I have not written articles in a few months, except for the one I wrote for the July issue of Institutional Investor magazine, on Japan (I’ll post a link once the magazine comes out)..  I am sure Freud, after spending a few minutes in my subconscious, would provide some disturbing explanations.  But as Freud said, [...]

China Roundtable with Robert Horrocks and Vitaliy Katsenelson

Christian Science Monitor approached me to write an article on China after they saw my presentation – China the Mother of All Black Swans.  This article is a combination of this presentation and articles I’ve written in the past.  It was published in the March 16th paper. 
 China: the coming costs of a superbubble
China may seem to [...]

 I had an interesting conversation last week with a potential investor.  I described my thoughts on the US economy, explaining that in our (my firm’s) view the current strength of the US economy is significantly boosted by steroids graciously provided by the US government in the form of stimulus.  (I’ve written about it in this [...]

I was interviewed on BusinessInsider about China. If you did not see it, this presentation covers a lot of points I discussed in this interview.
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Chinese economy – it has tremendous overcapacity in the commercial and residential real estate and industrial sectors as you see from this presentation:
China – The Mother of All Black Swans – By Vitaliy Katsenelson
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 If I were a prosecutor I’d be thanking Al Gore for inventing the internet and email (I don’t know if Mr. Vice President claimed the email invention, but without the internet there is no email).  Especially email, because now you can amass evidence of wrongdoing in a very searchable and easy-to-use format.  TheStreet.com has dug [...]

 The Chinese economy must be getting out of control, because the Chinese government is doing the unthinkable: It is desperately trying to put the brakes on the economy. When you pump a stimulus package that represents 14% of GDP through a fire hose into an economy, which was already on shaky bubble foundation, in a [...]

 This paragraph, taken from a SocGen research report by Dylan Grice (one of the few sell-side folks worth reading, along with Albert Edwards, also at SocGen), sums up the dichotomy between how investors look at China and the rest of the world.
Trading on a lowly 0.5x book value, Lloyds (LYG 5.1 ↓2.49%) is clearly unloved, [...]

Electricity was not the only economic statistic not controlled / calculated by the Chinese government that showed that the 6% plus GDP growth in the first six months of 2009 (at a time when the global economy was sliding off the cliff) was an accounting miracle.  
Guangshen Railway announced its results a few days ago for [...]

I know, I may sound like I’m beating a dead horse how much printer cartridge can one spill over China?  – but I have a very high burden of proof to overcome. 
Let me demonstrate it by this analogy:  Let’s rewind 20 years.  It is 1989 and I am writing that the Japanese economy is on [...]

After I wrote the last note about China’s creative calculation of its GDP, a friend wrote: “So what?  Who cares what is going on in China?”  If the Chinese economy was the size of the Vietnamese economy, and it was not responsible for more than 2/3 of our trade deficit and didn’t hold $2.2 trillion [...]

I hope you are enjoying the last month of summer.  I’ve gone fishing twice this month – caught absolutely nothing.  Actually I don’t think I’ve caught a single fish over the last five years.  But I’ve been mainly reading, listening to music and drinking beer while I was fishing.  So the fish probably did not [...]

 I am not writing this under duress, neither my family nor I were kidnapped by the Chinese government; I simply made a mistake in my last note about China called “Simple Math of Chinese ‘Staggering’ Growth” and would like to correct it.  The Chinese non-export economy is not growing at a 23% rate.  This figure [...]

 Chinese non-export economy grew 23% in June!  Before you start googling for that number, let me warn you. You won’t find it. I’ve computed it using fifth grade math.
Here is what we know: exports constitute about 35% of the Chinese economy and they dropped over 20% in June, while the Chinese economy (GDP) grew 8%. So the [...]

Financial commentators are obsessively debating whether the recent rise in the Chinese stock market means there’s a bubble — and if so, when it’s going to burst. My take? Who cares! What happens to the broader Chinese economy is what we should really be watching. It will have a far-reaching impact on the rest of the world — much more far-reaching than a decline in stocks.

Be careful about investing your hard-earned dollars in the latest Chinese five-year economic miracle.  One should not confuse China’s latest economic growth — retail sales up 14.8 percent, industrial production up 7.3 percent and car production ahead 18 percent — with sustainable growth.
Now that the US consumer is de-leveraging and the global appetite for goods [...]

As a follow up to a recent article, I had a very interesting conversation with a reader.  He argued that there is something very important and intangible that economists cannot measure.
The will of people.
That public will becomes even stronger when a country’s past is ridden with political and economic misery.  Think of Germany and Japan [...]

One more bubble, please.
After the bubbles in technology, housing, and commodities, we saw the mother of all bubbles: the one in global liquidity. The world economy seemed to require bubbles for its continued functioning.
I get the distinct feeling that investors’ prayers are now being answered: There’s a new bubble now – or an old one [...]

I often start my mornings with egg, cheese and turkey sandwich at Panera Bread.  This morning was no different.  While reading newspapers on my Kindle, sipping hazelnut coffee (I know I just lost respect of the true coffee drinkers), I started with yesterday’s FT, an article on China piqued my interest.  China plays a very [...]

You should buy Freeport McMoRan (FCX), Caterpillar (CAT), PACCAR (PCAR).” – that is what I hear from friends of mine, who are in the biz, all the time.  They tell me how cheap these stocks are – 3, 6, 8 times earnings.  “You are a value guy! How come you are not loading up on [...]

I’ve said for a long time that one should not trust economic statistics data coming from the Chinese Government as it has the incentives (and power) to interrogate the data until it confesses to what it wants to see.   Today we learned that industrial production in China rose 8.2% in October, a slowdown from [...]

Whenever I write or speak in front of a group of people and feel the need to apologize for my message, I am usually right. This usually happens for two reasons.
First, I am likely saying what people don’t want to hear; and second, because the message goes contrary to common opinion. So I am probably [...]

I was interviewed by terrific Robert Huebscher at Advisor Perspectives.  We’ve revisited my range-bound markets thesis, possible economic scenarios for our economy, and discussed global economy including Europe, Russia, Middle East, and of course China.   Here is a link to the interview.  
Robert also interviewed me awhile back, we discussed range-bound thesis in great detail.  Here is a [...]

I was interviewed by The Wall Street Transcript, here are some excerpts from the interview:
Investing vs. speculating
Let’s talk about financial stocks for a second, because I’m sure they are on investors’ minds right now. You want to be an investor rather than a speculator; at least I am talking about investing. If you own financial [...]

This weekend’s papers provided new signs of global economic slowdown. The first came from Japan. For the first time in 26 years – a long time – Japan became a net importer (imports exceeded exports). FT article sums it up:
The contraction was led by plunging sales of Japanese cars and trucks in a weak US [...]

I was interviewed by a super-smart and funny Kate Welling at Weeden & Co I am attaching the interview (link opens PDF). In the interview I am touching on several topics I’ve discussed in the past and some new ones (mentioning two new/old stocks too).
 

 
I had my TV service disconnected at home for awhile now, don’t want my kids to become TV-addicts.  We reconnected it on Friday so we could watch Olympics – I am glad we did.  The opening ceremony was incredible.  It was a demonstration of Chinese might, but not through a communist-by-the-book parade of nuclear weapons [...]