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NOBODY else in the computer industry, or any other industry for that matter, could put on a show like Steve Jobs. His product launches, at which he would stand alone on a black stage and conjure up a “magical” or “incredible” new electronic gadget in front of an awed crowd, were the performances of a master showman. All computers do is fetch and shuffle numbers, he once explained, but do it fast enough and “the results appear to be magic”. He spent his life packaging that magic into elegantly designed, easy to use products.

He had been among the first, back in the 1970s, to see the potential that lay in the idea of selling computers to ordinary people. In those days of green-on-black displays, when floppy discs were still floppy, the notion that computers might soon become ubiquitous seemed fanciful. But Mr Jobs was one of a handful of pioneers who saw what was coming. Crucially, he also had an unusual knack for looking at computers from the outside, as a user, not just from the inside, as an engineer—something he attributed to the experiences of his wayward youth.

Mr Jobs caught the computing bug while growing up in Silicon Valley. As a teenager in the late 1960s he cold-called his idol, Bill Hewlett, and talked his way into a summer job at Hewlett-Packard. But it was only after dropping out of college, travelling to India, becoming a Buddhist and experimenting with psychedelic drugs that Mr Jobs returned to California to co-found Apple, in his parents’ garage, on April Fools’ Day 1976. “A lot of people in our industry haven’t had very diverse experiences,” he once said. “So they don’t have enough dots to connect, and they end up with very linear solutions.” Bill Gates, he suggested, would be “a broader guy if he had dropped acid once or gone off to an ashram when he was younger”.

Dropping out of his college course and attending calligraphy classes instead had, for example, given Mr Jobs an apparently useless love of typography. But support for a variety of fonts was to prove a key feature of the Macintosh, the pioneering mouse-driven, graphical computer that Apple launched in 1984. With its windows, icons and menus, it was sold as “the computer for the rest of us”. Having made a fortune from Apple’s initial success, Mr Jobs expected to sell “zillions” of his new machines. But the Mac was not the mass-market success Mr Jobs had hoped for, and he was ousted from Apple by its board.

Yet this apparently disastrous turn of events turned out to be a blessing: “the best thing that could have ever happened to me”, Mr Jobs later called it. He co-founded a new firm, Pixar, which specialised in computer graphics, and NeXT, another computer-maker. His remarkable second act began in 1996 when Apple, having lost its way, acquired NeXT, and Mr Jobs returned to put its technology at the heart of a new range of Apple products. And the rest is history: Apple launched the iMac, the iPod, the iPhone and the iPad, and (briefly) became the world’s most valuable listed company. “I’m pretty sure none of this would have happened if I hadn’t been fired from Apple,” Mr Jobs said in 2005. When his failing health forced him to step down as Apple’s boss in 2011, he was hailed as the greatest chief executive in history. Oh, and Pixar, his side project, produced a string of hugely successful animated movies.

In retrospect, Mr Jobs was a man ahead of his time during his first stint at Apple. Computing’s early years were dominated by technical types. But his emphasis on design and ease of use gave him the edge later on. Elegance, simplicity and an understanding of other fields came to matter in a world in which computers are fashion items, carried by everyone, that can do almost anything. “Technology alone is not enough,” said Mr Jobs at the end of his speech introducing the iPad, in January 2010. “It’s technology married with liberal arts, married with humanities, that yields the results that make our hearts sing.” It was an unusual statement for the head of a technology firm, but it was vintage Steve Jobs.

His interdisciplinary approach was backed up by an obsessive attention to detail. A carpenter making a fine chest of drawers will not use plywood on the back, even though nobody will see it, he said, and he applied the same approach to his products. “For you to sleep well at night, the aesthetic, the quality, has to be carried all the way through.” He insisted that the first Macintosh should have no internal cooling fan, so that it would be silent—putting user needs above engineering convenience. He called an Apple engineer one weekend with an urgent request: the colour of one letter of an on-screen logo on the iPhone was not quite the right shade of yellow. He often wrote or rewrote the text of Apple’s advertisements himself.

His on-stage persona as a Zen-like mystic notwithstanding, Mr Jobs was an autocratic manager with a fierce temper. But his egomania was largely justified. He eschewed market researchers and focus groups, preferring to trust his own instincts when evaluating potential new products. “A lot of times, people don’t know what they want until you show it to them,” he said. His judgment proved uncannily accurate: by the end of his career the hits far outweighed the misses. Mr Jobs was said by an engineer in the early years of Apple to emit a “reality distortion field”, such were his powers of persuasion. But in the end he changed reality, channelling the magic of computing into products that reshaped music, telecoms and media. The man who said in his youth that he wanted to “put a ding in the universe” did just that.

I just returned from a trip to New York, where earlier last week I gave a talk at the Council on Foreign Relations.  The topic was the question on everyone’s mind these days:  the outlook for China’s economy.

Over the past several weeks, a number of news reports and market figures have caught my attention, which appear to indicate that China’s economy may be approaching a crisis.  I use the word “crisis” in the traditional (or medical) sense, meaning a critical turning point when tensions or contradictions are resolved, for better or worse — sometimes in unexpected ways.  One potential interpretation of this crisis is that China is entering the terminal stage of a bubble, and that what we are seeing are the early signs of a much broader collapse.  But it may not be that simple.  I have been saying since the year began that China is due for a correction, and just last week I told the Globe and Mail that such a correction could be a lot worse than most people expect.  How exactly the situation will unfold, though, and whether we’ve already reached a tipping point or not, remains to be seen.  For the moment, I’m reminded of that song:  Something’s happening here; what it is ain’t exactly clear.  But — and this is the real point — something is happening, and people both inside and outside of China are right to be nervous.

Let’s start with real estate.  For the past several months, China’s official media have been touting official data indicating that while most Chinese cities are still seeing housing prices rise, a growing number of cities are starting to see a plateau or even decline in prices — evidence, they say, that the central government’s cooling measures are finally working.  More significant, in my eyes, are reports — which began emerging in late August — that in several cities across China, prices in primary housing markets (developers selling to homeowners) have begun falling away from those in secondary markets (homeowners selling to other homeowners).  The effected markets include not only 1st tier metropolises (Beijing, Shanghai, Guangzhou, and Shenzhen) , but also 2nd tier (Chongqing, Wuhan, Tianjin, Zhenghou) and 3rd tier (Ningbo, Foshan, Wuxi) ones as well.  In late August, reports had secondary market prices for many downtown properties in Chongqing at 4-10% higher than primary prices.  Last week, another report put the price gap in 1st tier cities like Beijing and Shanghai much higher, at 20%.

What could explain the growing price gap?  Back in April 2010, when the central government first announced its intention to “cool” the real estate market, property developers were skeptical.  They’d seen this movie before:  the market, they figured, might stall for a while, but as soon as policymakers saw the negative impact on investment-led GDP growth, they’d rush back in to support the sector.  Six months, tops, they would be right back to business as usual.  In the meantime, savvy developers better get ready for the next round by continuing to borrow and build.  That’s precisely what they did, which is why, despite jittery buyers and slumping transaction volumes, investment in real estate (in yuan) rose 33% and new construction (in square meters) climbed 26% in the first eight months of 2011, compared to the same period last year — data that China’s National Statistics Bureau touts, by the way, as proof that the Chinese economy is still going strong.

All of this continued building was predicated on the assumption that China’s cooling policies could not last.  In fact, since developers kept building, there was no negative impact on GDP, and no reason for policymakers to pull back.  To the contrary, inflation rose, and the cooling measures targeted at real estate were broadened into a more general credit tightening policy aimed at reining in lending.  As developers piled up more and more inventory — the primary market inventory in Shanghai, for instance, now starts at an all-time high, 12.5% higher than in December 2008 — they had to borrow to stay in business.  With credit conditions tightening, they systematically ran through the credit lines available:  first the banks, then high-yield bonds in Hong Kong, then the private wealth management vehicles that have been popping up all over China, then the loan sharks.  Finally, they ran out of options, and had no choice but to start selling some of their inventory at whatever price they could get.

That’s why primary prices are dropping:  hard-pressed developers offering steep discounts on property they’ve been holding out on, in order to get cash.  Investors who already purchased homes, often as a place to stash large amounts of cash, don’t face the same pressure and so you don’t see the same price drop in secondary markets.  However, it’s important to note how small and illiquid those secondary markets are.  In the U.S. and Europe, the ratio of existing homes to new homes sold (in normal, non-crisis times) is something like 13 to 1.  In China, it’s more like 1:1, or 2:1 at most.  The price gap may be less of a real “gap” than a “lag.”

Frustrated by their inability to cool the property market, China’s bank regulators say they are intentionally trying to squeeze developers to force a correction.  The thing is, they may get more than they bargained for.  Consider what might happen if a lot of developers hit the wall at the same time, and start dumping their inventories.  Sizeable discounts would have to be offered, and prices in the primary market would crater.  True, investors who have already bought — in many cases — multiple properties might not face the same cash pressures, but absent a liquid secondary market they have been marking their investment to primary market prices, and looking to them for assurance that their properties are a reliable “store of value.”  If primary prices collapse, that assurance is gone.  And if they decide to cash out, even in part, they will find — as they might have known all along, had they cared — that there is no secondary market to cash into.  The result could be a panicked rush to the exits.  Even if just the primary market crashes, the rationale for the supposed solvency of a whole host of Local Government Financing Vehicle (LGFV) bank loans and bonds — that local authorities can always sell land to pay them back — falls apart.