Yes Virginia...It's a Bubble...

[jk]

Re: Yes Virginia...It's a Bubble...

Still falling back into old patterns under stress however. I wonder how many more will be "disappeared" before this newfound consciousness of their image kicks in?

Can we assume that their image is important enough now that they won't shoot their own citizens once again?

shooting outliers is part of shaping the public's perceptions.

[GRG55]

Re: Yes Virginia...It's a Bubble...

Jk, I think you're really getting a hang of how things works in a Chinese styled authoritarian state which is quite amazing for someone who isn't living in China or even Asia. The Internet and social media has created a unique situation in which the CCP has become very conscious of their image both locally and abroad. This phenomenon is very recent, only in the last 3-4 years.

Still falling back into old patterns under stress however. I wonder how many more will be "disappeared" before this newfound consciousness of their image kicks in?

Can we assume that their image is important enough now that they won't shoot their own citizens once again?

[touchring]

Re: Yes Virginia...It's a Bubble...

the chinese gov't is always described as being afraid of social unrest which might threaten the ccp's legitimacy in its powerful role. this gives rise to the thought that the ccp may be more interested in public opinion than the governing parties in the u.s., where the veil of democracy obscures the awesome power of big money.

Jk, I think you're really getting a hang of how things works in a Chinese styled authoritarian state which is quite amazing for someone who isn't living in China or even Asia. The Internet and social media has created a unique situation in which the CCP has become very conscious of their image both locally and abroad. This phenomenon is very recent, only in the last 3-4 years.

[jk]

Re: Yes Virginia...It's a Bubble...

This crack down in China is yet another visible example of the severe limitations of China's current economy and governance - they are flailing around incapable of dealing with even the most modest of economic stresses in their economy.

the chinese gov't is always described as being afraid of social unrest which might threaten the ccp's legitimacy in its powerful role. this gives rise to the thought that the ccp may be more interested in public opinion than the governing parties in the u.s., where the veil of democracy obscures the awesome power of big money.

[GRG55]

Re: Yes Virginia...It's a Bubble...

Your assumption is that the new world order is going to be the same as the previous world order - dominated by a single democratic/free country.

I've already warned this on my multiple posts in the last couple of years that the fall of America's influence and scrwe up of the Middle East will lead to a new world order that looks nothing like the past US dominated world order.

It's fun watching the mass orgy in Syrian Colosseum (FSA vs Assad vs ISIS vs Turkmen vs Kurds vs Al Qaeda) but the whole world is also watching the spectators in the Colosseum. At the back of everyone's mind is - who is responsible for this? Who sabotaged the poor Syrians? The MSM may not talk about this, but it doesn't mean the 6 trillion people in the world don't think about that, both consciously and subconsciously.

I know that the MSM and many people like to use GDP or the number of Fortune 500 companies to measure America's strength or even for China, but in realty, dominance is not just about the economy alone - if not Japan would have the same dominance as China does today when they were number 2 in GDP. I note that the Great Depression of the 1930s also didn't stop the US a century ago.

The biggest battle is on ideology and mindshare, and the mindshare in the entire South East Asia has already been captured by China, so much so that China can occupy the South China Sea and no one can or dares to do anything about it. In fact, if you read the news nowadays, except for the Philippines, no one even complains about it.

The last time Japan tried to take over South East Asia, they bombed the hell out of Subic Bay and Pearl Harbor. Today, China does it without firing a single gun.

The crack down on the finance industry is a good example of how the new world order will look like in the future.

I'd be careful about what assumptions you make about my assumptions.

As to your closing line, I seriously doubt it. It is no more sustainable than East Germany trying to keep its people in using a wall. This crack down in China is yet another visible example of the severe limitations of China's current economy and governance - they are flailing around incapable of dealing with even the most modest of economic stresses in their economy. And that is why the outcome for China, especially in terms of talent and capital leaving, will be worse than it needed to be.

[touchring]

Re: Yes Virginia...It's a Bubble...

Your assumption is that the new world order is going to be the same as the previous world order - dominated by a single democratic/free country.

I've already warned this on my multiple posts in the last couple of years that the fall of America's influence and scrwe up of the Middle East will lead to a new world order that looks nothing like the past US dominated world order.

It's fun watching the mass orgy in Syrian Colosseum (FSA vs Assad vs ISIS vs Turkmen vs Kurds vs Al Qaeda) but the whole world is also watching the spectators in the Colosseum. At the back of everyone's mind is - who is responsible for this? Who sabotaged the poor Syrians? The MSM may not talk about this, but it doesn't mean the 6 trillion people in the world don't think about that, both consciously and subconsciously.

I know that the MSM and many people like to use GDP or the number of Fortune 500 companies to measure America's strength or even for China, but in realty, dominance is not just about the economy alone - if not Japan would have the same dominance as China does today when they were number 2 in GDP. I note that the Great Depression of the 1930s also didn't stop the US a century ago.

The biggest battle is on ideology and mindshare, and the mindshare in the entire South East Asia has already been captured by China, so much so that China can occupy the South China Sea and no one can or dares to do anything about it. In fact, if you read the news nowadays, except for the Philippines, no one even complains about it.

The last time Japan tried to take over South East Asia, they bombed the hell out of Subic Bay and Pearl Harbor. Today, China does it without firing a single gun.

The crack down on the finance industry is a good example of how the new world order will look like in the future.

Apparently China is Purging more than foreign technology these days

Tell me again how China is going to dominate the world economy...

Markets| Fri Dec 4, 2015 5:56am EST

Foreigners drawn in as fear and loathing grip China's finance industry

A widening regulatory probe into some of China's biggest brokerages has set nerves jangling in a financial industry still recovering from a summer of turmoil, with fear of becoming entangled in investigations spreading among foreign investors.

People working at domestic securities firms report an ugly mood after news in the past week of increased scrutiny of the sector by authorities. A nervous inertia is slowing new business as staff are encouraged to report their bosses or colleagues for corruption.

"It's creating a very dog-eat-dog environment," said a partner at a Chinese mutual fund. "People collect evidence on their bosses, because if they get rid of their boss, it means that they can get promoted faster."...

..."Everyone is absolutely terrified of China," said a director at an international brokerage in Hong Kong, echoing the sentiment of many in the industry contacted by Reuters. Most did not want to be identified due to the sensitivity of the issue...

..."They put a notice on all the floors with the number that you can call anonymously to encourage people to dial in. They say they just want people to report corruption," said a source at Guotai Junan...

...Brokers, consultants and lawyers said foreign investors operating in China were becoming increasingly reluctant to speak publicly on market issues in case they attract adverse attention from regulators.

While they welcome the need to investigate and prosecute rule breakers, they say a lack of legal recourse in China creates the fear about being caught up in the net. When authorities call executives in, they say they are never sure if they are being asked to help with enquiries or are under suspicion and when they might be released.

A lawyer who has assisted foreign firms caught up in the probes said some were introducing new onshore compliance programs, although that did not guarantee keeping out of trouble.

"You can't 'comply' because there is no rule of law," he said. "The best thing you can do is establish processes for who is likely to be taken away, and how to make sure they aren't disappeared forever."...

[GRG55]

Re: Yes Virginia...It's a Bubble...

China is Planning to Purge Foreign Technology and Replace With Homegrown Suppliers

By Bloomberg News Dec 18, 2014 7:13 AM GMT-0200

...

Apparently China is Purging more than foreign technology these days

Tell me again how China is going to dominate the world economy...

Markets| Fri Dec 4, 2015 5:56am EST

Foreigners drawn in as fear and loathing grip China's finance industry

A widening regulatory probe into some of China's biggest brokerages has set nerves jangling in a financial industry still recovering from a summer of turmoil, with fear of becoming entangled in investigations spreading among foreign investors.

People working at domestic securities firms report an ugly mood after news in the past week of increased scrutiny of the sector by authorities. A nervous inertia is slowing new business as staff are encouraged to report their bosses or colleagues for corruption.

"It's creating a very dog-eat-dog environment," said a partner at a Chinese mutual fund. "People collect evidence on their bosses, because if they get rid of their boss, it means that they can get promoted faster."...

..."Everyone is absolutely terrified of China," said a director at an international brokerage in Hong Kong, echoing the sentiment of many in the industry contacted by Reuters. Most did not want to be identified due to the sensitivity of the issue...

..."They put a notice on all the floors with the number that you can call anonymously to encourage people to dial in. They say they just want people to report corruption," said a source at Guotai Junan...

...Brokers, consultants and lawyers said foreign investors operating in China were becoming increasingly reluctant to speak publicly on market issues in case they attract adverse attention from regulators.

While they welcome the need to investigate and prosecute rule breakers, they say a lack of legal recourse in China creates the fear about being caught up in the net. When authorities call executives in, they say they are never sure if they are being asked to help with enquiries or are under suspicion and when they might be released.

A lawyer who has assisted foreign firms caught up in the probes said some were introducing new onshore compliance programs, although that did not guarantee keeping out of trouble.

"You can't 'comply' because there is no rule of law," he said. "The best thing you can do is establish processes for who is likely to be taken away, and how to make sure they aren't disappeared forever."...

[ProdigyofZen]

Re: Yes Virginia...It's a Bubble...

Corn began falling in 2013

Back in 2012/2013 I identified the price collapse in corn and what companies this would affect. Chicken producers like Tysons and Pilgrims Pride came to the forefront of my analysis.

I surmised that corn prices being one of the highest input costs aside from labor for these companies that the 50% + decline in the price of corn would eventually feed its way into the margins of TSN for example and lead to expanding margins.

This is in fact exactly what occurred. The stock price of TSN went from 16 a share to a now 51 share price.

Chicken producers margins have expanded to all time highs and now the margins are bound to mean revert as they have over produced chicken hatchings.

This will eventually feed its way into the stock price of TSN and PPC but not yet.

The key is identifying these macro factors that will substantially change the margins in a business and be ahead of the eventual investor capital inflows or outflows that will inevitably enter these stocks.

Obviously because the market is perfectly efficient and all.....

[jk]

Re: Yes Virginia...It's a Bubble...

more deflation.

[Southernguy]

Re: Yes Virginia...It's a Bubble...

I am quite sure the price of beef shall go down. Most of it is produced using rations made essentialy of corn and soy spoils after oil is extracted. There is a time lag because you need several years to increase animal population. Unlike, for example, pigs, cows only have one calf at a time. And they need 9 months to do it. Corn began falling in 2013, soy beans did it in 2014. Beef prices should fall significantly in 2016-18.

Don't know much about corn or pork but the $ price of soft commodities has been dropping in the last 2 years.

http://www.nasdaq.com/markets/corn.aspx?timeframe=10y

I believe the price for agri-commodities should have fallen even more if not for the El-Nino effect. But that doesn't mean farmers can earn more as they have to spend more on irrigation.

The price of Soy - http://www.nasdaq.com/markets/soybea...?timeframe=10y

China tipped to massively increase pork imports as price of the meat soars


http://www.scmp.com/news/china/econo...ice-meat-soars

[touchring]

Re: Yes Virginia...It's a Bubble...

Don't know much about corn or pork but the $ price of soft commodities has been dropping in the last 2 years.

http://www.nasdaq.com/markets/corn.aspx?timeframe=10y

I believe the price for agri-commodities should have fallen even more if not for the El-Nino effect. But that doesn't mean farmers can earn more as they have to spend more on irrigation.

The price of Soy - http://www.nasdaq.com/markets/soybea...?timeframe=10y

China tipped to massively increase pork imports as price of the meat soars

http://www.scmp.com/news/china/econo...ice-meat-soars

[jk]

Re: Yes Virginia...It's a Bubble...

the u.s. is a large agricultural exporter and the commodities are priced in dollars. i would think that a stronger dollar would raise the global price of corn, which would in turn raise the price of pork. is this incorrect?

[touchring]

Re: Yes Virginia...It's a Bubble...

these developments will certainly sow confusion among the american politicians yammering about currency manipulation. in the meantime, yuan devaluation is another deflationary force, another push upward for the buying power of the dollar. also a weaker yuan will hurt chinese internal demand, e.g. for meat, and thus push down on commodity prices.

It depends on how weak, but from my own experience, it won't make much of a difference at least for imported food since most of it are from NZ, Australia, Japan, Korea, Thailand, Taiwan, India, South Africa and the EU.

As for manufactured goods, including cars and plastic household stuff, they are mostly made in China anyway. Branded goods from the EU/Swiss/Sweden, and industrial goods, robots from Germany, France and Japan. Military hardware from Russia.

However, Hollywood movies from the US, XBox games, Nike sneakers and McDonalds' fries may cost more.

Wages in China have more than tripled since 2005, an annual growth rate of more than 7% a year. Any depreciation of the Yuan will be partially offset by higher wages.

http://www.tradingeconomics.com/china/wages


Meanwhile, a report on Australia's depreciation. Food for thought.

Why does depreciation help no more in raising the Australian CPI?

http://www.fxstreet.com/news/forex-n...a-4d6d49518fcb

[GRG55]

Re: Yes Virginia...It's a Bubble...

these developments will certainly sow confusion among the american politicians yammering about currency manipulation. in the meantime, yuan devaluation is another deflationary force, another push upward for the buying power of the dollar. also a weaker yuan will hurt chinese internal demand, e.g. for meat, and thus push down on commodity prices.

I agree, if the yuan is allowed to fall, as expected, to support the broader export economy it will not do anything to enhance the shift to the allegedly desired "consumer economy".

China's Manufacturing PMI Weakens to Lowest in Three Years

November 30, 2015 — 10:49 PM MST

China’s manufacturing conditions slipped to the weakest level in more than three years as sluggishness in the nation’s old growth drivers add to risks facing the government’s growth target.

The official purchasing managers index fell to 49.6 in November, the National Bureau of Statistics said Tuesday -- the lowest level since August 2012...

...Six central bank interest-rate cuts since November last year haven’t been enough to spur a recovery in manufacturing, which has continued to weaken while activity in the services sector has shown more strength. Premier Li Keqiang’s goal of about 7 percent expansion for 2015 is at risk, even as employment has held up thanks to resilience the in services and consumption.
"The data show further divergence in manufacturing and non-manufacturing sectors," said Zhu Qibing, a Beijing-based analyst at China Minzu Securities Co. "Considering further cuts in overcapacity, the divergence will continue into at least mid-2016."

The Shanghai Composite Index pared earlier losses and was 0.4 percent higher at 1:43 p.m. local time. The yuan -- which won approval Monday for addition to the IMF’s list of reserve currencies -- weakened in offshore trade.

Another manufacturing PMI released by Caixin Media and Markit Economics edged up to 48.6 in November, exceeding the median estimate of 48.3. The gauge has a smaller sample size and includes smaller companies and exporters.

[jk]

Re: Yes Virginia...It's a Bubble...

these developments will certainly sow confusion among the american politicians yammering about currency manipulation. in the meantime, yuan devaluation is another deflationary force, another push upward for the buying power of the dollar. also a weaker yuan will hurt chinese internal demand, e.g. for meat, and thus push down on commodity prices.