Sunday, November 9, 2008
Big Trouble in little China? WONG! excuse me, I mean WRONG!
Okay so today's headlines read $586 Billion Chinese bailout. China has decided to implement their own emergency financial savior package of sort to help save the butts of some of it's own distressed markets/sectors. Although full details on when and how the money will be dispersed have yet to be disclosed, I am going to interpret this as some brownie points for China's own "Blue Chip" companies...China Mobile (CHL) for example is definitely on my interest list, as maybe BIDU (the chinese Google), I'll let you know if I decide to act on anything interesting. Hopefully they don't open at a premium tomorrow morning...this could be a short term pump and dump scenario as the global credit crisis is far from resolved.
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Read an interesting article today about the bailout being negative for U.S.
"One of the major investors in the U.S the past few years has been the Chinese government. Running massive surpluses, they have almost $2 trillion in reserves, and probably close to $800 billion of that is invested in Treasuries or Agency paper (like Fannie and Freddie). China will need to finance this stimulus package, and if it doesn't mean they will be sellers of U.S paper, they at least won't be buyers on the same scale."
"While the Chinese economy was/is still growing, it needs to grow at something like 6% a year just to absorb new entrants into the work force, as the move from the countryside to the city is massive"
heres something I did get out of chinese newspaper articles...infrastructure is top priority, continuing to build transportation, roads, buildings etc. A part of the money is going toward education, communication for more and more rural provinces in the mainland. Keep in mind the bailout package they have is to act as stimulus for their country over the next 2 years. I am long on select chinese sectors for sure.
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