May 6th, 2014, 6:51 am
My view is that it is not a single bubble, rather it is a froth of N bubbles in specific areas, so I expect to see spikes up and down at the same time, caused inter alia by the way that you don't really "own" things in China and a scarily dysfunctional banking system.In it's own way that is worse than the standard "western" bubble because some people will make extraordinary profits, both in % terms and absolute cash value by selling out of the spike downs and buying into the spike ups. Some of this will be skill or else luck and being China these will converge on corruption as the government clamps down on extreme events and fraud.So we shall see "flights to quality", investors throwing money at what they perceive to be grossly undervalued assets and the creation of investment vehicles of ever more complexity and opacity.Property prices by their very nature are pretty much always bubbles, of the positive or negative kind, part of this froth of positive bubbles is that for the last 500 years, China has had a negative bubble.