China: Upside Down?

The China bubble situation is looking ominous today.

Beijing, Shanghai and Guangzhou sales all fell in September, even though developers continue to add inventory. If Sales don’t pick up in October, the bubble prick may finally happen.

Real-estate investment rose 9.9% in Q1/Q2, Exports fell 23.4%, yet bad loans will help us “protect 8” (8% GDP growth/year)

Why is Focus Media (does elevator TV ads in China) valued at $1.4B? Considering sunglass maker Oakley with 30 years of reliable operations, excellent brand image, huge gross margins, and world wide distribution sold for $2B to LUX, I can only say it’s off by at least a zero. How do “investors” keep forgetting the lessons from each prior bubble?

China claims yet another 7% rise in FDI. OK. From where? The western economies are stretched for cash and not investing. If that FDI number is accurate, there is only one reasonable source: hot money. And if there’s that much hot money here, it’s going to hurt when it goes.

Shanghai Int’l Board to open, with RMB denominated shares. Last time this was tried was in Japan’s 1991 Hyper-Bubble. Japan closed the exchange in 2004 due to lack of participation.

One thought on “China: Upside Down?”

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