higher is not better

> Bank crashing = money printing = asset values go back up. Can't lose.

If you buy real estate right before a housing crash, you immediately lose a lot of money vs. having just sold or not bought it, and even if the prices recover in the long term it can take years.

Meanwhile you can't refinance the loan at the new lower rates because you're underwater and no longer have the collateral for a loan that size.

Then there's the "risk" that people learned the lesson of the last housing crash and don't do the same thing, i.e. reinflate a housing bubble right after it pops. This wouldn't even have to be not lowering interest rates, it could just be lowering them but continuing the existing momentum behind relaxing zoning rules so the lower rates can fund new construction. Then the low rates save the rest of the economy but real estate prices stay reduced because the lower interest rates are offset by (and pay for) new construction.

You can definitely lose.

Yeah, if you buy a house when you have little equity, your equity can go up manyfolds from the purchase, but at the risk that if you time the purchase badly, you’re in a bad spot for many years.

“Leverage goes both ways”

I should have been more clear - this is to indicate that "we" can't lose, meaning society as a whole. Individuals for sure can lose their shirts, but overall, this bank collapsing won't be an issue.

This bankruptcy happening and not causing a huge, devastating, world ending crash is a gigantic feature of the Chinese economy. Not a bug. It means asset values in China are deflating in a semi-controlled manner.

People love to complain about the banks that are "too big to fail". Now this huge company that should really be too big to fail is failing, and the world isn't ending. The only people who are upset that everything isn't tumbling down, are the ones hoping for the crash.

Expectation is that across the world, sustained med-high interest rates will cause deflating of multiple bubbles, Private Equity, zombie multinationals, residential+commercial RE.

It doesn't feel like a "black swan" but some of these approaches to making money could be going away. Dropping interest rates and printing money requires a set of circumstances which aren't there.

Deflating those bubbles will destroy a lot of individual wealth, that is where it's going to get bumpy.

>"real estate assets everywhere but China now look better in the long term."

They do not look better. They look inflated and unaffordable. If not fixed this will have social consequences at some point and it won't be pretty.

Housing can't be inflated and unaffordable at the same time. Someone is buying properties, driving prices higher. Those someone can definitely afford housing.

> Those someone can definitely afford housing.

By "unaffordable" people mean that median person/poor person has problem with paying for housing. Not that no one at all can afford it.

65.8% of Americans own a home as of 2022. Which covers the median person and some below that.

They also can handle $100,000,000 boats. I am so happy for those poor souls

The word "affordable" means "not expensive".

Inflated by investors buying to turn them into rentals that are unaffordable.