liabilities. Funding and the Loan Mix.
It is clear that banking institutions, state-owned enterprises and local government financing vehicles have remained relatively insensitive to, or been able to circumvent, higher interest rates and bond yields, central government curbs on the shadow banking sector, and the rampant realestate and infrastructure markets.
They also tend to be associated with rising stock and realestate markets, which, by making households feel wealthier, encourages higher consumption. This isn’t the first time, of course, that the balance-sheet dynamics during a growth miracle have created unrealistic evaluations about the quality of policymaking.
This model rests on an understanding of how distortions in the savings rates of different countries have driven the great trade and balance-sheet distortions with which we are wrestling today, just as they have in most previous global crises, including those of the 1870s, the 1930s, and the 1970s.
Patrick Housing Crash News Top Housing and Commercial RealEstate News. Balanced Budget Ammendment Sign the Balanced Budget Petition. Bay Area RealEstate Trends. Mish and Eric King discuss Gold, the Stock Market, the US Dollar, Sideline Cash, China, and US realestate. Pension Tsunami.
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