Tuesday, May 5, 2015

Some news and opinion

US looks like it wants to keep selling... the argument this time is apparently "sell in May go away". Or maybe people are still scared of imminent wage inflation, as if we've seen any of that at all since Reagan declared war on the workers 30 years ago.

So I guess we're in a holding pattern, still.

Gold btw broke down ex-US a while ago, but since the gold miners are still in a slow uptrend I'm not concerned very much. The PMs really do look like they're bouncing along the bottom here, and as long as Indian jewellers stock up on gold again this summer everything should still pick up in a month. My only concern is that the gold miners will have done their advance ahead of the metals.

Anyway, I've been ignoring Bill Bishop's blog for too long, so here's a couple China stories:

Bloomberg - China finds cure for debt hangover in $4T stock boom. Yes, that's right - the pop in Chinese shares has so far added over $4 trillion dollars to China's market cap. And if this does result in $160 billion in capital raising this year according to UBS, at least that's dilution of equity and not accumulation of debt. And as for China being "overvalued"? Well, firstly, where else are Chinese supposed to invest to get a return? And secondly, wasn't it undervalued before, considering that even 6%/yr growth means a doubling of GDP in 12 years?

Matthews Asia - yeah, about those "ghost" cities. That "ghost city" story has turned out to be a gigantic joke - they're becoming fully occupied. Seems it's Whitey who is stupid, not the Chinese government.

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