China |

Liquor City R.I.P.?

The latest in the long and growing list of modern ghost towns in China is “Liquor City” as shown below via this NPR story the other day where we learn of another victim of the commodity boom gone bust – it seems that financing a liquor production center with coal revenues didn’t exactly work out as planned.

There is good news to report, however, in that the brand new $160 million airport (which doesn’t sound like nearly enough to build an airport) isn’t completely deserted – it gets three to five flights per day (wouldn’t be surprised if the planes are pretty empty).

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Cramer Says Sell! Sell! Sell! China Stocks

I don’t know if anyone still watches CNBC and, if so, whether Mad Money’s Jim Cramer still has people tuning in, but there’s a strange sense of deja-vu in this clip from yesterday in which he laments the recent market crash correction and provides some free advice.

Things become kind of surreal at about the 2:15 mark when he comments on (and successfully pronounces, apparently) Guangdong Meiyan Jixiang Hydropower Company and the now failed Chinese government’s support of its share price.

I had to stop the video there…

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Panic on the Street

It looks like they’ll have plenty to talk about this week beyond the official topic of  Inflation Dynamics and Monetary Policy at the Federal Reserve’s annual gathering of the brain trust in Jackson Hole, WY, what with the sky being full of smoke from physical fires burning to the West and financial markets around the world figuratively going up in smoke.

What’s interesting about recent developments (if not surprising) is that China’s disappointing economy is being blamed for the market turmoil, prime evidence being the graphic below in this Wall Street Journal story today:

What gets short shrift from most media outlets (this Forbes piece by Steve Keen being the exception to the rule) is that we may be looking square in the face of yet another ugly unwind of yet another reckless expansion of credit and debt. Oh well…

China Readies More Stimulus

The sharp 8 percent drop in China exports last month has many thinking more stimulus is on the way for their sputtering quasi-command economy as detailed at Bloomberg.

On a related note, What if Mao still ran China? at the Financial Times points out that growth was pretty good long ago when there was no “quasi-” associated with the economy.

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Given the remarkable increase in the number of stock trading accounts and soaring margin debt in China over the last year or two, stories such as the one below about a farmer losing his life savings (and then some) should be expected, but, after seeing this man’s distress and learning of the dollar amounts and approach involved, it is a little surprising.

Investing his entire stake of $164K in one company and then being extended $1 million in margin probably weren’t the best moves Yang Cheng could have made.

Clearly, the government should have provided some basic instruction about investing in stocks when they began their effort to promote stock ownership. Maybe they did and he thought he knew better – the only thing missing from this sordid tale is the claim that Yang Cheng at one point was worth $4 million, or something like that.

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