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These morons are selling at 17.5 . Fire sale after hours CCME
CCME is now 50% of my trading portfolio. I have broken all of my rules . Even if the market sells off this stock will bounce whether its tomorrow or Wednesday then we have a nice bounce and then we could catch Reg Sho
Bought a lot more CCME at 17.60 in PM breaking rules
Bought more 17.8 breaking rules now > 35% of my trading portfolio CCME
Back in CCME 20 % China trading portfolio buy at 17.80
My absolute fav for next leg up is CCME UTA YONG still cash in my China account
Glty
I currently have no position today . I appreciate your input. More information for me to ponder.Thanks a million
Is China Redstone Group Legitimate?
http://seekingalpha.com/article/249636-is-china-redstone-group-legitimate?source=yahoo
Take a dozen microcaps, and one of them will likely to turn out to be a fraud. For Chinese microcaps, the odds are probably double. That's why I spread my Chinese microcap stock positions over a basket of a dozen or more stocks (I trade them actively so the number tends to vary from 12-20).
Fraud allegations have been lodged over the past months regarding a few of the China stocks I own. Some believe that China MediaExpress Holdings (Nasdaq:CCME) doesn't have the business it claims. Others point out that recent transactions announced by Artificial Life (ALIF.OB) seem fishy.
But no China stock in my portfolio has come under more fire recently than China Redstone Group (CGPI.OB). It has lost over a quarter of its value in the past month, following accusations raised on GeoInvesting.
Specifically, GeoInvesting raised the following concerns (quoted directly from the GeoInvesting message board):
A non-existent or improperly disclosed ownership structure between the non-PRC and PRC entities that questions CGPI claim to revenues.
CGPI may not have disclosed the actual owner of cemetery license. (CGPI VIE/operating company, Foguang, does not have ownership interest in the actual company that owns the cemetery license).
Misrepresentation of land use rights; appears that the developed cemetery plots are situated on a much smaller area of land than CGPI claims.
Illegal lease of land where cemetery plots have been developed.
Fines have been levied against cemetery operation in the past; right to operate cemeteries by actual company that held the license has been revoked.
The real potential for increased competition exits with regards to cemetery operations.
Tourism business plan may be less attractive than portrayed by CGPI due to the development of a nearby steel/iron manufacturing plant.
At least some of these questions seem to have been answered by China Redstone Group management. In a January 26 press release, CGPI describes its real estates and cemetery licenses. It also provides links to relevant documents — though they are in Chinese so I cannot make heads or tails of them.
Management also had a conference call on Friday, which is available for replay here. All China Redstone investors should listen. CGPI management, in my view, attempted to respond to each of GeoInvesting's points. That doesn't eliminate all concerns, but it is significant that the company is attempting to win back investor confidence. To that end, management said it would pursue an uplisting and also seek to upgrade to a major auditor. Both would be extremely positive steps.
The story is not over, but as it stands today I believe it's more likely than not that CGPI turns out to be a legitimate company. I remain long.
DISCLOSURE: Long CGPI.OB. Also long ALIF.OB, though I have a sell order in. Took profits in CCME.
Linde Equity Report
I had wondered, in my Oct. 7 column, if Linde wasn’t implicitly dissing the China craze, based on its sales of Universal Travel Group (UTA 7.40, -0.05, -0.67%) and China Education Alliance Inc. (CEU 2.27, -0.10, -4.22%) . But in its current issue, it rates Harbin Electric Inc. (HRBN 18.83, -0.50, -2.59%) as “undervalued.”
Who cares about the market? Just buy good stocks!
Commentary: Top-performing letter remains bullish on stocks
http://www.marketwatch.com/story/who-cares-about-the-market-just-buy-good-stocks-2011-01-31?siteid=yhoof
It probably wont start tomorrow
HK stocks seen lower as investors dump risky assets
Sun Jan 30, 2011 8:21pm EST
HONG KONG, Jan 31 (Reuters) - Hong Kong stocks are set to
fall on Monday after riots in Egypt prompted a sell-off in risky
assets, especially those in emerging markets, over concern that
the protests will spread to other emerging countries.
Stock markets around the world slumped, crude oil prices
surged and the dollar gained on Friday as the flow of money into
riskier assets such as stocks and emerging markets reversed
course. [ID:nN28175088]
Emerging markets exchange traded funds in the U.S. ended
lower on Friday with declines coming on heavy volumes. The
iShares MSCI emerging markets ETF EEM.N fell 1.9 percent in New
York.
In Hong Kong, investors will have a further reason to cut
risk, with the Lunar New Year holidays cutting short this week's
trading by two days.
On Friday, the Hang Seng index .HSI ended 0.7 percent
lower, taking its losses to 1.1 percent on the week, as
short-selling steadily picked up, in a sign that investors were
betting that near-term weakness will persist.
Oil majors such as CNOOC (0883.HK) and Petrochina (0857.HK)
will be in focus after their underperformance last week and as
U.S. crude oil prices surged over 4 percent as unrest in Egypt
rattled markets. [O/R]
Elsewhere in Asia, Japan's Nikkei .N225 was down 1.6
percent while South Korea's KOSPI .KS11 1.7 percent lower,
easing from near record-high levels, as of 0105 GMT.
STOCKS TO WATCH:
* Macau casino magnate Stanley Ho said on Monday that he has
dropped a lawsuit against his children and others in a family
feud, which involves billions of dollars and the succession of
his gambling empire. The move marks another U-turn by Ho,
chairman of Macau's biggest casino operator, SJM Holdings
(0880.HK), in the zig-zag tussle for the 89-year-old tycoon's
assets. [ID:nTOE70T016]
* Aluminum Corporation of China Ltd (Chalco) (2600.HK), the
country's largest producer of the light weight metal, said it
plans to raise up to 9 billion yuan ($1.37 billion) from a
private placement of new shares to be listed in Shanghai. The
proceeds from new A-shares (601600.SS) will be used to fund the
Xing Xian alumina project and other purposes. [ID:nTOE70T010]
* POSCO (005490.KS), the world's No.3 steelmaker, said on
Sunday that it has agreed with Brazilian miner Vale
(VALE5.SA)(VALE.N)(6210.HK) to jointly seek to develop a coal
mine in Mozambique. [ID:nTOE70S00L]
* China Unicom (Hong Kong) Ltd (0762.HK), China's No.2 mobile
operator, said on Friday that it expected its 2010 net profit to
fall by more than 50 percent compared with the previous year, due
to rapid depreciation. [ID:nHKV002665]
* General Motors (GM.N), the largest overseas automaker in
China, sold roughly 20 percent more vehicles in the country in
January than a year earlier, a senior executive said on Friday.
GM, which operates auto ventures in China with state auto groups
SAIC Motor Corp (600104.SS) and FAW Group, sold 219,192 vehicles
in the country in January 2010. [ID:nBGNSCE79A]
* Chinese railway transportation equipment manufacturer and
distributor CSR Corp Ltd (1766.HK) said it estimated its net
profit attributable to shareholders for 2010 would show an
increase of more than 50 percent as operating revenue increased
due to fast development of high-speed railways in China.
[ID:nTOE70U002]
* Yanzhou Coal Mining Co Ltd (1171.HK) said it was successful
in bidding for the mining rights of Zhuan Longwan coal mine zone
at Dongsheng Coal Field in Ordos, Inner Mongolia Autonomous
Region, for 7.8 billion yuan. For statement click
here
* Jiangxi Copper Co Ltd (0358.HK) said it expected its 2010
net profit attributable to equityholders to show an increase of
90-110 percent, prices of its main products increased
substantially in 2010. For statement click
here
MARKET SUMMARY
*Egypt riots spark biggest drop in nearly 6 month [nN28196807]
*Dollar, franc may hold gains if Egypt woes continue [nN28591045]
*Treasuries up as stock slide, Egypt feed safety b [nN28449355]
*Oil near $100, gold jumps, on Egypt scare [nN28130008]
*
The last time Chinese stocks were this cheap relative to Hong Kong, in June 2004, the MSCI China Index was almost two months into a 3 1/2-year bull market. The measure increased fivefold and the earnings multiple climbed to 31 from 12.5, data compiled by Bloomberg show. At the time, the U.S. Federal Reserve was preparing to raise interest rates from 1 percent, a record low until policy makers cut their target for overnight loans between banks to near-zero at the end of 2008.
This is the second story from a main stream publisher today . Which leads me to believe the possibility of the switch being flipped back to now its ok to buy China . Its a little game the Goldmans play . They sell and then put out negative after negative story then they repeat the cycle on the buy side up. I feel this is the possible beginning groundwork for a potential China stock rally . The only stumbling blocks are a short term potential US equities sell off between 5 and 10 % . China still may rally soon . I will be watching the Shanghai for a lead .
Bloomberg
China Record Discount to Hong Kong Means ‘Buy’ for Prudential
http://www.businessweek.com/news/2011-01-30/china-record-discount-to-hong-kong-means-buy-for-prudential.html
January 30, 2011, 6:43 PM EST
By Lynn Thomasson and Rita Nazareth
Jan. 31 (Bloomberg) -- Chinese stock valuations have tumbled to a record low compared with Hong Kong, a sign to investors that mainland equities are poised to rally even as the government cracks down on inflation.
The MSCI China Index’s 9.2 percent slump since November has left it trading at 11.7 times estimated profit for 2011, data compiled by Bloomberg show. The MSCI Hong Kong Index rallied 26 percent between July and December, beating China shares by the most in nine years and pushing its valuation to 17.5 times earnings, the highest ever compared with shares on the mainland.
Prudential Financial Inc. and USAA Investment Management Co. say the gap will close because economic growth may average 9.6 percent over the next two years, double the global figure in International Monetary Fund data. Premium valuations in Hong Kong, the route to China for most investors, signal that seven increases in bank reserves and two interest rate boosts by Wen Jiabao’s government since 2010 won’t derail growth, they say.
“Things will be all right even as China takes steps to tighten,” said John Praveen, the Newark, New Jersey-based chief investment strategist at Prudential International Investments Advisers, which oversees $750 billion. “Chinese growth will still be good.”
The global recovery is boosting demand for Chinese goods even as the nation takes steps to cool expansion in what likely became the world’s second-largest economy last year. China exported $283.3 billion to the U.S. in 2010, according to customs bureau figures released on Jan. 10. Gross domestic product in the U.S. grew at a 3.2 percent annual rate in the fourth quarter, up from 2.6 percent during the previous three months, the Commerce Department said Jan. 28.
Fivefold Surge
The last time Chinese stocks were this cheap relative to Hong Kong, in June 2004, the MSCI China Index was almost two months into a 3 1/2-year bull market. The measure increased fivefold and the earnings multiple climbed to 31 from 12.5, data compiled by Bloomberg show. At the time, the U.S. Federal Reserve was preparing to raise interest rates from 1 percent, a record low until policy makers cut their target for overnight loans between banks to near-zero at the end of 2008.
The MSCI China, a measure of mainland companies available to foreign investors, has retreated since Nov. 8 as regulators stepped up efforts to reduce inflation. The country’s policy makers increased the minimum down payment for second-home purchases and told local governments to set price targets on new properties, according to a Jan. 27 State Council statement.
Consumer Prices
Chinese consumer prices increased 5.1 percent in November, the fastest pace in 28 months, and 4.6 percent in December compared with the previous year, according to data from the statistics bureau.
“We have to wait and see what will happen to inflation,” said Terrace Chum, the Hong Kong-based managing director of greater China equities for Manulife Asset Management, which oversees $118 billion. “The Chinese companies look very cheap to me, but nobody wants to be the first to get in.”
Global investors are bracing for a financial crisis in China, with 45 percent saying they expect one within five years and another 40 percent anticipating a meltdown after 2016, according to a quarterly poll of 1,000 Bloomberg customers who are investors, traders or analysts. Only 7 percent said China will indefinitely escape turmoil, based on the survey that was conducted Jan. 21-24.
China Stocks Lagging
Hong Kong companies are beating Chinese equities again this year. The city’s shares have climbed 3.2 percent, while the MSCI China is unchanged for 2011. Speculation that Beijing policy makers will boost interest rates again drove the MSCI Hong Kong down 0.9 percent to 11,549.30 last week and the China gauge to a 1.2 percent loss to 66.59.
The MSCI All-Country World Index fell for a second week, dropping 0.2 percent to 334.54, as Egyptian protesters clashed with police. The gauge has rallied 94 percent since March 9, 2009, as the global economy recovered from the U.S. mortgage crisis that caused $1.98 trillion in bank losses and writedowns. Annual increases of 32 percent in 2009 and 10 percent last year were the biggest since gains of 32 percent and 13 percent in 2003 and 2004, data compiled by Bloomberg show.
“Global growth is fine,” said Madelynn Matlock, who helps oversee $13.8 billion at Huntington Asset Advisors in Cincinnati. “The liquidity from developed countries is helpful. The test that the Chinese policy makers face is probably a little tough. They have to find a way to keep the economy growing, without overheating. The good news is that they’ve done a good job so far.”
Less Than India
Consumer prices rose less in China than India last year, increasing 3.3 percent versus 10.8 percent, as both economies expanded at similar rates, according to data compiled by Bloomberg. GDP grew 10.3 percent last year in China and more than 8 percent in each of the first three quarters in India, according to government data. China’s GDP probably exceeded Japan’s last year, Economic and Fiscal Policy Minister Kaoru Yosano told reporters in Tokyo on Jan. 20.
PetroChina Co., the nation’s biggest energy producer, has risen 17 percent in the past six months as the Beijing-based company benefited from the 15 percent increase in crude oil prices last year. Its price-earnings ratio using 2010 income was 13.3 at the end of last week, compared with 13.9 for Irving, Texas-based Exxon Mobil Corp.
China Petroleum & Chemical Corp. of Beijing, the nation’s biggest oil refiner, advanced 33 percent since July 27. Energy stocks in the MSCI China trade at an average of 12.1 times estimated earnings, the lowest among 10 industries.
Biggest Gains
Companies that benefit from global growth are posting the biggest gains. Rising demand from emerging and developed nations led the IMF to raise its forecast for worldwide economic growth this year to 4.4 percent from 4.2 percent, according to a Jan. 25 report from the Washington-based lender.
Hutchison Whampoa Ltd., the world’s biggest container- terminal operator, has rallied 84 percent, leading industrial shares to the biggest gain among 10 groups in the MSCI Hong Kong in the past six months as rising exports helped drive expansion. The valuation for the company controlled by Li Ka-shing, Hong Kong’s richest person, has more than doubled from a two-year low of 13.7 times annual earnings in July to 26.8, according to Bloomberg data.
While the pace of China’s growth will slow in the next five years, the economy need not contract, said Aaron Gurwitz, chief investment officer at Barclays Wealth, which oversees about $244 billion. Gurwitz, who spoke in a Bloomberg Television interview, is bullish on Asian shares, including China, Korea and Taiwan.
Discounted Valuations
The MSCI China trades at 11.7 times estimated profits, below the average of 14.9, according to data compiled by Bloomberg since 2006. Among the 10 biggest global equity markets, only France, the U.K. and Germany have lower valuations. Gross domestic product in the European Union is estimated to rise 1.6 percent this year, the median estimate from 20 economists surveyed by Bloomberg. GDP in China will climb 9.6 percent this year and 9.5 percent in 2012, according to the IMF.
“The valuation disparity will probably return to normal,” said Wasif Latif, vice president of equity investments at USAA Investment Management Co., which oversees $47 billion in San Antonio. Chinese regulators “are trying to engineer a soft landing-type of situation and they will probably be able to manage that,” he said. “That would make for a decent buying opportunity.”
--With assistance from Ye Xie in New York, Irene Shen in Shanghai and Susan Li in Hong Kong. Editors: Chris Nagi, Nick Baker
To contact the reporters on this story: Lynn Thomasson in Hong Kong at lthomasson@bloomberg.net; Rita Nazareth in New York at rnazareth@bloomberg.net.
To contact the editor responsible for this story: Nick Baker at nbaker7@bloomberg.net.
Next week will be a big week for economic data
some of the more critical data are
Auto Sales, the ISM Mfg Index, the ADP Jobs Report for January, Factory Orders, the Labor Department’s Employment Report for January.
For the full calendar follow the link below
http://biz.yahoo.com/c/ec/201105.html
China central bank says Fed easing ineffective and dangerous
BEIJING | Sun Jan 30, 2011 8:01am EST
(Reuters) - Quantitative easing by the Federal Reserve and other central banks cannot address fundamental economic problems but may lead to excessive global liquidity and competitive currency depreciation, China's central bank said on Sunday.
In its monetary policy report for the final quarter of 2010, the People's Bank of China (PBOC) also confirmed that it would target 16 percent growth of the broad M2 measure of money supply this year, down from the 19.9 pct growth recorded at the end of 2010.
The central bank said the Fed's monetary easing was pushing up international commodity prices and asset prices in emerging markets, including China.
"Quantitative easing policy cannot fundamentally address economic problems, and it may cause excessive liquidity on a global scale as well as risks of competitive currency depreciation," the Chinese central bank said in its 59-page report.
"It is creating imported inflation and short-term capital inflows, pressuring emerging markets," it said.
As a result, China needed to work hard to soak up liquidity from foreign exchange inflows in order to minimize the impact on the domestic economy, it added.
The central bank reiterated that it would keep the yuan basically stable while making the exchange rate regime more flexible.
The central bank said it would continue to use different tools, including interest rates, bank reserve requirements and open-market operations, to rein in money supply and bank credit growth as a way of handling inflationary pressure.
(Reporting by Zhou Xin and Michael Martina; Editing by Simon Rabinovitch)
http://www.reuters.com/article/2011/01/30/us-china-economy-idUSTRE70T19V20110130
I am just curious on your opinion of why numbers 5 and 6 have acted in a conventional manner but number 6 seems to be lagging ?
I know money managers have been worried about inflation . I think the article i posted earlier about managed money increasing inflows to China in January is very constructive.
But China as a whole was down in January which has caused me to temporarily step to the sidelines since slower growth US stocks are way up and i expect a temporary pullback.
Can you see anything besides inflation worries and the company specific accounting issues for the under performance of number 6 ?
Tia
Your right i do not think this response is any different than what they usually do .
The world keeps shifting .
I would love to see a completely free China in our lifetime .
Many people have endured hardship for just speaking their minds.
Weather-related shocks cannot explain increases in the other three indexes. The only factors that could cause a simultaneous increase in the four commodity prices are increased global liquidity and demand. These factors are natural by-products of an overly accommodative monetary policy in both advanced and emerging economies
Is this your point from the article because it strengths my point exactly . Like i said you are on a different wave length and i am done discussing this issue with someone on a completely different wave length . This is my last post to you about this topic . You can have the last word which is what i think all you are doing
GLTY
They would either have to subsidize exporters even more (in reality it would be not possible) or the yuan would have to appreciate. Terms of trade would go up and it would destroy their main engine of their economy
I agree with your point and think China and the US are in difficult situations .
But countries dont always act rationally .
What if China's demand for Treasuries declines ?
It could cause US rates to sky rocket. I know it would be financial suicide but they do hold some cards in this game .
The US holds a lot more cards and is in the drivers seat. I do not think China will do anything except hike rates and let the Yuan appreciate .
Do you think QE2 will turn out to be a success , failure or non factor ?
Most people seem to be in the camp of non factor right now .
These policies scare me
It covered energy and famine as well.
I dont disagree with those points but the energy problem has been inflated by QE2.Its part of the inflation problem in emerging markets. Famine has a lot less to do with Chinas inflation situation . Thats why i have missed your point along this discussion . Anyway i think you and i are on two different wave lengths.
Guess who is worried . Remember tiananmen square? Not saying it will happen because Chinese are more worried about work and education but the communists have to be worried.
China blocks "Egypt" searches on micro-blogs
China blocked the word "Egypt" from micro-blog searches in a sign that the Chinese government is concerned that protests calling for political reform in the country could spill into China's internet space.
Searches on Sunday for "Egypt" on micro-blog functions of Chinese web portals such as Sina.com and Sohu.com -- sites comparable to Twitter -- showed phrases saying search results could not be found or could not be displayed in accordance with regulations.
More than 100 people have been killed in Egypt in five days of unprecedented protests that have rocked the Arab world.
On Sunday, more than 1,000 protesters gathered in central Cairo, demanding President Hosni Mubarak step down and dismissing his appointment of a vice president.
Authorities have put thousands of extra carriages into service, opened additional ticket offices and cracked down on scalpers, but travelers complain tickets are hard to come by as in previous years.
Bolds well for companies like UTA
China: Smooth Lunar New Year travel season so far
BEIJING -; Transportation officials in China say Lunar New Year holiday travel has been generally smooth ahead of the biggest travel days of the year.
About 230 million Chinese are expected to take part in the world's biggest annual human migration.
Deputy railways minister Wang Zhiguo said Sunday that 58.3 million people have taken trains in the first 11 days of the holiday travel season.
Authorities have put thousands of extra carriages into service, opened additional ticket offices and cracked down on scalpers, but travelers complain tickets are hard to come by as in previous years.
Millions more will soon take to the roads, boats, planes and trains to make it home for the traditional "reunion meal" on New Year's eve, which falls on Wednesday. ...
"China has the greatest potential among the BRIC markets. As soon as it is clear that inflation is moderating, Chinese equities should start to pick up," Philipp Baertschi, chief strategist, at Swiss private bank Sarasin said.
I am not long term negative on the CGS group i am waiting for a better signal .I wont catch the bottom but being a part of the bottom can be very nerve wracking . Plus the inflation of US equities has hurt because we have the potential for US equities short term correction.We will get more data soon .
ASIA FUND POLL: International Funds Move Into Chinese Stocks
By Nisha Gopalan
Of DOW JONES NEWSWIRES
HONG KONG (Dow Jones)--Chinese equities, one of the worst performers last year, were back in favor in the first month of the new year, while investors increasingly saw Southeast Asian and Indian stocks as overvalued, according to the latest poll of fund managers by Dow Jones.
A survey of fund managers and private bankers in January showed investors firmly overweight on Chinese stocks, from slightly overweight in December, while investors eased their exposure to some Southeast Asian stocks as well as Indian equities.
"We are overweight on Chinese stocks, which continue to have some of the lowest valuations in the region," said Desmond Tijang, chief investment officer for Asia excluding Japan at BNP Paribas Investment Partners.
The benchmark Shanghai Composite Index, which tracks both A and B shares, fell 16% in 2010, and is down a further 5% so far this year. Fund managers pointed to the country's growth prospects--China's gross domestic product expanded by 9.8% in the fourth quarter--as well as valuations as reasons behind their optimism toward Chinese stocks.
Invesco said that the valuation of A-shares "is even more compelling, trading at a low price-to-earnings ratio of 14.1 times 2011 earnings, much lower than its 13-year mean of 24 times."
Apart from reasonable valuations, success in containing inflation should help Chinese equities, analysts said, in contrast to Indian stocks, which are looking expensive.
"China has the greatest potential among the BRIC markets. As soon as it is clear that inflation is moderating, Chinese equities should start to pick up," Philipp Baertschi, chief strategist, at Swiss private bank Sarasin said. "While India equities are attractive, valuations are expensive relative to other Asian markets.
Fund managers also said Southeast Asian stocks, among last year's biggest gainers, are expensive, although the young population and growing workforces in these markets may still work to their favor, fund managers said. Indonesia trades at 14.5 times forward price-earnings, Thailand at 12.3 times, Malaysia at 14.8 times, and Singapore at 14.5 times. By comparison, Asia trades 13 times forward price-earnings.
Of Southeast Asian stocks, fund managers were particularly receptive towards Indonesian and Thai shares, both from countries expected to see continued economic growth this year.
"We are overweight Indonesia, which is expected to see an increase in investment and consumption demand growth in 2011," said Tijang. "Another southeast Asian country, Thailand, is offering good value now as political tension returns. Despite the political turmoil the country has seen, Thai domestic consumption remains robust and a series of infrastructure projects is expected to start soon, helping support the economy in 2011."
Fund managers also increasingly invested in technology-dependent exporting markets such as South Korea and Taiwan in January, though they cautioned that currency costs would limit gains.
"We're seeing a late cycle in technology demand coming through, which makes Korea and Taiwan attractive--a lot of managers are rotating to external demand focused markets," said Andrew Pease, chief investment strategist for Asia Pacific at Russell Investments. "Taiwan as a market stands out for value."
In terms of overall global weightings, investors were markedly in favor of equities over bonds or cash, on which they were underweight during the month. Fund managers said they expected around 10%-15% earnings growth in Asian companies this year.
"Overall, we expect equities to outperform bonds in 2011, although we expect that it could be a bumpier ride than widely expected by the sell-side consensus," said JP Morgan Asset Management. "But bond yields still remain too low to be attractive."
Weightings reflect managers' portfolio composition compared with benchmark indexes.
Each month, Dow Jones Newswires surveys fund managers on portfolio weighting recommendations for the succeeding months, with most looking at a 12-month horizon.
This latest survey was taken over the past week. Respondents for this month's survey were Aberdeen Asset Management, Amundi Asset Management, Baring Asset Management, Invesco, J.P. Morgan Asset Management, Prudential Asset Management, Robeco Asia Investment Center, Bank Sarasin, Russell Investments and RBS Coutts.
For the survey, each participant was asked to assign recommendations to each asset class. The weightings from each fund manager were then averaged: 0 is neutral, up to +0.5 is slightly overweight, above +0.5 to +1 is overweight, above +1 is very overweight. Meanwhile, 0 to -0.5 is slightly underweight, below -0.5 to -1 is underweight, below -1 is very underweight.
OVERALL GLOBAL WEIGHTINGS
Jan 11 Dec 10 Nov Oct Sep
Cash -1.00 -0.50 -0.50 0 0
Bonds -0.50 -1.00 0 -0.25 0
Equities +0.50 +1.00 +0.50 +0.50 +0.25
Commodities +0.50 +0.50 0 0 +0.25
GLOBAL BONDS Jan 11 Dec 10 Nov Oct Sep
Asia ex-Japan -0.50 +0.50 +0.75 +0.25 +0.50
Japan -0.50 -1.00 -0.25 -0.50 -0.75
North America +0.25 +0.25 +0.25 +0.25 0
Europe -0.50 -0.50 -0.25 0 0
Non-Asian +0.50 +1.0 +1.0 0 +0.75
emerging mkts
GLOBAL EQUITIES Jan 11 Dec 10 Nov Oct Sep
Asia ex-Japan +0.50 +0.50 +0.50 +0.25 0
Japan +0.25 -0.50 -0.50 0 0
North America +0.50 +0.75 +0.50 +0.25 +0.25
Europe -0.50 0 0 +0.25 +0.25
Non-Asian +0.50 +1.00 +0.50 +0.75 +0.50
emerging mkts
ASIAN EQUITIES Jan 11 Dec 10 Nov Oct Sep
Japan 0 0 -0.50 0 -0.25
China +1.00 +0.50 +0.25 +0.25 0
Hong Kong +0.75 +0.50 0 +0.25 +0.50
Taiwan +0.75 -0.50 -0.50 -0.25 -0.50
South Korea +0.75 +0.50 -0.50 -0.50 -0.50
Singapore 0 +0.50 +0.25 +0.25 0
Indonesia 0.5 0 +0.50 +0.50 +0.50
Philippines 0 0 -0.25 +0.25 -0.25
Thailand +1.00 +0.50 +0.50 +0.50 +0.25
Malaysia -0.50 -0.50 0 0 0
Australia -1.00 -1.00 -0.25 -0.50 0
New Zealand -1.00 0 -0.25 -0.25 -0.25
India 0 +0.50 +0.50 +0.50 +0.50
-By Nisha Gopalan, Dow Jones Newswires; 852-2832-2343; nisha.gopalan@dowjones.com
Wow just read your post and concur with most of it . Remember China is the one buying our bonds and they have a lot more influence than most would assume . Round one goes to the Fed for sure but its another short term balloon to fix a long term pickle .I know the Chinese leadership has to be scared to death with what we are seeing in the middle east . So for now it will be inflation over suffocating the economy with too many rate hikes . The genuine inflation rate in China is much higher than official recognized number we are given .
Thanks . I am very prejudiced against QE2 and i think it will end up bruising countries like China more than it could help . I know China is very agitated with the US and believes the Fed is doing this punitively over the Yuan revaluation disagreement . Although it has been very accommodative for US equities i personally conclude it has been one of the causes that our stocks discussed here have not participated. But you can tell from my opinion i am very much against it . Maybe in the end Mr Bernankes endeavor is fruitful. I for one have no conviction in this potential future train wreck . Having been trained in economics i have several good friends who will passionately disagree with me.
GLTA
If you think QE2 is having no effect on the world you are living in a dream world.Its having a negative effect .
Its not my nice try its the Federal Reserves own statement.
The excess liquidity in the advanced countries is being directed toward emerging economies as investors take advantage of stronger economic growth and higher returns. This influx of capital is causing inflation concerns to build within the emerging economies. Rising inflation is a by-product of the emerging economies’ reaction to increased capital flows.
These economies have three options when dealing with increased capital inflows. The first option is to do nothing. This would cause currency appreciation, which is not beneficial for the largely export-driven emerging economies. It is clear that these economies are not choosing a "do nothing" tactic because their exchange rates remained relatively stable in 2010
The second option is to implement capital controls that prohibit or limit capital flows from abroad. Capital controls historically have not been effective at preventing currency appreciation. They prove easy to circumvent and do not address the source of the imbalanced flows. Thus, emerging markets are forced to take the third option and maintain a stable exchange rate by importing the easy-monetary policy of the advanced economies. To combat fluctuations in the exchange rate, emerging economies are buying foreign exchange reserves and funding these purchases by increasing the monetary base. This is causing high M2 money-supply growth across the emerging economies
M2 includes the currency in circulation, along with demand deposits and close substitutes for money, such as money market accounts. It captures the excess currency issued by monetary authorities in emerging economies to make foreign exchange reserve purchases. In fourth quarter 2010, annual growth in foreign exchange reserves was 20.8 percent in Brazil, 18.7 percent in China and 6.7 percent in Russia. Emerging economies must adopt this expansionary policy to achieve a stable exchange rate given the capital inflows. However, this lack of monetary independence is allowing inflation to rise.
Commodity Prices Creep Up
Increased capital investment in the emerging economies, coupled with easy monetary policy, is causing commodity prices to rise. As of Jan. 4, annual price increases were 9.9 percent for energy, 18.4 percent for industrial metals, 28.3 percent for precious metals and 35.2 percent for agriculture and livestock
ome of the increase in food prices can be explained by weather-related supply shocks in 2010. Agriculture production suffered worldwide from severe droughts and floods. However, the four major commodity price indexes are determined in segmented markets. Weather-related shocks cannot explain increases in the other three indexes. The only factors that could cause a simultaneous increase in the four commodity prices are increased global liquidity and demand. These factors are natural by-products of an overly accommodative monetary policy in both advanced and emerging economies.
Subway network
http://www.shanghaidaily.com/sp/article/2011/201101/20110130/article_462818.htm?utm_source=twitterfeed&utm_medium=twitter
XI'AN plans to build 15 subway lines stretching for 600 kilometers before 2040. Line No. 2 is scheduled to start operating on September 28, said Chen Dongshan, head of the subway construction office of Xi'an, capital city of Shaanxi Province. Construction of Line No. 1 is expected to be completed by the end of the year. Construction of Line No. 3 will start in October. Some 4 billion yuan (US$607.9 million) will be invested this yearXi'an
(Chinese: ??; pinyin: Xi'an) is the capital of the Shaanxi province,
( I wonder who is getting the contract ? )
Saturday, 29 January 2011
January 29th, 2011 Guangzhou Airport Express audit of CCME
( sorry if it is a repost )
http://ccme-info.xanga.com/
It wasn't QE2, it was the Russian Wheat crisis last summer
My post was a very short blurb of a much more complicated problem that China faces and how QE2 is a part of a much bigger problem . That is why some of our stocks here are off more than 50% along with the accounting questions.
The inflation that is going on in most of the emerging markets that has contributed to higher food prices has to do with QE2 and other factors for sure. Of course what is going on in Russia is adding more gasoline to that fire.Speculation may be even a better term than inflation .The real problem in China has been the source of Chinese inflation is much more prosaic: their money supply is growing too fast, fueled by a credit bubble from Chinese banks, not the Fed. Chinese M2 is up 55% in two years, and its PPI is up 5.5% year over year. QE2, and certainly the commodities bubble contributes to inflationary pressure inside of China. one-off events like the Great Queensland Floods in Australia and the Russian drought have aggravated the problem . China still has some serious issues to solve and uncle Ben is not helping. To think some people were thinking it was as simple as increasing the Yuan.
The Egypt situation could be a greater net negative for China stocks than non risker US stocks .Part of the catalyst for the Egypt unrest has been higher food prices which have been brought on by uncle Bens Qe2 . China is also an authoritarian regime that must keep the masses happy . China may even act more aggressively to fight inflation . We get important #s from China next week . The leaders already know these numbers . I did not think we would see another rate hike until at least mid February but now it could come faster and more aggressively .So after thinking about the spreading middle east situation i do not expect any China stock rallies for at least several weeks
The market did not seem to like todays GDP report but upon closer inspection it was very good
Real final sales of domestic product -- GDP less change in private inventories -- increased 7.1 percent in the fourth quarter, compared with an increase of 0.9 percent in the third
Real personal consumption expenditures increased 4.4 percent in the fourth quarter, compared with an increase of 2.4 percent in the third. Durable goods increased 21.6 percent, compared with an increase of 7.6 percent. Nondurable goods increased 5.0 percent, compared with an increase of 2.5 percent. Services increased 1.7 percent, compared with an increase of 1.6 percent.
Real nonresidential fixed investment increased 4.4 percent in the fourth quarter, compared with an increase of 10.0 percent in the third. Nonresidential structures increased 0.8 percent, in contrast to a decrease of 3.5 percent. Equipment and software increased 5.8 percent, compared with an increase of 15.4 percent. Real residential fixed investment increased 3.4 percent, in contrast to a decrease of 27.3 percent.
Real exports of goods and services increased 8.5 percent in the fourth quarter, compared with an increase of 6.8 percent in the third. Real imports of goods and services decreased 13.6 percent, in contrast to an increase of 16.8 percent.
Real federal government consumption expenditures and gross investment decreased 0.2 percent in the fourth quarter, in contrast to an increase of 8.8 percent in the third. National defense decreased 2.0 percent, in contrast to an increase of 8.5 percent. Nondefense increased 3.7 percent, compared with an increase of 9.5 percent. Real state and local government consumption expenditures and gross investment decreased 0.9 percent, in contrast to an increase of 0.7 percent.
The change in real private inventories subtracted 3.70 percentage points from the fourth-quarter change in real GDP after adding 1.61 percentage points to the third-quarter change. Private businesses increased inventories $7.2 billion in the fourth quarter, following increases of $121.4 billion in the third quarter and $68.8 billion in the second.
More arguments for the stocky legs, long snout, shaggy hair club
The sell-off is just beginning
http://money.msn.com/top-stocks/post.aspx?post=7b2d7357-4760-4162-b6e6-dbb22d5dd881
As Egypt burns, market volatility spikes in what's shaping up to be the worst correction since August.
By Anthony Mirhaydari on Fri, Jan 28, 2011 2:20 PM
Stocks were plunging Friday in reaction to political turmoil in Egypt and a weaker-than-expected? GDP report. With the financial news networks broadcasting images of chaos in Cairo, along with big declines in the major stock averages, I can't help but think of the similarities between today and the May 6 flash crash meltdown that occurred during protests in Greece.
But really, the upheaval in places like Tunisia, Egypt and Jordan is merely providing the catalyst for a sell-off. The underlying conditions for a correction were already there. There have been plenty of signs over the past two weeks that investors were becoming overconfident and that stocks were rising on narrow support. I talked about some of these in my column this week as well as in blog posts here and here.
So now what? By one measure, stocks appear to be entering their worst market correction since last summer. Here's why.
For the benefit of the subscribers of my newsletter, The Edge, a few months ago I created a market direction and strength model that uses a variety of momentum and breadth measures. The tool, which I've dubbed the TREND Indicator, gauges the strength of rallies and corrections. It also identifies major market turning points.
Check out top-performing ETFs
Today, on an intraday basis, the model flashed its biggest sell signal since Aug. 11 -- which marked the beginning of the final summertime decline before the current five-month uptrend got started. The S&P 500 went on to lose an additional 4.6% before turning tail and moving higher.
Before that, you have to go all the way back to the April 27 sell-off to see a sell signal of similar strength. The S&P 500 went on to lose nearly 15% in the months that followed.
To be sure, investors suddenly have a lot more to worry about:
Austerity measures in the United Kingdom have plunged the economy back into recession.
Japan just had its sovereign credit rating cut for the first time in nine years as that country grapples with unsustainable debt loads, troublesome budget deficits and an aging workforce -- the same pressures faced by the U.S. and Europe.
Inflation is forcing emerging-market economies like Brazil and China to raise interest rates and tighten monetary policy.
Earnings growth is set to slow.
And the eurozone has yet to resolve the problems with Ireland, Greece and Portugal as borrowing costs start to rise again.
For conservative investors, at the very least I recommend holding off on new stock purchases. Ideally, they would increase their cash allocations to protect against continued declines. I would continue to avoid bonds, despite the bounce they may see from haven buying in the coming weeks, because the long-term outlook for fixed-income investments is cloudy at best.
For short-term traders, I recommend looking for short ideas in the emerging markets. Not only are the stocks of places like China and Brazil suffering as policymakers there grapple with rising inflation -- just look at the spike in China's inter-bank lending rate -- but foreign stocks will suffer as investors push up the dollar. This happens when hedge funds and other institutional traders move out of foreign assets due to currency translation losses.
Good candidates include the ProShares Short Emerging Markets (EUM) and the ProShares UltraShort Brazil (BZQ). For more specific ideas, look at these two Brazilian bank stocks: Banco Bradesco (BBD) and Itau Unibanco Banco Multiplo S.A. (ITUB).
Disclosure: Anthony does not own or control a position in any of the companies or funds mentioned. He has recommended BZQ and EUM to his newsletter subscribers.
Be sure to check out Anthony's new investment advisory service, The Edge. A two-week free trial has been extended to MSN Money readers.
The author can be contacted at anthony.mirhaydari@l?ive.com. Feel free to comment below
Very clear explanation of the bank bailouts
http://www.minyanville.com/dailyfeed/breaking-new-video-from-quantitative/
Here is something to cheer you up
Weekend reading for the us delusional mislead market bears
Morgan Stanley Sees Recent Market Conditions As Reminiscent Of August 2007 Quant Crash, As “Don’t Fight The Fed” Groupthink Trade Fizzles
On Monday we posted an article, highlighting Morgan Stanley’s observations that we may be on the verge of an August 2007-like quant wipeout. Considering what is happening today, it may have proven eerily prescient. Below, we repost the full thing as some may not have taken it seriously the first time around.
Morgan Stanley Sees Recent Market Conditions As Reminiscent Of August 2007 Quant Crash, As “Don’t Fight The Fed” Groupthink Trade Fizzles
Something scary this way comes from Morgan Stanley’s Quantiative and Derivative Strategies: “market
conditions over the last two weeks are somewhat reminiscent of that
during the August 2007 ‘Quant Crisis’. In only a few days, a number of
quantitative long-short equity funds experienced unprecedented losses in
seemingly ‘normal’ market conditions. We do not suggest here
that the magnitude of hypothetical losses match those from 2007,
however, there is little question that the rotation has drawn attention
of many quant investors.” In other words, the massive groupthink trade
that we have been warning about for months may be about to claim its
first mass casualties.
The just released report by author Charles
Crow elaborates what many have been suspecting, yet few dared to voice:
“Recent substantial factor movements in Europe have contributed to
portfolio volatility and, in some cases, abrupt performance degradation.
Portfolios positioned to take advantage of prevailing factor trends may have suffered substantially over the last two weeks.”
Is the groupthink trade about to end? If so, does that mean the funds
will be forced to stop “not fighting the Fed” as this is really the only
factor-driven trade that has made sense. If so, we have reached the
critical point where being aligned alongside the Fed has no incremental
marginal returns, at least for the non-Primary Dealers. This could
promptly transform to a watershed event, especially since as Morgan
Stanley adds, the market currently has “relatively low liquidity” to
absorb the fringe moves.
More details from Morgan Stanley
http://stocksthatpay.com/?p=14578
With that said, I'm staying long CCME because it's a special case
Personally i think CCME is in a weird way a great hedge .Even though i sold mine the other day i am looking to re enter . I agree it is special . I do not think it gets below 18 again for a while but who knows. Shit i have been waiting for Chevron to go back to 60 forever . We can all dream .
Sorry
Just got to your apology post . Guess i was taking life to seriously
wonder if the cash people that missed some huge gains are itchin and prayin for it to go down....Wow no stock is safe .
Why do you have to attack a whole group of people just because they have a different opinion than you ? If we are not all in group think we are evil . Dont take life so seriously
Wow
Thats a company CNYD that is due . It was a darling here last summer but they had some bad luck with floods if i recall
CGPI - c'mon, that means nothing until you actually see a name and a completed audit. I thought the CC sucked to be honest.
I didn't have a chance to listen . Can you be more specific about what sucked about the CC ?
If they do announce an official auditor big 4 add i will be in with both hands