Steve Wynn is mad as hell about Obama and the American political elite:
“Macau has been steady. The shocking, unexpected government is the one in Washington. That’s where we get surprises every day. That’s were taxes are changed every five minutes. That’s were you don’t know what to expect tomorrow. To compare political stability and predictability in China to Washington is like comparing Mt. Everest to an ant hill. Macau and China is stable. Washington is not. Is there a businessman or a media person in America who isn’t frightened by the next crazy idea that’s coming from Washington? The financial institutions, the cars, the businessmen, the taxes, the health care, everything is coo coo and God knows what’s next.”
Watch the whole thing.
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It should be “That’s where”, not “That’s were”.
Wynn makes valid points about the uncertainty Washington is inspiring, but China is far, FAR, from stable.
China is currently experiencing the mother of all bubbles. Price to income ratios in major Chinese cities are, in some cases, over 100 to one! At the height of the US bubble, the worst cities experienced ratios of 6 – 8 to one.
And its not just property prices: the government has been directly malinvesting into the economy for years — building bridges to nowhere, pouring miles of concrete for no apparent reasons, etc.
When the china bubble pops, commodities will crash.
Then try shorting China.
I cannot predict the timing of the collapse, and I do not have the funds to ‘wait forever’.
Russ, surely he also meant ‘Macau and China ARE stable’.
I’ve simply given up on the op-ed writers and talking heads who continue to proclaim China as the great economic power of The Future. Yes, China has liberalized greatly in the last few decades. Millions (if not hundreds of millions) of poor people have been lifted out of poverty and there has been incredible, real economic growth.
But. They are still a greatly centralized society, and (as one commenter points out above) they are also in the midst of a massive bubble. They are constructing more buildings than they would ever need in the next dozen years — many of which will simply go unoccupied — and they remain to a large extent tied to US false prosperity.
Two trends ameliorate China’s malinvestment. First, despite their decades-long chart busting growth, they still have a long, long way to go before they are North Korea or Singapore. Second, living standards will eventually allow internal demand to drive the economy and growth, which will have a steadying effect on investment.
Both these massive fundamentals will tend to dwarf current misappropriations over time. After all, over 1.5B people live there. Building the equivalent of Houston every month is not as risky as one might imagine. They will soon have the largest English speaking population of any country in the world.
China has a free market tiger by the tail. They must continue, as they have, to let it off its leash or risk the largest downfall of an economy in the history of the world. I do not believe they are that dumb.
Surely you meant to say South Korea.
So you’re saying that they’re too big to fail? That malinvesting the equivelant of a Houston every month is not a big deal???
A POOR country like China, with only $3,250 per capita GDP, cannot afford that kind of malinvestment, not at all.
China has non-economic reasons for taking some of the policy positions that they have, like pursuing an export-oriented, anti-Yuan policy. It keeps the populace busy working and not protesting in the streets. This is a major consideration for the CCP.
Japan’s economic model is the future. Look at how much money they are able to lend to the US. And look at property values in Japan! No bubble here…
Amen. Steve Wynn is a Las Vegas shyster looking to blow up the next bubble.
China will pop like Japan circa 1990
Everybody in America, and in other Western countries should take a few minutes to seriously digest what the man has just said. The entire society is being run at the behest of lawyers. And what value do lawyers create ? Nothing. They exist on the presumption that human beings are continually trying to take advantage of each other, that there will be disrespect between human beings, and wrongdoing.
The West has being playing with idiotic Keynesian economics since the 1930s, and with a neo-Marxist interpretation of Keynes since the 1960s, and it is creating a policy framework that will bankrupt the West morally, socially, and economically. Nobody is pasing comment. Instead it is sports TV and news coverage focussed on minutae and irrelevancies.
WAKE UP !!!!
And what value do lawyers create ? Nothing
Whoa, brother. Lawyers are the lube that keep the gears humming along quietly. A society without lawyers is a stalled engine on the side of the road. Lawyers create value every day, as evidenced by the huge sums clients happily pay.
In short he’s just making a good point: the present uncertainty climate is wrecking havoc. And this uncertainty is all the work of the “gang of robbers writ large” which includes government and all its pals (special interest groups, big business etc). We all agree on that.
But one thing he’s missing. While he made the right quote from Tocqueville he forgot to mention how ordinary people is hopelessly hooked on government drug. While there’s a growing minority clamoring for less regulation, less taxation and less phony “services” as the only sensible way out the vast majority is actually clamoring for “more”. The people are scared, yes, but are scared of losing their cushy jobs, scared of having to make do with budgets like we all in the private sector have to, scared of having to “shop around” to get health insurance instead of simply paying taxes, scared of losing the opportunity of being able to retire at 60, scared at the prospect of having to put up with aggressive and innovative competitors.
Scared people is dangerous. Really dangerous.
i wish i had the funds available to short china, it may take 10 or 20 years for the bubble to finally collapse, but when it does, it will do so big time!
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