Obviously I didn’t get to these yesterday…
sorry it’s been a busy couple of days.
First up the stuff on the Chinese property bubble that I talked about. In last weeks Economist, which in my opinion is the single best news magazine on the market (yes they have a little bit of a leftie tilt, but they are honest about it and they are probably the single most pro-American magazine on the market, and I mean that in the good seeing the potential of America and the American system, not in the jingoistic everything we do is perfect way.), there was one of those little blurbs at the the front of the magazine that mentioned the Chinese central bank was extremely worried about the overheated property market. They are expecting a crash that will cut Chinese economic growth by half. That’s not good given that a lot of the world is expecting China to pull us out of the current recession. Yesterday I saw those sentiments echoed in an article on Bloomberg “China’s Desert Ghost City Shows Property `Madness’ Persists”
Fund managers James Chanos and Marc Faber, Citigroup Inc. economists Willem Buiter and Shen Minggao, and Harvard University professor Kenneth Rogoff are among those who have warned of a crash in China if the government can’t stop the property bubble. Buiter and Shen say it may take three years for the boom to bust while Faber says it could happen within a year.
The result will be “pretty horrendous,” slashing economic growth to less than 5 percent over two years and saddling banks with more than $400 billion in bad loans, said Jim Walker, chief economist at Hong Kong-based Asianomics Ltd. and former chief economist at CLSA Asia-Pacific Markets, in an interview.
Banks are at risk because they often use land as collateral for loans from developers. A 50 percent fall in property prices would mean the loans are no longer covered by the land’s value, calling into question “the solvency of the entire banking system,” Chovanec wrote in a blog in January.
It’s not a pretty picture.
Next – One of the witnesses in the Rod Blagojevich trial has asserted that President Obama knew the selling of the Senate seat.
John Harris, Blagojevich’s former chief of staff, testified Wednesday in the former governor’s corruption trial that three days after the Nov. 4, 2008, presidential election, the ex-governor told Harris he felt confident Obama knew he wanted to swap perks.
Defense lawyers say Harris’ testimony contradicts the government’s previous public statements that Obama knew nothing about deal-making involving the Senate seat appointment.
I’m not sure what exactly this will mean for Blago or Obama but it can’t help the President’s approval ratings if it starts to get any play.
Newsweek is reporting that the Times of London is retracting it’s climategate stories – it’s not exactly how I read the retraction.
Finally – backing my hatchet job theory the Washington Post is reporting that Rolling Stones broke their agreement with McChrystal when they published their article in the way that they did. Here is a public affairs officer’s view of the episode, he also comes right out and says hatchet job. The BBC’s John Simpson agrees with me,
the manner of President Obama’s reaction to a few remarks quoted in Rolling Stone magazine is already being interpreted as showing the president’s weakness, rather than his strength.
A stronger, more self-confident president would have given Gen McChrystal a public roasting, then told him in as many words to get on with the job and keep his mouth shut in future.