I spent quite a bit of time writing about the Chinese Real-Estate bubble in 2009-2010. Back in 2005, the bubble (based on affordability ratios) was already evident, but post Gov’t stimulus boondoggle, the bubble turned into a super-bubble. Sometime in late 2010, I had written everything that I really had to say about it, and since there’s no equivalent of Chinese-CDS that I could find to buy and make some cash on the impending real-estate meltdown, I could only sit back, think about other things, and wait for the inevitable.

Some of the things I wrote:

• Dec 2009 – China Radio International: Real Estate
• Jan 2010 – Bloomberg Picks Up on China Real Estate Bubble
• Dec 2009 – Real Estate Bubble – Exit Strategy
• Jan 2010 – China Bubble? Jim Rogers “No”. Jim Chanos “Yes”.
• Jan 2010 – Even the Police Dept. is Building Houses
• Jan 2010 – Leverage and the Chinese Property Bubble
• Dec 2009 – Take It From Japan – Bubbles Hurt
• Dec 2009 – Finally an Economist who Understands China

Most interesting notes from two years ago?

This is exactly what China needs to worry about – when the debt is unwound, what will keep the brakes on the descent.

And…

The 2009 “Expand Domestic Consumption” (扩大内需) policy of China has been a newspaper success around the world, however, I’m inclined to think the result will be exactly what was experienced in Japan: “succeeded only in inflating the national debt”.

So here we are. The music has stopped. Let’s see who sits down, and who doesn’t. In the long run, this is a very good thing for the Chinese economy. Every day earlier means less mis-allocated resources to re-allocate.

Conspiracy Theory:

Could the technocrats have planned this all along, as a way to force wealthy Chinese to provide financing to develop new housing for the rest of the nations citizens, and crash the market enabling those less affluent citizens to buy up the houses at effectively subsidized prices?