The ghost of JM Keynes isn't just smiling, he's laughing his (ethereal) backside off
From Bloomberg via Crain's Chicago Business, April 13:
The investor who won big in the 2008 housing crash has advice for office landlords: Tear 'em down.
Kyle Bass has some advice for real estate investors: Tear it down.
The founder of Dallas-based Hayman Capital Management says office buildings in cities need to be demolished because demand isn’t returning and it’s impractical to turn most towers into apartments.“It’s one asset class that just has to get redone, and redone meaning demolished,” said Bass.
The Dallas-based investor shot to fame more than a decade ago betting against subprime mortgages before the US housing collapse. He’s since pushed a series of contrarian investments that have occasionally burned investors such as predicting the collapse of Japanese government debt and Hong Kong’s dollar....
Here's an interesting point:
....“You have to jackhammer rebar and concrete. You have to re-plumb everything,” Bass, 53, said in an interview. “And when you finish it, it just doesn’t feel right. You wouldn’t want to live there,” he said, citing for instance the lack of light....
....MUCH MORE
As we've pointed out over the years, this kind of stuff is a real world example of Keynes':
"If the Treasury were to fill old bottles with banknotes, bury them at suitable depths in disused coalmines which are then filled up to the surface with town rubbish, and leave it to private enterprise on well-tried principles of laissez-faire to dig the notes up again (the right to do so being obtained, of course, by tendering for leases of the note-bearing territory), there need be no more unemployment and, with the help of the repercussions, the real income of the community, and its capital wealth also, would probably become a good deal greater than it actually is. It would, indeed, be more sensible to build houses and the like; but if there are political and practical difficulties in the way of this, the above would be better than nothing."
Related, November 1, 2012: "Frequent Bridge Collapses Help Boost China’s GDP"
...Zhao Wenjin, the lead commentator of Lanzhou Daily, commented on the incident, saying, “With each collapse, we need to reflect: why are we chasing GDP?” According to a Jingyang Net report, Wang Yang, Party secretary of Guangdong Province, said at a provincial Party meeting in 2009: “Sometimes the GDP number looks good, but it didn’t really create wealth for society. It was, instead, a waste of society’s wealth....
