Comments on: China remains the swing factor http://www.ritholtz.com/blog/2009/07/china-remains-the-swing-factor/ Macro Perspective on the Capital Markets, Economy, Geopolitics, Technology, and Digital Media Tue, 14 Feb 2012 20:08:08 +0000 hourly 1 http://wordpress.org/?v=3.0.5 By: Mike in Nola http://www.ritholtz.com/blog/2009/07/china-remains-the-swing-factor/comment-page-1/#comment-191433 Mike in Nola Thu, 09 Jul 2009 12:26:45 +0000 http://www.ritholtz.com/blog/2009/07/china-remains-the-swing-factor/#comment-191433 I would advise anyone who wants to short China (as they should) to wait at least another week. The latest government-doctored economic reports will be out soon and will be belived by the gullible, probably pumping the Chinese indexes a bit more. The current boomlet over there is all being fueled by wild lending backed by the central government. Since the export businesses that fueled China's growth are basically bankrupt because of lack of demand, much of the lending is going into stocks, commodities and real estate in a replay of the US bubbles. The only question is how long the facade can be maintained. I have read that there are growing calls to cut back lending and raise interest rates in China, actions that were fatal to the US bubble. I would advise anyone who wants to short China (as they should) to wait at least another week. The latest government-doctored economic reports will be out soon and will be belived by the gullible, probably pumping the Chinese indexes a bit more. The current boomlet over there is all being fueled by wild lending backed by the central government. Since the export businesses that fueled China’s growth are basically bankrupt because of lack of demand, much of the lending is going into stocks, commodities and real estate in a replay of the US bubbles.

The only question is how long the facade can be maintained. I have read that there are growing calls to cut back lending and raise interest rates in China, actions that were fatal to the US bubble.

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