38 replies to this topic

[iloli way]

Well, "Do you know where China is today?",your guess is as good as anyone's, I give you at least that.

Who says anything about their 'worthless shack'? That is some prejudice ignorant comment, taken from its face value. You do realize that from those 'worthless shack' housing the greatest manufactures of the greatest consumer boom in the human history? I am talking about massive infrastructure rebuild after the ice disaster. And money from around that 'wothless shack', like Singapore, Taiwan, Japan, Korea...already salivating over this oppertunity. They do not care what you care or not, believe me.

First of, I am sorry for what happened and lost lives, I just do not want to sound like an arrogant jerk here.

Very short: only in US that people are given plastic credit cards to spend after a disaster like Katrina.

I bet most of the damage in the housing is in the rural areas, I don't know and those are probably meaningful to the agriculture than manufacturing. I am sure they will rebuild their damaged plants, restore the power and clear any blocked roads etc, if there is any, but how is that adding to their bottom line unless they build them bigger and if they build them bigger, will there be more demand out there unless they sell their products perhaps cheaper? ... and then what happens if they already have an overcapacity or oversupply of goods?

I hope the best for them, but this doesn't sound like a new wave or boom of growth to me since it doesn't seem to be adding to the future net worth... BTW, it didn't add in US either, it only grew the money supply or inflation. But the inflation in China is different than the inflation in US...

You do know that they buy US treasury with their funny money, as in trade surplus vs our trade deficit? The majority real wealth was kept inside that country. Eventually, not too far away future, they do not need to rely on heavy export but to utilize their broad production base to produce for domestic consumption. Yes I would worry they stop buying as much treasuries around the world, but I am less worried they can't support their own booming cycle.

That brings back to the possibility of their equity market advance to come.

...China supporting its own economy with its own domestic consumption... and isn't this a communist country?

Just watch the treasuries...

"and isn't this a communist country?" What exactly is your point in this statement? Let's go one point at a time.

[iloli way]

"I bet most of the damage in the housing is in the rural areas." What and who gives you the winning bet that the Mother Nature only picked the "housing" and only in "the rural areas"? If this is money out of your own pocket, I'll not BET on it.

[iloli way]

"Very short: only in US that people are given plastic credit cards to spend after a disaster like Katrina. " You ever been to Pacific Rim? Plastic is everywhere!

[iloli way]

"and then what happens if they already have an overcapacity or oversupply of goods?" What if they don't. Other then their own consumptions, and South-est Asia's, Europe's, Russia's, ...don't I remember how their products always fail at the most critical joints that bring down the whole products to be serviceable impossible? So you go to Walmart, Target, to re-supply the demand, because it's cheap affordable to do so?

[iloli way]

"I just do not want to sound like an arrogant jerk here. " An arrogant jerk? I'm sorry, I did not put those words in your own mouth.

[iloli way]

"I am sure they will rebuild their damaged plants, restore the power and clear any blocked roads etc, if there is any, but how is that adding to their bottom line unless they build them bigger and if they build them bigger, will there be more demand out there unless they sell their products perhaps cheaper?" What is this 'bigger' and 'cheaper' idea come into this context? Did we use this bar to measure any other natural disasters? or any war aftermaths? WWII for instance, did you realize after studying the aftermath?

[arbman]

goflow, we are communicating in completely different frequencies and styles and most likely trading also in different time frames and instruments too, you go ahead and invest in China and I will go ahead do my own trading. Good luck to ya.

[iloli way]

goflow, we are communicating in completely different frequencies and styles and most likely trading also in different time frames and instruments too, you go ahead and invest in China and I will go ahead do my own trading. Good luck to ya.

FYI, I do not post here to fade or pump my trade.

Check my past posts and topics if you will, otherwise you really don't know anything about "we are communicating in completely different frequencies and styles and most likely trading also in different time frames and instruments too", do you?

I never in my life bought any China, the posts here is purely tell it like it is, to what you just posted.

[arbman]

I wasn't going to respond, but I have some free time...

What if they don't.

Is this how you do your trading? I hope not.

The numbers I have is the growth in Chinese real estate market is in the couple hundred billion dollars range, compare this to the some 20-25 Trillion dollars US real estate that generated somewhere over 7 Trillion dollars of borrowing over the past 5 yrs, much the same in Europe etc etc...

So, China is about manufacturing (about $3-3.5 Trillion dollars in output), Chinese stock market is about manufacturing, Chinese labor force is about manufacturing, not about agriculture, not about high tech, not about rebuilding, not even about the Olympics, imho...

They will hardly be able to consume that much manufactured goods themselves to sustain their own economy, they heavily depend on the exports and will continue to do so at least for 2 more decades, I'd say, if not more. The rising cost of commodities is basically squeezing their margins, so it will their labor and internal consumption unless they can pass those costs to their exports. It ain't going to happen quickly in this environment. Where does this leave their earnings and equity indices then?

I never in my life bought any China, the posts here is purely tell it like it is, to what you just posted.

I wish you told this at the beginning. I was one of the few who was trying to pick the top with FXI puts last summer before the big break and who commented on the overcapacity built similar to the nasdaq top in 2000.

I traded a ton of options on the Chinese ADRs and ETFs over the past 2 years as well as other stocks and options on the Russian and other Asian stocks (ADRs) etc etc. But I prefer mostly the US index options, not even futures. Anyway, just read the charts, they'll tell you the 'what if'. I did not read or listen much main stream news for years probably, btw, so your comments about the disasters etc did not register earlier in my analysis...

There can be a snapback rally or some sort of a new high later in 2008 into 2009, but my guess is the Chinese boom is maturing rapidly with the global slowdown due to the end of borrowing with the housing problems and it won't be over before 2010-2012. The credit expansion is over and I wrote about this days after the break in July 2007 with charts, including the prediction of this ongoing recession back then for Q4 '07 or Q1 '08. Although I managed to make a few dumb calls in between...

Here, 40 wk FLD broken targeting low 1200s. The 4.5 yr cycle could be left translated, not only the LT cycle made its high some 4 months ago, but also the cycle lengths got much longer since then. Even if the index goes down to low 1200s or somewhat lower, it will not be violating the previous 4.5 yr cycle lows and this is enough for the 9 yr cycle to remain up and the larger cycles...

http://stockcharts.com/c-sc/sc?s=$SPX&p=W&yr=0&mn=7&dy=0&i=p20984306499&r=3188&.png

For the ST, I expect a little bit more upside...

Good luck.

Edited by arbman, 19 February 2008 - 09:35 PM.