Imminent and severe market correction

Relevent to the current discussion .....

World Bank Report: China's Economy Overestimated By 40 Percent
December 18, 2007 10:53 a.m. EST

Washington, DC (AHN) - A World Bank study released on Monday said China's economy was overestimated by 40 percent. Despite the less reliable methods used to measure China's gross domestic product, it still was the world's second biggest economy in 2005.

The 2005 report was the first time that China was included in the World Bank report, while India is reinstated in the report since 1985.

The World Bank used the Purchasing Power Parity tool, which removes the effect of currency exchange, to evaluate the economies of 146 nations.

The report said the world economy came up with almost $55 trillion worth of good and services in 2005. Almost 40 percent of that output were from developing nations.

Twelve nations, seven from high-income economies, accounted for two-thirds of the world's output. The seven were the U.S., Japan, Germany, the United Kingdom, France, Italy and Spain. The five others were China, India, Russia, Brazil and Mexico.

China was responsible for 9 percent of global production, while India accounted for 4 percent. India was the fifth largest economy. Asia had an overall 20 percent share in the global production pie.

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http://www.allheadlinenews.com/articles/7009486566

"It's better to remain silent and thought a fool, than to open your mouth and remove all doubt."


I really like that - I am going to use it..

Whiskers said:

Yeah ithatheekret, thats true, but we have to work with something. Do you have a better data source that I could use?

The following site link provides estimates by the IMF, World Bank and the CIA.

They vary a bit, but they all give the US about $13 trillion. The CIA gives China (inc Taiwan & Hong Kong) $8.02 trillion and India $2.96 trillion. The World Bank gives China (inc Taiwan & Hong Kong) $6.16 trillion and India $2.34 trillion.

I 'm not sure where dhukka sourced his numbers from, but his numbers for China and India are considerably less than all three of these.

http://en.wikipedia.org/wiki/List_of_countries_by_GDP_(PPP)

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That's what I was doing AM on a weekend , downloading last weeks data , prices etc., sometimes when you gleen through it you find a few gems .
I've been looking for something , something out of the ordinary . But sometimes it needs to be downloaded twice and sometimes , three times as the bundles come through , I have noted little pieces missing , when finally found , let's just say to date the differences have been extreme , sometimes it's Telstra streaming and what speed wireless can acheive for poor old Telstra . Anyone noted that shareprice lately , I haven't , I have a joke on the brokers now and then , keep asking them to place a buy at 99 cents .

Lots of flattened tongues getting paid big bucks for f....ups .
World Bank , stick your fingers in ya mouth and try to say that .
CIA ....... wasn't that why condoms were invented ?



Why is the question , it always will be . Minties don't solve problems or everybody would be toothless . George is dishing out Minties .
No wonder kids are running around screaming hack the planet .

When you get the data look for something to prove it wrong , I just can't help myself . But when something looks too good to be true well you know .........

Didn't that run on the Dow look great 12846 cough ,cough ,cough , what not 12846 yet ........ eeeek ! I like Minties though

Freeballinginawetsuit said:

I don't see the relevance of youre comparison . On the topic of China's GDP, IMO any stats out of China should be taken with a grain of salt.

A more relevant (and accurate lol) stat would probably be US TT's..........

China Imports YTD Nov:295.8B
China Exports YTD Nov:58.3B (most to offshore invested US Co's on the mainland)
US TT's Percentile:12.4%

Offshore invested co's suppling the essential discretionary and non discretionary (bang for ya buck) items that the narrow sighted/highly geared and illiquid yanks will least do with out in a recession.

On an I/E defeciency basis, China pegs Canada markedly for top spot although Canada largely trades on a par with the US and pegs 1st place for total trades.

Personally I feel that Canada/Germany's TT's will suffer the greatest if uncle sam indeed drowns in his muck

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FB I take it your a young adult , like me although I'm nearly 50 , couple more to get there , but in that time reaching that pinnacle , I have travelled in my youngers days , I have little pins and badges from every country I've visited , many of which were Commonwealth Nations or use to be ...........

I go off tangent sometimes , I noted your loss in comparison , but it was the comparisons I wasn't wanting to show . I was trying to explain that what you see in the feeds and what really happened are usually two completely different things . It takes hours to get down to the nitty gritties at times .

I apologized for flaring up at you , it was unbecoming of me and I was an ass for doing it . Your obviously an intelligent young man ( that is you in the photo ? ) But to expain myself may , to some , be arrogance at it's utmost .

I know I'm above a few , but many are much higher than me , I take a page out of their books and add it to mine , and follow their example .

I am arrogant I know that , but I also have very strong principles which you can have a laugh at if you like too , many have . I have sworn allegiance to Her Maj. and nothing on this earth even family would have me cross that allegiance . I look upon the flag with reverence , and I know this country has independent thinkers , I see them nearly everyday on this site .

You see your second post , just proved your a thinker , so forgive me for saying this , but if I stray off tangent it's because there is something that's not right . I try to bring to the members attention .

China Imports YTD Nov:295.8B
China Exports YTD Nov:58.3B (most to offshore invested US Co's on the mainland)

I would question this data . Can we agree that India is the next big move for growth , real growth . I made an error in a statement previously about money supply and China being the only double digits growth around , that was a faus paux on my part , because I had recently reported that another country that has been under heavy sanctions by the US , has seen double digit growth too , it doesn't rely on the US consumer .

I want to make people think , force them if I have to , but facts show that those that learn , want to learn .

China is set up to become the worlds chief nett exporter , India is it's target , they know the problems faced in the US . You can paint stagflation blue pink or red , it's still stagflation , it has taken them nearly 7 years to admit it . We could go into a mass of data out of Japan , back through 99-2006 , it was garbage . I'm sure Kauri would remember my post on the Japanese economy from years ago , it was right .

I don't actually like being right , because I know where this all end and it infuriates me to know that the public of America will have to foot the bill for all the policy mistakes ever laid to bare on the US . The same goes here , I'd say the ALP is good for at least 2% in rate rises . Bag them I may at times , but I will never forget their sacrifice for Australia in the Coral Sea , our honour says we must stand by them . I know that's difficult for some to swallow but that is the basis of it whether liked or not .

Dhukka I can only lay accollades at his feet , he ( I think D.s a he , I could be wrong I don't know ) puts in an effort to cross reference the info overload in the markets . I think he can smell chit a mile off and lets us know , that takes guts to stand your ground in a setting of growing opposition .

So Dhukka gets my kudos . I agree with you that Canada and Germany will each feel the double edge of the economic sword . But with inflation swinging about from a demand - pull to cost- push , the emerging countries will be first cabs off the rank , China will cop its share of that , it will be in your face stuff for just about very Chinese citizen as their food costs rise and rise and rise .

regards and best wishes ,

Mark

PS .....

A question for Dhukka : How much do you think the Chinese currency is under valued ? also .... How much do you think the Yen is under valued ?Careful it's a trick question on the Yen , because the last appreciation calculations were based on the data they put out that was bollocks for years .

ithatheekret said:

China Imports YTD Nov:295.8B
China Exports YTD Nov:58.3B (most to offshore invested US Co's on the mainland)

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Hi ya,

The aforementioned US TT data is accurate, census sourced and the most current feed I have access too.

Cheers

Hi ,

Yes , okay I can relate to that , I do too , quite a few , that's about as far as I'm willing to go on that matter .

I have one small query .

Is the data recorded from first occurrence , I assume the scale is logarithmic as it is the easiest for me to compile it that way , as it gives me one glance information . But has the data been smoothed say using an EMA ( expotential moving average ) of say with an Alpha equivalent to 0.40 ?

ithatheekret said:

A question for Dhukka : How much do you think the Chinese currency is under valued ? also .... How much do you think the Yen is under valued ?Careful it's a trick question on the Yen , because the last appreciation calculations were based on the data they put out that was bollocks for years .

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Good question, the Chinese currency, who knows? Could currently be as much as 50% undervalued or more. I'm with Jim Rogers on this one. I think China's currency will easily double, triple or even quadruple in the coming decades. I'm quite the China bull, the main difference between myself and others is the timing.

The Yen, jaysus! I'm a bit biased because I earn the bulk of my money in yen. Ballpark I'd say 15 -20% undervalued. Others have pointed out how dodgy official Chinese numbers are, the Japanese are no choir boys.

its all gonna be ok, I had a dream last night the asx went up 12%! hahaha
now if only it would come true..

dhukka said:

I hope you savoured your moment of victory

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Wow, you sure are a dominant male dhukka... a real Right Fighter! http://www.selfgrowth.com/articles/Byler1.html

because it's about to be shattered.

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Not likely.

It actually helps if you understand the data you're looking at.

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Well we agree on one thing.

All you need to know about the link you provide to wikipedia is the first few lines.

There are three lists of countries of the world sorted by their gross domestic product (GDP) (the value of all final goods and services produced within a nation in a given year). The GDP dollar estimates given on this page are derived from Purchasing Power Parity (PPP) calculations. Using a PPP basis is arguably more useful when comparing generalized differences in living standards on the whole between nations because PPP takes into account the relative cost of living and the inflation rates of the countries, rather than using just exchange rates which may distort the real differences in income.

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"All you need to know...", There's that damn dominant male Right Fighter again!

If it's alright with you dhukka, my mind is free and open to the big picture.

PPP as suggested above is useful if you want to compare living standards but that's not what we are debating here.

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GDP isn't about comparing living standards!?

The GDP of a country is defined as the total market value of all final goods and services produced in a country in a given period of time.

Debating... I thought this was a discussion forum, like in dialogue... Right Fighter!

You'll notice that the currency they use is international dollars. I don't know anyone who owns international dollars. You know why that is? Because they don't exist, it is a fiction...

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Really!

...created by these agencies to compare general standards of living between countries

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Exactly! If you look at the definition of GDP, market value is the key phrase. From where I stand it's a world market... hence the need for an standard international measure. It matters nought whether you call it an international $ or widgees, so long as everyone can relate to it equitably.

The figures I supplied are in $US dollars.

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Thats ok if you assume the rest of the world revolves around the US for ever. It hasn't always been the case and most likely the US has had it's day in the sun as it is already surpassed by the EU and soon by Aisa.

What happens when the US is long 3rd or 4th. What measure will you use then or more importantly what measure will be most relevant!?

I reckon it is much wiser to use a standardised international measure to cope better with the transition, rather than suddenly realising one day that the US$ is now insignificant... and what am I going to use now!

I am sure of my facts...

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I'm sure you are! (Right Fighter)

...because I do the research .

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• Good boy! But you should do better.
  
• Then you would know that China's currency is artifically low, at least in the US view. If China did what the US wanted and revalued their currency against the US, wouldn't that make China's GDP appreciate significantly (in $US). So you are not recognising the intristic true value of China but literally an artifically low nominal value in $US.
  

...and don't just cut and paste

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I'll have to remember it's a cardinal sin to 'cut and paste' anything.

Here's another tip for ya,

"It's better to remain silent and thought a fool, than to open your mouth and remove all doubt."

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So you want me to shutup unless I agree with you eh, Right Fighter! :

So say's Jim Rogers...........

"Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."

http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm

Back to my research on Kondratieff!

http://www.kwaves.com/kond_overview.htm

Freeballinginawetsuit said:

Hi ya,

The aforementioned US TT data is accurate, census sourced and the most current feed I have access too.

Cheers

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Freeballs,

Do you really trust "census sourced" data?

John Murphy | The Market Message
JANUARY BAROMETER PREDICTS BAD YEAR
I haven't heard anyone in the media talking about the January Barometer, which is based on the view that "as January goes, so goes the year". That's probably because they only talk about it when the market has a strong January, which predicts a good year. Unfortunately, this January was a very bad one. The 6% loss in the S&P 500 makes it the sixth worst January on record. According to the Stock Trader's Almanac, "the January Barometer predicts the year's course with a .754 batting average. It goes on to state that "every down January on the S&P since 1950, without exception, preceded a new or extended bear market, or a flat market". In addition to a bearish January Barometer, the market had a bad chart month as well. The monthly bars in Chart 1 show the S&P 500 falling -6.12% since the start of 2008 on the heaviest volume in a decade. The monthly stochastic lines (above chart) have fallen to the lowest level since mid-2003. The monthly MACD histogram has been negative for two consecutive months.

Uncle Festivus said:

So say's Jim Rogers...........

"Bernanke is printing huge amounts of money. He's out of control and the Fed is out of control. We are probably going to have one of the worst recessions we've had since the Second World War. It's not a good scene."

http://money.cnn.com/2008/01/30/news/international/okeefe_rogers.fortune/index.htm

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Uncle Festivus don't forget to quote this gem from the same artical,

Ultimately, Rogers doesn't think that the troubles in the United States will be much of a drag on the prospects for the People's Republic. "Anybody who sells to Sears (SHLD, Fortune 500) or Wal-Mart (WMT, Fortune 500) is going to be affected, without question," he says. "Some parts of the Chinese economy are going to be untouched, however. They won't even know America's in recession. They won't care if America falls off the face of the earth."

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dhukka said:

Good question, the Chinese currency, who knows? Could currently be as much as 50% undervalued or more. I'm with Jim Rogers on this one. I think China's currency will easily double, triple or even quadruple in the coming decades. I'm quite the China bull, the main difference between myself and others is the timing.

The Yen, jaysus! I'm a bit biased because I earn the bulk of my money in yen. Ballpark I'd say 15 -20% undervalued. Others have pointed out how dodgy official Chinese numbers are, the Japanese are no choir boys.

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Yes , have to agree .

Big difference in both the fundamentals and the technicals , technically the Yen should push into 96 , fundamentally ........... 136 .
Huge disparity in it , trying to think of an easier way to put it , stumbling here mate , had a few comments to bring the language down . Incongruous elements , which show a huge lack of propriety , better stop there and zip that one .

The Yuan , I have a trading figure for right now , based on the data allowed out , that shows the Yuan is at a discount of 43.488% to market .
If China successfully completes it plan ....... get out the ball park figures , the current climate in the markets are right out of whack due to this discount and I think they know it and will fight like the banshees to stop it from getting there . The average wage earner there just wouldn't be able to afford to eat , except their sweat . When we see a 4 , I'll probably pass out with shock .................

Whiskers said:

GDP isn't about comparing living standards!?

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Didn't say it was, you're the one who is insisting that it is by using PPP.

Debating... I thought this was a discussion forum, like in dialogue... Right Fighter!

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Argument and debate is the lifeblood of a democracy, the more of it, the more healthy a society.

Whiskers said:

Exactly! If you look at the definition of GDP, market value is the key phrase. From where I stand it's a world market... hence the need for an standard international measure. It matters nought whether you call it an international $ or widgees, so long as everyone can relate to it equitably.

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You don't need an international standard. You can use US dollars, yen or any other currency , you don't need to invent one.

Then you would know that China's currency is artifically low, at least in the US view. If China did what the US wanted and revalued their currency against the US, wouldn't that make China's GDP appreciate significantly (in $US). So you are not recognising the intristic true value of China but literally an artifically low nominal value in $US.

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Yes, acknowledged above that the Chinese currency is undervalued, I said 50% undervalued, ithatheekret says 43%. Also take into consideration previous statements that China may have overstated it's economic numbers by up to 40%. Even if we gross China's GDP up by 50% we get $4.5 trillion roughly a third of the US.

Thats ok if you assume the rest of the world revolves around the US for ever. It hasn't always been the case and most likely the US has had it's day in the sun as it is already surpassed by the EU and soon by Aisa.

What happens when the US is long 3rd or 4th. What measure will you use then or more importantly what measure will be most relevant!?

I reckon it is much wiser to use a standardised international measure to cope better with the transition, rather than suddenly realising one day that the US$ is now insignificant... and what am I going to use now!

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As above, you'll still be able to use $US or any other currency, that's the beauty of having exchange rates.

Bottom line, China's economy is currently;

• too small
• too financially fragile
• too export dependent

to not be affected by a significant US slowdown.

wayneL said:

Freeballs,

Do you really trust "census sourced" data?

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Yeah on trade stats I do,.......a bit like a passport really!.

I'd lean to the higher side on China though, warehousing/maufacturing and component sourcing would slant the stats to the upside as well, in the case of Chinese derived imports.

Name a more accurate source Wayne........than customs data e-logged at the point of origin, directly into US census data.

Freeballinginawetsuit said:

Yeah on trade stats I do,.......a bit like a passport really!.

I'd lean to the higher side on China though, warehousing/maufacturing and component sourcing would slant the stats to the upside as well, in the case of Chinese derived imports.

Name a more accurate source Wayne........than customs data e-logged at the point of origin, directly into US census data.

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Just have a healthy distrust of gu'mint stats Freebs, whether e-logged or de-logged.

Test everything. Trust No-one.

wayneL said:

Just have a healthy distrust of gu'mint stats Freebs, whether e-logged or de-logged.

Test everything. Trust No-one.

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Its not a matter of trust, more realism.

US elogged customs data logged direct into the census system is exactly the same as US elogged immigration passport data logged into the census system.

In regard to US TT's (Census Data) it is the most accurate source available.

I don't trust governments............or suscribe to rabid info from obscure web sites or nexus mags. However customs/immigration yada yada would be one of the most reliable sources of info a government data source provides.


Cheers

Freeballinginawetsuit said:

Its not a matter of trust, more realism.

US elogged customs data logged direct into the census system is exactly the same as US elogged immigration passport data logged into the census system.

In regard to US TT's (Census Data) it is the most accurate source available.

I don't trust governments............or suscribe to rabid info from obscure web sites or nexus mags. However customs/immigration yada yada would be one of the most reliable sources of info a government data source provides.


Cheers

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OK, whatever you say.

But Nexus is The Oracle.

wayneL said:

OK, whatever you say.

But Nexus is The Oracle.

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LOL, I thought you were a subscriber