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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
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 [...]
The market has risen dramatically without looking back, ignoring every possible piece of negative domestic news (e.g. lower home sales, bankruptcies of subprime lenders). The reaction to the possibility of slowdown in the Chinese economy was an excuse for a correction. This correction has caught many with their pants down, due to the euphoria of [...]