tag:blogger.com,1999:blog-2335748440449035592.post794929032363570722..comments2010-09-05T03:52:02.861-04:00Marknoreply@blogger.comBlogger17125tag:blogger.com,1999:blog-2335748440449035592.post-30363665026511484892010-09-05T03:52:02.861-04:002010-09-05T03:52:02.861-04:00thanx for information but realy good post.makalehttp://www.uzmanmakale.netnoreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-67891312488815691942009-02-20T11:56:00.000-05:002009-02-20T11:56:00.000-05:00Garng.... Clearly we have our own corruption here. Look at the crooks that keep popping up lately as the SEC gets busy. Look at the the corrupt relationship between business and our government (HAL, BAC and etc.) Apparently corruption is human nature. If it wasn't, we wouldn't need laws.<BR/><BR/>I certainly hope China pulls this cart out of the mud. <BR/><BR/>jeganjeganhttp://www.blogger.com/profile/05850061548373752817noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-41746791832869258942009-02-20T11:34:00.000-05:002009-02-20T11:34:00.000-05:00Exactly because China has a much smaller GDP than US, it is much easier to stimulated their growth using similar amount of money. <BR/><BR/>On top of it, they have much less political struggle than here to pass anything, all decisions will be based more on economics than anything else. Of course, some will be lost through corruptions; after seeing the financial system's "contributions" and self-rewarding salaries, I am not sure our corruption is less anymore!Garnghttp://www.blogger.com/profile/06560399296568234454noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-53241568738065694292009-02-18T17:34:00.000-05:002009-02-18T17:34:00.000-05:00Hi Garng,<BR/><BR/>You make a good point - I call it the symbiotic relationship. They need the US to at least tread water for now, as they grow and transform their economy to be more internal consumption. As quick as China has evolved in past 20 years, it still will take time.<BR/><BR/>I did see today China in return for cash bought some large oil stakes in Russia. In the end, those with cash will win. CHina is doing a very interesting strategy in Africa for natural resources that very few here are aware of - instead of being a "dominant" like Western countries... they are a partner. Help the African country in return for access to natural resources.<BR/><BR/>I just dont think China is yet big enough to be a weight on the entire global economy - on commodities or specific niches yes... but with 3% of the people US is 25%? 30%? (I don't recall off top of my head) the GDP.<BR/><BR/>Give it a decade and we'll be talking a whole different story.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-77331037100573313322009-02-18T15:52:00.000-05:002009-02-18T15:52:00.000-05:00Garng : re China needs to do more. What a country should do and what it does are two different things. Just look at the mess we've gotten ourselves into. I've done a lot of reading on China ("Be your own China Guru" and "Oracle Bones" are two excellent perspectives. I can also suggest "Interfax" for a nuts and bolts daily on Chinese business and Michael Pettis' excellent blog "China Financial Markets" for a weekly insiders look at banking and government.) and my opinion is that China still resides behind the walls of the Forbidden Kingdom. They are inwardly focused and do act immediately to solve their own problems without seeming to be aware of the general ramnifications of their actions. A very interesting country. I'm very eager to visit. <BR/><BR/>jeganjeganhttp://www.blogger.com/profile/05850061548373752817noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-11085346605765920672009-02-18T14:57:00.000-05:002009-02-18T14:57:00.000-05:00Hi, Jegan:<BR/><BR/>Does US intend to be a white horse in the past or current situations? Not to my memory. But US did become a locomotive to pull up the world economy unintentionally in the past while we enjoy the cheap goods form emerging economy. Similar dynamics may happen here also to China.<BR/><BR/>To me, China has little choice. It is too risky to hold too much US treasury notes. They have to diversify the risk. They got into commodity from Russia, Australia, etc. to diversify. They invest heavily to their own infrastructure to improve efficiency and to diversify the risk.<BR/><BR/>What else can they do? They need to do more, not less. They may need to diversify into gold mines also.<BR/><BR/>Just my two cents.Garnghttp://www.blogger.com/profile/06560399296568234454noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-68520234418772236432009-02-18T12:59:00.000-05:002009-02-18T12:59:00.000-05:00Garng, Re: "They are helping the world by helping themselves. "... <BR/><BR/>My concern is that the Chinese have stated quite clearly that they are only interested in saving China. They have further stated that this worldwide collapse is an American problem and we should fix it. <BR/><BR/>My readings and viewing of the Baltic Dry, copper, iron, coal etc., lead me to believe that there is no real 'pin action' from the Chinese. I feel that resting our hopes on a Chinese revival are misdirected. And in fact, the issues you pointed out indicate to me that as a world, we are not out of the woods yet. I think things will only get worse. <BR/><BR/>And you are correct. Aside from TM's mentions of riots in many countries, we only have to look at Iceland, Ireland, England and Switzerland's banking problems to get a feel for what's hiding around the corner (No. It isn't a Bernie Madoff bobblehead..) The Russians have just managed to save their hide by working a 12 year deal with the Chinese, which in essence bolsters their currency for awhile (Don't those Chinese ever learn?), the Swiss are leveraged much more than our banks were and holding Eastern European notes. Amazing considering that everyone has always considered the Swiss to be the epitome of good banking. The Brits, Spaniards and now the Italians all have real estate problems that might easily dwarf our own. <BR/><BR/>You are so right. These are big problems. Possibly insurmountable. I just don;t see the Chinese on a white horse with guns blazing, coming to our rescue. <BR/><BR/>jeganjeganhttp://www.blogger.com/profile/05850061548373752817noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-26311577340984201032009-02-18T10:22:00.000-05:002009-02-18T10:22:00.000-05:00"Just read today that the Chinese have already spent 25% of their 'Stimulus Package'. based on the last few days of Baltic Dry dropping and miscellaneous articles referring to mine closures, price drops in commodities, etc, I'd say that their stimulus isn't helping the world economy much."<BR/><BR/>They are helping the world by helping themselves. Otherwise the unrest will spread to the whole world. Look at EAST EUROPE! It may toppe the whole Europe!Garnghttp://www.blogger.com/profile/06560399296568234454noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-37203354859200682022009-02-17T16:56:00.000-05:002009-02-17T16:56:00.000-05:00Just read today that the Chinese have already spent 25% of their 'Stimulus Package'. based on the last few days of Baltic Dry dropping and miscellaneous articles referring to mine closures, price drops in commodities, etc, I'd say that their stimulus isn't helping the world economy much. <BR/><BR/>jeganjeganhttp://www.blogger.com/profile/05850061548373752817noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-86590413581688143782009-02-17T14:39:00.000-05:002009-02-17T14:39:00.000-05:00Well, Japanese are different. They are always stingy. You can find out from the Japanese food. They are educated that way. Chinese are more fun oriented; in certain situation even worse than US. They can spend for leisure and fun. Look how they enjoy their restaurants and foods. The huge market there is hard to imagine.<BR/><BR/>The consumer spending rate cannot be reflected by import numbers. The number is down due to the collapse of the commodity prices. That means people there can start enjoying more and more consumptions will follow.Garnghttp://www.blogger.com/profile/06560399296568234454noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-5084554809719314542009-02-17T14:19:00.000-05:002009-02-17T14:19:00.000-05:00Hi Garng,<BR/><BR/>First I could always be wrong<BR/><BR/>Second, there is a reason for savings (a) cultural and (b) lack of safety nets. If you knew if you got sick you'd have to pay out of pocket you'd have a different incentive. <BR/><BR/>Also there are multiple China's - are we talking the 100M middle class or the 800M extremely poor rural? etc.<BR/><BR/>I think humans have a tendency to pullback, no matter the country in times of trouble - the Japanese have not been spending despite high savings rates for a few decades. <BR/><BR/>But we'll see; I just don't buy the arguement you transform your economy from export led to domestic in a span of 6 months, or 16 months or 60 months. It took us a good 25 years of bad practices to get rid of much of our productive assets and turn into a nation of shoppers.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-43292561722153619822009-02-17T13:38:00.000-05:002009-02-17T13:38:00.000-05:00Even though the analysis is reasonable, the assumption that China consumers will not make the gap is questionable. They have huge savings; many do not have as much as the western world yet. Just a little bit more spending, as encouraged by the government, will make a difference. Chinese know how to enjoy life. It is from their culture.Garnghttp://www.blogger.com/profile/06560399296568234454noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-76200365620693609722009-02-17T12:16:00.000-05:002009-02-17T12:16:00.000-05:00kb, good question and I don't know how much to be frank. But I'd be wary of explaining away things by drop in value of commodities - much like when retail sales drop in US people then run in and say "well that's due to the drop in gasoline prices".<BR/><BR/>I never hear the opposite arguement on the way up - i.e. higher prices of commodities goosed up prices (or imports) etc. <BR/><BR/>A lot of this stuff is marginal (on the edge) although obviously in China with their voracious sucking up of commodities its more important than say gas prices in the U.S.<BR/><BR/>But a good question.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-32896661588897499062009-02-17T06:47:00.000-05:002009-02-17T06:47:00.000-05:00TM<BR/>Since China imports a huge amount of raw commodities,(grains,coal, fertilizer)and we have seen a severe drop in those values, how much does that contribute to the 40%+ drop in imports?kbhttp://www.blogger.com/profile/16332962049649649457noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-4931244167036239112009-02-16T17:47:00.000-05:002009-02-16T17:47:00.000-05:00Jeff, you read it just above <BR/><BR/>"Even taking into account that Chinese New Year came in January, the results were well below market forecasts."<BR/><BR/>Sorry you CANNOT explain a 43% YEAR OVER YEAR drop by "a holiday"<BR/><BR/>that is like the retailers using an excuse that weather was bad or they had 2 less days between Thanksgiving and Christmas than the year before.<BR/><BR/>Is there an effect at the margin? Certainly. Is it predominant? No.<BR/><BR/>Let's see what the excuses are in Feb, Mar, and Apr.TraderMarkhttp://www.blogger.com/profile/06241756200482130281noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-35674891865403553602009-02-16T17:28:00.000-05:002009-02-16T17:28:00.000-05:00Great piece, Mark. It's important to also mention that the flow of liquidity into the securities markets is a normal part of the economic recovery process for modern fiat economies. During the early stages of a recovery industrial companies are still laying off staff, and end-user demand is still ambiguous. However, easy access to capital is put to work by entrepreneurs and 'first movers' in sectors that lead the way out of recovery. Capex in those sectors drives the economic indicators higher, which in turn supports consumer confidence and the stock market.<BR/><BR/>Also, the excess liquidity that banks take on is first put to work in trading accounts until industrial lending demand picks up. This supports stock prices.<BR/><BR/>It's the excess liquidity in trading accounts that is driving the Chinese markets at the moment.<BR/><BR/>The Chinese banking sector is a direct extension of its central bank. For this reason, loan growth is not necessarily related to constructive economics for the lending institutions. Instead, it is driven by the macro objectives of the politboro.<BR/><BR/>Eventually, the nationalization of domestic U.S. and european will allow western governments to achieve the same objectives. Until then, the velocity of money will remain stagnant, economic growth will falter, and asset prices will continue their decline.Gestalthttp://www.blogger.com/profile/15636551868375563464noreply@blogger.comtag:blogger.com,1999:blog-2335748440449035592.post-73657670306645184532009-02-16T17:23:00.000-05:002009-02-16T17:23:00.000-05:00I read something somewhere, mentioning that because chinese new year fell in Jan this year, its artificially down. If that's the case, then Feb will be artificually up. But I do agree with the overall premise that the chinese domestic wont be able to match the decline in US imports. Once the US stabilizes, China will run which is the thesis. Sooner or later that will happen so I view it as a trading environment with a bullish bias. Buy the dips, sell the rips type trading - but not investing. "Yet" - that is...Risk Manager Jeffhttp://www.blogger.com/profile/14994763012317049832noreply@blogger.com