Sunday, September 30, 2007
I've been watching this place since July - not because I want to buy it, but because I think that it is a poster child for irrational, speculative exuberance, and I'm going to watch it go all the way down to $400 G's. I might even consider it at that price, though the banks will probably have tightened up credit to self-employed people by then, and I won't be able to get a mortgage - regardless of credit-worthiness or income.
I featured this place on September 12th, at which time it was listed for $825K. A reader wrote that it was no longer showing up on MLS, and wondered if it had been sold., Well, no, it was not sold, just had a new MLS#, and a price reduction of $26K. The MLS# back then was V648709, now it is V668870. Does that mean that there has been 20,000 new MLS#'s since July? Being that there are not 20K listings in Vancouver, it indicates to me that things are being re-listed to show fewer days on market.
It is also interesting that many "tear-downs" in the same area approach this new construction in asking price. Price compression all over the place...
I won't bother going through the "feature sheet", it is much the same as the original listing, though they did clean up the hastily written features (to make it more readable?). A new picture was added - which is still a bad picture, and they are still claiming that it is "heritage style". Whatever, and good luck with that.
I think that we have reached a stalemate, and Chipman's numbers are well towards a buyers' market. This will be the winter of discontent, I think.
Friday, September 28, 2007
This new "grab bag" explains the hot Vancouver housing market. Or does it?
It's been a busy week. Forgive me my absence. On top of that, I haven't got too much of a clue as to what is really going on, do you?
There have been all kinds of fallacious explanations as to why Vancouver's RE market "remains so buoyant", and over at Rob Chipman's place, a couple of knuckleheads are convinced that it is the pot "industry" that both drives the market, and maintains it. They have all kinds of different measuring sticks as to the value of that industry, and I suspect that maybe they are themselves grow operators who have bought RE with their proceeds, or they are just knuckleheads. It's as silly as the mountains, the Olimpdicks, and the mountains, in my view.
Today I heard Marc Emery (fighting extradition to the US for selling pot seeds, and also the leader of the Marijuana Party) twice quoted (on CBC) on the effect of the low US dollar on BC's pot exports. Apparently, the price that the growers garner has dropped (relatively) with the strength of the dollar, and demand has not diminished at all - despite the climate of prohibition and interdiction. I did find it amusing that it was a topic of discussion on the national business news. And so what? I smoke pot, and have for thirty years. I do have MS, so it is (now) "medicinal", but really... Reefer Madness was a bit of campy propaganda from the 1930's, but this is the 21st century. Get over it already!
The dollar closed at $1.01 something US today. Yee haw! So what?
GM went off strike after two days. So what?
$13.8 Billion Federal surplus. So what? (National debt is some $1,600 Billion - depending on how measured).
US housing market continues to slide. So what?
I really believe that the Vancouver market is sliding too. So what?
Wake me up when we are back at 2002 prices. I'm going to smoke a joint (because there is nothing like a Mint Julip and a joint).
Monday, September 24, 2007
This topic was somewhat pre-empted in the comments on the last post, but I have been thinking about fleshing it out, so here goes.
Much ado about nothing regarding parity with the US$, there is a much bigger story brewing just under the surface.
Some of you more interested types may have already read this, but I have redacted it below for your edification.
The dark cloud? The U.S. economyIt looks like a deep pile of doo-doo for the US economy (and GM went on strike today), and there have been rumblimgs of pricing oil in Euros for some time (some say that that was a big motivator for invading Iraq), and it looks as if that might be closer to a reality every day.
From Saturday's Globe and Mail
September 21, 2007 at 11:04 PM EDT
WASHINGTON — If the United States were a patient, a doctor might look at the tumbling dollar like a sudden drop in blood pressure. It's a symptom...of a binge.
For too long, Americans have been gorging on cheap credit and foreign oil, and all things that go with the lifestyle – monster homes, big cars and big-screen TVs. For 15 years, the U.S. economy has been a magnet for global products and credit.
Now the patient is overindulged; his credit card maxed out.
The dollar is falling in large part because foreigners are no longer willing to pay for all this excess...And this week, Ben Bernanke and the U.S. Federal Reserve injected a new concern into the mix – that cutting short-term interest rates could fuel inflation.
This is isn't a story about the Canadian dollar...it's all about the United States.
The greenback is tumbling against virtually every currency that isn't pegged to the dollar...
“During this period of extreme turbulence, when our attention is riveted on near-term events, it's easy to miss the startling fact that since Bretton Woods ended, the U.S. dollar has never been this low,”...
Over the past five years, the dollar has lost roughly a quarter of its value...the United States could even cede its role as the world's reserve currency...
This week, Saudi Arabia opted not to match the lower U.S. interest rates, even though...the riyal – has been pegged to the dollar since 1986. The move suggests the Saudis may soon abandon the peg, setting off a stampede out of the U.S. dollar by oil-rich Gulf states...
Two of Saudi Arabia's neighbours, the United Arab Emirates and Kuwait, have already said they want to cut their U.S. dollar reserves...
“Because the oil-rich nations are paid in an increasingly falling U.S. dollar, their purchasing power diminishes and their imported inflation surges,”...“Economic realities are making the current arrangement increasingly untenable.”
There is an estimated $3.5-trillion (U.S.) of Arab money parked in U.S. dollars. If Saudis and their neighbours decide they no longer need to hold U.S. dollars (or price their oil in dollars), the greenback's decline could become a rout.
In an ideal world, a lower dollar should eventually ease the U.S. trade deficit...But at more than 5 per cent of gross domestic product, the trade and current account deficits remain exceptionally high by historical standards.
...Together, China and oil account for roughly 80 per cent of the U.S. trade deficit.
So unless the price of oil falls substantially or China moves quickly to revalue the yuan, the trade deficit is fated to remain high – even as the dollar falls.
The Iranian President addresses the UN today, Harper? Hmmm. North-west Passage. Alberta oil reserves. High loon. Over-extension of the US military. Blackwater kicked out of Iraq. Big history in the making?
Thursday, September 20, 2007
All of this hullabaloo about the Canadian $ at historical highs ($1.15 by Hallowe'en...) has had me thinking about helicopters lately.
The last time the dollar was this high, it was Afro's, bell bottoms, platform shoes, wide ties and the BeeGees The pundits crow. (guilty, but I despised disco). Gerald Ford (Republican) was President. The pundits crow. Then I thought, yeah, and the US was bogged down in a war against "insurgents" in Vietnam, and was doing it's damnedest to get out (and did in 1975). And Nixon was later impeached (though not in relation to the Vietnam debacle). To be fair, it was LB Johnson - a Democrat - who started it.
The Vietnam war was initiated on false "intelligence" - related to the US blowing up it's own ship in the Gulf of Tonkin. And it was against the heathen communists that threatened the American way of life. The Can $ was trading at $1.014*. They used helicopters to evacuate Saigon.
Today, the US is bogged down in an unpopular war in Iraq (going after the heathen Al-Qaeda that threaten the American way of life). Another war against "insurgents". Another war initiated on false "intelligence". People are calling for Bush's impeachment. It's Metrosexuals (or is it something else now?), latte frappuccino low-fat bourgeois biscotti, miniature dogs, and scooters. Bush is a Republican. There are also those who say that 9/11 was a false flag operation - just like the Gulf of Tonkin. They will use helicopters to evacuate Baghdad.
Going back to the high before that, we are in 1959 - when the Can $ traded at $1.042*. Wow! The US was bogged down in a Cold War and arms race with China and the USSR. Around this time, Canada bought it's first Sea King helicopters. It was duck tails, straight-leg chinos, The Big Bopper, and some jazz on the fringes. Dwight D. Eisenhower, a Republican, was president.
The high before that was in 1952 - when the Can $ traded at $1.021*. The US was in the middle of another war that they could not win in Korea. The Korean War was the first war that the US used helicopters in a meaningful way. There was no culture to speak of - beyond Mom and apple pie. OK, big bands. Whatever. Dwight D. Eisenhower, a Republican, won the presidency (though Truman - a Democrat started the war).
Interestingly, the Can $ was high against most other currencies during those periods as well. It has actually fallen a long way since then. Mind you, that data* is going back to early post- WWII, so a lot of the European nations (and Asian nations) were still in tatters, and rebuilding. and heavily in debt to boot.
In conclusion, helicopters and Republicans are good for the Canadian dollar. So are untenable wars embroiling the US.
One last thing about helicopters. Don't they call Ben Bernanke Helicopter Ben?
*Historical Foreign Exchange data from fx.sauder.ubc.ca
Article comparing Vietnam War to Iraq War.
Wednesday, September 19, 2007
I haven't dragged out the soap box for a while, I don't know why...but I'm dragging it out now.
I don't necessarily rate the popularity of this tawdry little blog by the number of comments it gets, but I don't seem to have been striking any chords lately, and I'm wondering what you want to talk about. Or are y'all as talked out about real estate, exchange rates, etc. as I am? Are you all waiting with bated (or baited as the case may be) breath for this monster to finally fall flat on it's face, or do you even care any more? Que sera, sera, or whatever.
Does our soaring loon affect you in a positive way, or a negative way? Are we actually seeing a decline in the value of our hoarded cash? Ought we to be using the Euro or Yen as a benchmark against our dollar - rather than the US green back? Do the US Fed, and BOC have a clue? or are they just flailing like I am?
Comments please, I'm getting lonely...
Tuesday, September 18, 2007
aleks posted up a link to Digital Luddite's One-Step Guide to Becoming Rich over at mohican's place that is worth reading. Maybe you will be curious to take the link trip. It's not RE related, but the writing is a good diversion.
This whole RE/financial thing is getting wearying. It's like waiting for the denouemente in the Russian version of War and Peace.
Here is the One-Step Guide to Becoming Rich (redacted), and it is not flipping real estate.
Becoming rich is not complicated. Calculating the launch vector to send a rocket to Pluto is complicated, involving all sorts of higher level math (ie grade 10 and above). Becoming rich involves no math more complicated than addition and subtraction.Couldn'a said it better myself.
The reason most people don't do it is that it's difficult...
The One-Step Guide to Becoming Rich is this: Spend less than you earn. The more you earn and the less you spend, the richer you become.
It sounds like common sense. It should be common sense. And yet, as sense goes it's anything but common. The...collective US citizenry...are in fact following the One-Step Guide to Becoming Poor.
Probably because if you are like most people,... you want to appear rich. You want...to make your neighbours jealous. You don't even know how to calculate your net worth, or what it means when the number is negative.
And ironically, it's the desire to appear rich that prevents people from becoming rich. Trying to impress your neighbours is the very first thing on the list of 10 Reasons You Aren't Rich.
Another good one is #6: You Try to Make a Quick Buck. Gambling is more popular now than ever...
CONdo flipping is gambling
Sure, you can probably do basic addition with a calculator, and some of you may remember what a ratio is, but on a fundamental level you don't understand how numbers work....
...Today's hip internet slacker doesn't want to "save," you want to "invest" and buy "stocks" and "currency hedged mutual funds whose asset mix and investment strategy you don't understand."
...If you spend less than you earn, you can't help becoming rich. Maybe you would become richer faster if you made better investment decisions, but there's a corollary for that too: You are not Warren Buffett.
Every month that you follow the One-Step Guide, you will be richer than the month before. It's a virtually foolproof system.
The only flaw is... Once you spend the money, you're not rich anymore. Like the One-Step Guide itself, it's pretty much common sense, but it's a bit of a catch-22.
In a future rantenspiel I'll outline the Two-Step Guide to Becoming Slightly Less Rich But Still Getting to Go Out Occasionally and Buy New Versions of Guitar Hero.
It's not quite as catchy.
From the same site -
Of course, what's really happening is that journalists are acting more like bloggers.I like that! Grainy and hand-held is us.
Which was pretty much inevitable, if you think about it. The internet at large is always at least five years behind the porn industry, and what is a blog except a low budget, grainy, amateur hand-held version of real journalism?
Monday, September 17, 2007
The above picture is illustrative of much right now. Markets and economies soaring so headily for the last 6 years or so are paused in a Wile E. Coyote moment, and about to feel the effects of gravity. Everything is going around in circles, and there is not much that interests me enough to write about (in regards to real estate in Vancouver). It's all been said 10,000 times.
Greenspan keeps dropping bombs on his book tour - saying today that UK RE is overvalued.
Tomorrow the US Fed is expected to cut rates between 25-50 bp's, and those expectations seem to be having more of a subduing effect on the markets than a boosting effect. CAN $ is up even more.
Northern Rock in the UK saw a bank run that pulled some 2 Billion Pounds Sterling out in the last couple of days.
Meanwhile, in Canada, the 40 year mortgage trap is set, and ready to snap closed.
Look out below.
Friday, September 14, 2007
Did y'all hear what David Dodge has been saying in London, England (the same day there is a bank run there)?
ECB cash infusions may not succeed: Dodge
September 14, 2007 at 7:06 AM EDT
ZURICH — The European Central Bank's efforts to restore confidence to credit markets by pumping in liquidity are unlikely to succeed, Bank of Canada Governor David Dodge was quoted as saying on Friday.
“I'm not sure practically, whether it would do anything,”
Interest rates have risen well above overnight money market rates as banks have hoarded cash as a precaution in case they are forced to bail out off-balance-sheet debt vehicles they helped to set up during an era of abundant cheap money.
“If I thought that somehow there was a magic wand and if we did that for three or four days, then all of a sudden the markets would clear and life would be beautiful ... There is no principle that says (this) is a bad thing to do, but I can't believe it will do the job,”.
Mr. Dodge also said it was not the duty of central bankers to “bail out people who have made losses.”
Dodge says he should have driven rates up 'harder'
Reuters, Globe and Mail Staff
September 14, 2007 at 5:26 PM EDT
Bank of Canada Governor David Dodge says he should have driven up interest rates “harder” before the current global credit squeeze to tighten borrowing conditions, according to an interview published in The Economist magazine.
In a mea culpa to financial markets, he said the central bank may have played a role in fomenting excesses in credit markets prior to the disruption stemming from rising defaults on payments by U.S. subprime mortgage holders.
I never thought that those cash infusions would work, but merely give the big players the chance to get their money out. The shite hits the fan, there is a big bally-hoo, the CBs use a whole bunch of our money to drag things up, the big money pulls out, and the greedy sucker class rushes back in to get slaughtered again. Or something like that. I have also been hoping for significantly higher interest rates for the last 3 years - to slow this train down. I am fairly ignorant of economic intricacies and ephemera, but if I have seen this coming (and many of you have too), how come it took all these "experts" so long to see it? Wilful ignorance?
Things have reached an excess in every aspect of Western civilization and exploitation, and there is a cleanse coming. Recession talk in the MSM, etc. means depression. Things are much worse than is let on. We are living in interesting times, and as I have admonished before, gird your loins.
I can't believe that people are still buying real estate at this point. It is going to crash, and crash very hard - along with everything else. These banking/loan shenanigans are the trigger - the "outside event" that so many of the RE boosters have been saying we would need to turn the RE market. You know - the one that will never happen.
I have a little theory on what is really causing all of this madness. It is very "out there", but I will present it in the coming days.
Wednesday, September 12, 2007
Unique design for spectacular view of DT & N shore. Spacious corner lot, heritag e style. 3 lvl 2080 SQ.FT. open floorplan. Mstr bdrm on third floor with 2 balco ny. 2 bdrm, living room, kitchen on second lvl. Ground lvl possible for 2 one bdrm suites. 2-5-10 New Home Warranty.
MLS®: V648709 Finished Floor Area: 2078.0 sqft.
Property Type: House Lot Frontage: 36.99 ft.
Basement: None Lot Depth: 93.78 ft.
Bedrooms: 5 Age: 00
Bathrooms: (Full:4, Half:0)
I first wrote about this place back in July when it was still under construction. It was for sale then, and still is. Clearly built on spec., and clearly trying to sell to a speculator. What a laugh.
The blurb speaks of Ground lvl possible for 2 one bdrm suites. Well sure, but the second of those would be an illegal suite. I wonder if the buyer would even be aware (or care) of that. The junk fortress that was built new next to me has an illegal suite too, and the next three in a row as well. It's all the rage it seems, flaunt the law to be able to afford something. We just end up with rats' nests.
Although only recently finished, this place has been on the market for a good 90 days. It will be fun to watch it on the way down in a new feature called Wait Reduction - how to shave 10's of 1,000's off of your ridiculous asking price every week.
I suppose that it's a bit more "reasonable" than that little green shack for just 87 G's less that we saw yesterday.
Monday, September 10, 2007
The first house is 107 years old, and has very little going for it - other than having rental income of $1450/month. Wow! With 5% down, you will only be bleeding about $3800/month. Not to worry! Prices can only go up... Household income to buy this? $200K per annum.
The second house is a mere $11K more, on the next block east, and is 39 years old. A youngster to be sure! There is a claim of it being re-done inside and out, so this house is immediately livable, and has five bedrooms. You could probably rent it out for $2500/month, so with 5% down, you'd only bleed ~$2700/month.
The third place is 3 years old, and is situated 3 blocks east, and 2 blocks south. It is next to brand new, and is only $32K more than the little green tear-down (or is that place heritage scheduled?!). Granted, the lot is ~10% smaller, but the new place is already built, and the GST absorbed.
There is a bit of a disconnect going on here. Everybody keeps talking about how it's the land that's worth the money, but 3 almost identical lots, in the same area, are so close in price. It will surely cost more than the $38k difference in price to pay all the commissions, PTT, and to tear down and build new, so what gives?
Rare find! Completely remodelled beautiful solid house in prime Renfrew Heights. View from top floor. 2 bedrooms up, 2 bedrooms on main (master bedroom ensuite with steam bath). Downstairs with 2 separate suites (2 bedrooms & 1 bedrooms suite) for your mortgage helper. Total 4 bathrooms. House features: 2 bright skylights, all beautiful hardwood floor re-sanded 4 years ago, all new shutters & window coverings, new double glazed windows, 1 year old roof, new hot water tank, new furna ce, new designer paint, crown moulding, new toilets & faucets, new light fixtures, new patio cover, also 2 sets of laundries for your convenient. Very good rental income $1,450.00 p/m., 2 bedrooms suite is partially furnished. Big double garage.
MLS®: V653794 Finished Floor Area: 2901.0 sqft.
Property Type: House Lot Frontage: 33.0 ft.
Basement: Full Lot Depth: 120 ft.
Bedrooms: 7 Age: 107
Bathrooms: (Full:4, Half:0)
Features: Central location
SOLID 2-Level Special with over 2,400 SqFt of space. 3 Bedrooms Up and 2.5 Bedro oms Down. Completely restored inside and out with new double-glazed vinyl window s, plumbing, metal roof, crown mouldings, laminate floor + more. Extra large covered sundeck with views! Located on a quiet tree-lined street. Easy access to transportation, schools and shopping. So clean you can just move in today! ACT FAST! This won't last.
MLS®: V666349 Finished Floor Area: 2413.0 sqft.
Property Type: House Lot Frontage: 33.06 ft.
Basement: Fully Finished Lot Depth: 119.8 ft.
Bedrooms: 5 Age: 39
Bathrooms: (Full:2, Half:0)
Features: Central location
A home close to everything with a view of the North Shore Mountains. Finishing i ncludes a beautiful granite foyer and granite countertops. Room for the extended family. Enjoy barbecues on the covered deck. This home is only 3 years new!
MLS®: V658540 Finished Floor Area: 2149.0 sqft.
Property Type: House Lot Frontage: 33.0 ft.
Basement: Fully Finished Lot Depth: 114 ft.
Bedrooms: 6 Age: 3
Bathrooms: (Full:4, Half:0)
Features: Central location
Friday, September 07, 2007
I was digging around on Google image search for some images for some CONdo marketing spoofs that I have been amusing myself with, and came across this below. The last paragraph really floats my boat in speaking of Interesting way of turning the real estate market upside down, letting demand nudge supply in the right direction, and moving the market from push to pull. This market needs to be turned upside down (though I do believe that is starting - thanks to the "credit crunch"?) The original page can be veiwed here in it's original context.
This could blow craig's list, VOW, MLS, etc., out of the water if implemented here. Hmmm. Anyone interested in a .com startup? I just don't have the giddy-up-go these days. You can give me 1% as a finder's fee though (grin). Google Inc. is probably all over it already...
Igglo combines large amounts of real estate information into a customer friendly package that could alter how the housing market operates, by letting potential buyers 'pre-order' houses that aren't yet for sale.
The Finnish company has photographed every building in Helsinki, with more towns to follow, and combines these photographs with satellite images and maps. Every property is listed, not just those that are currently on the market. (Their tagline is: "Your house is already on Igglo.")
Potential buyers can earmark a building, street or neighbourhood they're interested in, and post offers online. This lets potential sellers find out how desirable their property is, even if they weren't actively considering selling. Buyers also receive an alert when a property in their earmarked building or area comes up for sale.
If demand and supply meet, Igglo handles the transaction for a lower fee than is charged by regular real estate agents (less than 2%). Lower fees are made possible by the fact the Igglo agents don't get involved until buyers and sellers have found each other. The company is looking to expand the service to other big cities.
Interesting way of turning the real estate market upside down, letting demand nudge supply in the right direction, and moving the market from push to pull. One to watch!
Tuesday, September 04, 2007
Bob Rennie is moving on to Edmonton. I suppose, because the lack of land in Vancouver. Or maybe Vancouver is just saturated with inventory about to be available? Isn't Edmonton heading for the crapper?
Nifty website (aren't all of Rennie's sites nifty?). Whatever one thinks of Rennie, ya gotta hand it to him, he does what he does well. I read the other day that he is behind $2 billion in projects. That's a lot of donuts.
Speaking of Rennie, and Edmonton, and donuts, the site for Century Park exhorts one to visit with Taylor - who will fix you up with a donut and coffee - to help you "to understand the century park difference". "As you take your next sip of coffee" she'll mention a "recently approved LRT station right at your front door". How fabulous! That can't be literal - what if you live on the tenth floor? And do CONdo's have back doors? Back to Taylor - after being astounded by having that LRT at your front door (what about the pan-handlers?), you're likely to be famished, and you are offered another donut! By now, your eyes are wide from too much coffee and sugar (glazed, even - like donuts!), and the sight of the kitchens and bathroom will open them even wider, "more coffee?".
On to the fitness club - you don't really need cardio exercise, your heart is already racing with caffeine and sugar. But weight! Uh, wait! "c'mon have one more donut". That's better, now you are so bloated with coffee and donuts, the fitness centre is starting to sound good.
As you approach the building model, "you may notice a lot of red on the availability board because phase one is already sold out". Well, I'm glad to know that it's not from a coffee-induced explosion of an aneurysm.
It's interesting to see the marketing shift with the demographic. Taylor looks like a wholesome girl (in stilettos) who works evenings at Chaps and Spurs (or whatever) as a hostess. No hip yuppies on Vespas drinking Okanagan's finest rotted grapes, it's cowgirls coffee and donuts in Edmonton, and none of that fancy dee-zyn coffee like Vancouver.
Well, I was just doing a little digging on this new development, and came across a blinking forum dedicated to it. The superlatives are almost as bile-inducing as the coffee and donuts
This project will blow the doors off of the Edmonton market.I hope that the breath is not "baited" with prairie oysters and Old Tyme Pilsener. And with those towers sticking up, the "pimple on the prairie" will start looking more like a badly lanced boil. And, aren't the doors already off the hinges in the Edmonton market?
Can't wait for this bad boy.
I am watching this development with baited breath. I really like the potential to have a signature highrise community visible from our southern entrance. What a way to dispel this pimple on the prairie moniker...
Bye bye Bobby. Don't look back.
Thanks to bearclaw for the link.
Saturday, September 01, 2007
find the market
I pulled this from charle hugh smith's site (which I recently found through cheap realty) and thought that I would share some lucidity with you (emboldening is mine).
No need for me to babble about it, but if you are intrigued by the excerpt below, check out his site.
Henry Ford said it best, essentially, he said, "If my employees can't afford my cars, where is my market?"
Today's corporations and economic thinkers seem to have forgotten the father of capitalism.
Yes, US wages will fall to match the rest of the world--that's expected and spoken of. What is overlooked is that NECESSARILY--prices, and profits...and taxes...--must fall to meet them.
I'd like to put this one other way: an economy is nothing but people trading to shuffle things around and make life nicer for themselves. As Bastiat said, Everybody cannot live at everybody else's expense and everyone get rich: it sometimes works with ONE v Everyone, but not Everyone v Everyone.
But there's another side: if there is no way for everyone get rich at everybody else's expense, then everyone must increase in wealth TOGETHER. ...And that doesn't sound so bad. For things to improve for ME, I also need to help YOU...and that is also capitalism. Its good and productive side.
I'm happy China has increasing wages and opportunities, however, in exchange, I need the vastly lower taxes, food, and housing costs. That fair exchange for my now permanently low wages is being stonewalled by the companies scooping up that differential--but it's a historical anomoly that is now ending. Chinese wage inflation is +5%, and english-speaking professionals now receive about the same wages worldwide.
Greenspan's last paper showed that perhaps ALL of the 2001-2005 boom was due to Home Equity Withdrawl. When that ends--and it has--demand will fall precipitously, and with it, prices. Economists have another name for massive overcapacity, low wages, and falling prices: Depression. Get used to it because they tend to last a long time.