cubetrader.com

Article: A New Meaning for the Term "Chinese Takeout"

The Bear's Lair, an interesting article by Martin Hutchinson:

The coming China crash
December 3, 2007

While the Chinese stock market, as measured by the China Securities Index 300, is down 18% since October 16, which follows a period of almost two years during which the CSI 300 had soared 535% since January 1, 2006. Chinese economic growth is currently running at over 11% and the big money is convinced that it will continue, while the country's foreign exchange reserves are $1.4 trillion, the largest in the world.

A crash would appear to be imminent!

Bears on China have been common for the last decade, and their track record has not been good. To take just one unfair example, Henry Blodget, the former Internet genius, wrote in Slate in April 2005 "You've probably been daydreaming about the fortune to be made in Chinese stocks. Well, keep dreaming....you'll eventually conclude that you could have done better selling insurance in Toledo." That was about six months before the Chinese market took off, and if anybody has made 500% on their investment by selling insurance in Toledo during that period, I haven't met him.

Blurb: China to Move From Dollar to 'Stronger' Currencies

Remember what happened to the dollar before October 1987? Doesn't mean history repeats, but it might rhyme. Cheers, chrisco

The dollar slumped to record lows and stock index futures fell sharply early Wednesday after Chinese officials said they would further diversify the nation's $1.43 trillion in foreign reserves in view of a declining U.S. dollar. "We will favor stronger currencies over weaker ones, and will readjust accordingly," said Cheng Siwei, vice chairman of China's National People's Congress, told a conference in Beijing. Siwei's comments sent the euro to a new record high of $1.4703, gold futures up $20 to as high as $848, and oil futures as high as $98.6. At the same conference...

The Great Gates Contradiction

This is an interesting article from the LA Times. With one hand Bill Gates spends money improving lives and with the other he invests money destroying them. Until more of this type of contradictory behavior is exposed, people like Bill Gates, who has the power to influence major corporations such as those discussed in this article, will continue their contemptible behavior, donning their black ties at fancy dinners to accept charity awards when the source of their philanthropy is polluted.

What’s It Look Like When Risk Premiums Re-“Emerge”?

Above: Picture from front page of CNN.com: Indian broker at midday, when the market was down 10% and halted. This guy is too young to remember the last time emerging markets had a crisis. Seems like he’s having to do some recalculations, after possibly believing that emerging market stocks can only go up (kind of like U.S. investors with housing prices, gold prices, commodities, and commodity stocks). This type of action comes from sentiment shifts brought about by drying liquidity and rising risk premiums. The down 10% in a day part is brought about by margin calls and people getting out at any price to make the pain stop. Russia's RTS Index declined 9%, and the Turkish market fell 8%. See below for today’s WSJ article for more.