Here's China's response to 'Trade' bill

Official Statement form China 商务部新闻发言人就美参院通过《2011年货币汇率监督改革法案》发表谈话

2011-10-12 08:22  文章来源：商务部新闻办公室

文章类型：原创  内容分类：新闻

10月11日，美国国会参议院通过《2011年货币汇率监督改革法案》，商务部新闻发言人沈丹阳就此发表谈话指出，在全球经济复苏面临严峻考验的关键时刻，美参院推动以立法方式逼迫贸易伙伴货币升值，无异于发出了贸易保护主义升级的错误信号。此举严重违反了国际规则，不仅威胁中美经贸关系的稳定发展，也与世界各国共同应对挑战、反对贸易保护主义的努力背道而驰，中方对此坚决反对。 沈丹阳强调，中方一贯主张中美双方加强沟通，共同采取积极正面的措施发展中美经贸合作。美国会的相关议案一旦成法，势必导致中美经贸关系严重受损，这是中方所不愿看到的。希望美方深思明辨，客观理性地对待汇率问题，作出正确抉择。 Isn't that crazy? Kidding...jump past the break for the translation.

China: A Growth Story

The Great Wall

After the Tiananmen Square protests of 1989, China, lead by President Jiang Zemin and Premier Zhu Rognji, took advantage of economic policies put in place in the 1979 post-Mao era of market and social reform. Subsequently, the PRC experienced an economic boon that pulled 150 million people out of poverty, and sustained an average annual GDP growth rate of 11.2% up through last year. This is the China we know today. The fast-growing behemoth that has dominated the last decade both financially and politically. But unfortunately China's final story may be a cautionary tale on the pitfalls of being  overdependent. Jump past the break for the scoop.

Looking ahead to next week

Today's economic data wasn't all that bad, but China and Europe are driving the action. We'd be down a lot more but America is actually getting healthier, and our companies have strong fundamentals, unlike Europe. On the other hand, if you're company even knows where China is on the map, it's selling off today. Anything related to China is getting swept up in talk of what could be the hardest "hard landing" in history. Throw in an SEC investigation into the balance sheets of Chinese ADR's, most of which are traded on the Nasdaq, and you have a real problem. I forever the optimist don't think it will unfold like this, but it's not the time to be buying anything Chinese. Next week we get a slew of economic data, starting the week with the ISM Index, then construction spending, auto sales, truck sales, and factory orders. At the end of the week we get the big ones, Nonfarm payrolls and Unemployment. We'll see if the US data moves the market, or if it's still all about China and Europe. My guess is on the latter with one caveat, Apple (AAPL). If you read my blog you know next Tuesday, Tim Cook will release the much anticipated iPhone 5 and iPhone 4S. It's hard for me to say whether the market will like the phone or not until it's unveiled, but if Apple (AAPL) gives us a positive surprise or two, I think it can take the tech sector up along with it. ARM Holdings (ARMH) and Broadcom (BRCM), both of which are down close to 2% today, will be great ancillary plays off any good Apple (AAPL) news.

This is not a recommendation to buy or sell any securities. DAK was long AAPL, BRCM, and ARMH at time of publication but positions can change at anytime.

Me thinks this market be crazy

If you invest in momentum stocks like I do, you're not really sure what rally the lame-stream media is talking about today. Up 140? The Dow once again masks the ugly, underlying action that, at least for the time being, is the true tale of this market. I have about 100 companies I watch on a regular basis, and five had green arrows today. Five. This looks like a big move away from risk, or as the kids are saying "Risk Off." But, I did do some shopping today. I bought some Alexion Pharma (ALXN) as it was down 4%. I had been looking for this one to pullback for a while and today gave me the opportunity to add to my position. Also, I am now speculating on a Netflix (NFLX) takeover with the NOV 135 calls. I covered some of my shorts in Fossil (FOSL) only because by mid-day the stock was down almost 12%! It ended the day down 7% so I'm already happy with the move. I still think there is plenty of downside risk out there, so I'll be leaving the rest of my Fossil (FOSL) shorts on until I see some better data points out of Europe and China. China took center stage today as fears of a hard landing have accelerated. If it's not Europe, it's China. We can't get a break! Add to that the SEC is now probing Chinese companies to make sure their balance sheets aren't air, and that made for an all-out sell-off in the Chinese ADR's. Baidu (BIDU) and New Oriental Education and Tech (EDU) were down huge but parred their losses going into the close. At one point New Oriental Education and Tech (EDU) was down over 18%! I had to literally leave the office so I wouldn't buy these names, but it looks like I would have already made a handy profit had I just listened to my instincts. I wouldn't have held anything overnight, but it would have been one boss of a day trade. 

This is not a recommendation to buy or sell any securities. DAK was long ALXN and NFLX, and short FOSL at time of publication but positions can change at anytime.

I'm still not buying it...

I seem to be a very torn individual these days. Many of the things I predicted would happen have begun to come true. The market is up 150+ points as Germany passed the TARP-like measure seen as necessary to save the Euro Zone, and jobless claims and GDP came in better than expected so it seems the economy isn't quite as bad as we all thought. All seems rosy right?? Wrong. There are some ominous signs out there that have me raising cash and only picking at a few select names on weakness. We'll start with copper, probably the best indicator of economic growth out there, has fallen like a stone. China, the gasoline keeping this global economy running, is drastically reducing how much copper it's consuming. Then a poll taken by Bloomberg showed 59% of respondents believe China will fall to sub-5% GDP growth by 2016. A "hard landing" of less than 5 percent growth for the world's most populous nation would be "disastrous" for the world economy, said Qu Hongbin, an economist with HSBC in Hong Kong. The nation wouldn't be able to create enough jobs for those entering the workforce, sparking a "serious social problem," he said. "I'd rather bet that it's the end of the world in five years than to bet on China's growth falling below 5%." This puts into perspective just how dire this situation is. If China goes, we all go. Your iPhone goes from costing $250 to $1000. Not good. Hopefully China would have the foresight to change their model to accommodate the lower growth by shifting to a strategy of household spending- led expansion, softening what global investors anticipate will be a hard landing. We should stay away from BRIC stocks such as Baidu (BIDU), New Oriental Education and Tech (EDU) and Arcos Dorados Holding (ARCO) until we get a clearer picture of what's going on in the land of Mao. Another ominous sign is which stocks are actually leading this market. I truly believe as goes Apple (AAPL), goes the market, and recently Apple's (AAPL) RS line has been falling. I talk about Apple (AAPL) a lot as the leader of this market but it's not just Apple (AAPL). All the mo-mo names like Green Mountain Coffee Roasters (GMCR), Decker's Outdoor (DECK) and Wynn Resorts (WYNN) need to lead the way. Right now that just isn't happening. Almost every stock I watch is down today in an up 160 market. Gold and silver are up a bit here but I won't be adding to my shorts today unless we go dramatically higher. The precious metals have fallen so much you'd think there would be a little consolidation before we move another leg down. The only move I'm contemplating right now is adding to my euro shorts. The euro is up about a penny today versus the dollar off the Germany vote, but I see many bumps in the road ahead for Europe. My year-end price target for the euro is $1.28.

This is not a recommendation to buy or sell any securities. DAK was long AAPL and ARCO at time of publication but positions can change at anytime.

Breaking News: China Willing to Buy Bonds from Debt-Crisis Nations

Zhang Xiaoqiang

Breaking: China Willing to Buy Binds from Debt-Crisis Nations

Reiterating what Wen Jiabao said last night in Dailan, National Development and Reform Commission Vice Chairman Zhang Xiaoqiang, said China is willing to buy more Euro Zone sovereign debt. I already expressed my concerns with this development last night, though it looks like a positive in the short term. He also believes any further QE by the Fed will cause more inflation in China. CPI is expected to rise 4% this year.

Thinking about Indonesia....

I've been looking for a play on Indonesia for a while. After exhausting my research I thought I'd ask Jim Cramer on Twitter and he promptly replied. Check it out:

While I appreciate Jim's advice, I still think Indonesia will be huge in the coming decade so I will continue to look for an opportunity. Right now the best play I can find is the ETF I mentioned (IDX) but I hate buying ETF's as investments. I only like to use them for short term trades, because if you're going to invest, why buy a basket of stocks that has the bad ones and the good? I'm going to have to add an extra "I" to BRIC. Maybe I'll even drop Russia and just make it BIIC. I'll get back to you on that one. 

Breaking News: China to the rescue

Wen Jiabao

Breaking: Chinese Has Expressed Readiness To Increase EU Investment: Wen

While this is positive in the short term, it's nothing that hasn't been said before, and may carry long term repercussions. Here's why. Obviously China is willing to buy European assets at fire-sale prices and invest in double digit +IRR investments. They'll do it happily! The question is, how long will the relief last, and on what conditions? After all, China already has sizable investments in the Euro, Greece, Portugal and the EFSF, and we've still ended up in this miserable situation. Will Wen then use the bailout as leverage to basically make the EU its bitch, and vote with China in all future WTO escalations with the US? When Wen says "Recognizing China as a full market economy is how a friend recognizes a friend", he means the Chinese will win any future trade disputes with the EU. Wen "urges" Europe to do this before the WTO does in 2016. A subservient trading partner like Europe could severely hurt our position in any upcoming trade wars, and if Europe likes life the way it is, that may be their only route. This coud devolve into worldwide trade wars, and after trade wars come war wars. Yeah. It sucks.....I'm not quite as pessimistic as to think this scenario will play out as I described, but it's certainly possible and something to be watched. The best way to hedge against all this craziness is physical gold. Not the Spyder Gold Trust ETF (GLD), but physical gold. That's why at least 5% and no more than 20% of your portfolio should be in gold. As of this post futures are down off the news by a half of a percent. It seems other people were thinking the same thing I was. Amazing how the lame-stream media misses the whole gist of the story. Sigh.

This is not a recommendation to buy or sell any commodities or securities. DAK owns physical gold and is long the GLD but positions can change at anytime. 

Gold goes lower; Futures modestly higher

I'm watching the Yankee game which was delayed for 4 hours because of rain and a quick check on the Bloomberg shows a rally in the Asian markets, the Euro below $1.40, and gold down $30 to $1843 per troy ounce.  With the Euros just about to wake up and most likely hit us with some ungodly news about bank solvency or sovereign debt, I can't imagine these facts will be the same when I wake up. Here's hoping <fingers crossed>

Update: Yankees Win 5-3