Andy Xie: America more likely to crash again in 2011

[nero3]

Re: What's the win-win trade if Xie is right?

It seems that in recent years there has been no diversification; every investment is either a proxy for being long growth/risk, or short it.

But if Xie is right and there are two possible outcomes: a) China crashes as inflation bubble pops, US grows stably, and b) US debt collapse causes dollar to crash,with China growing stably; Do these predict a binary outcome for any investment, or do they each predict a similar outcome for some asset class or other.

For example, when I read the article and the posts here, it seemed that in both scenarios, we'd see a positive nominal growth in the US economy. Real as well as nominal in case (a), but perhaps only nominal in case (b). Still, there are ways of making money on nominal price rises.

I am not putting that forward as a well thought out thesis, but just to put forward the question: Is there an asset class which can be expected to go the same way (up or down in price) in both scenarios (a) and (b). Or is every asset poised to go in opposite directions depending on how things turn out?

If you look at the yield on some blue-chip stocks, and see how well their earnings have increased over the last 10 years, and guess for a similar earnings increase over the next 10 years as well a crash in China could mean that instead of a 8 % earnings yield they will yield around 4 % (I assume a strong dollar and a treasury bond market similar to 1950-1965) while at the same time earnings increase 2-5 times depending on the company. That gives you a 4-10 times return on your investment. I think this is the best case for a China Crash, a return of the bull-market that ended in 2000.

[touchring]

Re: What's the win-win trade if Xie is right?

BDI on a downward trend.


[IMG]file:///C:/Users/Fujitsu/AppData/Local/Temp/moz-screenshot.png[/IMG][IMG]file:///C:/Users/Fujitsu/AppData/Local/Temp/moz-screenshot-1.png[/IMG][IMG]file:///C:/Users/Fujitsu/AppData/Local/Temp/moz-screenshot-2.png[/IMG]

[jk]

Re: What's the win-win trade if Xie is right?

BDI on a downward trend.


[IMG]file:///C:/Users/Fujitsu/AppData/Local/Temp/moz-screenshot.png[/IMG][IMG]file:///C:/Users/Fujitsu/AppData/Local/Temp/moz-screenshot-1.png[/IMG][IMG]file:///C:/Users/Fujitsu/AppData/Local/Temp/moz-screenshot-2.png[/IMG]

do we know how much is reduced shipping tonnage versus how much is an increase in the number of ships?

[nero3]

Re: What's the win-win trade if Xie is right?

do we know how much is reduced shipping tonnage versus how much is an increase in the number of ships?

Shipping was dead from around 1974 to around 1988, then great in 1989. All due to the supplies built during the crazy boom in 1973-1974, I think something similar as during 73-74 and 88-89 went down in 2007-2008, it seems it's not a connection with a good US stock market and a shipping boom. The last boom before 73-74 was in the period around the end of the first world war before the 1920's boom.

[c1ue]

Re: What's the win-win trade if Xie is right?

Yes, they are very scared of it, which is the reason why you can find even more objective news on Xinhua news website. But this is a losing war because the younger generation can surf the Internet, so domestic press can only target the 60s, 70s and uneducated folks which isn't a small group either.

Lee Kuan Yew is already 87 years old, not many years left, particularly for someone has hasn't retired and still under stress. Being the only person in charge for more than half a century, which by the way is a world record for a non-Monarch (at least official one), if he goes, a power vacuum would lead to a power struggle within the oligarchy.

So ironically, the oligarchy he created would devour his descendants, not the press, the position or the people.

I've spent a lot of time in Singapore and known a lot of Singaporeans - 'native' and otherwise.

I have seen zero evidence of a restive populace - indeed Singaporeans are almost terrifyingly complacent about their government and society.

Perhaps you can point to some examples of this restiveness - outside of attempting to paint Singapore's news as being less 'free' than Xinhua.

After all, a 5 decade long supreme ruler has his own agenda precluding outside influences - no different whether North Korean or Singaporean.

[touchring]

Re: What's the win-win trade if Xie is right?

I've spent a lot of time in Singapore and known a lot of Singaporeans - 'native' and otherwise.

I have seen zero evidence of a restive populace - indeed Singaporeans are almost terrifyingly complacent about their government and society.

Perhaps you can point to some examples of this restiveness - outside of attempting to paint Singapore's news as being less 'free' than Xinhua.

Have you seen zoo animals? In modern free roaming style zoos, not those in 19th century circus cages that restrict movement.

Unlike what most animal rights activists think, they are not unhappy, but look rather contented. Eat, sleep and F all day long in peace. Human beings are the same as animals, as long as you can provide them with food, shelter, safety, and sex (there are probably more prostitutes per capita here than anywhere else in the world), they will be contented as zoo animals do.

Few people, including the expats that got 'acclimatized', even think about what will happens when the supreme ruler is gone, a not so distant future, and there is absolutely no discussion by the media, or even the "opposition" about what will happen then.

After all, a 5 decade long supreme ruler has his own agenda precluding outside influences - no different whether North Korean or Singaporean.

This is what Lee Kuan Yew once said:

The Bell curve is a fact of life. The blacks on average score 85 per cent on IQ and it is accurate, nothing to do with culture. The whites score on average 100. Asians score more ... the Bell curve authors put it at least 10 points higher. These are realities that, if you do not accept, will lead to frustration because you will be spending money on wrong assumptions and the results cannot follow

Of course, we now know that McCain and the Republicans didn't win. So much for the Citibank bailout. ;)

This statement sums up what he thinks. He truly believes he is superior to everyone else (more so being an Asian) and so deserves to be in charge.

[c1ue]

Re: What's the win-win trade if Xie is right?

Have you seen zoo animals? In modern free roaming style zoos, not those in 19th century circus cages that restrict movement.

Unlike what most animal rights activists think, they are not unhappy, but look rather contented. Eat, sleep and F all day long in peace. Human beings are the same as animals, as long as you can provide them with food, shelter, safety, and sex (there are probably more prostitutes per capita here than anywhere else in the world), they will be contented as zoo animals do.

Few people, including the expats that got 'acclimatized', even think about what will happens when the supreme ruler is gone, a not so distant future, and there is absolutely no discussion by the media, or even the "opposition" about what will happen then.

So in fact you do not see a real opposition or unrest, you merely speculate that it will spontaneously arise when the 'grand old man' kicks off.

It is also interesting that you at least acknowledge the gigantic sex trade industry in Singapore - the Orchard road phenomenon.

Is a gigantic sex trade a sign of healthy economic growth? Or merely a confluence of banksters? Note New York and London are also notable in this respect.

This statement sums up what he thinks. He truly believes he is superior to everyone else (more so being an Asian) and so deserves to be in charge.

That may be, but let's face it - a Chinese bankster who manages to create an entire nation out of nothing, he's got some serious chops.

And it is debatable how much his attitude differs from any other leader - elected or otherwise.

[touchring]

Re: What's the win-win trade if Xie is right?

That may be, but let's face it - a Chinese bankster who manages to create an entire nation out of nothing, he's got some serious chops.

And it is debatable how much his attitude differs from any other leader - elected or otherwise.

His skill is in propaganda (local and international) - which he does it to such a perfection that even the Chinese communist come to Singapore to attend courses to learn how this is done.

The real person behind Singapore's economy is actually a mathematical genius and maverick economist who incidentally resigned the same year the son was appointed as a junior minister.

Goh Keng Swee seems to be the type of person America needs, he is good at fixing broken economies.

http://en.wikipedia.org/wiki/Goh_Keng_Swee

Goh won a scholarship which enabled him to further his studies at the London School of Economics and Political Science (LSE). During his time in London, Goh met fellow students seeking independence for British Malaya, including Abdul Razak (later Malaysia's second Prime Minister), Maurice Baker (subsequently Singapore's High Commissioner to Malaysia), Lee Kuan Yew and Toh Chin Chye. A student discussion group, the Malayan Forum, was organized in 1948 with Goh as the founding chairman.[3][5] Goh graduated with first class honours in economics in 1951, and won the William Farr Prize for achieving the highest marks in statistics.[3]

Goh was a key member of the PAP's Central Executive Committee, and later became its vice-chairman. Goh successfully contested the Kreta Ayer seat in the 1959 general election, was elected to the Legislative Assembly on 30 May,[10] and joined the first government of Prime Minister Lee Kuan Yew as Minister for Finance. In this role, he assumed stewardship of Singapore's economy. As a budget deficit of S$14 million was forecast that year, he introduced stringent fiscal discipline which including cutting civil service salaries. As a result of these measures, he was able to announce at the end of the year when delivering the budget that the Government had achieved a surplus of $1 million.[11] He initiated the setting up of the Economic Development Board which was established in August 1961 to attract foreign multinational corporations to invest in Singapore.[3][12] The next year, he started the development of the Jurong industrial estate on the western end of the island which was then a swamp, offering incentives to local and foreign business to locate there.[3][5] According to former Permanent Secretary Sim Kee Boon, Goh admitted that the Jurong project was "an act of faith and he himself jokingly said that this could prove to be Goh's folly".[12] Nonetheless, Goh also felt strongly that "the only way to avoid making mistakes is not to do anything. And that ... will be the ultimate mistake."[13]

[touchring]

Re: What's the win-win trade if Xie is right?

do we know how much is reduced shipping tonnage versus how much is an increase in the number of ships?

I think it matters not, China and Asia is building so much over capacity that even a slowdown in the rate of increase is deadly.