Last edited by theticalanti; 02-29-2016 at 12:48 AM.
This might be the beginning of the end. I hope it ends fast, I don't want America to end up like Japan. Slow death sucks, gimme the Zombie Apocalypse!
It's a blip.
It's a buying opportunity.
Actually, it is not, at least not for Chinese stocks, which have questionable fundamental values. But for US stocks, yes, a buying opportunity. After they fall just a bit more. I like a bargain.
Chinese foreign investors quietly bought out and took over the majority of Canada's oil resources and companies (thanks to a generous for corporate federal conservative government) The same is happening in forestry. China's domestic markets might be experiencing a dip, but the country itself is in no way in trouble.
I'm not sure buying up Canada's oil resources is such a great idea at this point. If the oil companies thought that the reserves were worth a lot, they'd have never sold them off. The world has an oil glut right now. In the latest US govt lease sales, almost no one bid. Evidently, the carbon energy companies have realized they have enough reserves for the foreseeable future. In fact, their proven reserves are sufficient to turn this planet into Venus and end all life more complex than anaerobic bacteria if they are burned. So, I would say that the Chinese are mercantilists rather than capitalists, especially because they are buying up land for crops in foreign countries. This is neither a profitable nor a durable strategy, if push comes to shove.
The last time something like this happened was in the mid 1980's, when the Japanese were popularly thought to be ready to take over the world economy as the US economy exported the most highly polluting manufacturing jobs and started building IT jobs. The Japanese paid extremely high prices for property on Times Square, and sold it off at a terrific loss a few years later. I believe China's long-term situation is not much different.
About oil being down that is very true, all over the news here saying oil is below $50 a barrel, which is really hurting the oil economy here. Unfortunately Canada's federal government has put all its eggs in the oil resource basket for the past 8 years, and is now experiencing a huge down turn with tens of thousands of lay offs in the oil fields.
As it stands, China already owns much of the oil extracting former Canadian companies (see Nexen). I think actually that Chinese government and interests are extremely forward thinking by buying the oil and means of extracting it from wherever they can because as they see it, the Empire needs to last for a VERY long time into the future. I'm sure that for them, they neither care about where, or how they get these power resources, they only care about getting them, period. I think that for them it is less about economic superiority like it has been for the Japanese (although this would be a welcomed aspect of reserves control) and more to do with security of the people and bureaucracy of the Chinese nation itself longterm. Being able to control the flow of natural resources, no matter where it is located on the planet, is the means in which a country can use to bargain and survive with well into the future.
Canada contains the third largest reserves of oil on the planet, below Saudi Arabia and Venezuela. It also happens to be in the most dirtiest form of sludgy, gravelly sand that is extremely power intensive to extract and process. Sadly, the Canadian government sold its wealth for short term gain.
Here is one perspective on the recent US stock market losses against its gains over the past few years. Note that the stock market valuations have doubled, as US companies bought back their stock (instead of increasing wages) to raise their share prices.
Now look at China's market over the past few years.
The global economic demand for goods has been slowing for the past few years, and China's manufacturing output reflects that, as did its stock market. however, the Chinese government decided that reducing the economic expectations of its workers was politically untenable, and instead encouraged its citizens to buy stocks, thereby creating a bubble. That bubble is bursting.
After China lands flat on its back, the US should devalue the dollar to make US goods cheaper for the world to buy. Making these goods would boost the amount of work that US workers would have, and would keep the US economy going strong and would support wage increases. But politicians will probably not do that, because they are surprisingly affordable to corporations that would just as soon see US workers idle in order to keep wages low, because multinationals are just as happy to manufacture in other low-wage countries.
Hmm, that's cool. Everything seems so tenuous. It's kind of nerve-racking actually.
Kabu makes things go kaputt!
Let's fry some stocks everybody!
If it ain't broke, don't fix it
I want to be ISTp.
These people often have an earthy, mysterious quality to them. They are slow to commit, but once they do it is with an attitude of life commitment, to the establishment of an impermeable bond. Others can be taken aback by how suddenly and completely this type can lock into them, and by the depth of understanding of the otherís condition. They attach to others at an organic, root level, in contrast to the other subvariantís surface formality. The sanctuary of home is of paramount concern, and this type takes particular delight in decorating their spaces to reflect their cherished sense of taste and depth. Depth and discrimination characterize this stacking.
Motivation: to live in a secure, comfortable environment where they can pursue their private interests in depth.
I find it a little annoying frankly. Changing one thing for the better seems to imply changing something else for the worse. It would be nice if there could be economic solutions that benefited everyone involved, but I just don't see how that's possible. For example, I could argue lower oil prices benefits everyone involved because the cost of transporting goods goes down and everything should become cheaper; however this hurts the people that produce and profit from the oil, as well as any economic activity they create with that profit. I suppose the best people can do is to benefit many in favor of a few.
Honestly it seems the only way to truly increase the wealth of a country is to ignore monetary valuations and look at how much is produced and the quality of the production, as well as how easy it is to produce. If you have all three of those, it becomes easier to create and do things in general. Though that can only be certain to work if production is mostly kept inside your own country's economy. China for example produces a lot, but it's low quality and requires a lot of labor, despite it being cheap labor; and they send their goods outside the country so that its citizens do not benefit from them, print money so that any profit they receive from the transaction keeps the Chinese currency from increasing in value, and then reinvests all their profits+printed money back into the US as debt. The Chinese are slaves to their own economic system; yet it's ironic that if the US economy collapsed, they would have an opportunity to invest their production for themselves and increase their standards of living, i.e. actual wealth. Then you have the US which doesn't produce much anymore with the quality of production usually being good, but requiring expensive labor to produce; and it seems content replacing their quality goods with a higher quantity of low quality Chinese goods with a constantly diminishing rate of the US dollar in foreign buying power. That seems like a terrible trade-off, but no one seems to care or maybe no one can really do anything about it.
But this probably isn't much to be concerned about. Stock markets undergo correction when people get too optimistic and overvalue stocks. The Chinese government has been encouraging business growth and investment and now it has probably hit a plateau and people are disillusioned by it. Something psychologically to do with people expecting much more from their investments than they get; so the jerk reaction is to take their money out and do something else with it, even if it means taking a loss. This is the best time to buy because once the pessimism subsides, things can only go up and get optimistic again; consider it a psychological cycle I suppose. I suppose in a lot of ways stock valuations are quite arbitrary in this sense, aside from dividend stocks. But I wouldn't consider this a stock market crash, since the economy isn't failing, as it seems to be stagnating and undergoing a correction.
hardly the first time chinese stocks displayed the notorious Eiffel Tower pattern (straight up, then straight down)
"...Generally, by the time you are Real, most of your hair has been loved off, and your eyes drop out and you get loose in the joints and very shabby. But these things don't matter at all, because once you are Real you can't be ugly" (the Skin Horse)
This is hardly the end I think, it does however signal a shift in Chinese market strategies. Their growth is not sustainable without more domestic consumption.
They don't have a floating currency and they peg their currency to the USD, all fiat currency has no value except in relation to the stability of the government. As long as the Chinese system is stable these sort of market corrections are just blips, they have very little effect on anything except stockholders. The government is the bank, and it will not fail thru economic mechanisms. Currency is no more than say share in your national organization, its nominal value is 1 cent like shares in any business, valuation is entirely determined by stability and the potential for future profits.
I think commodities like oil are really undervalued at the moment, political stability can easily shift oil prices up, any sort of political disturbance in Saudi Arabia can do that.
I think the Chinese's goal is to prop up the existing global finanical system while acquiring power over natural resources around the world, and it does this with a currency entirely controlled by the government and pegged to the dollar which people accept because of Chinese political/economic strength.
I think Chinese trained economists simply don't see money the same way as Western Economists, althrough they've adopted some neo-liberal concepts in recent history, they're still basically Marxist in origin and Keynesian in practice.
I think trying to analyze why/what the chinese are doing from a western economic perspective is doomed to miss out on the control they're asserting over various spheres of influence even if somehow they're "losing money".
The mind a killing weapon
The heart an open wound
It's time to buy their stock. You know what they say...if there's blood on the street buy real estate
Dual type (as per tcaudilllg)
Enneagram 2w1sw(1w9) helps others to live up to their own standards of what a good person is and is very behind the scenes in the process.
Tritype 1-2-6 stacking sp/sx
I'm constantly looking to align the real with the ideal.I've been more oriented toward being overly idealistic by expecting the real to match the ideal. My thinking side is dominent. The result is that sometimes I can be overly impersonal or self-centered in my approach, not being understanding of others in the process and simply thinking "you should do this" or "everyone should follor this rule"..."regardless of how they feel or where they're coming from"which just isn't a good attitude to have. It is a way, though, to give oneself an artificial sense of self-justification. LSE
Best description of functions:
Not really sure who benefits from lowered gas prices, certainly not the people in this country who still pay the same amount at the pump no matter what the price of a barrel of oil.
Domestic markets go up and down truly, the point I was pressing is that nations like china are purchasing resources themselves from other countries as well as the power to extract them at legal will makes them a dominant force with much buying power. In doing so they are providing their own people with the means to energy security at the loss to another set of people on Earth, namely Canadians. This could been seen as unfair as the oil belongs by right to Canadian Sovereignty.
Put it this way...its like you owning the rights to your neighbours fridge. Your neighbour may have the fridge in their kitchen yet because you own the food and condiments inside of it, your neighbour may not eat the food himself. He sold you the fridge and the food, still he shoulders the cost of running it. The burden is on him, for less of the value of the "right to fridge".
BTW, I have this feeling they might unban the stock sales earlier than those six months. In the end that action's single purpose is a simple message: "get a grip". Any opinion, our well-informed fellow @Subteigh ?
(... I'm well-informed? are you confusing me with @InvisibleJim maybe?)
It seems fairly clear to me that it would definitely been worth investing in a Chinese ETF at this time...but Meb Faber would suggest that it would be wisest to spread risk by investing in ten national ETFs with the lowest CAPEs...(and I think China would almost certainly be one of those 10 at the moment).
This is not something I am going to do any time soon though.
I trust you are the most informed.
Investing as in buying stock, or something else? Let alone that the former would not be very easy ATM, just asking Confucius about it, wouldn't he say that you take something from someone for nothing?
I bought Chinese in 2010. I should have stuck with them.
Your thoughts are almost entirely contingent on your specific experience. Why be so attached to them?
Most investors never see hard cash or anything of real value, so what meaning does it have to lose or gain 8.5% anyway?