odin

Debate Continues About the Validity of China's Economic Data

There is a lot more unity in views that the market is bubbling but are quite a few unanswered questions re: who is speculating in these markets. The more interesting questions are what happens after there is a large correction in China. I dont claim to have the answers but the right questions are just as important.

If the Shanghai market unravels, will there be contagion effects in commodities and real estate in Asia (undoubtedly)? Will this contagion spread to neighboring or other emerging markets (shades of the Asian crisis)?

And what impact will this have on local population (esp. if the average Wang or Lee has been speculating in these markets and borrowing to fund his position)? Unrest in China? Military adventurism in the Pacific?

What about the impact on US retailers whose profits are largely derived from labor arbitrage (Walmart)? What impact on consumers who have gotten used to cheap goods?