Bobbleheads Still Predicting Bursting Bubbles in China

June 17, 2011

It wasn’t that long ago (May 17) that I wrote about a Chicken Little-Henny Penny predicting a real estate bubble bursting in China and wrecking its economy as it did in the US in 2008.

Then a friend recently sent me another link to another “sky is falling” piece.  This time, the “want-to-happen” bad news came from Jeff Cox, a staff writer for CNBC.

Cox wrote, “China’s economy is showing real signs of weakening, particularly in real estate, and even could tip into a recession, hedge fund manager Jim Chanos told CNBC.”

I’m surprised that Cox looked under a Hedge Fund rock to find a quote predicting a bad economic future for China.

Basically, Hedge Fund managers do two things: they use small amounts of money, or leverage, to promise large amounts of stocks or commodities. Secondly, they all say they will deliver this stock or commodity at a particular point in time. In that sense, hedge fund managers are trying to time the market, which some would say is very difficult if not impossible to do unless they manage to manipulate the market in some way or have a crystal ball.

Using other sources, we discover a few facts that tell us Cox should have left that quote under the Hedge Fund rock where he found it and called someone else.


Discover how many Chinese buy real estate.

First on May 5, Jason Simpkins writing for Seeking
Alpha says,  “Yes there are probably pockets of bubbles in China and in the real estate market, but against that backdrop you have 500 million people expected to move into Chinese cities by 2020. That means the number of people expected to move into cities is almost double the population of the United States,” said Money Morning Chief Investment Strategest Keith Fitz-Gerald. “So in the context of China’s explosive growth, what we’re looking at are some moderate setbacks over an extended period of high growth.”

Second, on May 9, James Kostohryz writing for Minyanville says, “China’s Housing Bubble: Mainly Hot Air… Studies by the World Bank, The Economist Intelligence Unit, and UBS have noted that average home prices in China as a whole have risen by roughly 6%-7% per annum in the past decade.

Third, China’s real estate investment accounts for roughly 11% of its GDP, and from Chris Oliver writing for Marketwatch on May 18, we discovered that “New home prices rose across leading Chinese cities in April, even as many key cities saw the pace of appreciation and sales volume cool, according to official data Wednesday.… Of 70 cities tracked in the survey, 56 reported gains in new home prices.”

“So, I think that it should be clear by now, that there is no generalized price or quantity bubble in the Chinese residential real estate market,” Kostohryz wrote, “Home prices have actually been getting substantially more affordable in China in the past decade relative to income levels.”

To learn more, I recommend reading what Simpkins, Kostohyrz and Oliver wrote on this topic. The links have been provided.

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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Posted by Lloyd Lofthouse

Automation Nation

June 15, 2011

There are sound economic reasons why jobs are vanishing in the US.

Economically speaking, to remain competitive, manufacturing companies must reduce their overhead, and lower product cost to the consumer.

The problem with lost jobs in the US is the politics, which stirs up a storm of ignorance when the blame is put in the wrong place. Due to politics, when jobs in the US are farmed out to foreign workers, American workers scream bloody murder and blame China, India or Japan.

Then recently, I read a piece from the Daily Ticker “Made in America”: The Comeback that revealed (without meaning to) the real reason so many jobs have been lost and may never come back even if China, India and Japan vanished tomorrow.

The Daily Ticker said, “Since 1972, U.S. manufacturing output has risen nearly 2.5 times, according to Boston Consulting Group (BCG)…. However, U.S. manufacturing employment has fallen nearly 25% in the same period.”

If American manufacturing output has risen nearly 250% since the 1970s, and the population only increased by 50%, why has manufacturing employment fallen nearly 25%?

The answer is “automation”. If you want to learn more, watch the two embedded videos.

In addition, today 80% of the work force in the U.S. is employed in the service sector. This sector, like manufacturing, is threatened by not only cheap labor overseas but automation technology as well.

Even if the manufacturing sector were to increase in the United States, human labor would still be replaced by automation technology.

Soon, there will be only the wealthy and the machines that serve and pamper them. The rest of of us will be obsolete. What do you think will happen to the unemployed then?

Instead of getting angry at workers in other countries, shoot a machine. Then after cooling down, discover the reasons low and/or unskilled labor jobs have gone overseas or have been automated.

One of those reasons is the three kinds of illiteracy.

Low and/or unskilled jobs that do not require literacy are easy to move overseas where there are hundreds of millions living in severe poverty willing to work for much less than most workers in the US.

“The United States Department of Education estimates that functional illiteracy, incompetence in such basic functions as reading, writing, and mathematics, plagues 24 million Americans. Thirteen percent of American seventeen-year-olds are illiterate, according to a recent issue of Time; the estimate for minority youth is an astonishing forty percent.

Then there is cultural illiteracy — “To be culturally literate is to possess the basic information needed to thrive in the modern world.”

The third is moral illiteracy.  “In generations past, parents were more diligent in passing on their principles and values to their children and were assisted by churches and schools which emphasized religious and moral education. In recent years, in contrast, our society has become increasingly secular and the curriculum of the public schools has been denuded of almost all ethical content.” Source: Reformed.org

Discover The End of Cheap Labor from China

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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Posted by Lloyd Lofthouse

Earning Honor by Going to the Moon

June 14, 2011

It looks as if China’s space program will fuel humanity’s next trip to the moon and beyond. The Middle Kingdom has everything needed to succeed. Why is this?

China is turning out more engineers from its universities than the United States is, and China has the technology and industry to support an active, growing space program.

China isn’t crippled by the deficit (debt) the US has.

China’s nine-man Politburo Standing Committee, the country’s top ruling body, are engineers instead of lawyers or businessmen like in America.

In the last few years, China has sent men into space and conducted space walks. There is a strong chance that in a few more years, there will be Chinese space stations orbiting the earth with footprints on the moon that were not made by Americans.

In fact, China plans to send a lunar probe with a rover to the moon in 2013. Source: The Next Big Future

My wife and I were in China in 2008 when one of the space walks took place, and it was big news filling TV screens and splashing headlines across newspapers. It was easy to sense the pride.

The excitement was equal to the time Americans walked on the moon decades ago. Now, America’s space program is limping along—almost a cripple.

To send supplies to the international space station, the world (except China) depends on Russia.

The honor China lost during the 19th and early 20th centuries to the bully tactics of aggressive Western powers and Japan during World War II is being reclaimed.

For more than two thousand years, China was a regional super power. They have achieved that status again.

Discover Mao’s War Against Illegal Drugs

This revised post first appeared on February 17, 2010 as Growing Great Honor in One Lunar Leap

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Lloyd Lofthouse is the award-winning author of the concubine saga, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

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Posted by Lloyd Lofthouse

A Brief History of Parenting – Part 3/3

June 13, 2011

As you may have learned in Part One and Two, Old-World parenting was an improvement over the way children grew up before the 18th century and the Chinese may have learned this parenting method from the invading Western nations after The Opium Wars.

However, parenting methods developed further and by the 1960s, according to research, the best method of parenting is not Authoritarian but Authoritative, which is characterized by moderate demands with moderate responsiveness.

The authoritative parent is firm but not rigid, willing to make an exception when the situation warrants. The authoritative parent is responsive to the child’s needs but not indulgent. Baumrind makes it clear that she favors the authoritative style.

The worst parenting style represents what studies show are the “average” child and parent in the United States today.  These parents are Permissive, Uninvolved or a combination of both.

Since the “average” parent in the US today talks to his or her child less than five minutes a day and the “average” child spends more than 10 hours a day dividing his or her time between watching TV, playing video games, listening to music, social networking on sites such as Facebook, or sending hundreds of text messages monthly, it is obvious what the results are. Source: Media Literacy Clearinghouse

Since the Permissive and/or Uninvolved parent has few requirements for mature behavior, children may lack skills in social settings. While they may be good at interpersonal communication, they lack other important skills such as sharing. The child may also fear becoming dependent on other people, are often emotionally withdrawn, tend to exhibit more delinquency during adolescence, feels fear and anxiety or stress due to lack of family support and had an increased risk of substance abuse.

Return to A Brief History of Parenting – Part 2 or start with Part One.

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Lloyd Lofthouse is the award-winning author of “The Concubine Saga”, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

Leave a Comment » | America, American culture, China, Chinese Culture, Chinese women, cultural differences, education, family values, history, parenting | Tagged: , , , , , , , , , , , , , | Permalink
Posted by Lloyd Lofthouse

A Brief History of Parenting – Part 2/3

June 12, 2011

Amy Chua’s so-called Chinese parenting style, identified as mostly Authoritarian, is the “CLASSIC” no nonsense do as I say, not as I do parenting style that first developed during Victorian England in the 18th century. The other parenting methods did not materialize until the 20th century, so how Amy Chua raised her two daughters had been in practice for more than two centuries.

Amy Chua says, “I believed that raising my two daughters the same way my Chinese immigrant parents raised me was the right way and that I had nothing to learn from the laxer parenting I saw all around me.” Source: USA Today

Positive Parenting Ally.com (PPA) says, “I think we can see the early seeds of the authoritarian parenting style in the 18th century. At that point in time, parents in the Western world (particularly the British) began taking the first steps toward a mind shift and become more involved in their children’s upbringing.”

PPA also says, “The mind of an authoritarian parent likes order, neatness, routine and predictability.… Children of authoritarian parents tend to do well in school and are said to generally not engage in drinking or drug use. They know the consensus rules and follow them.”

Instead of calling this method of parenting authoritarian or Chinese, I’ve used the term Old-World, which fits and is an acceptable choice of parenting

Authoritarian parenting was a vast improvement over how children had been raised (or not raised) before the 18th century. Prior to the authoritarian parent, children were mostly treated as adults and faced severe punishments such as mutilation, slavery, servitude, torture, and death. In fact, the US has a long history of treating children this way. Source: Child Labor in U.S. History

It was in the 18th century that Western parents stopped seeing their child as a potential representation of dark and evil forces that had to be kept in check physically (harsh beatings etc.) and instead attempted controlling their minds, their feelings, and their needs.

Continued on June 13, 2011 in A Brief History of Parenting – Part 3 or return to Part One

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Lloyd Lofthouse is the award-winning author of “The Concubine Saga”, My Splendid Concubine & Our Hart. When you love a Chinese woman, you marry her family and culture too.

To subscribe to “iLook China”, look for the “Subscribe” button at the top of the screen in the menu bar, click on it then follow directions.

Leave a Comment » | America, American culture, China, Chinese Culture, Chinese history, Chinese women, cultural differences, education, family values, parenting | Tagged: , , , , , , , , , , | Permalink
Posted by Lloyd Lofthouse

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