What a real estate bubble feels like

It was 2012 and on the outskirts of a Chinese city I cannot remember - perhaps it was Xian - I was in a taxi. As taxi drivers do, this was racing down a freshly laid freeway with the graceful elevated curves you would expect from LA. The shoulder was fair game and the taxi used it to pass trucks and semi-trailers.

Outside we passed identical block after block of apartments like a looped backdrop of a cartoon chase. The blocks were about four stories tall, so hardly towering but each were rooted in a courtyard of tiles. As new buildings and entire new cities did in China it clung tightly to its prefabricated character. This made it look very new but also cheap - that it would soon look old and cracked. The blocks themselves were clearly empty - it was possible, even from this distance to see when passing windows at the front and rear align without ever the silhouettes of furniture interrupting. The balconies were empty and they were clean.

On we drove and these apartments offered to investors throughout China were being bought with borrowed money. The feeling was a chill - as if I was witnessing the product of a massive accounting error. Someone with utter faith in the freemarket had taken that faith and leapt into the void.

It has taken 8 years for them to finally land and they will land hard. Yet I can remember very clearly the eerie chill of American freemarketism combined with Chinese breakneck construction. It was like being a long piece on an immense monopoly board.