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ChrisGraley (30.25)

A little bit of info about China

Recs

14

November 12, 2009 – Comments (2)

An eyebrow raised when I read kdakota's blog post here. If this is true, and the Shanghai market does crash, it could lead to another crash in the US market.

First, just about everything I know about Chinese astrology, I've learned from placemats in the local restaraunt, but the Chinese take this stuff seriously so I went online to see if the year of the ox was a good sign or a bad sign for investors. Apparently it happens to be one of the worst signs. The year of the Ox is interpreted to mean economic struggle. I'm thinking that Chinese investors would try to bail out at the first sign of trouble.

Now for a few articles...

Bears Say China’s Economy Set to Collapse3 Arguments for China’s Looming Economic CrashChina's Improbable Economic Growth Figures

Copper On Pigfarms And Giant Lots Of New Cars

China Bubble, U.S. Dollar Top 2010 Risks, Bank of America Says

When you add the fact that a large part of the Chinese population invested borrowed money in the market, this doesn't bode well.

I will be doing a lot more DD on China because if the bears are right, this isn't a trivial matter.

 

As always I hope this helps.

Chris

ps... sorry for the formatting.

2 Comments – Post Your Own

#1) On November 12, 2009 at 11:21 PM, catoismymotor (38.90) wrote:

Chris,

Thank you for doing some research for our benefit. This could trigger the often speculated second crash. I need to so some more reading on this subject. I have a large portion of my holdings in Chinese small caps. That might soon change.

Cato

 

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#2) On November 13, 2009 at 2:39 AM, throwerw (29.71) wrote:

the comments from geithner are absolutely absurd.  US consumption was the primary driver of global economic growth?  More like the primary drag.  I fail to see how over production will really be a problem in a nation of 1.3 billion people that have been saving their whole lives for this moment.  Deflation is a sign of a healthy economy (think tvs, computers, etc).  When prices come down China will boom.  The amount of borrowed money in the Shanghai market probably pales in comparison to the borrowed money in the US market.  Most people here put their savings in the bank or in their own businesses.  There are many opportunities in US-listed smallcap chinese companies where the prices are way below intrinsic value.  Don't worry too much about the Shanghai market, just worry about how your companies are doing.

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