Asia

What's Driving Australia Right Now

11/23/2009 by Research Reloaded

Note that Australia is only one of three developed nations that will show positive GDP growth in 2009.

It has just half the unemployment rate of the U.S., sells China raw materials, and has a dynamic domestic economy.

Yet real estate, stocks, and the Aussie dollar have been soaring most recently.

Is there now a giant bubble down under?

We see it more like a giant wave.

There are risks, such as a China slow-down, but ride Australia correctly and you could do well even if some of the froth eventually comes falling down.

Long-term a lot of things are looking good. The stock market remains well below its highs. The Aussie dollar is stronger, but on a long-term time frame hasn't run that much. Regardless of a China collapse, Australia's top natural resource exports are key for the industrialization of developing economies. It's also full of gold, which doesn't hurt.

Why It's All Good In Australia >>>

China's 14 Dominoes of Destruction

11/18/2009 by Research Reloaded

Yes, China has delivered the world's most spectacular economic growth story in history.

And whatever your political beliefs, the Chinese have lifted millions out of poverty, more than any aid organization in such a short period of time. China also remains a fascinating nation with one of the richest cultural heritages in the world.

Yet the government has massively distorted the nation's economic system over the last few decades, leading to fourteen dangerous Chinese excesses, each of which is only sustainable by inflating the others!

Watch how each domino falls into the next one.

China's Fourteen Dominoes of Destruction >>>

China Can't Cool Down Its Steel Bubble

10/22/2009 by Research Reloaded

 Still going... we're still waiting to see the massive value destruction that overcapacity could realize.

Excellent FRONTLINE Documentary: Young And Restless In China

10/01/2009 by Research Reloaded

Maybe save this for the weekend when you have more time.

http://www.pbs.org/wgbh/pages/frontline/youngchina/

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Highlights From The Money Game

09/18/2009 by Research Reloaded

As stock markets kept rallying, the consensus has increasingly been forced to accept the fact that the global economy has indeed improved. Still, dollar weakness and gold strength shows that the US government's massive monetary stimulus comes at a cost. Check out recent highlights from The Money Game below.

-Vincent

Best Bull Argument for the Chinese Market

08/07/2009 by Research Reloaded

The best bull argument I can find in regards to the Chinese market is that the government has little choice but to keep liquidity flowing, even if they know this is will be negative in the long-term. 

Since a government "investigation" can't possibly yield much, and since they're saying flat-out that lending won't be capped, this sounds incredibly bullish. China isn't going to take away the punchbown -- as we've noted, they just can't. When even the slightest hint of lending curbs recently brought up, the market tanked nearly 7%. Imagine if the threats were real. The bubble must roll on.

The government may fear the potential repercussions of deflating asset prices in the short term so much that they are willing to ignore the longer term consequences of fueling asset prices further. Fair enough, sounds like standard human nature when it comes to politics and just today Chinese officials have said they will investigate price gains but won't cap new lending. Thus if you openly regard this as a punt on the government's actions, fair enough we can't argue that. But...

Anecdotes of Anarchy: Chinese Building Collapses, Newsmen Beaten

08/06/2009 by Research Reloaded

Caijing provides us a brief translation of a recent building collapse in China, hit by lightning, where 17 people died. To make matters worse, reporters who presumably tried to cover the situation were beaten. This comes on the heels of a steel executive being beaten to death in response to privatization efforts. Right now its just anecdotal. We realize there are stories like this all over the world. But currently we think it might be interesting to keep track of what could be rising anarchy in China, especially if the economy hits a speed bump. As Caijing says in relation to the steel executive death, maybe people need to feel they have more of a say in what's happening.

Short-Term TIPS Market Oversupply Could Lead to Stronger Long-Term Demand

08/06/2009 by Research Reloaded

The US is increasing its sales of treasury inflation protected securities (TIPS) in response to Chinese interest. While TIPS will remain a tiny market on comparison to the $6.66bn US government bond market, it looks like we could have $10bn in new supply flowing into a market which issued just $44bn in the nine months to June 2009. That's a lot of new supply in relative terms. The TIPS market fell on the news, no doubt due to fears of this potential oversupply, but might there be a positive angle to this development?

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