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Why Bubbles are Bad

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Another great post by Piggington. Apply it to you know where.

The bubble beneficiary sectors, so named because they grew like weeds as a result of the housing boom, are: construction, finance (which includes real estate transactions), and retail (not directly related to housing like the other two, but a bubble beneficiary nonetheless as a result of vigorous home equity-financed consumer spending). In the graphs below, I have grouped these three sectors together as the “Housing Bubble Sectors” and charted the change in their size alongside that of the non-bubble private sector industries and government.

Graph

Those excess jobs are gone for good, now that the bubble is no longer with us. They never should have existed to begin with. We would have been far better off if all the labor and resources that were squandered on the housing bubble were instead put to uses that could have generated a sustainable increase in society’s long-term prosperity. As a bonus, we would have avoided a big crash, too.

Why Bubbles are Bad

Of course, virtually ALL of the employment growth in Canada since the 2008 recession has been in the bubble beneficiary sectors.

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Copied from PaulB’s number
http://www.laurenandpaul.ca

 Date      Listing  Price(+-)  Sold   Inv     Inv(+-)  S/L(%)
Apr-02       450     139       125   16,074            27.8
Apr-03       319     133       224   16,124     50     70.2
Apr-04       302     131       147   16,230    106     48.7
Apr-05       277     118       117   16,345    115     42.2

Apr-10       403     211       159   16,475    130     39.5
Apr-11       416     151       202   16,618    143     48.6
Apr-12       333     140       103   16,736    118     30.9
Apr-13       289     146       150   16,807     71     51.9

Apr-16       341     170       137   16,883     76     40.2
Apr-17       280     177       179   16,893     10     63.9
Apr-18       301     146       170   16,971     78     56.5
Apr-19       251     127       129   17,025     54     51.4
Apr-20       238     131        85   17,137    112     35.7

Apr-23       309     175       150   17,195     58     48.5
Apr-24       343     145       218   17,220     25     63.6

Total-Cur   4852   2,240     2,295           1,146     47.3
5 day-avg    288     145       150              65     52.1
Total-Est  6,006   2,819     2,897   17,482  1,408     48.2
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Apocarypse Mao

@ # 104 Anonymous Says: April 24th, 2012 at 12:31 am “Mandarin Residences for Chinese only? etc, etc”

It’s all good ’cause Beijing has ‘Vancouver Forest’!

http://www.ekistics.com/projects_tp_vf.htm

And I would guess, that it’s not marketed at Canadians.

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willy_p

aberdeen center is a scottish mall

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Anonymous

70%

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patriotz

@Anonymous:
The word “mandarin” is actually of Indian origin and was used in colonial SE Asia to refer to important people, thus by extension to important Chinese. It has never been used by the Chinese to refer to themselves, except when speaking in English.

Also note that the web site for the development is in English only.

http://www.mandarinrichmond.com/

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Anonymous

@Meh: “No, just highly discouraged.”

You are not bright enough to understand the name is actually marketing to NON Chinese speculators hoping to cash in.

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Anonymous

Mandarin Residences for Chinese only?

How about:

Bohemia – is it for Czechs?

Virtu – for Italians?

Espana – for Spanish?

Olympic Village – for Greeks?

The Erickson – for people named Erickson?

The Westside – for Westerners?

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Meh

@Anonymous: “Umm who said whites couldn’t buy at the Mandarin Residences?”

No, just highly discouraged. And not just whites, but anyone who isn’t Chinese. Its heading in the wrong direction, further encouraging the ethnic balkanization that’s becoming all too obvious.

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Anonymous

@Meh: “Umm you do know that British Properties was once off-limits to non-Whites and non-Christians? Sort of backs up the concerns about using ethnic names for real estate. TWO WRONGS DON’T MAKE A RIGHT.”

Umm who said whites couldn’t buy at the Mandarin Residences? Half the condo complexes and most streets in Vancouver have a British name. What provice do we live in – BRITISH Columbia. Should we ban Chinese food restaurants because it implys only Chinese can eat there?

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Meh

@N: Umm you do know that British Properties was once off-limits to non-Whites and non-Christians? Sort of backs up the concerns about using ethnic names for real estate. TWO WRONGS DON’T MAKE A RIGHT.

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Anonymous

@N: “Yeah, next thing you know they’ll give some place a ridiculous ethnic name like British Properties or something.”

LOL!

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N

@MR:

“This type of marketing perpetuates that perception and it really reinforces the ethnic self segregation in this city.”

Yeah, next thing you know they’ll give some place a ridiculous ethnic name like British Properties or something.

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goodpriceforyou

@Hu Yu Fulling

Dude be nice, I’ve giving your dad so many empties this year in my back alley. PS, big party this weekend so u and him come by and u can have them all. Just in time too, mortgage payment and that lease on the beamer next week;)

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MM

@Rakim: McMartin should disclose his interest in rising RE prices. If he’s feeling smug’n’comfy about a healthy increase in the value of his house, he may simply not understand how stressed the average Vancouverite is about housing affordability, or realise how offensive/taunting his columns come across.

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Hik

lot’s of whites upset tonite…is it because no rioting this year in Vancouver ? hi-hi

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Laibach

@BP:

Fortunately it’s Richmond so all stays within family.

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Anonymous

@Laibach:

I’d say that scenario is unfolding for the last several yeas if not a decade or two. For example, I will never forget the scene when I walked into HSBC IT office in Burnaby and literally all employees were Chinese speaking only in Chinese.

I was recently in the US and walked in a TD Bank. Everyone in there was speaking Canadian. Unbelievable! If RBC opened a bank in Hong Kong do you think people might speak English?

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BP

Banker “What the marketing is trying to do is exactly what it did with you. It created the illusion this complex will be in high demand by rich Chinese.”

exactly!!
creating illusions for the locals idiots.

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Anonymous

@Patriotz’ No.1 Fan:

How is it possible that a developer (Polygon) can get away with building a building without floors that end with 4. (I presume 4 is the dreaded unlucky number for the Chinese, correct?)

For example, in the highrise I am renting, there are no 4th, (13th), 14th and 24th floor. This is so misleading. If you live on the 27th floor, you are actually living on 23rd. To me that appears to be quite a difference.

They have no problem in the taller buildings with floors in the 40s. The reason they do is because people will pay more for the 27th floor over the 23rd floor even if it is on the same level. I bet most people who buy the presales do not even know which floor they are actually buying.

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Banker

@MR:

“Mandarin Residences” in Richmond?

Now I don’t know about you, but buying into a place called “Mandarin Residences” seems to imply a certain something about the buyer. It is not hard to tell which group of buyers they are targeting.

Why is the media so shocked when people blame “rich Chinese” for high prices when developers target that supposed demographic so blatantly.

What the marketing is trying to do is exactly what it did with you. It created the illusion this complex will be in high demand by rich Chinese. In fact it will be bought by people who plan on flipping to rich Chinese in the future.

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Bobby

i mean let’s be honest, whites are on defensive in the global economic game and there are only two things that they are doing: finger pointing and bailouts. he-he

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Hu Yu Fullin

or something like white executives briberies at Walmart,
http://www.marketwatch.com/story/walmex-tumbles-in-mexico-city-after-bribery-report-2012-04-23?link=MW_story_latest_news

and BTW did you guys recovered money from MF Global or that was just price of doing business in white America? he-he, you are such useful idiot for corporate world

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benny

“Its great to see the media supporting the forcing out of Canadians from their homes for the sake of wealthy immigrants.”

you can always move to Ottawa and get lousy government job. bunch of whiners

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Makaya

@Hu Yu Fullin: “White Canadians should work harder to become wealthy and to be able to compete with Asians. simply as that. stop whining and start competing.”

Like these people I suppose?

S.E.C. sues SinoTech Energy, another China-based accounting fraud

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Capo

Rakim “Its great to see the media supporting the forcing out of Canadians from their homes for the sake of wealthy immigrants.”

it’s not wealthy immigrants that jacked up the price of moldy East Vancouver shack. It is the locals that created this mess.

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