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Chinese Checkers !

|Includes: BAC, The Blackstone Group L.P. (BX), C, SHA

Do you remember when you were young.  My Uncle would play checkers with me and we had great time at Lake Winnipesaukee.  Then he showed me Chinese Checkers.  What a weird board with all these marbles instead of checker pieces.  The variables were far more numerous than in the regular game.  Not so straightforward.

I think that in Government and Finance what we are looking at in China is the difference between regular checkers and chinese checkers.  We know the rules of how we play the game.  They know the rules of how we play the game.  But, only the Communist Chinese know the internal rules of how to play Chinese Checkers when it comes to finance in China.  This is ok when things are going well.  But, when there is a problem.  Instead of losing money.  There maybe a knock at your door and some Internal Police Agent may want to visit with you if your trading inside China.  Look at the Rio Tinto executives. 

It is easy to forget that China is not free.  This is not saying its bad or good.  That is for another story.  But, the Chinese economy is humming if the US and EU are busy buying things.  The bulk of Chinese in rural areas and provinces are not going to be buying consumer goods anytime soon.  The cities are where the financial action is.  Leave the city and there is mass poverty and low income.  The people in these areas are pretty happy folks.  But, they do not have the ability to earn more.  So the real up side of the Chinese Economy is not so good. 

Obama wishes he had control of all business and government like China has over every aspect of life in China.  He is doing his best to acquire that power.  But, China has the power already.  And one thing about power.  Once they got it, they do not give it up easy. 

Bottom thought - When your investing in China.  Use money you have already taken off your balance sheet.  Then when this happens you will or can just say - " Oh Well !  That was fun ! "  

Disclosure: c