China is Done: Or What XFML changing to XSEL Means To You
Xinhua Finance Media Limited (XFML) was a Chinese company that attempted to profit from the growing interest within China in business/finance/and advertising. On the basis of what can only be described as wildly fraudulent financial reports, XFML managed to maintain a price over $5 for quite awhile. (It IPOed at 13 and pulled a Vonage, never trading over 13 in its relatively brief and painful life.) Recently, however, the company, which now trades at around a quarter of a cup of SBUX coffee, changed its name to Xinhua Sports and Entertainment Limited. What does this mean? It means that the China bubble really is finished. When the pumpers give up on the name, you know the goose really is cooked. Of course, we'll have to wait until the business model abortion that is JRJC gets delisted before we can finally say China is back to being a 3rd-rate banana republic economy, but for now XFML's conversion into the decidedly unexcellent XSEL shows us that their economy won't be returning to vigor.
China's boom was built on the false illusions of globalization, a manipulated currency, and the premise that cheap oil would last forever. Now, we find out, the majority of Chinese cities are critically short such niceities as fresh water--realize they will be paying out the nose for oil over the next decade (they have virtually none domestically) and they are still run by a deadbeat tyranical government. China is done. Finished. I invite opposing opinions--I'm writing a book that predicts the future and a key section will be on the rise and fall of China as a world player and I'm always open to more viewpoints.