Daily Archives: 04/17/2011

Time Management

 

I never trust anyone who's more excited about success than about doing the thing they want to be successful at.

Time Management
Fri, 18 Mar 2011 00:00:00 GMT

Looking at China’s Real Estate Boom Before it Busts

NoOneOfAnyImport shared this.

I’ll just post the video, which was fascinating. I’d heard of China’s real-estate bubble before, but the scope of a booming but overbuilt real-estate sector is amazing.  The video really made that starkly real.  It’s the result of a centralized economy.

A few observations:

1. Clearly allocation of productive workers and resources is still not so good in a communist countries.  Strong conservatives gleefully point this out.

2. If more of Chinese labor was occupied in manufacture for export the competition with US workers might be even more painful for us.  Hooray for communism after all?  Strong conservatives might be less gleefully about this.  Overall though and in the long-run better use of Chinese productive capacity would benefit produce more benefits than costs.  But workers in US manufacturing would be hurt.

3. This is a kind of stimulus on steroids.  Keynesianism can produce full employment of a sort.  People are employed, but not in making anything there’s any voluntary demand for, except for speculation.  A point that isn’t useful to any one ideology.

4. Note though that apparently private investors are buying these empty pieces of real estate.  In the end apparently, this may wipe out much of the new Chinese middle class.  What happens if that happens?

5. China is still remarkably poor.  At least partially a failure of socialism.

More on the subject here:

Marginal Revolution

via Nouriel Roubini on Austro-Chinese business cycle theory.

China is rife with overinvestment in physical capital, infrastructure, and property. To a visitor, this is evident in sleek but empty airports and bullet trains (which will reduce the need for the 45 planned airports), highways to nowhere, thousands of colossal new central and provincial government buildings, ghost towns, and brand-new aluminum smelters kept closed to prevent global prices from plunging.

Commercial and high-end residential investment has been excessive, automobile capacity has outstripped even the recent surge in sales, and overcapacity in steel, cement, and other manufacturing sectors is increasing further. In the short run, the investment boom will fuel inflation, owing to the highly resource-intensive character of growth. But overcapacity will lead inevitably to serious deflationary pressures, starting with the manufacturing and real-estate sectors.

Eventually, most likely after 2013, China will suffer a hard landing. All historical episodes of excessive investment – including East Asia in the 1990’s – have ended with a financial crisis and/or a long period of slow growth.

Layoff Produce Less Unemployment than you might think: New JOLTS Data

The effect or lack of effect of layoffs is fascinating.

Calculated Risk has an updated JOLTS chart.

While JOLTS is a young data set there are already a few lessons in how we think about the economy.

  1. Contrary to conventional,, wisdom layoffs actually do not seem to be a prime mover in recessions.
  2. Going along with that turnover actually seems to fall during recessions and quite a bit
  3. The prime movers seem to be job openings and quits. A recession is a period where few people are hiring and few people are quitting.
  4. There may be an extensive literature on this already, but how, why and under what conditions people quit their jobs seems to be a very important question.

Filed under: Economics

New JOLTS Data
Karl Smith
Wed, 13 Apr 2011 17:24:07 GMT

The rocky flight path from Yuri Gagarin to Aeroflot

 

My how time flies. I hadn’t realized until seeing the Google Doodle today that it was the 50th anniversary of Yuri Gagarin’s first successful manned space flight. I say successful because rumors persist that an earlier flight had crashed but the Soviet-run media never ran with the story. Back then they wouldn’t announce a launch until it […]

The rocky flight path from Yuri Gagarin to Aeroflot
Thomas
Wed, 13 Apr 2011 02:50:31 GMT

Good to Know we’re safe from Death Panels

Probability from XKCD

http://imgs.xkcd.com/comics/probability.png

If kind of amazing what you can do with simple doodles.