Jim Rogers: Focus on China 20 comments
August 03, 2009
| about: FXI
an article to
-
Font Size:
-
Print
- TweetThis
Nine minute video by Mr. Rogers; as usual unflattering towards the U.S. and constructive on China long-term. As I wrote in a piece last week, after the doubling in the stock market, he is cautious nearer-term on China. A nice swipe in the last minute at Timothy Geithner and a general comment about the U.S. holding no high ground to tell anyone how to run an economy.
Related Articles
|
-
The Seeking Alpha 100
See allThe top 100 stock
market authors
selected for publication
Seeking Alpha 100 » -
Fastest Climbers
Authors with the largestSee all
increase in followers
in the last 7 days
Fastest Climbers » -
Top Commenters
Top commenters,See all
as ranked by their peers
Top Commenters » -
Top Instabloggers
The 100 most active
Instabloggers.-
1
David Fry
-
2
TraderMark
-
3
Don Dion
-
4
Cliff Wachtel
-
5
Mike Havrilla
Top Instabloggers » -
1
-
Top StockTalkers
TopSee all
StockTalkers.
Top StockTalkers »
On Aug 03 04:25 PM Graham and Dodd Investor wrote:
> Something of "self-hating" in Rogers' love of China and panning of
> the U.S. It's true that this country has problems--until you see
> China's!
On Aug 03 04:25 PM Graham and Dodd Investor wrote:
> Something of "self-hating" in Rogers' love of China and panning of
> the U.S. It's true that this country has problems--until you see
> China's!
China had much worse problems 30, 20, 10, 5, or 2 years ago. The point is they adressing many problems and are facing lesser problems and have accumulated more and more resources and capacities to address their new problems.
The key is not how many and how bad their current problems are, but that they are, and have been improving at a very fast face and there is no sign this is ending.
On Aug 03 04:25 PM Graham and Dodd Investor wrote:
> Something of "self-hating" in Rogers' love of China and panning of
> the U.S. It's true that this country has problems--until you see
> China's!
Telling China to spend more money is ludacris. It's what got us into the problem. Telling them how to run their economy is insulting.
regards
and
Kudos to Margaret Brennan. She has left CNBC (or perhaps was asked to leave, who knows?) and joined a "real" business news network. See folks, it is never to late to restore ones integrity after selling your soul to the likes of CNBC.
Bravo Margaret!
Large scale infrastructure buildups are never self financing. Look at the slew of failed Great Lakes canal projects in the 1800s, followed by the giveaway of huge amounts of land and money to Cdn and US railroad builders. The Panana Canal bankrupted 2 (I think) French consortiums before the Americans came in and finished it. But all of these financially failed efforts have one virtue in common: they left behind built up real infrastructure.
I think China is aware of this history and is not too concerned that the present generation of developers may very well go bankrupt, but they will leave behind all the infrastructure they built. These "Condo Cities" can then be sold at grossly reduced bankruptcy pricing that the rising Chinese middle class will be able to afford.
China is still a communist country. It was Marx who noted that capitalism is a necessary stage in evolution towards 'ultimate socialism', because capitalism is the best way to build up the means of production. Unleash the animal spirits of your capitalists with the prospect of profits and they will build. Hey, it works for me.
And yes, Chinese banks will become just as insolvent as US banks currently are, but that does not mean you have to dissolve them and shut them down if bank closures does not suit your policy goals. A one party state does not have to support the illusion that their financial system is built on anything more solid than hope for the future, so there is no problem allowing failed banks to stay in business with downgraded asset values. Insolvency only 'causes' bankruptcy if regulators choose that route.
The US is trying to revive the solvency ruse by reviving asset prices by reviving borrow and spend, but you cannot revive a structurally bankrupt financial system by issuing more debt. That's just kicking the can down the road, which is not to say that the can cannot be kicked down the road for a very long time still, to protect the current holders of wealth from realizing losses and facing bankruptcy.
My point is that it looks to me like China is following the same paths that successful capitalist economies used to build themselves up. As students of this history they must know that busts follow the booms and bankruptcies reset prices and ownership of assets. I think this is all part of China's long term game plan to build up their 'means of consumption' and create a domestic consumer economy and become an economic powerhouse like the US.
That being said, the Chinese economy will perform just fine until the bill comes due. It might even be worth buying some stocks, but be prepared to sell fast if things turn around.
www.wealthalchemist.co.../
finance.yahoo.com/echa...;range=1d
It is for each of us to decide if a huge Chinese advocate that missed a 69.96% explosive market up move would then appropriately pontificate on others’ ineptitudes. Perhaps it is on point to suggest that stating quick to criticize and slow to praise (except of course relating to personal actions) is a pathognomonic marker of Jim’s persona!
On Aug 03 06:26 PM XPP wrote:
> China has lower corporate taxes than the US my friend! Capital will
> flow to China and away from the US. Socialism has never created wealth
> for its citizens. China knows the US Gov't is printing its way to
> total failure.
On Aug 09 11:16 AM jse17 wrote:
> Every investor’s “best friend,” Ole Jim, admittedly has not purchased
> Chinese equities since 11/2008 (date not specified). From 12/01/2009
> until 09/07/2009, the Chinese iShares, FXI, index increased 69.96%.
>
>
> finance.yahoo.com/echa...;range=1d
>
> It is for each of us to decide if a huge Chinese advocate that missed
> a 69.96% explosive market up move would then appropriately pontificate
> on others’ ineptitudes. Perhaps it is on point to suggest that stating
> quick to criticize and slow to praise (except of course relating
> to personal actions) is a pathognomonic marker of Jim’s persona!
On Aug 09 11:16 AM jse17 wrote:
> Every investor’s “best friend,” Ole Jim, admittedly has not purchased
> Chinese equities since 11/2008 (date not specified). From 12/01/2009
> until 09/07/2009, the Chinese iShares, FXI, index increased 69.96%.
>
>
> finance.yahoo.com/echa...;range=1d
>
> It is for each of us to decide if a huge Chinese advocate that missed
> a 69.96% explosive market up move would then appropriately pontificate
> on others’ ineptitudes. Perhaps it is on point to suggest that stating
> quick to criticize and slow to praise (except of course relating
> to personal actions) is a pathognomonic marker of Jim’s persona!
IF he
> was heavily invested in China as of last November, then he has presumably
> prospered mightily through the ensuing rise of more than 70%. <br/>
Yes and IF pigs had wings there are those that would insist we call them eagles! Additionally and consistent with your argument, IF Ole Jim was heavily invested in China as of last November, most assuredly, he would be the first to announce his financial coup!
On Aug 09 11:16 AM jse17 wrote:
> Every investor’s “best friend,” Ole Jim, admittedly has not purchased
> Chinese equities since 11/2008 (date not specified). From 12/01/2009
> until 09/07/2009, the Chinese iShares, FXI, index increased 69.96%.
>
>
> finance.yahoo.com/echa...;range=1d
>
> It is for each of us to decide if a huge Chinese advocate that missed
> a 69.96% explosive market up move would then appropriately pontificate
> on others’ ineptitudes. Perhaps it is on point to suggest that stating
> quick to criticize and slow to praise (except of course relating
> to personal actions) is a pathognomonic marker of Jim’s persona!
On Aug 09 11:53 AM nmelendez wrote:
> I am also bullish on China. However i am not heavily invested in
> China....yet. Remember, this is a cycle Bear. Waiting for a bottom
> when Dow hits 5000. Then i am in.