End of the China bull?

tothemax6 said:

So far I'm thinking something along the lines of USD, JPY, gold. I can't see anything else rallying during the China crash.
Buying stocks would be for afterwards.

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IMO holding the 1) Yen with no interest or 2) USD with no interest would be similar to shorting stocks provided you then convert back the AUD. Hard holding currency with no interest though! Buying stocks afterwards as you say could be the go. Looking for the Yen back at 80.

GRYPHON80 said:

Lianna Klassen 'I WILL NOT BE SILENT'

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Thanks.

MR. said:

IMO holding the 1) Yen with no interest or 2) USD with no interest would be similar to shorting stocks provided you then convert back the AUD. Hard holding currency with no interest though! Buying stocks afterwards as you say could be the go. Looking for the Yen back at 80.

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Well really any interest on AUDs is eaten by inflation after tax, and the yen has no inflation.
Problem is: buying yen or USD invokes being gouged by a bank or <shudder> travelex and their horrendous gouge-spreads. I could just take a position on my forex account, but its not the same.

Some recent statistic regarding GDP and analyst opinions of further decline.

Published: Monday, 16 Jan 2012 | 11:09 PM ET

China's economy grew at its weakest pace in 2-1/2 years in the latest quarter and it appeared headed for an even sharper slowdown in the coming months as export demand fades and the housing market falters.

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http://www.cnbc.com/id/46017091

Officially, economists have declared that China has accomplished a 'soft landing' and may in fact have to relax restrictions now that inflation has been 'tamed' (economist speak for 'we now have deflation'), conveniently forgetting that property has busted, exports have gone off a cliff and the price of oil is essentially causing a recession......

Economists - just an aberration due to Chinese New Year

Australia recorded a trade deficit in January, its first in 11 months, as weaker shipments of iron ore and coal contributed to the biggest drop in total exports in almost three years.

Imports outpaced exports by A$673 million ($715 million), from a revised A$1.33 billion surplus in December, the Bureau of Statistics said in a report in Sydney today. It was the biggest shortfall since March 2010. The median estimate in a Bloomberg News survey of 24 economists was for a surplus of A$1.5 billion.

The data add to pressure on Reserve Bank of Australia Governor Glenn Stevens to end a two-month pause in interest-rate cuts after the economy slowed last quarter and payrolls fell in February.

Today’s report showed Australia’s two-way trade weakened in January with each of the nation’s top four trading partners -- China, Japan, the U.S. and South Korea. Exports to Japan sank 16.5 percent, according to the report.
Total coal exports in January declined 5.6 percent and iron ore was down 23 percent, it showed.

Business profits unexpectedly dropped in the three months through December by the most in two-and-a-half years as earnings weakened at mining and financial companies. Gross operating profits fell 6.5 percent in the fourth quarter to A$66.3 billion from the previous three months, when they rose a revised 4.7 percent, a government report showed March 5.
Yesterday, a Bureau of Statistics report showed Australian employers cut payrolls by 15,400 jobs in February and the unemployment rate rose for the first time since August, to 5.2 percent.

Typical how the serial liars being the Chinese authorities have suddenly revealed a massive sudden trade deficit as soon as the US slapped a few new tariffs on Chinese exports artificially supported by Chinese government that are intended to harm international industries outside of China!

It's always been a matter of timing?

But the more time I spend in China, the more convinced I am that its current economic system is unsustainable. Yes, economists who specialize in China can give you all sorts of reasons why the country is supposedly different, and thus the regular rules of economics don’t necessarily apply. But one simple thing I always say about economics is that you can’t escape math. If the numbers don’t add up, it doesn’t matter much how big your economy might be or how fast it is growing or how heavy a role the state might play. And China has lots of numbers that just don’t add up.

Story here

Just in case a couple of Short ETFs NYSE: YXI, FXP .

Uncle Festivus said:

Yes, economists who specialize in China can give you all sorts of reasons why the country is supposedly different

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Economists are blithering retards when it comes to assessing China. They have no freaking idea what they are really dealing with or talking about!!
They keep spinning this stupid line that China has lifted 1 or 200 million people out of poverty and how fantastic that is. It's such crap. There is 1.6 billion!! Using the majority to lift up a minority to indulge a few dictators through intimidation and force is never going be sustainable in an economically successful way!!
There is no mutual socially ordered fabric holding the thing together.
It is all forced and fake just like all their products that fall apart!
Notice how they have suddenly thrown open their doors to international investment,!? They'd love to screw with the free world now - as they tank!

Just one more, then I'll let the data do the talking
At least they'll all have a car to live in?



Source: Apparently JPMorgan??

Fly Bull Fly Up, up to the sky.
http://www.cnbc.com/id/46822413

"Yes we will let you do some business in China.
Now you have to learn to lie, forge, fake and be totally dishonest.
If you can do that you can have our business Mr.American.
If you can't do that then you resign and we get another company to do our auditing.
If you agree to cheat, lie and forge which is the only way you will get our business just remember Stern Hu. At some point we may decide to imprison you for 10 years if you do something that annoys the Chinese Communist party like not give us enough confidential information about a Western Company. We imprison you because you cheating liar."

http://www.cnbc.com/id/46851977

Mean while Qantas pays 200 million to China Air on the hope that they will get some more business over there along with about 10 other international air lines and the share holders think it mazing!!
Just like Telstra and Fosters who paid billions for the privilege to lose billions over to China.
It's China, it's huge the potential!!

Be careful about what you read into Chinas official numbers -
On the same day Chinas "offical" PMI number indicated manufacturing expansion, jumped to 53.1 in March, the highest since April 2011, compared with 51 in February and 50.5 in Jan.
HSBC issued their own data which showed a different picture of Chinese PMI.
Their reading was just 48.3 in March, further dropping from February’s 49.6, signaling a fifth successive month-on-month deterioration in manufacturing operating conditions. Total opposite to the government figures.
Two of the richest property Tycoons were arrested over the weekend and one of the three big thugs that operates behind the political facade has basically been removed by the other two major thugs that pull the strings.
Demand for resources is slowing!

Some more pretty pictures................note property investment as % of GDP.........



Hard Landing...........for Australia!

First coal, then iron ore?

Iron ore lump rose $140m (13%) with quantities up 16% and unit values down 2%.
Exports to: China rose $126m (19%), with quantities up 18% and unit values up 1%.
Iron ore fines rose $507m (18%) with quantities up 17%.
Exports to: China rose $227m (11%), with quantities up 8% and unit values up 3%.
Hard coking coal fell $579m (27%) with quantities down 27% and unit values down 1%.
Exports to: China fell $111m (37%), with quantities down 44% and unit values up 11%.
Semi–soft coal fell $62m (9%) with quantities up 5% and unit values down 13%.
Exports to: China rose $142m, with quantities up 155% and unit values down 7%.
Thermal coal fell $289m (19%) with quantities down 16% and unit values down 4%.
Exports to: China fell $40m (29%), with quantities down 24% and unit values down 6%.

Certainly their share-market hasn't been as frothy as property. China can re-inflate their economy again, and will. Exports to Europe fell dramatically and really threw salt in the wound here...

Looks the Baltic Dry Index has bottomed but its not looking good until Europe starts buying again....Here's the article. Data out of Hong Kong is solid IMO.

Wen, Hu...pump it up before you leave...!

CanOz
BTW...god help us if China crashes.:22_yikes:

I'm not sure push-priming economies works any more.....

Whoever this bloke is, he's not confident either....the bazooka's been fired already?

HONG KONG (MarketWatch) — China’s consumption boom is drawing to a close, according to one economist’s contrarian view, which calls for no growth — or even a contraction — in the Chinese economy and the advent of an era of deflation and weaker spending.
Investments leveraged to the rise of the Chinese consumer, ranging from Australian miners to luxury-handbag makers and even iPhones are due for a reality check, according to Jim Walker, founder and managing director of the Hong Kong-based economic research company Asianomics.

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He believes that China’s low interest rates have helped stoke mal-investment on a scale never seen before, and that another government stimulus package appears unlikely, given a glut of overbuilding, including transportation projects such as airports.

“It was easy last time, because they just built property and infrastructure,” Walker said, referring to Beijing’s huge credit injection to held shield the economy from the global crisis in 2008.
“But this time around, there is too much in the way of misallocated capital embedded in the system to allow them to fund new project areas easily,” he said.

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Likewise, markets that are proxies for Chinese growth — including regional Asian trading partners South Korea and Taiwan and commodity-focused markets such as Brazil and Australia — should be avoided.

Story

Great points as always UF,

Keep in mind that we're still in cycle for the global bull market, so we won't, IMO, see things turn nasty for a while yet. We haven't seen Irrational Exuberance yet and these things can run on longer than you think.

China will still try and pump up the economy. While i can see there's got to be another big crunch coming, with little left in the printing presses globally to soften the de-leveraging, my bet is for another 6- 12 months of gains on most western equity markets and commodities. We haven't seen the agriculture run up in this bull yet either.

China has a leadership change due soon too, so they'll be wanting that to go well so the masses are happy campers.



CanOz



I'm not

One thing people over estimate about the Chinese is the Chinese ability to be liberal at anything. The Chinese think they can control everything, force everything. They think humans a like machines that can be programmed and even re-programed through torture etc to think anything the Chinese dictators want them to think.

The one thing that most experienced people will tell you is that human nature requires freedom and that markets that operate freely sort themselves out more naturally and operate best when left to operate as freely as possible. Cities and towns should be allowed to develop in a most organic and natural a way as possible i.e. as demand increases then you open up land to be developed etc.

The Chinese think they will just build 30 cities and 40 super fast train links and so on without any of it being something that is naturally happening or being subject to local demand. In many instances the Chinese force the rural communities off their land and into mortgages that they cannot afford. After the mortgages stop being paid they take the properties back off the people again then try to resell it to the next poor farmer only to do the same thing to them. The dictators have the partnerships with the property tycoons and bank the money. The people are left bereft! There's a lot of them to get though! In the surrounding countries which they have invaded, they just take everything. The indigenous people whose country the Chines occupy are not even offered employment and basically live off the streets.

If any 'rumors' of such get out it, they will be dealt with the official lines like, ‘This is against Chinese law and we are investigating these 'rumors' or corrupt local officials” Then they just try to do business with everyone to induce blindness, knowing that if there is enough money in it people will just rather forget about it and get on with making money.

You can only do this kind of thing for so long before you run into a catastrophic collapse.

It’s hard to say when the collapse will be. Could be now, could be in 15 years’ time. They will have a plan for the people when that happens. They are very fond of pulling down the curtains and rolling out the machine guns then creating huge human bonfires to hide the evidence - as in Tienanmen Square.

Notting, honestly where do you get this stuff?

Several of my wife's relatives where moved off their land. Instead of living in a run down two story brick house, they now live in a three story concrete villa that's well finished on the inside. When i asked her what it cost them she said nothing, in fact the government pay them based on the number of siblings in the family, including the grand kids....so they ended up much better off.

You would be blown away at how a family that looks poor is so wealthy. These people live very thin, and save every dime. Most of her family and relatives are millionaires. Yet they dress very conservatively and pinch every penny. We could learn allot from them.

So there is good and bad here, just like everywhere else. Don't think for a minute that this place is any different than living in the Western countries. The intentions of the leadership are very good, its in the lower levels where it gets mushed up.

Number one goal is social stability and prosperity.

They're not going to get it perfect, but there trying and they're changing.

CanOz