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Economic Model Untenable: A. Gary Shilling

A. Gary Shilling[The] "economic model, which leaves bureaucrats guessing about the market effects of their directives, is ultimately untenable."  A. Gary Shilling

Sounds like Shilling is talking about our current economy in the United States, doesn't it?  He's not talking about us.  He's talking about China--the country whose economy is tightly intertwined with our own.

Why should you care?

While macro views of the world economy don't get you listings or buyers, it's important to stay on top of events which can affect the earning of our daily bread.

Shilling's article this morning on Bloomberg.com paints a bleak picture of China's economy headed for recession following a period of amazing growth.

Inflation is the boogyman.  Imagine if you had to conduct your real estate business under the current constraints imposed by China's central government:

  1. Want to buy a second home?  Minimum downpayment: 60%.
  2. Want to buy a primary residence?  Minimum downpayment: 30%
  3. Are you a mortgage lender?  The central government sets annual limits on bank loans in advance.  If your bank loans the entire amount by the end of June, you'll have to wait until January 2012 for your next loan.

Government at any time, and in any country, is an experiment.  We're blessed in the United States to have a say in how our government works.  Especially in these economic times, that's not a blessing to be taken lightly. 

(photo courtesy Forbes.com)

_____________________

I'm Mike in Tucson, your preferred Tucson Arizona Mortgage Lender.

NMLS #223495

SUNSTREET MORTGAGE LLC ~ Correspondent Mortgage Bank
Offices in Mesa, Tucson, Sierra Vista & Nogales

 

Comment balloon 10 commentsMike Jones • June 29 2011 01:09PM

Comments

They are tightly controlled and growth cannot happen forever when markets cannot take ideas where the ideas want to go.  And the numbers coming out of there are never accurate!

Posted by Jay Markanich, Home Inspector - servicing all Northern Virginia (Jay Markanich Real Estate Inspections, LLC) about 8 years ago

They have the "benefits" of total government control, ie communism. Something we seem to be working closer and closer to......we are getting periously close to socialism as it is.

Posted by Than Maynard, Broker - Licensed to List & Sell - 405-990-8862 (Coldwell Banker Heart of Oklahoma) about 8 years ago

Hmmm....does that sound like the Chinese version of QRM?  So, our QRM is not as draconian, but it will have the same effects....

Posted by Brett Reichel, MLO 210215 (Pacific Residential Mtg., LLC - NMLS 1477 / WA CL-1477) about 8 years ago

Funny that Shilling would make these comments against Central planning/control about China when there is so much similarity with what we face here.

Posted by Ron Brown NMLS #270845 (NMLS ID: 40831) about 8 years ago

Mike

Very interesting post the over regulation in Washington is having a negative effect on the economy.

Good luck and success.

Lou Ludwig

Posted by Lou Ludwig, Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC (Ludwig & Associates) about 8 years ago

Mike - I remember Japan in the 80's and how everybody was concerned that their economy would overrun ours and the chaos would begin. Then we started to tax them like they were taxing us. The next thing you know, they were building plants in the USA and hiring american workers because it was a better business decision than paying 25 percent import taxes. When will we do the same with China and Mexico? I don't think we have a fair trade agreement with either of those countries, they tax our goods and we don't tax theirs. Seems a little unbalanced.

Posted by Larry Brewer - Benchmark Realty llc (Benchmark Realty LLc) about 8 years ago

They were talking on the news today about manufacturing jobs coming back to the U.S. because pretty soon it will be the same or less expensive to do so.  Good news, I guess.

Posted by Jane Peters, Los Angeles real estate concierge services (Home Jane Realty) about 8 years ago

This is a very interesting post.  America probably doesn't realize how good we have it.

Posted by Cara Marcelle Mancuso, Call a Marana neighbor, I'm THERE! LONG REALTY (Long Realty - Dove Mountain, Marana AZ) about 8 years ago

Cara,

Our society is more interested in being entertained...

Jane,

I don't know if that's a good trade-off for the devalued dollar.

Larry,

Good point!

Lou,

Good to see you.

Ron,

When I read between the lines, it's an indictment of our own direction.

Brett,

It may be.

Than,

Some benefit!

Jay,

Thanks for being the first to comment!

Mike in Tucson

Posted by Mike Jones, Mike Jones NMLS 223495 (SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) ) about 8 years ago

Our society is more interested in being entertained...   <------  that's the truth.  Many (way too many) have no idea what is really going on...   meanwhile, China is setting up little cities right here in our country.

Posted by Doreen McPherson, Phoenix Arizona Real Estate ~ (Homesmart ~ Scottsdale ~ Tempe) about 8 years ago

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