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Economics 101: The Skyscraper Curse and “7) Chinese stock market falls 40% by late summer”

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April 23, 2008 – Comments (19) | RELATED TICKERS: SKF , SRS , FXP

“7) Chinese stock market falls 40% by late summer” Predictions 2008: S&P Falls 25%, Chinese Mkt Falls 40%, Ron Paul Wins Presidency, Oil $175 etc...

 abitarecatania’s MF Blog on December 30, 2007,

“Also, if the Dubai boom was an isolated event, I wouldn't be particularly concerned. But everywhere I travel I am left with the uncomfortable feeling that the current boom is surreal and unsustainable….Cape Town, has become a huge circus reminiscent of the consumer electronic shows held in Las Vegas in the late 1990s.

And whereas I have a relatively positive view of commodities, I doubt that all these mining executives (predominantly promoters and liars) will make as much money as they hope to, simply because exploration and mining development costs are soaring.

Every major city around the world is also experiencing a huge condo and office construction boom, and in resort areas there are enormous developments of secondary homes. Should the financial sector contract, as I believe will occur for several years, will all these new offices find tenants? I also wonder if all the condo and second home buyers are aware of the maintenance costs of their units and that in over-supplied markets prices can decline sharply.” 2

-Marc Faber

SKYSCRAPER CURSE

“The desire to erect the tallest building seems to have much to do with sudden capital inflows that pump up credit creation and confidence. It's often periods of over-investment and financial speculation, fueled by excessive monetary expansion, that drive developers and politicians to architectural one-upmanship.”"Skyscraper Index" was created by Andrew Lawrence. It is unconventional economic barometer has connected the dots between epidemics of towering hubris and economic problems.

In 2006, most of the Middle Eastern stock markets declined by 50% or more

The world's tallest buildings are going up there….

In China, the Shanghai Financial Center will rise 1,584 feet over what's arguably Asia's most dynamic city. A planned project in Hong Kong would be even taller. Beyond that, mainland China and Hong Kong boast six of the 20 tallest buildings currently in use, according to Skyscrapers.com.

China continues to grow at rates approaching 8 percent at a time when much of the global economy is on the verge of recession. And while Hong Kong is experiencing deflation and record unemployment, there's little panic about the city's economic situation.

In the late 1920s, the completion of the Chrysler and Empire State buildings coincided with the Great Depression. The 1970s saw the erection of the 1,368-foot Trade Center and Chicago's 1,450-foot Sears Tower amid stagflation, a fiscal crisis in New York and the breakdown of the Bretton Woods monetary system. The completion of Kuala Lumpur's Petronas Towers in 1997 coincided with the collapse of Asia's economies.[1]

World Biblical Tower of Babel long before that, efforts to erect mankind's next architectural monstrosity have proved a reliable indicator of economic meltdowns.

http://findarticles.com/p/articles/mi_m5072/is_38_24/ai_92808208/pg_1

 1. Buildings go up, economies head down - Commentary - Brief ArticleLos Angeles Business Journal,  Sept 23, 2002 2. A "WATER TORTURE" BEAR MARKET, PART I
by Dr. Marc Faber
 

19 Comments – Post Your Own

#1) On April 23, 2008 at 2:32 PM, zygnoda (27.24) wrote:

How many hours a day do you spend reading?

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#2) On April 23, 2008 at 2:34 PM, abitare (77.35) wrote:

6 to 18

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#3) On April 23, 2008 at 3:03 PM, zygnoda (27.24) wrote:

Those eighteen hour days must be fun.  lol   I noticed the same thing with the Fisher Building in Detroit.  It was supposed to cover the whole block...

Initially, Kahn planned for a complex of three buildings, with two 30-story structures flanking a third tower twice that height. However, the Great Depression kept the project at one tower. 

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#4) On April 23, 2008 at 3:37 PM, AnomaLee (28.60) wrote:

An A for the thought & homework...

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#5) On April 23, 2008 at 3:57 PM, abitare (77.35) wrote:

I am expecting more of a B for lack of readability and messed up 2) reference.  :( 

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#6) On April 23, 2008 at 4:01 PM, abitare (77.35) wrote:

I am a maven for information I think dwot might be worse. I am an encyclodedia of useless knowledge. I am combine smart ideas from smart people with my useless knowledge to provided a degraded message for the FOOL community.

It is a value subtracting endevor. 

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#7) On April 23, 2008 at 4:04 PM, abitare (77.35) wrote:

dwot actually can take something and add value :)

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#8) On April 23, 2008 at 4:10 PM, lquadland10 (< 20) wrote:

Hey Aba,What I noticed is that after the next tallest building is finished is a world war.I wonder what pattern is there? Have you read Nuclear Jihadist yet? You might find that book interesting. 

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#9) On April 23, 2008 at 4:14 PM, abitare (77.35) wrote:

The greatest wealth transfers happen during wars. It is can be easy to scare people and then send the youth to fight. Meanwhile the tax payers pay for decades and the military industrial complex becomes extremely wealthy.

Of note, I believe the largest house in New York was owned by the orginial owner/manufactureer of Humvees. 

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#10) On April 23, 2008 at 4:16 PM, lquadland10 (< 20) wrote:

Dwot can take what I am trying to say and fail and when I read her work it is like thank goodness someone can put what I am feeling into words for me. It is a value subtracting endevor. dwot actually can take something and add value :)    I like to read both of you to get the pros and cons. 

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#11) On April 23, 2008 at 4:21 PM, lquadland10 (< 20) wrote:

Then the next greatest wealth transfers whould take place in rebuilding what was blown up. Round and Round we go.

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#12) On April 23, 2008 at 4:54 PM, Tastylunch (29.28) wrote:

The skyscraper bit I find to be particularly interesting and relevant Makes you wonder if Bear Stearns's real estate (which angry investors claimed was worth more than 2 per share JP morgan initially was offering) is really all that valuable after all ....

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#13) On April 23, 2008 at 5:52 PM, leohaas (33.53) wrote:

abitare, if Ron Paul wins the Presidency, your other predictions will come true too...

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#14) On April 23, 2008 at 7:07 PM, abitare (77.35) wrote:

lq,

dwot is nicer also. I say mean things at times.
:[

Tasty,

A building can usually collect some rent. But it is a very good point about the big BSC building. Of interest China's finance buildings are huge also.

leohaas,

Ron Paul wins by not walking into the mess the next president will inherit. For many Americans they were able to actually see a statesmen verses, some pro Nanny state, paid liar. 

The next President is going to get hit like Herbert Hoover and Carter. Carter inherited inherited the war debt and a destroyed dollar. Hoover inherited the first FED credit bubble and war debt. Both had lousy deals handed to them.  

Dr Paul has been speaking against the War, the FED, the nationial debt, the fiat currency, the excessive taxes etc... since the beginning. It would be a cruel joke for him to get in office and take the blame the next guy will receive.  

It is far better to have one of these corrupt shills inherit a mess they do not understand and cannot control and watch them take the hit.

Ron Paul in 2012! Call a Doctor to save us from the FED and Repbulicat created Depression! 

Ron Paul in 2012!

Why Dr Ron Paul in 2012?

He has never voted to raise taxes.

He has never voted for an unbalanced budget.

He has never voted for a federal restriction on gun ownership.

He has never voted to raise congressional pay.

He has never taken a government-paid junket.

He has never voted to increase the power of the executive branch.He voted against the Patriot Act.

He voted against regulating the Internet.

He voted against the Iraq war.

He does not participate in the lucrative congressional pension program.

He returns a portion of his annual congressional office budget to the U.S. treasury every year.

 

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#15) On April 23, 2008 at 9:33 PM, abitare (77.35) wrote:

FYI Mish Shedlock here speaking on China:

http://globaleconomicanalysis.blogspot.com/2008/04/china-acts-to-bolster-stock-market.html 

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#16) On April 24, 2008 at 2:10 AM, dwot (81.54) wrote:

Well, I think I'm being talked about here...

Thanks for the compliments :)

Weird economic indicator those buildings... 

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#17) On April 24, 2008 at 2:26 AM, madcowmonkey (< 20) wrote:

So bigger isn't always better. 

I am starting to get the feeling that these mining companies are full of it. It is hitting me in my gut, but slowly moving into the brain (or is that down to the brain?).

I think a good book that I have been read recently was about the owner of Patagonia. Title: Let My People Go Surfing.

It definitely gives a good basis for going against mainstream thought. Something that I find useful at times. 

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#18) On April 27, 2008 at 11:13 PM, lquadland10 (< 20) wrote:

off topic liberty dollar busted

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#19) On April 30, 2008 at 3:50 PM, abitare (77.35) wrote:

Great find lq.

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