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View Full Version : China Stimulus - creating a bubble?



Silverbird
08-25-2009, 01:25 PM
http://www.ft.com/cms/s/0/ae083ef2-90de-11de-bc99-00144feabdc0.html

Just in case anyone's thinking about the China stock market play...be careful.

Bullitt
01-09-2010, 06:49 PM
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/2010/01/07/contrarian-investor-predicts-crash-in-china/

Bullitt
01-13-2010, 10:04 AM
Can we even believe the numbers we're getting?

http://www.nytimes.com/2010/01/13/opinion/13friedman.html?ref=opinion

Bullitt
01-20-2010, 07:24 PM
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/markets/global-markets/China-lending-worry-hits-stocks-euro-tumbles/articleshow/5481070.cms

Silverbird
01-21-2010, 08:46 AM
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....:mad: 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.

Bullitt
02-04-2010, 09:05 AM
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.

8178

Bullitt
03-11-2010, 07:34 PM
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?pid=20601080&sid=axVdn46QiNyg

Boghie
03-11-2010, 08:53 PM
Do falling Enrons make a sound in China???

Silverbird
03-12-2010, 10:54 AM
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.

Bullitt
03-27-2010, 04:07 PM
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/2010-03-26/china-to-allow-stock-index-futures-trades-on-april-16-update1-.html

Bullitt
12-30-2010, 02:23 PM
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/photogallery/0,29307,1975397,00.html

alevin
12-30-2010, 03:22 PM
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.

Bullitt
12-30-2010, 03:44 PM
It just blows my mind that this doesn't matter to the markets. How much copper pipe, oil, lumber, concrete, rubber has been consumed to build a ghost town?

Meanwhile, everybody thinks Jim Chanos is the idiot.

Here's his case against China:
http://finance.fortune.cnn.com/2010/11/17/chanos-vs-china/

Here's a real estate expert's take on Chanos being wrong:
http://www.forbes.com/2010/01/11/china-bubble-chanos-leadership-managing-rein.html

This just isn't right. Hey, how long until the tech stocks blew up? It took quite a while.

crws
12-31-2010, 03:00 AM
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/photogallery/0,29307,1975397,00.html

Your hard earned U$D at work. Looks great, where's my pad?
They like their middle class kept happy....
I'm not laughing, because they really have NO competition, as they quietly moved into dominance of world manufacturing, using the world's resources to build entire modern cities such as this one.
We can point and talk all we want, but who would know?... without your camera, tv, computer, iPhone, whatever- manufactured in China.
I read the jabber that China "depends" on the US and therefore has a vested interest in our success.
We need to smoke some reality- after all this time- China doesn't have contingency plans for if US demand for goods dives? Are you kidding me?
They own us, and most other countries.
I mean, they build fully functional life size cities for the Jetsons! Not some paper maiche' pipe dream.
I hope we survive, but maybe this is just indicative of the new world of global trade, and China is the world's manufacturer....

Bullitt
12-31-2010, 10:14 AM
They own us, and most other countries.

No they don't.

Everyone makes the argument that 'they own our debt'. JPM, WFC, and BAC own a lot of mortgage debt and many owners are giving them the finger.

Okay, so they own us in the sense that goods cannot be produced in America due to the benefits we pay our citizens. China doesn't have to pay anyone over 30 cents if they don't want to, hence the profit margins remain even with lower prices than any nation on earth.

A scenario here to ponder....
Lets say tomorrow, China (or Japan) decides to covertly unload treasuries. Do you think this would go unnoticed? Many other nations would front run and kill yields higher if they did. Nothing in the market is covert, insiders know everything and besides there is always another side to the trade. Dummies on TV don't promote bonds because it's not cool to trade bonds. Bond trading is left to the smart money, aka central banks, nations, Goldman Sachs. If China were to start selling, and maybe 30 year yields go up to 7%, China will be nearly underwater.

Of course, so would Japan, and everyone else. Then again, so would the US since that would mean inflation is out of control.

One more thing.... What happens if the Yuan goes rampage against the dollar? The free markets will always trump intervention and you'd see us buying our crappy chachkies (http://www.urbandictionary.com/define.php?term=chachkies) from somewhere else.

China decided to check into the hotel California when they decided to become a world power. They can check out but they can never leave. They will be buying our debt for eternity. Just keep building those empty cities baby.

crws
12-31-2010, 10:35 AM
No they don't.

Everyone makes the argument that 'they own our debt'. JPM, WFC, and BAC own a lot of mortgage debt and many owners are giving them the finger.

Okay, so they own us in the sense that goods cannot be produced in America due to the benefits we pay our citizens. China doesn't have to pay anyone over 30 cents if they don't want to, hence the profit margins remain even with lower prices than any nation on earth.

A scenario here to ponder....
Lets say tomorrow, China (or Japan) decides to covertly unload treasuries. Do you think this would go unnoticed? Many other nations would front run and kill yields higher if they did. Nothing in the market is covert, insiders know everything and besides there is always another side to the trade. Dummies on TV don't promote bonds because it's not cool to trade bonds. Bond trading is left to the smart money, aka central banks, nations, Goldman Sachs. If China were to start selling, and maybe 30 year yields go up to 7%, China will be nearly underwater.

Of course, so would Japan, and everyone else. Then again, so would the US since that would mean inflation is out of control.

One more thing.... What happens if the Yuan goes rampage against the dollar? The free markets will always trump intervention and you'd see us buying our crappy chachkies (http://www.urbandictionary.com/define.php?term=chachkies) from somewhere else.

China decided to check into the hotel California when they decided to become a world power. They can check out but they can never leave. They will be buying our debt for eternity. Just keep building those empty cities baby.

Yes, "own" in the sense as "where is it going to be produced".
I dunno.
I just think that China has out-foxed the world.
From my perspective, it would be mere pittance to scale back on infrastructure investment after an extreme build out, and raise earnings throughout the nation with the same capital.
There is an end game, and we have a long way to go to catch up. I see us way behind the 8ball on this one.
The same Time pictorial had this slideshow as well....

http://www.time.com/time/photogallery/0,29307,2031786,00.html,
Which ironically is where I see this picture as representing us compared to China...

http://img.timeinc.net/time/photoessays/2010/orlando_foreclosure/orlando_foreclosure_08.jpg

Bullitt
12-31-2010, 11:02 AM
It's just a shame that the media has morons on with agendas who promote the China story. All you need to do is show them that slideshow. That slideshow is the Bower (http://www.pagat.com/euchre/euchre.html). There is no argument that can possibly justify it. How many precious commodities have been wasted in the building of that ghost town? Is that a driving reason behind rising copper and oil prices?

China has outfoxed the world. It's almost like we're praying for a miracle out of Shangri-la (http://en.wikipedia.org/wiki/Shangri-La) to save the world. A giant mystery that lies behind the curtain. Unfortunately, hope is not a strategy. All it took was a little dog named Toto to unveil the curtain once before. What will it be this time.