Thomas Wagner

ETF Billion Dollar Club Gets Smaller: May 2009

I suspect that the FED's plunge protection team is also keenly aware of the above. Take a look at the IYR/SRS and SKF on a day like today with the market down 140pts and interest rates rising on the long curve neither SRS or SKF are showing any upside movement. Now who do you think may be in buying today to support these?????. I think uncle ben and company have fiqured out they can short circute the shorts by taking the opposite side of there leverage trading vehicles

China's Growth Is No Miracle

I spent seven years traveling to China as part of my investment advisory and trading practice. While i do agree with the author about the potential negatives of Chinese bank lending, i do not agree with his assertion that millions have migrated to the cities and are now starving and out of work. My contacts in several provinces have confirmed that small company loan growth, personal income's and the general standard of living continues to rise in China, despite the slow down in exports. I also cannot ignore the logic of XIN post above. Sounds like he or she is chinese and has a first hand knowlege of China. The fact that China does control the banks and influences SOE capital spending plans does give it a more efficient mechanism to stimulate growth through monetary and fiscal policy. To a certain extent China is in a sweet spot. If it wants to stimulate activity it still controlls the SOE's as well as the Banks. At the same time it has had the benefit growing millions of private enterprises over the last 15 years that now dominate its domestic economy. That being said, directed economies are usually the most inefficient allocators of capital. Im hoping that the Chinese gov't has learned its lesson when it comes to directing production. The best way for China to ensure a stable domestic growth is to make capital avaliable to the small and medium private enterprises that now dot the landscape and dominate the creative talent in China. Pension reform and medical insurance company regulation would go a long way in providing a safty net for that segment of the Chinese population that is still saving instead of spending.

China: Exports vs. Domestic Demand, The Argument Rages

Hi Michael: As always a great article. Having traveled a good all over the interior or China, my observations are somewhat different than the last poster. I continue to believe that small businesses are alive and well and thriving in most of China, especially in the interior provinces such as Sichuan.

My home base of operations is Chengdu China. My local banking contacts continue to claim that smal loan growth in the 1MM -2MM RMB range continues to grow by double digits. A recent discussion with a middle market lender at Bank Of China also confirms that loan growth is through the roof in Chengdu.

In my travels throughout china it has always been the small business growth that has amazed me. What are you observations, if any, about the small business growth in China and its role in increasing domestic consumption.

Why China Will Continue to Buy U.S. Treasuries

I wrote about this senario several months ago and at the time no one believed that the chinese would contemplate selling there Treasuries. I see them trading them for commodities and investments in latin america and africa. I continue to be amazed at the sheer audacity of the Americans who state " they have to buy, were are they going to go". If this continues were on track for 14% interest rates and double digit inflation. A Chinese sell off of treasuries will make the 1974 oil shock look like a walk in the park.

China: Analyzing Trade, CPI Numbers

GDP = C+I+G+(x-m) consumption plus investment, plus government spending,plus imports- exports or net exports.

I just dont see consumption and government spending growing at a rate necessary to offset the drop in exports.

The real question is will china also suffer from a global "margin call" as foreign fixed direct investment slows to a crawl. I think we are already seeing a net outflow of funds from the residential real estate market in the eastern cities as this was a no brainer one way trade for foreigners.

It's 1974 for the U.S., but 1929 for China

Fran; I find your interpleading somewhat unusual. I was trying to give Mr. Cooper every opportunity to present the foundation for his research. As stated in my comment, I have been and continue to be in direct contact with many associates in China. So my research is based on first hand direct knowledge not recycled research or reliance on Chinese state published figures. I would like to know if Mr. Cooper, or anyone else has some quantifiable research that could give us all a better picture of what is going on in china. As for my position at "Baruch" I ran the fiancial programs and CFP program at there CAPS division. I also trained a large part of Bank Of New York and UBS private banking staff while running my practice which included several months a year in China. I also have a very large family in China since my wife is Chinese. Any hard evidence on what in fact is going on in china is always welcome.

China Punishes FXP Holders

looks to me like a nice 4th wave counter trend trade, you will note that we have had a very well defined fall over the last year. Im waiting for the 5th wave wash out that should start if we are not able to get and stay above the 50 day mavg. One question, why close the trade now, id run a trailing stop right under the 50 day ???

It's 1974 for the U.S., but 1929 for China

Hello Peter; I am a fellow blogger on this site. I have spent a great deal of time in china, mostly in Chengdu Sichuan. I have developed contacts in 37 cities in china and have frequent contact with them. There have been bankrupt companies in Guangzhou particularly in the toy and low end fashion industries, however the rest of the economy seems to be pretty vibrant. Can you provide us with some source material or references about your observations about what is going on in china ????. Do you have contacts within china or is your article based on second hand information?? In short the best argument would be to disclose you sources and your outstanding trading postions if any
Thanks
Tom Wagner CFP
Quantitative Advisors Inc
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