Lots of left-wingers in my twitter feed are semi-gloating over the share market meltdown, seeing it as a continuation of the global financial crisis or another ‘crisis of capitalism’. Maybe it will be, I don’t know – but gigantic panic-driven market crashes are just a routine feature of capitalism. They happen fairly frequently.
What this might show us here in New Zealand is the extent to which the Auckland housing market is (a) a bubble and (b) fuelled by foreign Chinese investors. The Shanghai bubble was driven by bank debt, and if thousand of Chinese investors all suddenly simultaneously decide to sell their properties in Sydney and Vancouver and Auckland to pay back their banks then there could be a very sharp correction in the market.