Anyone?
After all, the Chinese stock market is down 45% from the highs, yet not a peep. When the exchange was ripping higher, like Nasdaq 1999-2000, it was the talk of the town. That bow tie fucker, Jim Rogers, was saying it could go to 10,000. All of the pundits were predicting it would surpass the Dow; yet here we are at 3,000 and change.
Odd, no?
Like the Nasdaq of 2000-2002, I believe the Shanghai bubble has popped. But, for some reason, no one wants to talk about the ramifications. How about the negative wealth effect that is coupled with steep market declines? I’m sure many speculators have been wiped out, just like all of the dot com buyers in 2000.
I believe, people are in denial when it comes to China’s problems, because they (China) have been ordained as the “new great power” of the 21st century.
As you know by now, without the great demand for resources and goods from China, the “global growth story” would be derailed and its train sent off a cliff into a ravine.
All I’m asking is this:
Is the mind numbing decline in the Shanghai telling us something? Or, should we just ignore it and buy Chinese stocks because the Olympics is coming?
No doubt, most of you paper pushers will opt for the latter.
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Yes, China is troubling at this moment not only due to a decline in speculator’s fortunes (~200MM market participants in China), but inflation is a real issue when their incomes are small to begin with. I think the link with USD FX is creating headaches too…
I will be purchasing more cheap shares.
Fly, have you become a permabear? Just a few months ago, you were pushing them down stairwells!
Who are you, Ducati? For fuck’s sake what the hell is with the proletariat class yahoo chart?
Behold
Anyone want to talk about MON?
Down with the Jesuit General
Mr. T (I refuse to call you Dr.)
No. I am long some stocks, like RIG, AAPL and VMI. However, I just call it like I see it. No bias, just opinion.
When the time comes for “The Fly” to be bullish, he will kick all of his new bear friends into ravines.
Wood:
Technical analysis is for the lazy and ignorant. However, looking at charts is a vital part of seeing price action.
Yahoo charts are just fine.
did The Fly just post a legitimate chart?
Nice chart, fly. Really enjoying the contrast of the red line with the blue rectangles.
Random Roger has a similar post up http://randomroger.blogspot.com/
alias: BPOE
All I know about China is soon they are going to shut down all work projects before the Olympics. They are also putting limits on driving. This will be very negative for material and oil stocks. Looks like the herd will have to get off the POT and take their shit some other ass hole place.
I hate China. However, it’s for personal reasons. I try not to invest in anything I hate, my emotions get in the way of good decisions.
Of course I own FXP, waiting patiently for the Olympics to end, and a small amount of EWT just as a hedge (that’s Taiwan, so I just hold my nose and own it).
In addition to the wiping out of speculators and increase in inflation, you have to see that yesterday’s action here was in no way positive for China. The last thing they need are higher commodity costs, esp. of oil. Hugo may want to send his tankers there and sell to China at a discount, but he’s also pumping about 25% less than he used to when he had professionals running the business.
HK and Japan haven’t figured this out yet, apparently.
Disappointing GOOG report will lead the market lower just like I did last week.
That pedestrian chart sucks.
It lacks the handcrafted charm of the drunken scribbles.
Yes, superimpose FXP on that chart and no inverse correlation is apparent. Once upon a time, the Japanese were going to buy the entire planet – where are they today? Fly, please think oil a little here – another 10 to 20% in the next few weeks?
When low wage factory workers quit en masse because they have accumulated a (very relative) good deal of wealth due to stock market gains…..then the factory owners have to pay more to attract replacements. Not only does this adversely impact the competitiveness of the factory (and the country as a whole) viz export prices…..it also causes wage driven price inflation in the country as the newly (relatively) wealthy former factory workers raise their living standards and expectations.
So….at least for 2008, China and its Olympics hosting crutch won’t have to rely on domestic consumer spending to serve as an offset for China’s GDP versus the (dramatic and imminent) global economic slowdown. Then, in 2009, when China’s economic needs reverse and domestic consumer spending is needed in a big way….the powers that be in China “flick the switch” and begin to reinflate the stock market so that once again the citizenry can accumulate the wealth necessary to maintain the requisite consumer spending.
Plausible?
CHEERS!
D
All last year the Chinese authorities were saying they wanted the economy to slow, so they raised interest rates a number of times, increased bank reserve requirements several times and allowed their currency to strengthen. But those fuckers kept buying stocks. Asshats.
If demand from China is what’s been behind the rise in commodity/resource prices, and if the Chinese equity market is signalling a sharp economic downturn, why are commodities/resources continuing to rip?
Fly, on your chart, what do the little white and blue boxes mean? Without your TA its hard to tell whats going on.
Oil has the feel of running away. I’m done trying to short oil.
Chinese stocks are putting in a bottom and are a screaming buy. I mean, people were buying at SSE 6,000, you can outsmart all of them and buy at SSE 3,500!
BUY AGS ON THE DIP!!!
POTASH has more market cap than the Bank of Canada…sweet!
All kidding aside, short treasuries via SHV…very low beta; and short the fucking pound…Take a look at DRYS, failed to break EMA.
Can somebody create a dataset on how much major commodities has China absorbed in 2007 and 2008?
Over the last 10 olympics, hosting nation entered a recession 8 times out of 10 within 6 months. but this time is different… china is buying lots of fertilizer and seeds to make sure their economy continues to grow at 10% despite tougher comparisons. that will help china eclipse 9k by 09.
Big Mike,
What do you think about COF?
How bout the reason for the decline in these chinese stocks is because the big boys over here in the US are losing money so they are taking profits off the table. The decline in the index doesn’t necessarily say anything about the fundamentals.
china: 40% drop is invisible to the world because all it means is that 200M peon-farmers-turned-stock-tycoons have now become penniless villagers once more. I expect they will all soon be wielding shovels in the new Chinese potash mines…
POT: with Canpotex having achieved max-rapage of the Chinese, I guess there’s nothing more the stock to do but wait for the customer’s revenge.
Uncle Sam,
I’ve been shorting COF since $56 and I am still holding it very confidently. They are reporting #’s today which will likely be bad, but I am expecting some short covering and profit taking since we fell like 7 days in a row.
The chart is range bound, I have a partial buy target points at $44.50, $39.75…If we break $37.50 (6 months support), we could go way lower. However, I’m still putting a stop loss, @ $57.50.
Britain is in the same shit (lesser version) we are; and its consumers are the highest leveraged in the world. Housing prices showed first signs of reaching top and started to go down. Fuck Gordon Brown…and the Fly.
Ha, love the picture on front page.
The bottom is in. We are in the very infancy of a new sicular (sic) bull market. Buy everything including the kitchen sink and your mom’s foreclosure.
It can’t go any lower, I promise!
Foreigners cant invest in thier stock exchanges, you actually need to hold chinese passport, to be able to invest in china you have to do it through a fund which has the government permission to invest in the market, even then they set how much they can own.
Should’ve shorted AFG.ASX
http://www.asx.com.au/asx/research/CompanyInfoSearchResults.jsp?searchBy=asxCode&allinfo=on&asxCode=AGF
Also china has real estate and stockmarket bubbles every few years, this is because that they cannot export capital out to buy foreign stocks, the government has been movingto allow this recently. At least they don’t try and prop up deflating bubbles, cause you know, they are communists or capitalist or whatever
Fly, you are always a genius in your own bubble.
IBM numbers are higher because of China. Coke’s numbers are higher because of China. GE is going to invest $3 bil over the next 3 years. China just passed Japan in buying power. China is the sole reason food and energy are hitting all time highs. Their GDP grew at 10% last year.
You’ve been playing this game for awhile, no? I’m surprised that you fail to understand how the markets work. Look at your reasoning if applied to the tech bubble. The tech bubble has burst. It was a fad. The Internet is a joke. You can’t make money off the net. Blah, Blah. Here we are, using the Internet for everything to meeting friends, paying our bills, to hosting color mismatching blogs.
Killme:
You’re right. The 45% decline in China means nothing.
So Sorry.
Well, I’ve said it before, I’m the worst market timer in the world, but China’s future is bright, they’re diversifying out of the U.S. Dollar, they’re cooling their economy down, they have the olympics, they have the chinese which I love. The Chinese are investing 35% of their income towards the market compared to the U.S. which invests a cent or 2 for every dollar. The dollar is falling and China wants nothing to do with it, and I have a crocked tie, but I’mm not shaken, I will continue buying, shortt it if you don’t have the patience, but I’m in this for my daughter, who now speaks fluent chinese, she eats 3 eggrolls, every day, and she likes the dumplings, you have her boyfriend giving her moosho, and the other day I got a fortune cookie tha told me that by 2012 the Chinese would foreclose on the U.S. and they own 60% of our debt, so that won’t be an issue, they have gold reserves, they have the red dragon, you got Taosim.
I’m telling you, gold to 5000 and 20 year bull market in commodities, helicopter ben already bought a Maziradi for me thanks to the inflation dollars, and I have word that Buffett is going to continue investing overseas. No one wants to be in the market in the U.s. you have baby boomers retireing, you have increased socialism and regulation, I don’t want dollars, my friend and business partner George Soros doesn’t want dollars, some asian prostitute would rather me give her 20 yen for a bj than to give her a dollar… China exports everything they have, and the whole world is in debt, yet they still are becomming a superpower, the market decieves, right now they’res a lot of fear, but you really just have China getting cheaper, the only reason China is getting hit is because of the dollar, but they’re making an effort to sell the dollar, they’re eating bowl of rice, and even trading it in for stocks, you have gold and silver, you have corn, and soy, and sugar…
Look, I’m not smart enough to pick stocks, butI wouldn’t put a cent into india, I would buy sugar, or you can just buy an agriculture ETF, and I speak with run on sentances, and my voice flextuates in a repetative rythem, it doesn’t seem like I’ll ever keep talking, and then I conclude by mentioning something about helicopter ben dropping in, and taking money, and giving money out to everyone, and passing it out on the streets, and it’s becomming worthless… Look, what would hppen if the market would go down 10%, Ben could cut the rates to 0, but it isn’t going to make a difference, there’s so much credit, and he’s handing out more, he’s setting the trap for anotherroaring 20s that caused the depression in the first place, you’re all screwed so Nee How Biatches!
Look at a chart of FXI divided by the SPY.
You’ll see that, other than the March lows, the FXI has flatlined relative to the SPY since January.
http://stockcharts.com/h-sc/ui?s=FXI:SPY&p=D&b=5&g=0&id=p63211096660
Something to think about.