OldLimey

Can China's Raging Bull Market Last?

China bulls need to get a grip. Yes, China is going to be of growing importance going forward. But in the here and now, just consider:

1. Chinese statistics are not universally considered to be reliable.

2. The 'China can lead us anywhere' crew are forgetting the flaw in decoupling theory: China still has far too much industrial capacity targeted at the US consumer. This can change over time, but not in just a few months.

3. The specialist aerospace press reported a few months back on (well-corroborated) comments from the top of a leading Chinese company that had been compelled to borrow the equivalent of $35 billion for which it had no use. Probably not a unique example of the purported 'efficiency' of stimulus allocation.

Just as the US 'Goldilocks economy' only impressed the gullible or folks looking for something to be impressed by, we also need to be suspicious of the news out of China. Supertankers don't turn on a yuan, and anybody who can brush off this truism by pointing to the benefits of central planning under crisis conditions is not old enough to have had initimate experience of communist economies and certainly doesn't know today's China.

BRIC or CRIB?

"Often the markets lack the kind of transparency that many Western investors are familiar with, even given the financial crisis."

Wouldn't be talking about the type of transparency we see in the S&P ES half an hour before opening, and on the SPX when the stick-save special decides to run in the afternoon, would you? As for GS, they might well have invented the BRIC acronym to sell a story, but compared to what they do to (not 'in', but 'to') US markets every trading day that's a pretty insignificant 'crime'.

Global Stock Markets: Valuations Improving

The shallowest post I´ve read from a contributor who usually does very much better. BTW, can´t see the interest in trailing PEs and historic dividend yields in an environment where both earnings and dividends are seriously open to doubt going forward.