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Dow up on news from China?
03-05-2013, 09:39 AM
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#1
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Recycles dryer sheets
Join Date: May 2010
Posts: 497
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Dow up on news from China?
Hi,
Did everyone miss the 60 min show about china's housing bubble? Pretty scary stuff...whole cities new but vacant...high rise apartments, malls..the works vacant.
Bob
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Retired July '11 investments in very low cost index and mutual funds, balance once a year at best.
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03-05-2013, 09:42 AM
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#2
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Join Date: Oct 2005
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I suspect this is not news to Mr. Market and, if it is a factor in future economic expectations, it has already been priced into it.
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"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-05-2013, 09:42 AM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Numbers is hard
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03-05-2013, 09:57 AM
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#4
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The pictures were quite remarkable to me. This is not really new news but the scale of the problems is pretty amazing when shown on TV.
I notice that China only accounts for 4.5% of my broad index fund International Fund (VEU). But will this slow moving train wreck affect other markets?
It will probably cause the families who bought up the apartments to cut back on consumption as they appreciate that their investments will not pan out. This could then reduce China's willingness to import and open up their markets as the leadership tries to patch things up. It could cause a huge upheaval in the country which could lead towards more democracy or the opposite. Who really knows?
Don't quite understand the premise of the OP's thoughts on the Dow. Our recent market strengths have little to do with China I would think.
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03-05-2013, 10:18 AM
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#5
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Quote:
Originally Posted by Lsbcal
Don't quite understand the premise of the OP's thoughts on the Dow. Our recent market strengths have little to do with China I would think.
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If anything, I'd think the market would worry about this, not celebrate it. More and more of the economic growth in the major corporations that make up the US large cap market are more and more dependent on growth in emerging markets. The earnings growth Wall Street demands is sure as hell isn't coming from the US or most of the EU.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-05-2013, 10:32 AM
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#6
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Recycles dryer sheets
Join Date: Sep 2012
Posts: 62
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Dow is up on on the news that Dow will be up tomorrow. It is called "inflating the bubble", i.e. when people invest because they are afraid to miss the opportunity to invest. At that point people don't care about China, and other minor nuances, like earnings, economy, etc.
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03-05-2013, 10:34 AM
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#7
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
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Quote:
Originally Posted by hsv_climber
Dow is up on on the news that Dow will be up tomorrow. It is called "inflating the bubble", i.e. when people invest because they are afraid to miss the opportunity to invest.
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Yes, when there is "irrational exuberance (think stocks in 1998 or housing in 2006), people can spin almost everything into a bullish interpretation, and when there is extreme fear and blood in the streets (late 2008/early 2009), those same events are explained in very bearish terms.
In the end, it usually pays to be a contrarian!
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)
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03-05-2013, 10:46 AM
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#8
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gone traveling
Join Date: Sep 2003
Location: DFW
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Just goes to show how irrational mr market is and why nobody can predict what the market will do
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03-05-2013, 11:29 AM
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#9
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Quote:
Originally Posted by ziggy29
If anything, I'd think the market would worry about this, not celebrate it. More and more of the economic growth in the major corporations that make up the US large cap market are more and more dependent on growth in emerging markets. The earnings growth Wall Street demands is sure as hell isn't coming from the US or most of the EU.
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+1 It was a pretty scary view -- miles and miles of empty condos, people fighting to invest in vacant real estate. Wow. Every time I hear about the Chinese eating our lunch I think about the paper USSR tiger of the late 20th century. Russia made it's transition without a lot of the global economic horror stories we entertained while the walls were coming down. But if China implodes -- it is Katy bar the door.
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Idleness is fatal only to the mediocre -- Albert Camus
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03-05-2013, 11:50 AM
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#10
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Thinks s/he gets paid by the post
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Weren't we worried Japan was going to own us in the eighties?
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03-05-2013, 06:56 PM
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#11
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I saw it and could not believe what I was seeing. I have never heard of whole cities, shopping malls and apartments being built and no one lives there. It made me extremely nervous. We live in a global society and if their house of cards fall down, I could definitely see it affecting our stock market.
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03-06-2013, 03:06 AM
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#12
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Thinks s/he gets paid by the post
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I read somewhere that the prices of scrap metals as copper, brass, and steel are all at the level they are now because of the demand in china. all these components to construction have risen dramatically in the last few years because of china's bubble. It was a scary thing to see and what was scarier yet in the interview the real estate person said the average daily wage was about 2 dollars and that the people buying these apartments could not afford to live in them.
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03-06-2013, 06:27 AM
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#13
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Quote:
Originally Posted by Dreamer
I saw it and could not believe what I was seeing. I have never heard of whole cities, shopping malls and apartments being built and no one lives there. It made me extremely nervous. We live in a global society and if their house of cards fall down, I could definitely see it affecting our stock market.
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+1 But I'm not sure how much of an impact the house of cards falling down on the other side of the world would have on us - some for sure but how much I can't fathom.
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03-06-2013, 06:53 AM
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#14
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Quote:
Originally Posted by pb4uski
+1 But I'm not sure how much of an impact the house of cards falling down on the other side of the world would have on us - some for sure but how much I can't fathom.
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My take too. A little, a lot? Who the F knows. But those ghost towns are eerie. The Chinese middle class apparently have no place they can invest their earnings other than a volatile Chinese stock market that scares them and real estate that they should be more scared of but are not. Go figure.
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Idleness is fatal only to the mediocre -- Albert Camus
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03-06-2013, 09:13 AM
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#15
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There are some "Web Extras" from 60 Minutes towards the bottom of this link: China's real estate bubble - 60 Minutes - CBS News
Those shorts are good viewing too.
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