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Monday, October 5, 2015

You think the China fear is over?


A-shares ETF:

 After a couple weeks of failing to collapse, ASHR is starting to look healthy again.

 FXI:


And same for FXI. Challenging the SMA(50), even.

I dunno, maybe Wall Street Whitey has realized Shanghai only dropped back to where it was in the winter, and it doesn't feel like dropping anymore, and it's actually well-valued if you assume 6-4% growth for the next ten years?

Or maybe he realizes that there's a bifurcation in the EMs, and while dumps like Brazil and Turkey are collapsing under their own sociological ineptitude and their reliance on commodities whose production is easily expandible, China and India have still been growing quite well, as evidenced by the fact that both the yuan and rupee have remained strong. And thus, for example, Chinese and Indian USD-denominated corporate debt isn't even remotely threatening, since USD has depreciated against these local currencies.

I wouldn't exactly be buying China and India right now, but I'd maybe be looking at some sort of thing that's in demand in these countries, whose future outlook is dependent on continued Indian and Chinese wealth formation.

Y'know, like maybe some sort of yellow metal that they together buy 2000 tons of every year.

I'm only saying....


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