The only thing heating up in China is commodity prices

Officially, fuel is up anywhere from 8 to 11% over last year, in China (click for larger image):

Of course these are official statistics – possibly implying they are subject to bias but, more specifically, that they are subject to local temporal and geographical variation. Big variation, sometimes: forget not the death-tainted sale of cooking oil in China, last year.

So, given this story:

Severe snowstorms over broad swaths of eastern and central China have wreaked havoc on traffic throughout the country, creating gigantic passenger backups, spawning accidents and leaving at least 24 people dead, according to state news reports.

In many areas, where snow has continued falling for several days, the accumulation has been described as the heaviest in as many as five decades.

…

“Due to the rain, snow and frost, plus increased winter use of coal and electricity and the peak travel season, the job of ensuring coal, electricity and oil supplies and adequate transportation has become quite severe,” said Prime Minister Wen Jiabao in a statement issued late Sunday.

Shanghai’s weather is, according to the BBC, not all that bad:

But (a) I’m not poor. I live in a rich country, making more than enough money to keep myself in heated (in New York, of course, you’ve no choice. Half the time we’re opening windows to keep from being baked alive: NY apartments represent, for me, exactly why building-wide heating is a daft idea), (b) I live where it’s routinely that cold. I’m prepared, my clothes are appropriate, my diet is appropriate (I can cook) and my buildings are made appropriately.

Shanghai – historically – hasn’t had all that bad a January, to date. At its worst, however, its minima have still been at or above freezing, looking at the last 10 years:

Nothing that would prepare a people for snap freezes – particularly poorer/rural people with less insulation (or, mid-winter, spare heating/cooking fuel). It will be interesting to see how cooking and heating oil prices do, for the rest of their winter.

New lexicon: “intentional foreclosure”

Originally spotted at the Big Picture (where else?).

This is how it works. Bob paid $420,000 for his home. Then he notices the house across the street, with more upgrades, and is selling for $315,000.

So Bob, who has pretty good credit, decides to buy the cheaper house. He can’t afford both, so then he walks away from his original home, letting it fall into foreclosure. That will hurt his credit, but he’s willing to take the hit for a more affordable home.

“Works” is, of course, a matter of perspective: (a) the bank will be stuck with a house in the worst market possible (until next month), dragging down (on aggregate) the economy – poetically just, if Bob ends up losing his job and the other house as a result; (b) it could be market-based. Just because his mortgage is 420K doesn’t mean his house it. He could move across the street and see his house going for 300k – will be repeat the procedure?

The LA Times has a varied take on the issue:

A homeowner who can’t sell his house tells the L.A.Times, “Foreclose me. … I’ll live in the house for free for 12 months, and I’ll save my money and I’ll move on.”

Banks and lenders fear this kind of thinking – that walking away from a house could be the smart economic move – appears to be on the rise. Wachovia, in a conference call yesterday, warned investors that increasing numbers of homeowners are walking away from their homes by choice: “… people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they’ve lost equity, value in their properties…”

Calculated Risk notes this is “one of the greatest fears for lenders … that it will become socially acceptable for upside down middle class Americans to walk away from their homes.”

Oof. If banks have bread-baskets, I reckon such a fashion as this would count as a punch right in it. That would have to be the banker equivalent of being chased by giant carrots as a child, surely. Terrifying.

Funnily enough, my wife opened a new bank account over the weekend (with Wachovia: Bank of America, you’re just too big a bunch of dicks). During it she commented on her credit rating (good) – I told her that, 6 months from now, there’d probably be so many bad credit ratings going around that people wouldn’t know what to even do with a credit rating anymore (I’m a foreigner – this will all benefit me because, while mine is good, I barely have one at all)