Economic Model Untenable: A. Gary Shilling

Mortgage and Lending with SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) NMLS 223495

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 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


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



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Jay Markanich
Jay Markanich Real Estate Inspections, LLC - Bristow, VA
Home Inspector - servicing all Northern Virginia

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!

Jun 29, 2011 07:02 AM #1
Than Maynard
Coldwell Banker Heart of Oklahoma - Purcell, OK
Broker - Licensed to List & Sell - 405-990-8862

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.

Jun 29, 2011 07:37 AM #2
Brett Reichel
Pacific Residential Mtg., LLC - NMLS 1477 / WA CL-1477 - Clackamas, OR
MLO 210215

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

Jun 29, 2011 07:51 AM #3
Ron Brown NMLS #270845
NMLS ID: 40831 - Federal Way, WA

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

Jun 29, 2011 09:47 AM #4
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC


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

Good luck and success.

Lou Ludwig

Jun 29, 2011 10:34 AM #5
Larry Brewer - Benchmark Realty llc
Benchmark Realty LLc - Nashville, TN

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.

Jun 29, 2011 04:06 PM #6
Jane Peters
Home Jane Realty - Los Angeles, CA
Connecting you to the L.A. real estate market

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.

Jun 29, 2011 05:18 PM #7
Cara Marcelle Mancuso
Long Realty - Dove Mountain, Marana AZ - Tucson, AZ
Call a Marana neighbor, I'm THERE! LONG REALTY

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

Jun 29, 2011 05:36 PM #8
Mike Jones
SUNSTREET MORTGAGE, LLC (BK-0907366, NMLS 145171) - Tucson, AZ
Mike Jones NMLS 223495


Our society is more interested in being entertained...


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


Good point!


Good to see you.


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


It may be.


Some benefit!


Thanks for being the first to comment!

Mike in Tucson

Jun 30, 2011 01:47 AM #9
Doreen McPherson
Homesmart ~ Scottsdale ~ Tempe - Tempe, AZ
Phoenix Arizona Real Estate ~

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.

Jul 02, 2011 04:08 AM #10
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