Tuesday, July 28, 2009
Chinese Paper Dragon Coming Unhinged
Today I took a few hours off chasing the mighty shekel and studied the market. In the past I made money on Chinese stocks and they are recovering nicely. Is this, to employ a j-ism, an investable moment?
It appears that no. Chinese stocks have surged to double their low set in 2008 as the government has unveiled a 4 trillion yuan ($585 billion) stimulus plan to revive growth. Yet Chinese economic figures are contradictory and most probably untrue. Quote: Edward Chancellor, a member of GMO’s asset-allocation team, “strongly suspects that the Chinese economy is dangerously unbalanced and very likely to come unhinged in the next few quarters, surprising the pants off investors,” Grantham wrote.
I tend to agree.