doubleshortetf

China in a Bubble?

Can China with 1/3 US GDP will save the world?

I've been to China over 30 times since 1998 while working for 3 multinationals. It's amusing to see "experts" who has not been to China or spent few days in the big Chinese cities recommending Chinese stocks... Wonder if they ever spent weeks at a time in gritty factory towns or poor interior areas...

And Xie is right - Chinese market is indeed a ponzi scheme and gambling den where the "house" is CCP (Chinese Communist Party).

Some sober FACTS:

1. China is a communist country ruled by 1 party with iron grip. CCP party bosses appoint the national/regional/local politicians and many private company managements since many private companies are ex-SOE (state owned enterprises).

2. Corruption in China is prevalent, rampant and one of the worst even down to lower ranking employees. For example, factory canteen worker receives an "envelopes" in scheme where he claims he received 10 bags of rice when only 8 bags are delivered.

3. There is almost no "law" since laws are written to support the communist party or corrupt local communist bosses. Judges are appointed by the local communist boss and few if any understand law. Many judges got job thru "guanxi" or connection and of course bribes.

4. The Chinese banks in are BIG TROUBLE. E&Y got in heaps of trouble for discussing hidden bad and noncollectable debts. Local communist cadres dictate banks to lend to their pet projects and of course friends who bribe them not to mention COMPLETE lack of transparency.

5. No one except pea size brains trusts the communist government's statistics which are MANIPULATED.

6. Many of the listed companies numbers are COOKED. Auditors and their management can be bribed and extorted. It's beyond me how anyone would trust Chinese companies' financials unless audited by Big 4. And even Big 4s audited numbers are suspect since most Chinese companies carry multiple books including one for taxation and another with slush funds and hidden losses.

7. Latest Chinese share and commodity appreciation have lot to do with communists pumping money to the economy by directing the banks to lend. This kind of stimulus cannot go on.

Now is good time to buy FXP when all the investment gurus in unison are recommending Chinese stocks and even "taxi drivers" and clueless herd investors believe China with 1/3 US GDP will save the world.

China's Economy: All GDP Is Not Created Equal

Any of you fond of China been to China? You really think China with 1/3 US GDP will save the world?

I've been to China over 30 times since 1998 while working for 3 multinationals. It's amusing to see "experts" who has not been to China or spent few days in the big Chinese cities recommending Chinese stocks... Wonder if they ever spent weeks at a time in gritty factory towns or poor interior areas...

And Xie is right - Chinese market is indeed a ponzi scheme and gambling den where the "house" is CCP (Chinese Communist Party).

Some sober FACTS:

1. China is a communist country ruled by 1 party with iron grip. CCP party bosses appoint the national/regional/local politicians and many private company managements since many private companies are ex-SOE (state owned enterprises).

2. Corruption in China is prevalent, rampant and one of the worst even down to lower ranking employees. For example, factory canteen worker receives an "envelopes" in scheme where he claims he received 10 bags of rice when only 8 bags are delivered.

3. There is almost no "law" since laws are written to support the communist party or corrupt local communist bosses. Judges are appointed by the local communist boss and few if any understand law. Many judges got job thru "guanxi" or connection and of course bribes.

4. The Chinese banks in are BIG TROUBLE. E&Y got in heaps of trouble for discussing hidden bad and noncollectable debts. Local communist cadres dictate banks to lend to their pet projects and of course friends who bribe them not to mention COMPLETE lack of transparency.

5. No one except pea size brains trusts the communist government's statistics which are MANIPULATED.

6. Many of the listed companies numbers are COOKED. Auditors and their management can be bribed and extorted. It's beyond me how anyone would trust Chinese companies' financials unless audited by Big 4. And even Big 4s audited numbers are suspect since most Chinese companies carry multiple books including one for taxation and another with slush funds and hidden losses.

7. Latest Chinese share and commodity appreciation have lot to do with communists pumping money to the economy by directing the banks to lend. This kind of stimulus cannot go on.

Now is good time to buy FXP when all the investment gurus in unison are recommending Chinese stocks and even "taxi drivers" and clueless herd investors believe China with 1/3 US GDP will save the world.

China's Economy: All GDP Is Not Created Equal

How can a country where 83% or little over a billion people live with income less than $2,000 be heading to middle class?

Some sober data on China for investor (speculators) fascinated with China - 3rd world country ruled by 1 party - communist. Similar to the adoration US had for Japan 20 yrs ago right before the mother of all Japanese bear markets starting in 1989.

China would have to triple the size of its economy - and the US would have to stand still - if China were to pull even with the US in GDP.

Consider the following numbers, culled from official Chinese statistics:

1. About 65 million or 5% Chinese people live in households with more than $20,000 a year in income.
2. Around 165 million or 13% make between $2,000 and $20,000 a year.
3. About 400 million or 31% Chinese have household ­incomes between $1,000 and $2,000 a year.
4. About 670 or 52% million have household incomes of less than $1,000 a year.

As you see China is a land of extra­ordinary poverty.

And some dreamers to think that China can pull US and the world out of financial rut...

China Becoming a 'Middle-Class' Nation

How can a country where 83% or little over a billion people live with income less than $2,000 be heading to middle class?

Some sober data on China for investor (speculators) fascinated with China - 3rd world country ruled by 1 party - communist. Similar to the adoration US had for Japan 20 yrs ago right before the mother of all Japanese bear markets starting in 1989.

China would have to triple the size of its economy - and the US would have to stand still - if China were to pull even with the US in GDP.

Consider the following numbers, culled from official Chinese statistics:

1. About 65 million or 5% Chinese people live in households with more than $20,000 a year in income.
2. Around 165 million or 13% make between $2,000 and $20,000 a year.
3. About 400 million or 31% Chinese have household ­incomes between $1,000 and $2,000 a year.
4. About 670 or 52% million have household incomes of less than $1,000 a year.

As you see China is a land of extra­ordinary poverty.

And some dreamers to think that China can pull US and the world out of financial rut...

Housing Bottom - Oh Really?

Jeff,

Care to point out my "half truths"?

And yes I've been to interior cities and villages and things are getting pretty dicey everywhere. Have you been to China lately? Have you been to any gritty factory and dusty towns?

Dong Guan the world's factory between Shenzhen and Guongzhou lacked the hustle & bustle and vibrancy in the towns and tons of migrant and laid off factory workers waiting for buses holding tight to their bags. It's getting so bad that I hear workers are giving bribes to their supervisors and for some female worker their body. And sadly lots of suicides. Lots of petty crimes even in Shenzhen and I dared not leave my hotel room by myself at night. Some fancy Cantonese restaurants and even KTVs are closing due to lack of customers.


On Sep 11 12:43 PM Jeff Nielson wrote:

> Doubleshort,
>
> A classic example of half-truths. You claim to have been to China
> 30 times, but have you ever visited its INTERIOR cities (which have
> few, Western visitors)? The Chinese government, itself, acknowledges
> that its coastal, export-oriented "first-tier cities" are only experiencing
> 1% GDP growth.
>
> And don't start yammering about "falling exports to the U.S." Prior
> to the collapse, total Chinese exports to the U.S. AND Europe comprised
> less than HALF of all China's exports.
>
> China has a one-party dictatorship? The U.S. has a two-party dictatorship.
> What's your point?
>
> As for U.S. GDP versus China's GDP, those who have taken my previous
> advice and enlightened themselves through viewing Chris Martenson's
> superb "Crash Course" could tell you that $2 trillion per year of
> annual U.S. GDP is nothing but statistical padding - non-economic
> activity, where no transactions are taking place.
>
> The rest of the GDP is built upon borrowed money. Period. $57 TRILLION
> in accumulated debt - and growing exponentially. The U.S. is now
> slowly being cut off of credit from foreign governments. This leaves
> two possibilities, either an EXTREMELY painful (but necessary) debt-meltdown
> (which would then set the stage for a REAL recovery), or, hyperinflation
> and THEN a painful debt-meltdown. All indications are the U.S. government
> is going with "Plan B".
>
> As for your data from China, again, nothing but half-truths. As I
> pointed out in a comment earlier this week, wage data WITHOUT cost-of-living
> data tells us NOTHING about relative levels of wealth.
>
> As I also pointed out, if China borrowed $57 trillion, they could
> pump-up those incomes awfully fast - through inflation, as was done
> in the U.S. Since the Federal Reserve was created a century ago,
> the USD has lost 97% of its value, meaning that the NOMINAL level
> of U.S. wages has little meaning.

Housing Bottom - Oh Really?

China is considering bailing out of bad derivatives bet?

China is notorious for corruption and the CCP (Chinese Communist Party) ignoring and bending the rules to weasel out of bad financial bet made by SOE (state owned enterprises).

From Reuters couple of days ago:

Beijing's derivative default stance rattles banks

"It's like the father suddenly told the creditors of his debt-ridden son that his son won't pay any of his debt," said a lawyer from the derivatives risks committee of the Beijing Lawyers Association."

* State-owned firms may default on commodity hedges - report
* Bankers dismayed, confused by report; seek more details
* Lawyers question legality of the move
* Traders suspect lurking losses may have prompted warning

Just walk away from bad bet SOEs made hedging. Talk about bunch of unruly cowards...

This is the very government you China fans "invest" in where the corrupt CCP changes rules in blatant mockery of international law and not honoring contracts.

Housing Bottom - Oh Really?

Been to China over 30 times since 1998 while working for 3 multinationals. It's amusing to see "experts" who has not been to China or spent few days in the big Chinese cities recommending Chinese stocks... Wonder if they ever spent weeks at a time in gritty factory towns or poor interior areas...

And Xie is right - Chinese market is indeed a ponzi scheme and gambling den where the "house" is CCP (Chinese Communist Party).

Some sober facts:

1. China is a communist country ruled by 1 party with iron grip. CCP party bosses appoint the national/regional/local politicians and many private company managements since many private companies are ex-SOE (state owned enterprises).

2. Corruption in China is prevalent, rampant and one of the worst even down to lower ranking employees. For example, factory canteen worker receives an "envelopes" in scheme where he claims he received 10 bags of rice when only 8 bags are delivered.

3. There is almost no "law" since laws are written to support the communist party or corrupt local communist bosses. Judges are appointed by the local communist boss and few if any understand law. Many judges got job thru "guanxi" or connection and of course bribes.

4. The Chinese banks in are BIG TROUBLE. E&Y got in heaps of trouble for discussing hidden bad and noncollectable debts. Local communist cadres dictate banks to lend to their pet projects and of course friends who bribe them not to mention COMPLETE lack of transparency.

5. No one except pea size brains trusts the communist government's statistics which are MANIPULATED.

6. Many of the listed companies numbers are COOKED. Auditors and their management can be bribed and extorted. It's beyond me how anyone would trust Chinese companies' financials unless audited by Big 4. And even Big 4s audited numbers are suspect since most Chinese companies carry multiple books including one for taxation and another with slush funds and hidden losses.

7. Latest Chinese share and commodity appreciation have lot to do with communists pumping money to the economy by directing the banks to lend. This kind of stimulus cannot go on.

Now is good time to buy FXP when all the investment gurus in unison are recommending Chinese stocks and even "taxi drivers" and clueless herd investors believe China with 1/3 US GDP will save the world.

Housing Bottom - Oh Really?

Seriously, you really believe China will lead the way with "dynamic econoly"? Sorry I do not see it in person as having been to China 30 plus times since 1998. My contacts in south China export factories are really hurting.

Some sober data on China for investor (speculators) fascinated with China - 3rd world country ruled by 1 party - communist. Similar to the adoration US had for Japan 20 yrs ago right before the mother of all Japanese bear markets starting in 1989.

China would have to triple the size of its economy - and the US would have to stand still - if China were to pull even with the US in GDP.

Consider the following numbers, culled from official Chinese statistics:

1. About 65 million Chinese people live in households with more than $20,000 a year in income.
2. Around 165 million make between $2,000 and $20,000 a year.
3. About 400 million Chinese have household ­incomes between $1,000 and $2,000 a year.
4. About 670 million have household incomes of less than $1,000 a year.

As you see China is a land of extra­ordinary poverty.

And some dreamers to think that China can pull US and the world out of financial rut...


On Sep 11 11:16 AM Jeff Nielson wrote:

> Nickelman, the U.S. has the world's largest economy and is clearly
> on the way down. China has the world's most dynamic economy, and
> is clearly on track to replace the U.S.
>
> Meanwhile, we are in the midst of the greatest global financial crisis,
> making gold and silver both popular and necessary investments in
> every portfolio.
>
> I don't create the news, I report it.
>
> What am I expected to do, write about the world's smallest economies,
> and talk about the tungsten market? Lol!

Housing Bottom - Oh Really?

Well I lived thru housing collapse in southern California 90's from 1990 to 1995. It took 5 years for the price to bottom after couple of "false" rises only to fall lower (kind a like lower highs on low trend line). Another 2 years for price to stabilize and began to appreciate in 1997. In other words took 5 to 7 years and we're 3rd year into this mess.

Friends though they got bargain buying from bankrupt builder in 1992 and another bought their dream house in 1993. They were dismayed to see prices fall another 10% or more and in those days you had to put down at least 10%. My townhouse which I bought in 1989 for $146k went as low as $105k in 1994. I seriously considered short sale seeing few homeowners walk away.

Bottom was in 1995 when 1 of 3 homes we looked at as newly wed empty in desirable Irvine. We bought new standing inventory from builder which was priced lower than existing homes. It took 2 years or 1997 until price crept up again.

That said mid 90's housing market in southern California market did not have the no down or interest only or liar loan issues or horrendous foreclosures. Local economy was in doldrums due to defense cutbacks but not as bad now.

Therefore I think we're into 5th inning of this pain and worst is yet to come in next 2 plus years with interest resets and 5/1 and 7/1 interest only loans going sour.

The Rise and Rise of China

Good points and observations snagglesnarf. I've been to China about 30 times since 1998.

Which town in DG were you in? I spent weeks at a time in Houjie (near DG city), Changan and Tangxia on the other side, and weekends in Changping. Spent most of my time in Baoan and Shenzhen. Alsos spent time in Zhuhai and JIangmen. Highlight for me from the long hours in hot and dusty factory towns were evening foot massages and KTVs - I recognize popular songs since I spent every other night at KTVs.

DG lacked the hustle & bustle and vibrancy in the towns and tons of migrant and laid off factory workers waiting for buses holding tight to their bags. It's getting so bad that I hear workers are giving bribes to their supervisors and for some female worker their body. And sadly lots of suicides. Lots of petty crimes even in SZ and I dared not leave my hotel room by myself at night. Some fancy Cantonese restaurants and even KTVs are closing due to lack of customers.

That said, Chinese export engine slowed down quite a bit and locals folks are not spending.

And now we have bunch of pundits here trumpeting China arising...

The Rise and Rise of China

Some sober data on China for investor (speculators) fascinated with China - 3rd world country ruled by 1 party - communist. Similar to the adoration US had for Japan 20 yrs ago right before the mother of all Japanese bear markets starting in 1989.

China would have to triple the size of its economy - and the US would have to stand still - if China were to pull even with the US in GDP.

Consider the following numbers, culled from official Chinese statistics:

1. About 65 million Chinese people live in households with more than $20,000 a year in income.
2. Around 165 million make between $2,000 and $20,000 a year.
3. About 400 million Chinese have household ­incomes between $1,000 and $2,000 a year.
4. About 670 million have household incomes of less than $1,000 a year.

As you see China is a land of extra­ordinary poverty.

And some dreamers to think that China can pull US and the world out of financial rut...

The Shanghai Market Calls the Tune

China is considering bailing out of bad derivatives bet?

China is notorious for corruption and the CCP (Chinese Communist Party) ignoring and bending the rules to weasel out of bad financial bet made by SOE (state owned enterprises).

From Reuters couple of days ago:

Beijing's derivative default stance rattles banks

"It's like the father suddenly told the creditors of his debt-ridden son that his son won't pay any of his debt," said a lawyer from the derivatives risks committee of the Beijing Lawyers Association."

* State-owned firms may default on commodity hedges - report
* Bankers dismayed, confused by report; seek more details
* Lawyers question legality of the move
* Traders suspect lurking losses may have prompted warning

Just walk away from bad bet SOEs made hedging. Talk about bunch of unruly cowards...

This is the very government you China fans "invest" in where the corrupt CCP changes rules in blatant mockery of international law and not honoring contracts.

The Shanghai Market Calls the Tune

CCP (Chinese Communist Party) is looking for sucker foreigners to pile in and sustain the bubble. Thus they've just increased investment quota's for foreign funds by 25%. Talk about impeccable timing...

From Bloomberg:

“We have raised the limit for each fund to $1 billion within the current total $30 billion size of all funds to encourage more good investors to come in,”

Got to give credit to CCP coots to invite the "foreign devils" suckers into the greatest gambling den where the house is CCP. And there will be plenty to see all these fools who think China will save the world from economic calamity. Don't they know China's GDP per capita is 3rd world?

Did Chinese Government Stimulus Drive the Latest Rally?

CCP (Chinese Communist Party) is looking for foreigners to pile in and sustain the bubble. Thus they've just increased investment quota's for foreign funds by 25%. Talk about impeccable timing...

From Bloomberg:

“We have raised the limit for each fund to $1 billion within the current total $30 billion size of all funds to encourage more good investors to come in,”

Got to give credit to CCP coots to invite the "foreign devils" suckers into the greatest gambling den where the house is CCP. And there will be plenty to see all these fools who think China will save the world from economic calamity. Don't they know China's GDP per capita is 3rd world?

Some sober data on China for investor (speculators) fascinated with China - 3rd world country ruled by 1 party AKA communist. Similar to the adoration US had for Japan 20 yrs ago right before the mother of all Japanese bear markets starting in 1989.

China would have to triple the size of its economy - and the US would have to stand still - if China were to pull even with the US in GDP.

Consider the following numbers, culled from official Chinese statistics:

1. About 65 million Chinese people live in households with more than $20,000 a year in income.
2. Around 165 million make between $2,000 and $20,000 a year.
3. About 400 million Chinese have household ­incomes between $1,000 and $2,000 a year.
4. About 670 million have household incomes of less than $1,000 a year.

As you see China is a land of extra­ordinary poverty.

And some dreamers to think that China can pull US and the world out of financial rut...

I'm Slowly Rebuilding My Chinese Position

Some sober data on China for investors fascinated with China - 3rd world country ruled by 1 party AKA communist. Similar to the adoration US had for Japan 20 yrs ago right before the mother of all Japanese bear markets starting in 1989.

China would have to triple the size of its economy - and the US would have to stand still - if China were to pull even with the US in GDP.

Consider the following numbers, culled from official Chinese statistics:

1. About 65 million Chinese people live in households with more than $20,000 a year in income.
2. Around 165 million make between $2,000 and $20,000 a year.
3. About 400 million Chinese have household ­incomes between $1,000 and $2,000 a year.
4. About 670 million have household incomes of less than $1,000 a year.

As you see China is a land of extra­ordinary poverty.

And some dreamers to think that China can pull US and the world out of financial rut...