Mind Over Market

In this report from Australia's DatelineSBS, Adrian Brown reports that China is building 10 new cities a year and many of them, after completion, remain ghost cities with few or no inhabitants. The largest such ghost city is Zheng Zhou New District in Henan Province in north-central China. (The old Zeng Zhou is the capital and largest city of Henan.) This centrally-commanded economic activity is being done just to keep more people gainfully employed, according to Brown. However, it would appear to be building toward an ultimate crash and on a scale far larger than the U.S. housing bubble that created such havoc. There are an estimated 64 million empty new apartments in these new cities. The apartments are priced at $100,000 to $300,000, while Chinese median income is around $6,000. Thus, the vast majority of Chinese live in tiny one-room apartments -- or even shared apartments, often with shared communal sink and toilet. Buyers have to plop down half the price up fron...

CNBC reporter Simon Hobbs interviews George Gero, vice president of global futures and a precious metals strategist at RBC Wealth Management, and David Morgan, editor of the Morgan Report.

Henry Blodget of The Ticket interviews Professor Adam Lerrick of Carnegie Mellon University. Professor Lerrick says the United States will continue to have very low growth rates in 1.5 to 2 percent, and very low growth in employment for five to seven seven or more years because the nation does not have an economic policy and has not had one since President Ronald Reagan was in office. Instead, "Remember, this country does not have an economic policy. It has social policy disguised as an economic policy." The policy of the United States government instead seems to be to spread the wealth earned by the richest Americans to the rest of the country without promoting private-sector growth. America's competitors, on the other hand, are pursuing pro-growth economic policies that put American professional, skilled and unskilled workers against Americans in nearly all sectors of the economy. Professor sees no rebound for new home construction and commercial construction for a deca...

Note: Black Box Casino is to be published September 30 by Praeger. In writing this account of the financial crisis, the author found that ultimately some of what he had written had to be cut from the book. Below is an excerpt that was written too late to make it into Chapter 7: "Fast Money and High Stakes." By Robert Stowe England July 20, 2011 The Evanston, Illinois hedge fund Magnetar Capital LLC stated in April 2010 that it engaged in trading activities that its senior management claimed were neutral towards the housing market. That is, Magnetar claimed that they were making simultaneous shorts and longs on various pieces of collateralized debt obligations, which were backed by mostly subprime mortgage-backed securities. The point being made with the claim of neutrality was they were not betting against the housing market and bad subprime loans and securities. After a number of news stories surfaced in 2010 about the $50 billion or more in losses from CDOs deals in which...

Cue the Bee Gees who sang the mega hit "Massachusetts" back in 1970s. Having missed out on the nomination to be the head of the Consumer Finance Protection Bureau -- an agency that was her brainchild -- Warren will be packing up and going back to her home state. She declined to say if she was planning to run for the Senate and lauded the new agency. She dodged a question about JP Morgan Chase's Chairman and CEO Jamie Dimon's criticism of heavy regulation coming from the Dodd-Frank Act, which Dimon said last month was impeding the progress of the recovery. Although Warren was believed to be the Obama Administration's favorite to head the agency, she was hugely unpopular in Congress and faced fierce opposition.

This is the second hip-hop music video by John Papola and Russ Roberts at http://EconStories.tv. In this one, Hayek knocks down Keynes after several rounds of debates interspersed with simulated boxing, but the chairman of the Congressional panel hearing the debate -- who suddenly transforms into the fight referee -- declares Keynes the winner. You can view the first video which came out last year at this link

Charles Calomiris, a professor at Columbia Business School, talked July 7 about the U.S. financial industry and housing market. He spoke with Tom Keene on Bloomberg Television's "Surveillance Midday." See video of interview here . (Source: Bloomberg)