China credit default rates

 5-year credit default swaps of the People’s Republic of China .




In “China’s Worsening Credit Crunch,” published at Pragmatic Capitalism, Nomura analysts are quoted saying that some of the rise in the discount rate may be caused by financially stressed property developers. The article further observes that the gap between the commercial acceptance bill discount rate and the Shanghai interbank rate has widened to 5.7%, the highest level since data became available.

Steve Jobs gone

Their is a lot this man taught. Still most never learned.
What's worse is that so many nincompoop managements continue to sit in companies.

As Jobs said, several of the old failing Apple management pretended that Microsoft was the enemy- them versus us.  But as Steve summed his philosophy - Apple is about a lot more than competing with Microsoft. Its extraordinary that even after his "Think Different" tag line, no one else ever did ! Petty minded managements continue to run companies. There is no originality. Steve pooh poohed Microsoft and did never even consider them personally worth competition. As far as he was concerned they were just poor little copy cats with no gut, no soul.

He grew so big in terms of his diversity in influencing products and industries, he proved what a good mind ought to focus on.....originality and ideas. This is what he meant by saying follow your guts and instinct. You cannot connect the dots forward, only backward.

He truly thought differently.....and lived it as such.
So what is his lesson to us all ?

ITHINK.

New Trades

I had gone short last week end and successfully covered yesterday.
Today being a holiday, I could not go long.

Below is S&P 500 from 1987 from Jeff Clark.


I intend to go long again tomorrow.
Good luck

Next- Land of milk and honey

With my blog stating that China may be the net shoe to fall, its likely that in the next upturn India may be the leader till our political hoodlums screw it up the way they do in all countries.

This makes me realize that India will have a strong currency gain in the future years followed by a weakening as we do the usual overcapacity over indebtness game replay of China and US.

It follows from this that the offshore currency yuan weakening in Hong Kong is suddenly making sense.
Chinese are selling out. The money from the cute politicians "transferred" offshore is running away ?

For now, my dollar play looks dominant. Perhaps long 'long term US bonds' are indeed a good play. But they are already at 2007 levels.

Having missed the boat, I have to wait and watch now.

Medusa- Curse of the Greek Gods

Bert Dohmen

"A Greek default is now inevitable and will result in restructuring of the debt. This means that the holders of Greek bonds, primarily the large European banks will have to write down tens of billions of dollars of bonds. And that is the problem, not Greece. This is why the global stock markets are responding immediately to any news coming out of Europe.

You can be sure that the focus in Germany, France, and other Euro-zone countries now is to build a wall around their domestic banking system, protecting it from a Greek default. "

Dead cat bounce

THE GARY SHILLING (DEFLATION) PORTFOLIO

As Treasurys surge and inflation fails to materialize, Gary Shilling’s macro outlook is once again looking prescient. In his latest “Insight” newsletter he highlighted his portfolio positions in the current environment:

Favorable:
Treasury bonds
Income-producing stocks
The dollar vs. the euro and Australian dollar
Dollar index
Eurodollar futures
Rental apartments
North American energy
Medical office buildings
Unfavorable:
Sell your house, second home or investment single family houses yesterday, if you plan to do so any time soon.
Sell homebuilders
Developing country stocks
Commodities
Sell US Major and regional banks.