Most of us are at least passingly familiar with the theory: the completion of a new tallest skyscraper presages a market crash. Over-exuberant construction reflects over-exuberant markets, and over-confidence often spills over as the hyper-bullish slowly (and then quickly) realise that the good times are over.
Here’s the story so far:
And here’s the next chapter — earmarked for completion in January 2013:
Where else but China? As if that country didn’t already have enough empty buildings, enough empty office space, enough empty homes, and enough grey uninspired architecture. And it’s not like Changsha — the relatively-sparsely populated city where the thing is to be built — is running out of countryside to expand into.
Sky City One is planned to be prefabricated and built onsite, to a timeframe of just ninety days (that will instil confidence that the building won’t spontaneously collapse, right?) and at a much lower cost than the current titleholder (which of course presaged the 2008 crash, and bankrupted its builders) the Burj Khalifa.
“A milestone of life-style transforming” sounds about right (they have enough money to build a 200 storey building, but not enough to pay for good English translation?). The world will be a very different place after the next crash.
Not so good news for property speculators who are sure to dump money into what will soon be little better than a tax liability. But good news for Jim Chanos, and every other investor determined to short everything Chinese.
If its prefabricated the 90 days is not indicative of the time frame. Structurally it is not unusual to over-design by a factor of three for commercial buildings.
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I believe the problem is capital can’t get a return from productive assets, so it goes into speculative investments such as real estate.
The bigger they are the harder they fall right?
I hope 2013 is not the big reset!
The, “Big Crash,” has been underway since 2008 [well, 1971], [well, really, 1913].
If people are expecting the sky to fall, they are going to be very disappointed. The pain is being spread-out over the entire globe and will last many, many years [two decades and counting so far in Japan].
European Debt Crisis simply explained:
Amusing Ourselves to Death, who was right Huxley or Orwell?
No one cares, we are all too distracted to care.
Hold on, 100,000 people living in one building?
Someone has been playing necromunda….
Looks like another Tower of Babel.
There will be regional war in South China if/when China crashs because CCP will do anything to remain grab hold of their power. Nationalism is a big help.
I appreciate your perspective, and somewhat agree on your analysis, that part of the
China Boom is overpriced, but the Chinese have strong domestic support, and are investing
to lower their expensive resource costs. A few sectors could be down, while a few more on
average are up! Small cap and even mid cap stocks are already Depression value priced,
can they go much lower? Selective long term buying, with averaging down is in order
for the value investor.
Looks like the Tower of Babel, and no doubt the results of all our economic folly/socialism will be the same.
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Hi!, Patrons Et Al:
Rember, the Paper Aristocracy now rules the Planet Earth and, untill their Empires reach absolute zero, they will paper over every attempt occuring from a normal deflationary episode and so don’t count on a deflationary episode collapse begining in 2013. Time is marching onwards daily and time will tell us soon enough but solid planning will continue to be very ellusive in my opinion except planning to spend more to receive less.
RUSS SMITH, CALIFORNIA
Took the article for what (i think) it was; humour, made me chuckle. thanks.
On an unrelated note, been reading on the downfall of great empires (sumerians, rome) and both have been followed by a couple-hundred year dark age period. Wonder if this will happen again? and the poster above was right, the fall will be spread over a loong time. the western empire has had different masters over the years britain, US) but its is one and the same – and it wasnt built in one day.
It’s kind of humour.
I started thinking you had put this up as humor, Aziz, complete with the mistranslations, so I had to do a search to find that it is indeed “serious.” But you are right, it is “humor” nonetheless….
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Greatly amused by your knowledge of China. Changsha has 6 million people. In the United States only New York City has more!
When I say sparsely populated I’m talking about population density, not absolute numbers. It is fairly widely-spread, and has a lot more room to expand into than NY or LA or Chicago.
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What happens when all 100,000 occupants flush the toilets at the same time? Does it form a brown rice paddy outside the building. Flush and fertilize economics 🙂