Posted on 08/31/2009 9:41:16 PM PDT by bruinbirdman
A sharp drop in Shanghai stocks and weak industrial figures have raised questions about China's supposed recovery
A sharp drop in Shanghai stocks and weak industrial data reverberated throughout Asian exchanges today and raised fears that China’s much-vaunted economic recovery may be built on sand.
Shanghai stocks plunged by 6.7 per cent with a growing overhang of new share issues and evidence of corporate hardship being widely blamed for the collapse of confidence.
Chinese industrial profits in the first seven months of the year were 17.3 per cent lower than over the same period in 2008, according to official data.
China Southern Airlines, the country’s largest carrier, further dented sentiment with the announcement of a 97 per cent collapse in first half profits.
The splurge of red across trading screens triggered selling in Hong Kong and Seoul – it even managed to cut short a post-election “honeymoon rally” in Tokyo.
The nosedive took the main Shanghai index below its 125-day moving average, putting it officially in bear market territory and raising fears that September will see an even deeper sell-off as government stimulus measures begin to wear off.
Dealers in Hong Kong said that the turmoil on Shanghai would dramatically increase the scrutiny of a series of data releases expected in coming days. The August manufacturing index and bank lending numbers are expected to be especially sensitive: the government-backed, six-month deluge of credit was supposedly leading China and the region out of its slump, although senior economists have warned that the cracks in that theory are now clearly visible.
Chinese banks have extended credit at astronomical levels since the start of the year – a frenzied response to a government demand that they open the lending taps to help to break the credit crunch. According to Fitch Ratings, the banks
(Excerpt) Read more at business.timesonline.co.uk ...
Why shouldn’t their “recovery” be as fake as ours?
America is powerful enough to fake a rally longer than any other nation on Earth, thank you very much.
Both China’s and Russia’s economy are on precipises, and for the same reason... they depend on Western Economies.
China-they are realizing that we are not going to be able to pay them back OR buy their goods, and their banks are failing
Russia-We won’t buy their oil or natural resources, and yes their banks are also failing.
This also applies to other despots in the world, such as Venezuela and Iran. This will make them extremely dangerous and very belligerant.
Red China has a big party congress in October and a big trade show in Shanghai next spring so the government will keep China’s economy going and expanding through these dates. China has enough dollars and other currencies to pump up their economy to keep it humming a while longer.
Here’s another stat that back up the thesis.
http://contrarianedge.com/2009/09/01/another-confirmation-of-chinese-not-so-miracle-growth/
We’re in for a bad ride, folks.
Well, at least their organ transplant industry won’t suffer.
Because they didn't get to buy Rockefeller Center?
Heh...you’re right there... I keep hearing CNBC keep trying to sell the public to invest in the stock market and I just wonder where are the good guys - invest at this point, they have to be nuts! Actually, since it is NBC, I suspect their motives from the start!
Things are speculative at best and I am perfectly willing to let the big money guys do their gambling... I really don’t think that they should be trying to get the small investor into the market at this time (but they keep trying). I’m beginning to suspect foul play - ie., take the small investors money and laugh all the way to the bank...
http://www.chinadaily.com.cn/bizchina/2008-11/25/content_7237961.htm
thanks for the state-run publication input. lol.
As a whole, the numbers from any Gov’t source should be taken with a grain of salt.
Markets hit by China commodity default
the money quote
The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.
Mon Aug 31, 2009 11:55pm EDT
TOKYO, Sept 1 (Reuters) - U.S. Treasuries dipped in Asia on Tuesday, giving up some of the previous day's gains as Chinese shares stabilised after a 7 percent dive the day before, trimming safety bids for debt.
* The Shanghai Composite Index .SSEC edged up after a weak start on Tuesday. It tumbled 21.8 percent in August, posting its second-biggest monthly loss in 15 years after recording seven consecutive monthly gains.
* Treasuries rose on Monday supported by safe-haven buying amid worldwide losses in equity markets triggered by a sharp drop in Chinese shares underscoring nagging anxiety over the economy. Month-end buying of long-dated bonds by investors in thin volume also contributed to Monday's strength in Treasuries, analysts said.
[SNIP]
Asia markets are all up. See here.
European Factors -- Shares Set To Slip; US Data Eyed
Tue Sep 1, 2009 1:24am EDT
LONDON, Sept 1 (Reuters) - European shares were expected to open lower on Tuesday, following a decline in the United States, where investors took profits in financial shares after a recent strong run.
[snip]
Maybe you should not really believe what China is saying... Things are not always as rosy as they might seem.
In other Bloomberg “news”... Stocks receding worldwide. Rally called too optimistic... hmmm
Again, a NotNews moment for FR
The fool Jim Cramer did a monologue last night on how China was now the world’s # 1 economy and is the top CAPITALIST country in the world! Idiot Cramer actually kissed a picture of Mao while recommending that everyone needs to BUY, BUY, BUY! China will save us. I hate the guy and only watch Cramer for the comedy skits.
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