odin

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    • How Not To Trade the Chinese Earthquake [view article]
      Weng... my sympathies if you have been affected personally by the earthquake. Even if you havent, it is undoubtedly a tragedy -- for China and the world.

      However, it is important to also remember that the world doesnt stop (as it hasnt for any other tragedy in the past...). Which is a good thing in my mind. Industrious people go about and do their job rather than getting paralyzed. Even those who suffer because of the tragedy are better off BECAUSE of such an attitude. (imagine if rescue workers were paralyzed instead of doing their job). While there is a mourning period in China, life has not stopped (The exchange is open..companies affected by the quake are still being bought and sold). Again, a good thing.

      Now, as the point of "profitting off the earthquake": many people here invest as a profession. It is their JOB to look at situations objectively. One wouldnt doubt the planners in Zhong Nan Hai (or rescue workers) if they had to make hard decisions about who lived and who died in the midst of the tragedy nor should one fault investors here. Without knowing someone personally (there are many I know, who do trade dispassionately but are the first ones to contribute physically and financially in situations like these), I'd be hardpressed to pass a judgement like that and demand that analysis and opinions be stopped.       May 22 10:30 AM
    • New Currency ETFs - Give Them Some Time [view article]
      Its my impression that the currencies are held in NDF form (non-deliverable futures). i.e. you cant demand payment in the actual currency.

      While I dont know about the structure underlying the NDF (how are these issuers hedging? are they buying CNYs?) What this means is that during periods of high demand (rush into CNYs), they will likely incoporate some of the expected appreciation and trade at a premium fx rate. When everyone is selling, I expect a big discount.

      There are too many unanswered questions as to what one actually owns. What happens if convertibility is restrictred/suspended?       May 14 04:42 PM
    • China: April CPI Comes In Higher Than Expected [view article]
      Any natural disaster like this is a tragedy and it looks like the toll in terms of life and property will be higher than the first guestimates. However, I dont think it is quite on the order of the 1995 Kobe quake. Chongqing is also inland, away from major export ports so relatively speaking I doubt that the actual damage will be significant.

      However, if you try to guess at the sentiment and the impact on the market, you could flip a coin.       May 12 04:45 PM
    • China: Latest Indexes Indicate Inflation [view article]
      MP, re: convertibility, I dont doubt at all that most of the currency flow does happen under the radar -- but my concern was more from the perspective of foreign investors who invest in China thru the NDF instruments.

      Under the covers, I have no idea how the banks pitching NDFs structure the instrument (and how they hedge it). But I suspect if convertibility is tightened, even if the RMB revalues, there will be a significant discount applied to the NDF conversion (just as there is a premium now).

      And while you arent advocating specific investments, I'm sure many readers look at your articles from an investment perspective. My feeling is that related currencies will undergo a knock-on effect after a RMB revaluation (particularly HK, to some degree Singapore) and generally involve a lot less risk than participating in the RMB hot money flows.       May 12 02:41 AM
    • China: Latest Indexes Indicate Inflation [view article]
      What measures are really available to the authorities to control the hot money flows? (Esp. if its difficult to trace them). Plus, with the flow of people in for the Olympics, will this not be doubly hard?

      I suppose they could suspend/toughen convertibility at some point post the Olympics, but I'm not sure how you can fight fundamentals.       May 09 08:50 PM
    • Who Is Benefiting From High Commodity Prices? [view article]
      Isnt the picture more nuanced than that in the credit card space?

      If inflation spikes and the economic picture worsens, the transaction processors (MA, V) may benefit in the short run, but that is only fuelled by the fact that the banks who issue the credit are willing. When the chickens of delinquency come home to roost under a prolonged downturn, its hard to see how they will benefit.

      Under an inflationary environment, creditors usually suffer, debtors paying with cheaper money benefit.

      But its not clear to me that we can paint this as an inflationary environment with one brush. Its clear that cons staples (due to both supply/demand and speculation) will continue to face inflationary pressures (even after today's pullback). Its not clear whether durables are undergoing deflation.       May 01 03:42 PM
    • What Today's Drop in the China Market Could Mean [view article]
      citi, chinesepetti et al.: if you find fault with the article, criticise the message with hard facts...or better yet, given your location, comment on local opinion and sentiment, but there is no reason to say bad things about the messenger personally.

      as you can see from these comments, your message makes people assume you have nothing useful to say. you lose face everytime you post these empty messages. people may assume that you know nothing and lie about everything (even some that might be true).

      readers:
      its possible that some people undoubtedly have been at the wrong end of the 2008 selloff and it gets personal....but whats curious based on some of many comments i've seen about china and the immediate rebuttals dragging in the us or iraq or at one point nazism (in retaliation against a german poster) that this has taken a nationalist tinge for many chinese citizens. imagine putting up a spirited defense of value in the s&p500 just because you are american or the ftse because you are british!
      Apr 28 01:11 AM
    • What Today's Drop in the China Market Could Mean [view article]
      In a market like China's, govt manipulation (regulation, micromanagement etc) is a given. With the assumption that investors are not throwing up their hands and getting out of the business of china entirely, I think the more interesting question here the goals behind the regulation and secondarily, the short-term and more long-term effect of these policies bring.

      There is some consensus that the political appartus in China is obsessed with stability and its own survival. Issues surrounding Tibet, inflation, market drops, yuan valuation and the official responses to them all stem from the same worry. Even the Olympics, for all the hoopla as a coming out event, is about bread and circuses.

      The concern here is that the responses to the stock market decline -- even with all the technocratic prowess touted in Beijing -- have been rather short-sighted. Perhaps there was undue influence and self-serving advice from the middle layers of governance, since essentially there has been a transfer of wealth here to the insiders. But I would tend to venture that the government will be even more willing to support the market in the future because the ones who have bought into this retail frenzy are the so-called middle classes. The educated--perhaps not financially but still educated and world-aware--masses. I believe the government is most wary of this group. (though to me, its a group that most desires stability and is unlikely to protest too heavily). So much so that it appears the government has pushed forward these rules before the SMS-aided "protest" against market decline materialized. It leads me to believe that the government will further provide a cushion against major declines to prevent major dissatisfaction amongst the millions of investors here.

      However, the establishment doesnt just face a single challenge. From a ocean away, the rural population I feel is the biggest unknown in the government policy response. How will inflationary pressures, pollution, loss-of-land affect this population? How will they respond? If faced with greivances from this segment and a major backlash, how will the government respond? Will it still prioritize the urban investing population? Will it continue to encourage the stock market lottery? I think the government is most at risk from getting blindsided by the problems and actions of the rural population and so is the market.

      Apr 25 08:24 PM
    • The Google Economy [view article]
      Trying to understand the gist of this piece. Does economic environment no longer matter? Is it uncorrelated to ad revenues? I seem to remember hearing about how traditional metrics were irrelevant (eyeballs not revenues, they said) at another point long time ago.

      Ultimately, demand for ads stems from the fact that people want to BUY things. The ultimate ROI for an ad is an actual sale. While new media is better at targetting ads to relevant audiences, its ads are infinitely less memorable than a glossy travel mag ad. Those ads sometimes _generate_ demand where previously there was none. Not to say old way is superior, but blindly worshipping new media and GOOG in particular doesnt seem wise.

      The only point I'll make is that until there is some clarity about how much a click on GOOG leads to an actual sale and hence brings about permanent changes in marketing theories, I am not sure about the stickiness of these revenues and the growth forecasts on which GOOGs valuation is based.

      Disappointed that there hasnt been much focus on the non-US contribution to GOOG's revenues.       Apr 21 03:10 AM
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