Seeking Alpha

Why didn't D.C. think of this? With property prices falling, the Shanghai government has banned...

Why didn't D.C. think of this? With property prices falling, the Shanghai government has banned one developer from offering a discount of 30% to prospective buyers. From this point forward, any break of more than 20% will have to be approved by regulators.
Comments (5)
  • Hopefully, they didn't and won't think of it because it's an entirely stupid, self-defeating idea.


    If demand and supply are not allowed to equilibrate, then, unsustainable distortions are introduced that will have greater impacts later. For example, when politicians introduce "price controls" (as Nixon did in the '70's) --more typically to prevent higher, not lower, prices-- then, supply gets "hoarded" (reduced), as some suppliers are unwilling to sell at the artificially-created lower prices. If politicians peg prices artificially higher, then demand will get hoarded, which certainly does nothing to sustain prices or the underlying contractors and suppliers in the industry, and it will lead to an even greater price collapse later, as demand withers.


    To make China's policy work they'd have to not only peg prices, but make it a crime for people not to buy those houses at those prices. (Hey, come to think of it, that's rather like Obamacare, isn't it?)
    26 Oct 2011, 08:17 AM Reply Like
  • Who writes this drivel? DUH...we're NOT COMMUNIST CHINA...not yet at least but we will if Obama succeeds in all his plans for our great country! Not only is this Un-American, it is also ILLEGAL! Bypass the US Constitution, bypass the rule of law and what are we left with?
    26 Oct 2011, 09:26 AM Reply Like
  • There's only two possibilities here: (1) SA editors are communists; (2) the first sentence is simply dripping with sarcasm.


    I suppose it's a personal judgment which is the case here---I go for the latter.
    26 Oct 2011, 10:45 AM Reply Like
  • I agree it may be sarcasm. Perhaps the author needed to add something even more over-the-top to assure his readers that he isn't a complete idiot.
    26 Oct 2011, 10:48 AM Reply Like
  • DC is the only major metro with YOY price increases in real estate (Case-Shiller) - so they wouldn't need a program as such - our myopic leaders think things are ok in housing because they live in DC and prices are fine. Government has grown so big that they drive the local housing market up when down overall - wait til they ramp up spending more to help all of us outside of DC.
    26 Oct 2011, 09:48 AM Reply Like
DJIA (DIA) S&P 500 (SPY)