Oddly Relevant Mar-6-2013

60 min, China’s real estate bubble: Wang shi is one of the most respected businessman in China, and he believes that when it takes 45x a Shanghai resident’s annual salary to purchase a typical apartment, “of course there is a bubble”. While he believes that the central government has enough brain-power to solve the problem, he points out that the future remains uncertain.

Note: My father sold our house in Beijing a month ago; I think this is a problem that everyone knows but avoids. It is indeed a disaster if the buyers’ cash-flows dry up—given that the suppliers of housing can be and are highly levered. The government can, in the short-run, stimulate the field all she wants, but such an action would inflate the bubble and lead to uncontrolable results. I would not short China based on principle, but I will be a buyer after the unfortunate crash, should it occur

Here’s something to ponder though, Vanke actually accelerated its pace of land acquisition or construction…Source: http://www.cbsnews.com/video/watch/?id=50142079n

Interview: Lee Kuan Yew on the Future of U.S.- China Relations: founding prime minister of Singapore speaks up: that conflict is evitable—there will be a struggle for influence, but China needs the U.S. and has no non-negociable ideological conflicts. She also wants to be accepted not as an honorary member of the West, but as a powerful standalone nation. The U.S. had to live this a bigger China and share its preeminent position. [Note: a peaceful up-rise is what we want, really]…Source: http://www.theatlantic.com/china/archive/2013/03/interview-lee-kuan-yew-on-the-future-of-us-china-relations/273657/

Better Place was supposed to revolutionize electric cars. What went wrong? Their idea: Customers would buy the cars, but Better Place would own the batteries. When drivers needed to recharge quickly, they could simply swap out their batteries — in five minutes — at a Better Place station. They are now losing >$500 mm. What went wrong is that Local authorities, whose permission was needed to build battery-switching stations, put up unexpected roadblocks, slowing progress. [Note: Interesting, a case where supposed recurring revenue gets hampered by policies]…Source: http://www.washingtonpost.com/blogs/wonkblog/wp/2013/03/06/better-place-was-supposed-to-revolutionize-electric-cars-what-went-wrong/