Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

[touchring]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

I'd also like to point out - before the China bashing gets out of control - is that China is poor.

I have to disagree with this statement. China is not poor, only that most of the wealth is held by the government, government officials and elites.

[Chris Coles]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

I have to disagree with this statement. China is not poor, only that most of the wealth is held by the government, government officials and elites.

In which case, it is a Feudal nation; not a Communist nation.

[Chris Coles]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

This has just come up on Slashdot:

| Circuit Flaws Blamed For China Train Crash
| from the rest-in-peace dept.
| posted by Soulskill on Friday July 29, @17:38 (Bug)
| with 73 comments
|
| https://tech.slashdot.org/story/11/07/29/212238/Circuit-Flaws-Blamed-For-China-Train-Crash?utm_source=newsletter&utm_medium=email
+-----------------------------------------------------------------------
+---------------------------------
hackingbear writes "The Xinhua news agency reports that [0]a signaling equipment circuit design flaw and lack of safety alertness in railway management caused a high-speed train [1]to ram into a stalled train near the city of Wenzhou in east China's Zhejiang Province on Saturday, leaving 40 people dead and 191 injured. A lightning strike triggered the malfunction, which resulted in a green alert light failing to turn red, leaving railway personnel unaware of the stalled train, the official said. The Beijing National Railway Research and Design Institute of Signal and Communication Co., which was responsible for designing and building the signaling system, has posted an apology letter on its website, offering condolences and promising to 'shoulder any due punishments that may result from the investigation.' Domestic media has raised more questions over the explanation. 'Why was such seriously flawed equipment in use for nearly two years without being detected? Why was it installed in as many as 76 rail stations across the country? Are there other problems with the railway apart from equipment flaws?'"
Discuss this story at:
https://tech.slashdot.org/story/11/07/29/212238/Circuit-Flaws-Blamed-For-China-Train-Crash?utm_source=newsletter&utm_medium=email#commentlisting
Links:
0. http://news.xinhuanet.com/english2010/china/2011-07/29/c_131018337.htm
1. http://tech.slashdot.org/story/11/07/23/1547240/Bullet-Train-Derails-In-China

[FondoFinder]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

The high speed train from Shanghai to Beijing started up on the 90th anniversary of the communist party. So the project was date-driven, not quality-driven.

3 top officials were fired after the crash. Blame game.

SBB news says there were a series of malfunctions since late June, and a corruption scandal in the ministry of railways in January.

[c1ue]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

I have to disagree with this statement. China is not poor, only that most of the wealth is held by the government, government officials and elites.

As usual, your sentiment is devoid of fact.

China's ranking in world per capita GDP in the wiki list:

89	Jamaica	8,727
90	Maldives	8,541
91	Belize	7,895
92	Bosnia and Herzegovina	7,782
93	Ecuador	7,776
94	China, People's Republic of	7,519
95	Albania	7,453
96	El Salvador	7,430

Would you call El Salvador, Albania, Jamaica, and so forth not poor countries?

So while China's GDP may be large, on the other hand a huge percentage of it goes just for food.

[aaron]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

In Beijing, you can survive on a few hundred dollars a month. In Washington, DC I do not think that you can. Perhaps that is not adjusted for purchasing power?

[touchring]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

In Beijing, you can survive on a few hundred dollars a month. In Washington, DC I do not think that you can. Perhaps that is not adjusted for purchasing power?

The problem in China is pollution severely impacting on standards of living and gross misallocation of resources for the profit of the officialdom and elites, otherwise the standard of living in China is the range of a middle income country, at least for the China less Xinjiang and Tibet and maybe Yunnan.

Anyone game for a $250,000 bed? This company sells thousands of pieces of such grossly overpriced furniture a month in China. China is poor?

http://english.peopledaily.com.cn/90...4/7447599.html

[Chris Coles]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

The problem in China is pollution severely impacting on standards of living and gross misallocation of resources for the profit of the officialdom and elites, otherwise the standard of living in China is the range of a middle income country, at least for the China less Xinjiang and Tibet and maybe Yunnan.

Anyone game for a $250,000 bed? This company sells thousands of pieces of such grossly overpriced furniture a month in China. China is poor?

http://english.peopledaily.com.cn/90...4/7447599.html

My immediate reaction is; what a wonderful opportunity for a conventional business to sell good quality at fair prices reflecting a true competitive market price.

[touchring]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

My immediate reaction is; what a wonderful opportunity for a conventional business to sell good quality at fair prices reflecting a true competitive market price.

Late last year, I paid $1800 for a Fujitsu notebook (assembled in Japan). Fujitsu sells a similarly spec notebook for $1100, but assembled in China. They sell more of the assembled in Japan notebook than the made in China version.

I also inquired about the Thinkpad but quite a couple of salesmen revealed to me that it is no longer the same as when it was IBM. The Thinkpad is not cheap - I'm not willing to spend $2000 on crap. To be fair, Acer and HP didn't appeal to me also, especially when their products are OEM to contract manufacturers that had problems with employee suicide.

I guess made in China products are more popular in America and maybe also South America.

There's a saying, penny wise, pound foolish.

[patrikkorda]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

Why are you so sure the Chinese currency is undervalued? With the breathtaking misallocation of capital underway in that country I wonder if the renminbi might be one of the most overvalued currencies on earth at this moment.

To me the proof is in the pudding. Keynes stressed the point almost a century ago that an overvalued currency leads to stagnation and dramatically hinders exports. I have heard men like Jim Chanos hint at the possibility that the rmb is overvalued, but this would not make sense, for it would imply that the Chinese are supermen. Undervalued currencies usually boost growth and exports at the expense of preserving purchasing power i.e., it is a hidden wage cut. Furthermore, currencies being devalued typically lead to inflation and speculation, especially in real estate (which has been the case in China a world over). The rmb, due to being a blocked currency to most people at the moment, has a built-in green house effect. Once it starts to open up the demand side of the equation is bound to push the rmb a lot higher, that is when I plan to sell.

Once the real estate bubble in China bursts (if it hasn't already) I suspect the Chinese economy will have some serious problems, especially the banking system. However, China is still very much a cash society. There are hardly any atm's, whereas here in NYC you have one literally on every street. Moreover, a crisis in China to me implies a ka-poom scenario, where demand for rmb increases.

[GRG55]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

My immediate reaction is; what a wonderful opportunity for a conventional business to sell good quality at fair prices reflecting a true competitive market price.

I suspect you'll first have to figure out which officials you have to pay off so you can enter, and remain in, that "truly competitive market"...

[GRG55]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

To me the proof is in the pudding. Keynes stressed the point almost a century ago that an overvalued currency leads to stagnation and dramatically hinders exports. I have heard men like Jim Chanos hint at the possibility that the rmb is overvalued, but this would not make sense, for it would imply that the Chinese are supermen. Undervalued currencies usually boost growth and exports at the expense of preserving purchasing power i.e., it is a hidden wage cut. Furthermore, currencies being devalued typically lead to inflation and speculation, especially in real estate (which has been the case in China a world over). The rmb, due to being a blocked currency to most people at the moment, has a built-in green house effect. Once it starts to open up the demand side of the equation is bound to push the rmb a lot higher, that is when I plan to sell.

Once the real estate bubble in China bursts (if it hasn't already) I suspect the Chinese economy will have some serious problems, especially the banking system. However, China is still very much a cash society. There are hardly any atm's, whereas here in NYC you have one literally on every street. Moreover, a crisis in China to me implies a ka-poom scenario, where demand for rmb increases.

I think an argument can be made that China is already in the "poom" part of this current cycle...and everyone is trying to get out of rmb before the purchasing power of this overvalued currency is eroded further...

[touchring]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

I think an argument can be made that China is already in the "poom" part of this current cycle...and everyone is trying to get out of rmb before the purchasing power of this overvalued currency is eroded further...

I'm not so sure, it is difficult to predict the poom of any bubble, Dubai, China the same.

[Chris Coles]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

I suspect you'll first have to figure out which officials you have to pay off so you can enter, and remain in, that "truly competitive market"...

A very successful entrepreneur once said to me; Chris, it is all about timing, and then again, it is always about timing and after all that, it is still, all about timing....

[patrikkorda]

Re: Train wreck is no surprise to me, trains wreck all the time, but what happens next is really nuts.

I think an argument can be made that China is already in the "poom" part of this current cycle...and everyone is trying to get out of rmb before the purchasing power of this overvalued currency is eroded further...

We cannot tell whether it is an overvalued currency or an undervalued currency for sure, because it is still a blocked currency. However, I submit to you that it is not the Chinese that are currency manipulators. They pegged their currency to the dollar and in devaluing they are merely attempting to maintain stability, it is the Fed that is a blatant currency manipulator. That being said, if economic theory has any grain of truth to it, the rmb cannot be an overvalued currency as displayed by their growth and exports.

EJ recommended a Working Paper entitled The Great Exchange Rate Debate After Argentina by Sebastian Edwards. In it, Edwards wrote the following, "Situations of real exchange rate overvaluation are very costly, and lead to low growth and in some cases even stagnation. Moreover, under super-fixed nominal exchange rate regimes overvaluation is very difficult to resolve."

With China's huge savings rate as well as growth I do not see it possible that the rmb is overvalued, quite the opposite. It is true, a lot of their numbers are phony, but the same may be said of any country. I want to stay liquid for the time being and I do not see many other places to go.
Silver? No thanks
AUD? No thanks
USD? Hell no
Gold? My position has been set for years, not buying more
The rmb is still off most peoples radar screen and even those who are bullish on it for the most part do not know how to get ahold of it.