The Kind of Action You See at the Top

I'm not calling a top. I did that long ago, incorrectly. Rather I watch in awe of all the money unleashed by central banks blowing bigger and bigger debt bubbles. Every loan adds more money sloshing around. Curiously, that money can never find a home.

“What the hell do the buyers know that the sellers don't?”

An interesting rhetorical question. If I had $10 billion, I might spend half of it for a Hong Kong tower for the sake of diversity. If I owned several towers in Hong Kong, then I might sell one in order to diversify into gold and other investments. May have nothing to do with absolute values, if there is such a thing. Hong Kong real estate might be safer than Manhattan real estate. I mean if the Neo-cons, McCain and the Democrats manage to drag the USA into a war with Russia, 9-11 will seem like a border skirmish and Hong Kong will be the better place to be.

joelg5 makes an excellent point. Looking at any investment decision in isolation is an exercise in futility. One must look at the overall portfolio picture to often make sense of any transaction. I am glad you are not calling a top again. Continuing to issue these proclamations is somewhat similar to the article you posted about the Goldman analyst saying that gold was about to plummet. Often a contrary indicator!

Honk Kong is arguably a freak show due to its special status wrt China. Some Chinese are supposedly still overpaying in local currency for Bitcoin, just to get money out of the country. Buying overpriced towers in Hong Kong, may be another way of accomplishing something similar.

Of course, none of that means those kinds of prices are any more than plain silliness, brought about by simple confiscatory money printing. At the 20USD/ounce price for gold that were the norm back in the civilized era, this one fairly mediocre tower would have sold for about 5% of all the money in the world…… Which nicely illustrates why those bent on robbing others by debasement, prefer purchasing power to be represented by something they, and only they, can print up arbitrarily and cheaply to make themselves richer without expending effort doing anything useful. Rather than something everyone has an equal opportunity to dig up and/or manufacture.

Many large buildings changed hands in my area during the 24 months prior to the 2008 crash. Higher loan-to-value ratios, interest only loans, and other favorable terms increased purchasing power and transformed owners into sellers. I imagine some sellers traded up.

The problem with the one week chart joke is that some people have been calling for a top for 7 years.