Wall Street Journal (June 6)
“To the Chinese stock market and property bubbles, now add the whisky bubble.” Scotch is “the tipple of choice for the ultra-wealthy class” in China. In many ways this bubble mirrors Japan’s similar bubble of the 1970s and 1980s. Spirit makers are being cautioned they might be left with a hangover if the bubble bursts.“To the Chinese stock market and property bubbles, now add the whisky bubble.” Scotch is “the tipple of choice for the ultra-wealthy class” in China. In many ways this bubble mirrors Japan’s similar bubble of the 1970s and 1980s. Spirit makers are being cautioned they might be left with a hangover if the bubble bursts.
Economist (April 28)
U.S. home prices have rapidly corrected, having “lost nearly all the real gains they notched up in the bubble period.” In contrast, the correction has been slower in Europe. “British, Irish and Spanish house prices are still well above their “fundamental” value, while those in America are about right.”
U.S. home prices have rapidly corrected, they “have lost nearly all the real gains they notched up in the bubble period.” In contrast, the correction has been slower in Europe. “British, Irish and Spanish house prices are still well above their “fundamental” value, while those in America are about right.”
Tags: Bubble, Correction, Housing prices, Ireland, Spain, U.S., UK
New York Times (December 27)
“China’s housing bubble appears to be imploding, steel production is falling along with the demand for new construction and real estate developers are tottering, putting banks at risk.” A hard landing in China would be a blow to the world economy. It could also spark a trade war and this could be the “bigger risk” as China tries to prop up its domestic economy by subsidizing exports and discouraging imports.
New York Times (December 18)
China’s bubble appears to be bursting “and there are real reasons to fear financial and economic crisis.” The biggest is that “a world economy already suffering from the mess in Europe really, really doesn’t need a new epicenter of crisis.”
China’s bubble appears to be bursting “and there are real reasons to fear financial and economic crisis.” The biggest is that “a world economy already suffering from the mess in Europe really, really doesn’t need a new epicenter of crisis.”
Tags: Bubble, China, Crisis, Europe, Global economy
New York Times (November 8)
“Is there reason to fear that Americans will save too assiduously, as the Japanese did…to the point where the economy never goes back to what we consider normal?” The experts are divided. University of Tokyo professor Takatoshi Ito states, “Japan cannot be held up as a positive role model.” M.I.T. Sloan professor Simon Johnson points out, “Japan never experienced high unemployment. Perhaps we should envy and attempt to learn from their experience, rather than disparaging it.” And Morgan Stanley’s Stephen S. Roach asserts “it’s far too late to argue that the U.S. economy hasn’t fallen into a Japanese-like quagmire. Like Japan, we allowed asset bubbles to distort our real economy….”
The New Yorker (September 6)
Is China going the way of Japan? Similar bubbles and certain excesses seem to indicate China may be headed for a fall. Chinese real-estate tycoon Huang Nubo unveiled plans “to buy seventy-five thousand acres of Iceland.” The “weirdness” of this recalls similar weirdness during the height of the bubble, such as a 1989 plan by the head of Nomura Securities to make California a joint yen/dollar currency zone. That was three years after “the value of the nation’s real estate doubled in a single year.” It doubled again in 1987, making Japan “the world’s largest creditor, holding thirty percent of U.S. debt, and … home to the world’s ten largest banks, with a stock exchange bigger than Wall Street.” By 1993, it was all over. Does China’s “Iceland moment” signal the end of their bubble? Or “Will it be simply a quirky milestone on the continued ascent?”
Tags: Bubble, California, China, Iceland, Japan
Barron’s (July 25)
There is a social media bubble. “Investor enthusiasm for social-media stocks is way overblown.” To illustrate Barron’s points out that 8 social media companies (Facebook, Groupon, Zynga, LivingSocial, Twitter, LinkedIn, Pandora Media and Zillow) with recent or potential IPOs only earned combined revenue of $3.5 billion. Alone, the Washington Post earned $1 billion more than the eight companies combined, but the market value of the Post is just $3.4 billion. In contrast, Twitter has been valued at $8 billion and Facebook’s theoretical value is $100 billion. While these may be great companies, they appear to be bad stocks for investors.
Tags: Bubble, Facebook, Social media, Twitter, Washington Post
Financial Times (November 29, 2010)
Hong Kong is now the world’s most profitable wine market. Is this the ultimate sign of a bubble? Gideon Rachman writes Chinese are snapping up vintages in a manner “oddly reminiscent of the late 1980s, when Japanese buyers were paying unheard of prices for Impressionist art.” Recently, three bottles of 1869 Château Lafite went for a breathtaking £437,900.” Bubble or not, “For Europeans, staring bankruptcy in the face, China’s wine mania should be encouraging.”
