Thursday, April 12, 2007

Are Chinese stocks about to sell off?

"Special" China Update

Are Chinese and world stocks about to sell off?
Will it be another correction or the resumption of the secular bear that started in 2000?
When will the markets realise that the US is heading for recession?

Posted by sold 2 rent 1 @ 10:20 AM (523 views)
Please complete the required fields.



10 thoughts on “Are Chinese stocks about to sell off?

  • tyrellcorporation says:

    So the blokes got a ruler, Whoopee doo! I can get a graph and hack around with shapes too!

    If he correctly predicts anything by this then he’s a genius…

    Reply
    Please complete the required fields.



  • Well he might get lucky – might…!

    The people I know on the front line in the City are a bit twitchy right now. The correction we saw a few weeks ago was expected, but far smaller than expected, and bounced back much too fast. The feeling is that there’s a much bigger correction brewing, and the responsible stockbrokers are telling their clients not to buy right now.

    ‘Sell in May’ is on everyone’s mind, but some are thinking that May might be too late.

    There is going to be a significant re-alignment of the currencies of the developed world against those of the developing world over the next few years, and simple logic suggests that putting your money on the other side of the fence is a good move. However, finding safe places to invest is not so easy.

    For now, oil and mining stocks look relatively immune to downturns. Retail and financials look risky. If you want to look at commodities, think about Titanium..

    Reply
    Please complete the required fields.



  • sold 2 rent 1 says:

    For those who want unit trusts and not individual stocks,

    I invested in the fund JPM NATURAL RESOURCES A
    http://www.bestinvest.co.uk/funds/fmpro?-db=webprices.fp5&-lay=allfields&-format=fundfacts_popup.htm&-script=setglobalbenchmark&investment_codename==SPCOMM&-find

    in January. It has risen over 20% since then.
    A large factor of this rise was probably due to oil having risen $10 a barrel since then.

    Reply
    Please complete the required fields.



  • tyrellcorporation says:

    Thanks UT. Any particular oil company looking cheap at the moment? I heard BP could be worth a punt…

    Reply
    Please complete the required fields.



  • sold 2 rent 1 says:

    UT,

    “There is going to be a significant re-alignment of the currencies of the developed world against those of the developing world over the next few years, and simple logic suggests that putting your money on the other side of the fence is a good move. However, finding safe places to invest is not so easy.”

    I agree entirely.
    The Economist has noted many times that traditonal economic theory suggests that capital flows from developed countries to developing countries.
    The opposite has been happening in the last few years. This trend will reverse causing the west’s currencies to tumble.
    IMHO the order of devaluation will be USD first followed by GBP and lastly EUR.
    As each currency tumbles the ones remaining will be pushed higher with the economies suffering due to falling exports. Trade defecits will rise and eventually the currency will devalue at a fast pace possibly causing inflation problems.

    Reply
    Please complete the required fields.



  • talking rot says:

    S2R1

    I thin I understood most of your comment. Are you suggesting the UK trade deficit could rise? If so, what would the impact upon the economy be, please?

    Reply
    Please complete the required fields.



  • sold 2 rent 1 says:

    talking rot,

    What we are experiencing at the moment is the USD falling and the EUR and GBP rising. This is causing the trade deficits to rise in Europe (except Germany who are really competitive and have low internal consumption)

    See article today about UK trade deficit rising
    http://www.bloomberg.com/apps/news?pid=20601102&sid=anSEHWa.K2FU&refer=uk

    Large trade deficits are unsustainable in the long run. What should happen is that the currency devalues slowly to compensate for deficit. What can happen is that the currency stays higher for longer; crushing exporters and causing unemployment to rise.

    When the devaluation finally arrives, it can be swift, and a country can be faced with a slowing economy and rising “imported” inflation. Interest rates then have to rise to keep inflation from taking off.

    Reply
    Please complete the required fields.



  • sold 2 rent 1 says:

    Look at the graph of Balance of Payments
    http://www.statistics.gov.uk/cci/nugget.asp?id=194

    If it keeps growing like this it will be 5% of GDP next year (the same as 1989 just before the 1990 recession)
    Recession and HPC to start in 2008

    Reply
    Please complete the required fields.



  • S2R1 said “If it keeps growing like this it will be 5% of GDP next year (the same as 1989 just before the 1990 recession)
    Recession and HPC to start in 2008” – A lot has changed in the UK since the end of the 80’s, at that time the UK still had quite a strong manufacturing industry that went into rappid decline – in it’s place the service industry has grown, and London is now thought of as the financial capital of the world replacing New York. To drive the economy into a recession this time It has got to come from the service sector, so for those who want a recession I would say that hearing about the large job losses in Londons banking sector is great news, as the sub-prime mortgage companies start to fail, then we will see things take a nose dive.

    One probelm that we have is still huge amounts of investment for things such as 2012 olympics, the expansion of Heathrow etc and I can see this helping to keep the economy in a stronger position for slightly longer. Sure pressures on currency could also influence. The $ has been just keeping under the 2 to 1 ration for many months, I reckon we might see it break through by a significant amount that magical $2 to £1 over the next few weeks. This will certainly cause problems for exports, however it will also help in reducing inflation, as imports become cheaper.

    At the moment I cannot see how a recession / depression can be avoided. 🙁

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>