Oh, so now JUST EVERYBODY is betting against Europe? News to my ears, that is.
There I was, minding my own business, leisurely sitting around the 9th floor, when one “Joe” of a certain “interior corporation” magazine flashes across my screen with a piece spelling out how “you just know everyone is betting against Europe here; time to fade them.”
Yeah, where were these people Monday? Or Friday??
Where were these people when the DOW was undergoing a 1,000+ point rally over the last three weeks???
But now after a one day selloff, we’re just a bunch of euro-bashing bearshitters, huh?
Everybody’s been just “dreadful” to those poor EU politicians. Nobody’s given them the benefit of the doubt at all. Never mind all the traders pumping the long side on the expectation a real solution would be reached this week.
And in addition to that, now people are spouting some garbage about “Chinese stimulus,” which is apparently to fill the skeptic void that’s building over any American stimulus here at home.
Yeah, that kickass Chinese stimulus, whereby they keep their currency nice and cheap while building empty cities and rails to nowhere. I’m sure that’ll help out the American stock market. Hey, weren’t a bunch of you betting on renminbi appreciation about this time last year?
How’s that working out for you?
Here’ the real deal; China is not letting its citizens sell their homes for less than what they bought them for…ever.
Nice move China, except if you’re a real estate laden Chinese business with no money left, this is the devil’s horn blowing in the wind. Hear the sound, drop dead.
I’m sure that, just like all the other awesome decisions of the infallible People’s Republic, this will be just dandy for the Chinese people.
If you’re a young and coming Chinese man, you have all the luxuries of modern society, including the ability to board a “state-of-the-art” missile which will then fire you down a track at 300 mph with zero safety mechanisms. On your trip, you can enjoy the great many sceneries of the Chinese nation, such as – empty cities – rice fields – and of course, – slave worker factories, on your way to the capital. Once arriving at Beijing, you can walk through polluted, crowded streets of people (feel free to step over dying infants, should you encounter any) while looking for an elusive job. Should you desire to settle down and have a family, while trying to make ends meet, you can be blessed by the beautiful and plentiful numbers of women in China – almost one for every six men. But wait, like most young men, you probably want a home for that young bride (who you’ll definitely meet if you just wait another month or so). So now you should go by yourself a first time house – which cannot be sold to you for any less than the inflated home prices that exist today, under penalty of law.
Ahh, spring time in Beijing…
Why, with policies like these, there’s just no way they don’t have 9.1% all-natural-definitely-not-fraudulent growth next quarter.
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You forgot to mention the lighthearted Communist television…..
“China plans to limit reality TV shows and other light entertainment fare shown on satellite television stations as part of a drive to wrest back Communist Party control over cultural industries that are fueling more independent viewpoints.”
http://hosted.ap.org/dynamic/stories/A/AS_CHINA_CULTURE_CURBS?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT&CTIME=2011-10-26-07-17-54
Well with this kind of backdrop, the US certainly looks better. Which is maybe why the market is “rallying”…its just everything else is much scarier.
We cannot hang out up here without global trade. Our trading partners are huge, without them we lose a huge portion of our economy.
Cain, do you have any link to the fact that Chinese properties cannot be sold for less …
thanks
http://www.businessinsider.com/it8217s-official-shanghai-bans-property-price-discount-of-20-or-more-2011-10
unbelievable shit
Didn’t you hear, fading is the new national pastime. But, one must always stay ahead of the curve. It is no longer good enough to fade sentiment and fading the faders is starting to become a populated trade as well.
In times like these one must go boldly where no man has gone before. We shall fade the faders who are fading faders fading the original sentiment.
It’s amazing how people can even go down this road and not realize that billion dollar hedge funds, the ones that can actually move the market, cannot flip their portfolios overnight at the whim of every short term sentiment change.
China today almost makes me miss Chairman Mao…
Cain- I agree that China is on a path of fallibility but it seems they can keep this going for a while given their reserves, political/trade factors aside. Note that CNY/USD has been steadily increasing but has not blown out http://yhoo.it/tzeFLy. There are some interesting points to ponder too. Consider food inflation is their greatest threat in the Chinese cpi which is largely out of control of their government given the price of pork bellies/rice/etc is traded on an organized international market. Wage inflation has been billowing higher over the years but the gap between asset prices, like houses, and annual gross income is so large that it causes families to save and achieve their “dream” (a house). This has the effect of removing superfluous item consumption and concentrates income earned into savings and bare necessities. If you have a population with a high savings rate and a situation where the rate of return on savings at a bank is below the rate of consumer price inflation, you can quickly see how the government can lose control of getting its people into houses. Further, the jealousy between the have and have-nots grows even larger and when mixed with a government that imposes social repression; it becomes a fucking powder keg. If wages increase more you immediately tighten the margins the US corp earns on its slave labor and if it grows at a fast clip, the US corp may consider repatriation. A rise in wages does not however come without either an increase in aggregate global demand from said Chinese factory, a decrease in margins for the factory owner, or an increase in China money supply. You can immediately see the problem with this.
I have too many cogs going in my brain and I am going to take a break from thinking about this, lol.
Huh, you think they’re trying to force higher savings rates?
No. Saving is inherent in the Chinese culture. I’m saying that it’s quite the situation to have a country where its people have a high savings rate and food costs are rising above wage rate increases and interest earned on deposits. Real interest rates on deposits are negative and yet you want your people to purchase houses that require a large amount of savings. It’s a massive disconnect.
Ah, I follow you.