Jeremy Grantham – always thought-provoking. His latest on the question on bubbles and commodity trends:
http://www.gmo.com/websitecontent/JGLetterALL_1Q11.pdf
biggest influences are deemed China and the weather.
Tagged: China RSS
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jock
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Pete
China’s wealthiest village to purchase 20 aircraft in five years
A village in east China’s Jiangsu Province has announced plans to buy 20 aircraft for pilot training and tourism, after the government said it would open low-altitude airspace to private planes.
Huaxi, the richest village in China, said it would have its own fleet of aircraft in the next five years, with the aim of establishing a pilot training base.
“We’ve waited so long for the low-altitude airspace to be opened. The two helicopters in the village will begin tourist flights in mid December,” said Zhou Li, manager of the Huaxi Village tourism company.
Check out this fascinating video on Huaxi Village
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Investment Case For The China Infrastructure ETF…In Four Words
Nine day traffic jam.
That’s right, a traffic jam on a road leading into Beijing now stretches more than 60 miles and is entering its ninth day. Traffic on the Beijing-Tibet expressway slowed on August 14 after a surge in traffic from heavy trucks carrying cargo into the Chinese capital. Five days later road maintenance began, compounding the congestion problem further. According to a state-run newspaper, the monumental slowdown led to the creation of an opportunistic local economy; merchants began selling food and water to stranded motorists at wildly inflated prices.
Surely at this point the traffic jam is close to letting up, right? Not so fast. According to state media the congestion is expected to continue until workers finish up the construction projects on September 13.
The story then suggests that you may want to use the Chinese Infrastructure ETF, CHXX. Unfortunately, it only trades a few thousand shares a day.
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Bubbles
The market is coiled up waiting for the Fed to speak on Tuesday. The sentiment on the blogs and tweets that I follow suggest hope for a positive pop post-Fed announcement. Is it odd that this was paired with a lot chatter about bubbles on the web today?
Minanville posts Why the China Miracle Is Really a Debt-Financed Bubble This coincides with China starting a stronger round of banking stress tests. The new tests are supposed simulate a 60% drop in housing prices (previous stress tests were at 10%, 20% and 30%) as well as well as a hit to the steel and cement sectors. A 60% drop – wow!
Fortune asks “Is the party about to end in Brazil?”
Bloomberg – Structured Notes Are Wall Street’s `Next Bubble,’ Whalen Says
The WSJ says there is a ‘Frenzy’ in MLPs
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ArlingtonJB
Let’s add talk of a Yen bubble.
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Pete
StanChart: Chinese property correction imminent
Standard Chartered analysts have always proved themselves pretty exhaustive when it comes to assessing the Chinese property market.
So when they say they believe a correction in property prices is imminent, it’s probably wise not to take their words too lightly.
More China real estate talk.
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Pete
Beijing Billionaire Who Grew Up With Mao Sees No Housing Bubble
Zhang says she’s well aware of the chorus of investors and economists who predict that China’s property boom is about to go bust, taking the global economy down with it. The doomsday scenarios don’t intimidate Zhang, a onetime penniless sweatshop worker who ascended to Wall Street by defying the odds. She hopes to prove skeptics wrong again this year by betting hundreds of millions of dollars on new buildings in Beijing and Shanghai, Bloomberg Markets magazine reports in its September issue.
“I don’t see any bubbles,” says Zhang, dressed in a white V-neck zippered top, black slacks and red heels. “The next few months will be a fantastic time to buy.”
Will be interesting to see who wins the battle. Zhang putting up hundreds of millions of dollars in buildings while China’s banking regulator preparing stress tests for 50% drops in real estate prices. Get the popcorn!
If you believe in ‘magazine cover’ indicators Zhang is on the cover of Bloomberg Markets magazine. Hmmmm
Bloomberg Markets Cover September 2010-
ArlingtonJB
I neglected looking at TAO, assuming it would be a choppy nightmare with all the China real estate news. Shame on me, it doesn’t actually look too bad.
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ekuutan
http://www.marketwatch.com/story/chinas-overhang-of-empty-apartments-2010-08-03
BEIJING (Caixin Online) — How many flats in China are sitting empty? The media recently floated a story — denied by power companies — that 64.5 million urban electricity meters registered zero consumption over a recent, six-month period. That led to a theory that China has enough empty apartments to house 200 million people.
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ArlingtonJB 8:26 PM on August 24, 2010 Permalink | Log in to Reply
Here’s some more detail w/ better photos.