Thread: China Stimulus - creating a bubble?

The good news always seems to come out at the top.

China’s surging real estate sector, buoyed by a flood of speculative capital, looks like “Dubai times 1,000 — or worse,” Mr. Chanos frets. He even suspects that Beijing is cooking its books, faking, among other things, its eye-popping growth rates of more than 8 percent.

http://dealbook.blogs.nytimes.com/20...rash-in-china/

Can we even believe the numbers we're getting?

http://www.nytimes.com/2010/01/13/op...ml?ref=opinion

Watch out. Investors may think they have a good ice beer in their hands at the party, but the bartender may only be giving out drafts of O'Douls from now on. China taking steps to curb speculation in their markets by cutting lending.

http://economictimes.indiatimes.com/...ow/5481070.cms

Yes, our numbers are not a reflection of the actual market because we have to use U.S. data for everything, and in many cases, that's using the wrong data. But at least we know what we are tracking (even if we are tracking the movement of dogs to track the cats so to speak).

But if you think our numbers are whacked, try China's (and some other emerging markets). The only ones I can sort of depend on are their trade numbers - there is someone tracking what goes in and out. Pricing data out of China is, well.... especially with the controlled exchange rate. And tracking pricing and other data out of every country - no the USG doesn't have the resources, nor would it be smart to dedicate the resources to that.

Oh China bulls, where art thou? Lower highs and a rejection of the 200DMA in FXI is not what the world would like to see.

FXI.png

FXI, the new frontier of world economic growth, is still diverging in a major way from US indexes.

This whole entire rally has been built on speculative, easy money froth. There is nothing fundamental about it but hey, until the music stops, you might as well keep on dancing.

Chinese policy makers aim to prevent the world’s fastest- growing major economy from overheating after reports showed exports rebounded, industrial production accelerated and new loans exceeded forecasts. Central bank Governor Zhou Xiaochuan may raise interest rates as early as in the next three weeks, Standard Chartered Bank Plc, Nomura Holdings Inc. and Royal Bank of Canada said after this week’s data.

http://www.bloomberg.com/apps/news?p...d=axVdn46QiNyg

Do falling Enrons make a sound in China???

Probably not, but the froth from the extra capital spending they are doing could bring them down just like our real estate bubble. Chinese banks will keep lending to state-owned enterprises cause of all the incentives.

China will begin a Futures Index on April 14th. Traders will now be able to take a bearish position on China as compared to now being bullish or neutral. This event is very significant. Remember that the good news always comes out at the top.

http://www.businessweek.com/news/201...-update1-.html

Build baby build! What Fortune 500 company is not betting on China to continue growing in the years ahead?

Some interesting pictures here.
http://www.time.com/time/photogaller...975397,00.html

Tell you what, I saw ginormous 90% unoccupied apartment buildings all through main parts of Beijing all the way back in 2000, well before I was even thinking about China as an emerging market stockswise. talk about a bubble-its got to pop sometime or other.