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The China Bubble


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#1 wndysrf

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Posted 03 October 2003 - 03:10 PM

The Entire Globe, awash in liquidity, hyperextended on an orgy of credit.

From today's Wall Struck Journal

Liu Yijun is 27 years old and works as a real-estate agent. He and his wife, a supermarket purchasing agent, together make about $8,000 a year. On that modest income, this year they've bought a new Mazda for more than $19,000, and a new apartment priced at almost $91,000.

How did they do it?

"Bank loans changed our life, " Mr. Liu says.

China is awash in easy credit these days, spurring a national spending and investment spree in everything from residential property to wine, card, steel and shopping malls. Banks' liveral lending policies - Mr. Liu and his wife, for instance, financed at rates between 5% and 6%, have boosted lifestyles and help fuel China's white-hot economic growth. Economists estimate that of China's nearly $2 trillion in outstanding loans, between $500 billion and $750 billion aren't expected to be repaid.

China's money supply surged 21.6% as of the end of August over the same period last year. Total bank loans outstanding in yuan had risen 16% to $1.85 trillion. For the first 7 months of this year, banks have written more loans than they wrote in the entire year of 2002?

Banks have become so eager to lend that they often conduct only minimal credit checks and impose minimal penalties for delinquencies. Mr. Liu's bank failed to learn that he and his wife have a combined monthly income of $664 to cover a monthly debt payment for their new car and apartment of $882. Mr. Liu says he inflated his salary on his loan application and had his employer officially stamp it. Bank officers failed to check further, and they also failed to discover that he had missed a payment on a previous mortgage.

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#2 FauxCaster

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Posted 03 October 2003 - 03:34 PM

Twas only yesterday (literally), Crapvision was trumpheting the NEW re-fi boom coming if rates when on a fraction lower and the inevitable goodness that would flow into the stock market. After today, and a fresh memory wipe, we can have two Bullmarkets: One if rates go lower, one if rates go higher. Now that's risk-free investing!
"WE ARE BEING KEPT ALIVE by the Entropic movement of Dark Matter(Sino-Nippo-dollar purchasing of $UST)---as soon as there is a ringing sound,a sign of an clogged artriosclerotic wormhole on the emergency fiat-meter it will end--dynamic equilibrium,will have been achieved;better known as death" -- beardrech (Mar 15 2006, 01:17 AM)

"There's a good chance he was drunk or drugged. Only an idiot would jump into the bear cage." -- Belgrade Zoo Director Vuk Bojovic (August 20, 2007).

It's like you're dreamin' about Gorgonzola cheese when it's clearly Brie time, baby. -- Hitchhiker (S.A.M. 1998)

Mar 28 2003: July 2003 is the time I have identified as the low of the bear move...then the first leg of the bear is over ...many will be caught by surprise to see the market near it's all time high again within 3-4 years [2007] ..."depression" similar to 1932 doesn't come until 2010. -- blackbelt (Mar 28 2003, 10:05 PM)

#3 soup

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Posted 03 October 2003 - 04:08 PM

machine: Nice call on the double top. Here is hoping ( hate that word) that many will see the same and that we gap down on Monday
""Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory. Yet our high level bureaucrats, led by Alan Greenspan, exhort all Americans to consume still more of their seed corn and seek still more fools." N. Hultberg

#4 purdymouth

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Posted 03 October 2003 - 04:11 PM

Hamilton is really lathered up

SPX officially in bull market next week, says he

#5

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Posted 03 October 2003 - 04:11 PM

machine: Nice call on the double top. Here is hoping ( hate that word) that many will see the same and that we gap down on Monday

More bagholders created today on the long side. This may be it. Time to pull the plug and turn out the lights on all the train chasers. :huh: :o :lol:

#6 GregFokker

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Posted 03 October 2003 - 04:11 PM

Dec gold futures dropped 20 points in one hour starting at noon EST. Does anyone know the story behind that? Anything official or news related on it?

...A declining spenglerian carnival of Colossaalism united with Inflation where the numbers one through 10 are forever banished as worthless arithmetical detritus from a bygone age... - Beardrech

Naturally we believe the govt numbers... and Boobus Americanus sleepwalks off the edge of the energy-crisis cliff clutching his shares of "Crisco", Yoohoo and GooGah munching on his Yum Yums and Ho Hos. Future historians will have a hell of a time figuring out what the hell Americanus neanderthalus was thinking and exactly what brought on his sudden demise... - Henny Penny

Well, good night everyone. I gotta go lube up for tomorrow's regular end-of-week Gold Slapdown and Stock Index Bear Punishment Rally Weekend Greenprint. ...Probably another Shock-and-Awe Gap-Up-Open and Wire-to-Wire Meltup Runaway Bull Charge Mo-Mo Spike to Fresh New All-Time Lifetime Highs, culminating in a 4:15 yelping scalded dog runoff with panic short-covering and legal not-held bad double fills due to fast market conditions, plus quote system freeze-ups and trading platform lock-outs along the way. *yawn* typical gov't Friday. - Shorty


#7 machinehead

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Posted 03 October 2003 - 04:11 PM

The big fact today was that the SPX cash got within 0.98 point of setting a new 12-month high, then closed 10 points below its high. The Dec. spoos opened at 1032, and it looks like they'll close below their open.

It's a potential double top. I'll bet brian4 and The End have something to say about it too.

p.s. Have a great weekend soup. ;)
"GOLD -- it's not just for misers anymore."

"Dollahs -- fire-starters for the K-wave winter." - Drano

"Three humps and a dump." - anotherone, 21 SEP 2004

"No gold was harmed in the making of this movie." - Bizarro Greenspan

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- our jickiss

#8 soup

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Posted 03 October 2003 - 04:12 PM

greg: Bush was having a temper tantrum?
""Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory. Yet our high level bureaucrats, led by Alan Greenspan, exhort all Americans to consume still more of their seed corn and seek still more fools." N. Hultberg

#9 soup

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Posted 03 October 2003 - 04:17 PM

sigma, who did an excellent anyalsis of the employment numbers in LOB, should send said analysis to A. Ableson at Barrons
""Pretty bubbleheads preen daily on our financial networks, playing the shill to Wall Street and Washington in order to lure unsuspecting Americans into buying insanely overvalued stocks. The great market exchanges, once prudent arenas of investment where the engine of capitalism traded value for value, have become sham casinos staggering under decades of massive Fed created debt and lurching into oblivion on the greater fool theory. Yet our high level bureaucrats, led by Alan Greenspan, exhort all Americans to consume still more of their seed corn and seek still more fools." N. Hultberg

#10 DrStool

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Posted 03 October 2003 - 04:21 PM

Join Doc and Ike Iossif on Marketviews.TV this weak end for an audio panel discussion with three of your fellow stoolies, machinehead, wndysrf, and K Wave Rider.

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#11 The End

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Posted 03 October 2003 - 04:22 PM

The big fact today was that the SPX cash got within 0.98 point of setting a new 12-month high, then closed 10 points below its high. The Dec. spoos opened at 1032, and it looks like they'll close below their open.

It's a potential double top. I'll bet brian4 and The End have something to say about it too.

p.s. Have a great weekend soup.  ;)

damn straight on the potential for a double TOP. However, A high is not due until Tuesday +- a day. I am perplexed. I did not trade well personaly today. I shorted more at 1036 but covered that position for a slight loss and bought 1 (thank g-d, only one) call. I still own it. :angry: Still have 6 Nov. 1050's though(puts). Wish I had seven. The fly in the ointment is the fact about what the new week brings. Do we close the gap at 1020 and then go up? Do we fall from here into late Oct.?

An expanding triangle could still be in play targeting 1050 before we fall.

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NONE of what I type, should be taken as financial advice.

And when you loose control, you'll reap the harvest that you've sown
And as the fear grows, the bad blood slows and turns to stone
And it's too late to loose the weight you used to need to throw around
So have a good drown, as you go down, alone
Dragged down by the stone.


--Waters

#12 2 floaters and a sinker

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Posted 03 October 2003 - 04:23 PM

The big fact today was that the SPX cash got within 0.98 point of setting a new 12-month high, then closed 10 points below its high. The Dec. spoos opened at 1032, and it looks like they'll close below their open.

It's a potential double top. I'll bet brian4 and The End have something to say about it too.

p.s. Have a great weekend soup. ;)

This could be the tell. SPX goes no place without the banks.

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#13 PileDriver

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Posted 03 October 2003 - 04:24 PM

If you thought today's short squeeze was bad...

http://story.news.ya...ia_testicles_dc

:lol:

#14 DrStool

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Posted 03 October 2003 - 04:27 PM

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#15 GregFokker

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Posted 03 October 2003 - 04:27 PM

What a world :(

...A declining spenglerian carnival of Colossaalism united with Inflation where the numbers one through 10 are forever banished as worthless arithmetical detritus from a bygone age... - Beardrech

Naturally we believe the govt numbers... and Boobus Americanus sleepwalks off the edge of the energy-crisis cliff clutching his shares of "Crisco", Yoohoo and GooGah munching on his Yum Yums and Ho Hos. Future historians will have a hell of a time figuring out what the hell Americanus neanderthalus was thinking and exactly what brought on his sudden demise... - Henny Penny

Well, good night everyone. I gotta go lube up for tomorrow's regular end-of-week Gold Slapdown and Stock Index Bear Punishment Rally Weekend Greenprint. ...Probably another Shock-and-Awe Gap-Up-Open and Wire-to-Wire Meltup Runaway Bull Charge Mo-Mo Spike to Fresh New All-Time Lifetime Highs, culminating in a 4:15 yelping scalded dog runoff with panic short-covering and legal not-held bad double fills due to fast market conditions, plus quote system freeze-ups and trading platform lock-outs along the way. *yawn* typical gov't Friday. - Shorty






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