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China investor market scanning

China, the price of sugar is still rising up, although the government will sale 200,000 ton at tomorrow, the price rising craze yet,now the price of  sugar futures is 5500 Yuan / tun…, the price of food rise quickly in recent weeks.
China , the price of real estate is still rising up yet, in some city, house price rise more than 90%, we read report which said in Lan Zhou , the price of house rising 200% in 5 years, the price of BeiJing ShangHai had higher than USA Or, London. Now,the amount of real estate transaction is the half of the whole amount of consumer in China. In some city , for example in ChangSha, HuNang, China, which the price is 4500Yuan/M , sale out about 3000 house in last week, but in some city , for example Yangzhou, JiangSu ,China, the price is 8600Yuan/M, only sale out 600 house in last week, the price in BeiJing is 30000Yuan/M…. , in many city, thereare more than 50% house , although sale out, but nobody living in it, some body buy these house, but actually it is empty …

Now somebody say there are not inflation in china and there will not inflation in next year, and last month , the CPI is still 99.5, not more than 100%, but as a normal people who living in china, the egg, Oil, sugar , vegetables, OR, the price of rent and the price of house is still rising, we do not care about the number of CPI again,because we had began feel what is the real pain in the life.

In short term of last week, the price of china bond and stock is stable, center bank is still recycling money in market yet,but the amount is little. In USA, since the black Friday, seems have some little good news, although we can not sure what will happen after Christmas, Seems the adventure emotional is come back, Dollar is rising, gold is dropping, and the price of bond is dropping too, What is it really meaning?

china investor events in last week

I had reported china will not stop the export of rare earths 2 weeks ago , but china will reduce the numbers of the factory which produce rare earths, because many factory have a very low extraction degree. This week china accounced will reduce 80% numbers of factory which produce rare earths, and build two industry group in the north and south of  china . China get too many lesson in the negotiate with ore produce group, they control the price, this is a example for china,  in some point of view , this is a big improve in this industry, the price of rare earths will rise up in future years, we can not sold gold as potato , the reouse is limited and the reserve is very little now.

2. Green bubble: Green has been everywhere. With observers saying the “Age of Cleantech and Biotech” will be the next major economic revolution, and Washington pouring billions of dollars into alternative energy projects, you’d think a bubble would have already formed. But, as we noted this spring, it did not, at least from an investment perspective.

Still, as the economic recovery takes shape, alternative energy could see excess investment on hopes of big future returns. There’s plenty of hype left, and if investors regain the cash to get in the game, could green become the next internet or housing bubble?

3. Gold bubble: Gold prices just keep going up. They’ve risen for seven straight years, recently breaking $1,000 per ounce.

Is it a bubble? Right now, it doesn’t look too bad. Gold is good in both inflationary and deflationary periods, as it holds wealth tangibly. And, as the Telegraph notes, there’s real demand, especially from China.

But with some predicting a doubling of prices to $2,000 an ounce, too many people could jump in and spike the real value of the precious metal. The “rise forever” mentality usually means trouble.

4. Federal Reserve bubble: Is the Fed saving the financial system or creating another dangerous credit bubble by snapping up mortgage-backed securities?

At first glance, the Fed’s effort to clean up mortgage-backed securities is a winner. But, as Heidi Moore wrote for Slate’s The Big Money, the Fed is actually creating a bubble similar to the one it’s trying to do damage control on. By eagerly trying to save banks and stabilize the housing market, Washington is taking on too much: $1.25 trillion of mortgaged-backed securities, including both the original toxic assets and products of foreclosures to come. So who would bail the Fed out? You.

Click here to view the 10 bubbles in the make slide show.

5. Trash stock bubble: There’s a rush to trash going on. Stocks like Fannie Mae (FNM), Freddie Mac (FRE), AIG (AIG) and even GM made big runs in August — trading in trash financials made up nearly one-third of NYSE’s August volume.

So why are people buying junk? Charlie Gasparino says shares of junk financials — companies like Fannie, Freddie, AIG, Citi and Bank of America — are being pushed up by a short squeeze. The Wall Street Journalsuspects its high frequency traders. And others say its retail speculation and day traders getting their way while Wall Street went on vacation.

6. Education bubble: More people are going back to college and taking on huge debt to do it, despite questions about what the degree is really worth.

Last year, the amount borrowed by students and received by schools grew some 25% over the previous year, to $75.1 billion. That’s a huge amount, especially with weak, low-paying job prospects for graduates in this economy.

As we’ve noted, all this student loan debt is crazy. Despite the desire to see more subsidization of college, we suspect there will be a collapse in student loan debt availability and desire to take on new debt.

Short of telling kids not to go to college, something’s going to give.

The pop may be starting already. As Bloomberg reports, as many as one-third of all private colleges surveyed said they expected enrollment to drop in the next academic year. And almost 40 percent of those colleges said some of their students dropped out due to personal economic reasons and a quarter said full-time attendees switched to part time. Half said families had to cut back their expected contributions as the value of college savings plans dropped 21 percent last year.

7. Subprime bubble, 2.0: What are banks doing with all those subprime mortgages? They’re repackaging with a higher rating — “re-securitization of real estate mortgage investment conduits” — and selling them.

As we’ve noted, it’s a plan nearly identical to the complicated investment packages of the financial crisis a year ago. That being said, the problem was not strictly securitization, but the underlying housing bubble. So the return of complicated products isn’t necessarily the end of the world.

8. Life insurance securitization bubble: In its search for new profits, Wall Street is planning on securitizing “life settlements” — policies that the sick and elderly can sell for cash while they’re alive — much like it did subprime mortgages. The New York Times warns that we could be looking at subprime all over again.

Maybe. As we’ve noted, it wasn’t securitization that caused the financial meltdown. It was the bursting of the housing bubble. Yes, there was a feedback loop, whereby securitization allowed more money to flow towards housing, but it seems unlikely that “life settlements” would get big enough to infect all portions of the financial world.

9. Commercial real estate bubble: This bubble is already hissing, if not popping outright.

While the economy is improving and some home sales are slowly coming back, the commercial real estate market could get far worse.

As The New York Times reports, “Even though industry lobbyists were able to persuade Congress to extend a loan program aimed at prodding the stalled securitization market back to life, several analysts said it was unlikely to head off a spate of defaults, foreclosures and bankruptcies that could surpass the devastating real estate crash of the early 1990s.”

As UPI notes, commercial mortgage defaults could reach 4.1 percent by the end of the year, up from 2.25 percent in the first quarter, and Real Capital Analytics estimates commercial property loans worth $83 billion have been involved in default, foreclosure or bankruptcy in 2009.

Badly hit will likely be malls. “The next financial tsunami to hit will be the widespread failure of shopping center mortgages,” says Peter Monroe, co-chair of REOMAC, a not for profit trade association to CNBC. “Half a trillion dollars of commercial loans financed on historically low rates, are due for refinancing in the next three years,” says Monroe. “The negative impact of these shopping center mortgages is enormous.”

Will China stop the export of rare earths?

These day, a share listed in SHANGHAI Index — 600111 rise up quickly, 1 week it’s price rise up from 20.00 YUAN to 27.00 YUAN.Some reporter said it is because seems china will stop the export of rare earths.

OK, from my eyes, china will not stop the export of rare earths, it is ture now chinese govment begin manager this industry, but many chinese think that is right. My friend go to the one of the biggest base of rare earths– Sourth Area of Jiang Xi, them tell me there are so many little factory , many of them “Mention purity” is very low.They can not achieve the technolegy of  big factory and they have not any measures of environmental protection .

The result is so many rare earths resouece wasted and the price of rare earths is too low. Now from ipod to missile, if no rare earths, they can not work, the worth of rare earths is like gold, but now it saled as potato.USA have a law limit people to mine and export rare earths , and in many many years , japan buy and buy rare earths from china, but them do not use is , just hoard in warehouse….. , it is because it is too cheap.

Now USA had prosecution in China at WTO, said china must let rare earths export free, but in chinese eyes, if so , USA should cancel all of the limit of mine and export rare earths or oil and othere things first…. , But actually , china do not hope stop the export of rare earths, china just hope this rare resource can get the right price and do not waste so easy.

Now china had mine 95% rare earths of the global and 60% export of the world, but china can not rise up the price of the rare earths, many chinese people and manager said , if china need something, them will rise up crazy ,like ore, if china have something ,they must sale out as a very high price , else if china do not hope import something with so high and crazy price , china got moral condemnation and do not have any rights to protect the himself, but if china hope do something to rise up the price of rare earths ,although china mine 95% rare earths and these gold sale out like potato, china got moral condemnation and drop in raw trouble.

Just like a reporter said in routers, he found china begin join and trust these organization which build by West, yes we do, but we hope we can get a fair treatment, if there are just Law of the jungle , many things will become bother,becaue in chinese people’s eyes, what we will do is what West done and waht West doing.

monetary policy exit mechanism

Just 20 mins ago, I read a news subtitles under CCTV, which said england will think about monetary policy exit mechanism, it confused me, because I just read a report from reuters.com which said england add £ 50,000,000,000 to support “Quantitative easing program” .

Actually , I read a chinese report from cfi.net.cn which said The Central Bank Of China is talking about the monetary policy exit mechanism. The report said  somebody think there are a obvious sign of economy recover, and finical crisis nealy ended.

I very trust CCTV, but these information shown different way , it really confused me. But from my eyes, there are more important problem then about will england add or reduce money from the market. This problem is Efficiency Of Monetray Policy . I read many report said in england or USA, The bank do not hope give factory loan , do not hope give people loan to support house and custom , but these bank had accept many many money from country and people to pass “THEIR CRISIS” . But the result is these bank take money from people , but not return money to people , The multiplier effect of monetary stopped, at the same time, these bank distribution of high salary to their staff in the “PEOPLE’S CRISIS” . Now the controler just take people’s money to support self-service , but many many people lost job and living the street .  If these bank can not support the goal to help factories and woker, why we give money to them? From Greed to Fear, it just only 8 months. I believe the bank system should not only pay attention to owner’s profilt, but also the bank system should pay attention the “Social Responsibility”. If these bank can not support social responsibility, the center bank should build another way to support the facorties.

OK, In china, also I think the most important problem is employment ,we should let demographic dividend be a good thing, not a burden, many people born after 1949, from 40,000,000 to 1,300,000,000 , just a short time! The first baby borned in 1949 will retirement in this year , and in a short time, china will have many many old people…..

China can not only depanded export or depanded Houst to support today and feature, we must change our model of economy growth, we must let people can get house in 5 years , not 30 years, we must let young people become worker and customer, not unemployed youths . The money should been use build the jobs, not used to support house price.The focus of monetray policy should changed to increase the job , change the structure of economy, let university graduates become researcher and high-tech workers, not unemployed youths or nanny. The focus is not amount, The focus is efficiency! Do not waste valuable asset to build a “Asset bubbles” , we should let people easy to get house and easy to get job, let china become more civilization and more high-tech, realease the power of creative ability in china people, not help a littler people get more money, that is not the goal of reform.

Guan Zhou–the rent of office fell to the level in 2005

Guan Zhou , is the one of the leader area of china reform, the beneficiaries of Industrialization, he rent of office feel to the level in 2005 because financial crisis, the vacancy rate is keeping rise up.

In next year, there still have more than 570,000 SQ new office offer to the marker, it make some company begin move from old office to new office, because new office is more cheap and more beautiful.

It is not the Isolated incident in china, the rent of office in BEI JING is still fell too, and in japan, the rent of office of Tokyo is feel also.

At the same time, the price of residential rise up 30% in last months, it is very strange.

BYD, a new tiger

Today , the price of the leader of chinese electric cars company — BYD rise up 9.55% . BYD’s goal in electric cars area is become the biggest company before 2015 year and become the NO.1 in the global before 2025 , for this goal, BYD begin purchase some good company in china and build them as base of electric cars, last week, BYD purchase the “SAN XIANG” company in HU Nang, China, and then BYD will invest more than 3 billion YUAN to ensure the base will reach at least 30 billion yuan output value in 3 years. And, BYD is still increase the product capability in other base.

Although the fiest electric car–”F3DM” juse sale out 19  in HONG KONG and SHEN ZHEN, but BYD is really a new tiger , the goal of this year of BYD is sale out 400,000 cars, it seems it is very easy to reach.

China export: continued to decline

In the first half of this year, Chinese export is continued to decline, The amount of export of the first year is 521.53 billion U.S. dollars , which dropped 21.8% . This is the eighth months the amount of export keep decline.

Because the demand is still decline, some chinese company begin sale their goods to demostic customer,I saw a toy which can talk with baby, it suprised me, I did not saw this kind toy in chinese market before, many friends have the same view with me, it really a good news for chinese customer, CCTV reported the owner of this company said becuase the price of export is far away higher then demostic market and many demostic compamy have a strong capability to study and research, they do not sale it in demostic market before. About the price, some exporter face the competition, I heared many of then had to offer a lower price to foreign customers, it is really a hard work to find who have an order in the hand and also have money in the hand, Many chinese company select close the facotory in a short time, so the owner can keep money in the hand and keep the chance for the future.

Face the tough competition, chinese government taken some measures to help these company, some of them found it is more easy to get loan, In chinese eyes, we  did not take trade protection to solved the problem,the imports still keep 424.6 billion .U.S dollars , and china begin took the initiative in international organizations to face the trade protection measures , not select trade protection too.  Last weeks, China has asked the World Trade Organisation to probe a U.S. ban on Chinese poultry imports and has filed complaints about EU anti-dumping measures against Chinese fasteners. I read a review of a england reported said: china begin to participate in the institutions which controled by Western.

The above chart(China Customs) is the imports and exports data from 2007-10 to 2008-10,we can found the amount of the trade had a big reduce since the beginest month of the decline.

Chinese shares drop down 5 percent today

Today, chinese SHANG HAI stock marker drop down 5 percent , in afternoon, there are even a 7% drop down happened. At the end , SHANG HAI Index closed at 3266  which eat the rise up in last week, this is the most drop down in last 8 months.

Before today, a new share listed in SHEN ZHEN GEM, which been   pushed to 7 tims of the price of IPO, but today when a huge share –”Chinese Architecture” listed , it’s price drop down the price of IPO, this is chinese market,  a hot and a cold market at the same time.

Today, PE of Shang HAI is 28 and PE of SHEN ZHEN is more than 40, the price is really too high, because it is far away from the AVG of the global market, although the number of china gdp looks good, but Overcapacity is really a problem need to solved, if the economy of global can not rise again, Overcapacity will begin a big problem for china.

In a short time, chinese shares rise more than 100% , the drop down is a revise for the trend of the first half of year. Investor or Speculation? It seems select Speculation maybe a good choice for short term.

On the other hand, if stock market drop down , maybe somebody which like Speculation will begin speculate house market, it is not a good news for chinese people.

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China’s futures market,somebody happy and somebody sad

Yesterday evening, LME copper (three months) create the record of the year, closed at $4600 , the records in the history is $8940 in last June.  Today, ShangHai copper (3 months : 0911 ) open at 44600 YUAN  and closed at 44830 YUAN, the voloum is 833,398 . With the good data of economy published ,  there are still an atmosphere of optimism, but although the volume is keep in a high level, but   it seems there are somebody are selling , somebody get the profit from the current trend .

At the same time, Soybean future market got a cold, the Department of Agriculture in  U.S.  said soybean crop growing good, There are some report said some fund is still sale out their own Soybean future shares, In china , the first auction of soybean is failed, nobody hope buy soybean in current price , 0 voloum .

In China’s futures market somebody happy and somebody sad , but the current trend is decided by the amount of funding, not a strong basic economy, I think keep a mind of it is very important .

After several failures, china government bonds issued success

Yesterday, China’s 15th government bond finally started trade.  The bond is fixed-rate bonds with a period of 3 years and 2.22% nominal interest rate. Before it, there are three consecutive times failure of the issuance of treasury bonds.

MR market.china is worry about the inflation, he is also doubted with the policy concerns of the central bank of china, this cause the yield of the short-term government bonds rapid rise,just look the picture of the right ,it is the INDEX OF CHINA BOND.  Also, this caused three consecutive failed bonds issue. And, China’s Ministry of Finance was forced to postpone the four local debt issuance.

I think we should pay attention to the signal of the failure of the bond issue, which indicates that the MR market’s expected is reversing, and there are some problem in the loan structure of these banks. Now the amount of the loan is create and creating the record of  china , we must pay attention to the efficiency of these loan , is it to the factory and family? Or it just been used to invest house? just like chinese idiom said: overkill.

At the same time,China’s investment in government bond  of the United States broke the 800 billion U.S. dollars  now, continue to be the largest investor in the bond market of USA. At the same time, the “bond king”  Bill Gross is still sale out their own bond of USA, Gross managed the size of 161 billion U.S. dollars of funds,the holders of government bonds from 28% (March) , reduced to 24% (June) , Holders of mortgage debt assets  from 61% (May) to 54% (June) , it is the lowest level over the past two years. At the same time, Japan, Russia and many other countries are selling their U.S. Treasury bonds. At the same time, we are still buy and buy, more and more.

Gross warned investors care of the risk with dollar-denominated assets earlier in a television interview, now every American currently has 40,000 U.S debt, Chinese investors are very worried that our depreciation of the investment in USA. And many chinese people is worry about Clinton’s action, she is still tell the world and China’s neighboring areas , china is a threat , some observers of china said, business just is business, if we just use business profit to face the pressure of Clinton, if we just help USA but ignore the voice of ” china threat” theory. we will failed.