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Asia’s Dr. Gloom: China's Stocks Will Crash Soon
Money News ^ | 07/21/10 | Dan Weil

Posted on 07/21/2010 4:11:19 PM PDT by TigerLikesRooster

Asia’s Dr. Gloom: China's Stocks Will Crash Soon

Wednesday, 21 Jul 2010 08:37 AM

Article Font Size

By: Dan Weil

Economist Jim Walker was dubbed Asia’s “Dr. Gloom” in 1996, and his views about China continue to fit that bill.

Chinese fiscal and monetary stimulus have given life to many corporations that are in trouble below the surface, says Walker, whose one-man firm Asianomics is based in Hong Kong.

"There are an awful lot of companies that don't make any money in China, and they need to go," he told Forbes Asia.

Major manufacturing cities are suffering labor shortages, thanks to the real estate bubble that has drawn away workers and will ultimately burst, says Walker, formerly chief economist at CLSA (Credit Lyonnais Securities Asia).

(Excerpt) Read more at moneynews.com ...


TOPICS: Business/Economy; News/Current Events
KEYWORDS: china; stimulus; stock; zombiecompany

1 posted on 07/21/2010 4:11:22 PM PDT by TigerLikesRooster
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To: TigerLikesRooster; PAR35; AndyJackson; Thane_Banquo; nicksaunt; MadLibDisease; happygrl; ...

P!


2 posted on 07/21/2010 4:12:27 PM PDT by TigerLikesRooster (The way to crush the bourgeois is to grind them between the millstones of taxation and inflation)
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To: TigerLikesRooster

China will probably go the way of Japan, and the United States, even if it’s hobbled by the current administration, will continue as the world’s economic superpower, at least for the foreseeable future.


3 posted on 07/21/2010 4:15:25 PM PDT by Mr Ramsbotham ("O nation miserable . . . when shalt thou see thy wholesome days again . . . .?")
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To: TigerLikesRooster

I don’t know about that.. but, I do know... China has SLASHED exports of rare earth metals...

Things like, Cerium, Lanthanum, Praesidium.. etc.

Over that past 5 years, China successfully drove EVERY OTHER MINE IN THE WORLD out of business... with ultra-low prices.

Now.. they’ve CUT EVERYONE OFF.

These metals are needed for electronic manufacturing and catalyst production... we’re all screwed now, and scrambling.... You probably haven’t heard much about this yet.. But, you will.


4 posted on 07/21/2010 4:17:07 PM PDT by SomeCallMeTim
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To: SomeCallMeTim

You would be amazed at how quickly capitalists can move if there is a strong demand.

The mines that were closed will be re-opened pronto.


5 posted on 07/21/2010 4:24:14 PM PDT by proxy_user
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To: proxy_user
The mines that were closed will be re-opened pronto.

That's probably true... but, it will take MONTHS, at least. The metals we use are critical to our process... they will have to be tested and proven for use.

There is going to be a significant disruption in the market.

6 posted on 07/21/2010 4:28:12 PM PDT by SomeCallMeTim
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To: proxy_user
The mines that were closed will be re-opened pronto.

That's probably true... but, it will take MONTHS, at least. The metals we use are critical to our process... they will have to be tested and proven for use.

There is going to be a significant disruption in the market.

7 posted on 07/21/2010 4:28:18 PM PDT by SomeCallMeTim
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To: SomeCallMeTim

Fortunately, the US has perhaps the next two most valuable rare earth mines in the world after China. One is owned by Molycorp Minerals, in Mountain Pass, CA; and the other is at Barringer Hill, Texas, underneath Lake Buchanan.


8 posted on 07/21/2010 4:33:15 PM PDT by yefragetuwrabrumuy
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To: TigerLikesRooster

Sounds okay by me...the Chinese need an attitude adjustment.


9 posted on 07/21/2010 4:33:32 PM PDT by blasater1960 ( Dt 30, Ps 111, The Torah is perfect, attainable, now and forever)
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To: SomeCallMeTim

China appears to understand how to use trade as a strategic tool.


10 posted on 07/21/2010 7:20:39 PM PDT by Pelham (There is no "close the border first". Deport illegals now.)
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To: SomeCallMeTim

Do you know if the US has a strategic stockpile of rare earth metals, like we do with oil?


11 posted on 07/21/2010 7:22:39 PM PDT by Pelham (There is no "close the border first". Deport illegals now.)
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To: SomeCallMeTim
I don’t know about that.. but, I do know... China has SLASHED exports of rare earth metals... Things like, Cerium, Lanthanum, Praesidium.. etc. Over that past 5 years, China successfully drove EVERY OTHER MINE IN THE WORLD out of business... with ultra-low prices. Now.. they’ve CUT EVERYONE OFF.

You're right - we're all going to be hearing more about it...

China's playing hardball, but they're also not skilled at being capitalists - so it might get really interesting.

Let's hope China's NOT paranoid - failure and paranoia don't mix well when there's millions of extra men and many nukes....

12 posted on 07/21/2010 7:29:12 PM PDT by GOPJ (..Liberalism is Intolerance..- - Freeper Eric in the Ozarks)
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To: Pelham
Do you know if the US has a strategic stockpile of rare earth metals, like we do with oil?

I'm not sure if the US does.... I know, my company did not... even though, several of us have been requesting this for the past 2 years...

There ARE other sources in the world... but, they're not producing much anymore.. They say, Afghanistan has a lot... but, the work environment there sucks!

13 posted on 07/22/2010 4:38:02 AM PDT by SomeCallMeTim
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To: SomeCallMeTim; TigerLikesRooster; AmericanInTokyo; Loyal Sedition; Greysard; battousai; tcrlaf; ...
Jack Lifton “On the Rare Earth Crisis of 2009”

The two things being masked by this belief are that:
The selling prices of the rare earths outside of China are being artificially depressed; they are too low, and

China is moving towards or preparing for the re-pricing of commodities, such as the rare earths, (in which it is world dominant in production and usage) out of US dollars or perhaps of revaluing the renminbi.
http://seekingalpha.com/article/178225-on-the-rare-earth-crisis-of-2009

Tantalus Announces Extension Of Supervisory Board

The mission of Tantalus Rare Earths AG is the identification and development of rare earth exploration and mining projects outside from China, mainly focusing on Africa. Administratively, Tantalus Rare Earths AG is located in Düsseldorf, Germany. Currently, the investment portfolio consists of 100 % of the Tantalus Rare Earths Project in Madagascar.

http://www.techmetalsresearch.com/2010/08/tantalus-announces-extension-of-supervisory-board/#more-1449

14 posted on 09/02/2010 11:08:29 AM PDT by AdmSmith (GCTGATATGTCTATGATTACTCAT)
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To: GOPJ
China's playing hardball, but they're also not skilled at being capitalists - so it might get really interesting.

Ever spent time in China? You'll quickly disabuse yourself of that notion. The Chinese are probably some of the most cunning capitalists you'll find, and the 35 year dalliance with Communism was an aberration in a 3000 year history of capitalism.

For the last 15-20 years or so, China's been arguably MORE capitalist than the US, and continues to be so... In fact, by some objective measures the US is more Communist than China. China's built some muscles as it's regrown after the damage from Mao, and it's starting to flex them.

15 posted on 09/02/2010 11:38:57 AM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: SomeCallMeTim
Now.. they’ve CUT EVERYONE OFF.

These metals are needed for electronic manufacturing and catalyst production... we’re all screwed now, and scrambling.... You probably haven’t heard much about this yet.. But, you will.

Well, that's not QUITE true... They have cut off export of RAW metals. But if you want finished parts or goods that include those metals there's no restriction at all.

You can no longer go to China and get your supply of neodymium or samarium to make your own magnets. But you're more than welcome to either set up your own 100% wholly owned factory for magnets in China, or patronize an existing Chinese supplier of those magnets you want!

Likewise with most of the rare earth metals. No raw ore or metal sales, but no restrictions on sales of products that incorporate those metals.

16 posted on 09/02/2010 11:42:29 AM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: Mr Ramsbotham

If China’s stock market is crashing how will they buy our debt?


17 posted on 09/02/2010 11:49:30 AM PDT by Lucius Cornelius Sulla ('“Our own government has become our enemy' - Sheriff Paul Babeu)
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To: Mr Ramsbotham
"China will probably go the way of Japan, and the United States, even if it’s hobbled by the current administration, will continue as the world’s economic superpower, at least for the foreseeable future."

Perceptive.

It has been my perception that the closed economy of Japan has no interest in profit as a society. Their real income is the hard money interest they receive from their U.S. Treasury and other hard currency sovereign debt holdings.

Communist China seems to operate a similar system. ChiComs must retain huge hard surrency sovereign debt income to enable foreign trade.

yitbos

18 posted on 09/02/2010 12:31:11 PM PDT by bruinbirdman ("Those who control language control minds.")
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To: PugetSoundSoldier
Well, that's not QUITE true... They have cut off export of RAW metals. But if you want finished parts or goods that include those metals there's no restriction at all.

If you are a manufacturer... as my company is.. of finished parts or goods that use such Rare Earths... you're screwed. And, our customers are about to be screwed.

Indeed.. the main reason China is doing this is.. they want to force companies like mine to move our production to China. It's ALL wins for them if we do. They get more jobs, higher value exports (ie more taxes) and it becomes MUCH easier for them to steal our manufacturing technology... so they can use it in their own companies to compete against us.

They are NOT stupid... unscrupulous, yes.. but, not stupid.

19 posted on 09/02/2010 1:23:15 PM PDT by SomeCallMeTim
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To: SomeCallMeTim

See, you can still get the product to ship, you just have to use it to manufacture inside China. It’s actually quite shrewd of them, and shows they understand the capitalist system a lot better than most in the US.

I’m not saying your company was wrong, it was most likely the lawyers and professional politicians in DC who did your company in, via regulation and taxation. Strangely, people who’ve never worked or run a business in the real world simply do not understand the implications of their actions.

So, your company will have to do one of 3 things:

1. Fold
2. Petition Congress (donations/bribes) to re-open a few of the mines here (need pretty deep pockets, though)
3. Move production of those rare-earth-based subcomponents to China, and do final integration work here

I’ve seen it happen in many industries; Asia’s learned all about capitalism, and is now playing for keeps!


20 posted on 09/02/2010 2:51:10 PM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: SomeCallMeTim
You are highly respected on this forum, because you are one of those Freepers who makes it around the world on a frequent basis, and has first hand knowledge of the situation in many countries. There are a number of them here on FR, always a good resource; you are indeed one of them.

And yes, this is happening with CHINA, and people WILL hear about it.

In my opinion, it should be an issue in the midterms, and particularly in 2012 in the Presidential Primaries (if people in the US still have jobs and we arent all in breadlines).

21 posted on 09/02/2010 5:16:41 PM PDT by AmericanInTokyo (ENOUGH of this! **IMPEACH**&**CONVICT** the sonofab*tch. Early 2011. Sooner rather than later.....)
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To: PugetSoundSoldier
1. Fold

2. Petition Congress (donations/bribes) to re-open a few of the mines here (need pretty deep pockets, though)

3. Move production of those rare-earth-based subcomponents to China, and do final integration work here

Well... that would be the first thought. We are actively considering moving our production to China.. but, in the end.. I think, we won't.

The product we make... catalyst, not electronic sub-components.. is not made by any company within China. So, we're ALL in the same boat.

I think... we'll all suffer until mid-2011, when sources start to open up in other areas... like Australia.

22 posted on 09/02/2010 6:09:57 PM PDT by SomeCallMeTim
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To: PugetSoundSoldier
Asia’s learned all about capitalism, and is now playing for keeps!

It seems you are right, but what caused the change?

23 posted on 09/02/2010 6:10:58 PM PDT by GOPJ (BE the change you wish to see.... Gandhi)
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To: AmericanInTokyo
You are highly respected on this forum, because you are one of those Freepers who makes it around the world on a frequent basis, and has first hand knowledge of the situation in many countries. There are a number of them here on FR, always a good resource; you are indeed one of them.

Wow... that's the nicest thing anyone's ever said to me on FR! :-) Right back at ya!

I do get around.... Will be spending time in Amsterdam, Berlin, Munich, Zurich, Bogota, Salvador, and Santiago all within the next 30 days.. plus, a little vacation time in Vegas! :-)

The CHINA is definitely playing hardball... they are NOT our friends. Anyone who thinks they are... is simply not paying attention. The Japanese always admired American culture... the Chinese do not. They have their own...and, it's a VERY aggressive culture.

The problem with China is... they make decisions abruptly...Businesses have a hard time responding to their fickleness. They also have a HUGE problem developing among their own people:

1) They are tired of having pollution dumped on them without thought, and

2) They've figured out that they aren't being paid what they're worth.

China has HUGE labor issues on the very near horizon.

24 posted on 09/02/2010 6:19:43 PM PDT by SomeCallMeTim
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To: GOPJ
It seems you are right, but what caused the change?

Practice... they've been at this for 30+ years now.. and, they're pretty damned smart.

25 posted on 09/02/2010 6:21:12 PM PDT by SomeCallMeTim
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To: GOPJ; SomeCallMeTim

Tim’s response is quite on-target. And 3000 years of history. China’s always been very capitalist in its economy, the 30 years of Mao were really an aberration, and Deng Xiaopeng shook China from its slumber.

Not to mention a great respect for wealth, wealth creation, and a desire to learn how to build it. There’s a reason that Friedman’s “Capitalism and Freedom” is a big seller in China (in Mandarin, no less)!

In essence: a culture that rewards risk-taking and respects and admires success. The opposite of what we have in the US right now!


26 posted on 09/02/2010 6:26:47 PM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: SomeCallMeTim

That, unfortunately, is what many companies are hoping for. We’ll see if China doesn’t lock up Australia production as well.

At least operating a business in Australia is a bit easier than the US! Not as easy as most Asian or South American companies, but not impossible...


27 posted on 09/02/2010 6:29:38 PM PDT by PugetSoundSoldier (Indignation over the Sting of Truth is the defense of the indefensible)
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To: SomeCallMeTim

Agreed with ALL that you said, about Asia.


28 posted on 09/04/2010 1:49:13 AM PDT by AmericanInTokyo (ENOUGH of this! **IMPEACH**&**CONVICT** the sonofab*tch. Early 2011. Sooner rather than later.....)
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