It’s a strange world. In the past, when China’s economy was down, most of the world (at least silently) cheered. Now, as China’s growth slows, the world gets worried. Suddenly, it’s news when China’s auto sales fall 10 percent in November. Suddenly, the world gets alarmed when for next year, growth rates of only 5 percent are being projected. Yet, China may be out of the slump much faster than many think, or some still silently hope.
Business Week predicts that in the second quarter of 2009, “the benefits of China’s massive $582 billion stimulus package could start to flow through, and the economy could kick into a higher gear once again.” The signs are everywhere, says Business Week.
China’s stock market had been going down for all of the year. Suddenly, the market is up sharply. Even the battered Chinese housing market shows sign of new life. In Shanghai, sales volume sales jumped 47 percent in November. In the rest of China, there was also movement. Prices are lower, but inventory starts to move again. In this strange world, people are getting giddy about something that would have worried them before: Rising steel prices. Merrill Lynch economists Ting Lu and T.J. Bond noted an “especially eye-catching” rise in steel prices after a 60 percent drop since summer. “The turnaround in steel prices may suggest that business confidence has to some extent returned,” the duo writes.
As business confidence comes back, people will be buying cars again. Now we understand why China’s Association of Automobile Manufacturers was so specific when they prognosticated a “recovery in July 2009.” That’s when the Chinese government thinks their economy will be rocking and rolling again, and Business Week seems to agree. China will be back to its old role of saving the worldwide numbers of the auto industry. A strange world sure it is.
I don’t know about you, but about 8-10 months ago, I pulled out of the stock market and put money into “cash” for my 401k (so have “only” lost a tiny amount, thanks for asking) but with this in mind, it might just behoove me to re-invest in the stock market (selectively) for my 401k come the crash, which is perported to be as early as this Friday. How about between 6000 and 4000 on the Dow? Those are the closest guesses, and it can’t be nailed any closer than that. But it’s signficiantly down from today, shall we say…
This drop, I’m guess, will be partly due to two ‘major’ earthquakes which are on the reality event horizon.
So about Friday (give or take a few days either way), all the B&B will be wanting to know – how’d menno know/guess that?! Answer to come / and it’s not me, it’s someone else. Suffice to say, I read a lot.
In the meanwhile, if you live near any faults, you might want to bolt “everything” down.
Everyone also might want to stock up on food, batteries, don’t forget a can opener, something to cook with, warm clothes, etc. no matter where you live since food might get to be an expensive difficult to find issue if these ‘quakes are as bad as they “might” be – apparently there will have to be emergency shipments of food to thousands, which I’m guessing is going to cause issues in food quanitities available for the rest of us. Also the ‘quake is supposedly going to be in a food production area, with significant impact for up to a decade.
I just hope to God it’s not the New Madrid fault. Unfortunately, just last week, there was an earthquake in Arkansas in an area not known to have any faults at all. Not a good sign.
menno –
WTF? what is that all about? How would you know this? Some bees been acting strange around your yard? Been getting more than the usual amount of Nigerian money scam or male enhancement product email spam?
More info pleeze.
It’s not me, tomaxhawk. It’s something I’ve been following and reading online. I’ve kept track of the so-called predictive analyses and – lo and behold – they’ve been running about 75% “near as dammit” right for about a month or more that I’ve been following it.
I can share the site – it’s not a state secret. I just figured people wouldn’t care to see until after the ‘quakes. (And lets pray they’re in the 25% category – not accurate).
http://www.independencejournal.com/today.htm
Holy crap, menno, that is some serious wingnut woo-woo shit there.
Menno-
The one thing that strikes me as incongruous is why leave anything (even “cash”) in a 401K if the rest of the plan involves guns and canned food? I would think that you would want to take the hit and convert all those ones and zeroes that represent your “cash” into gold…
Bertel, the resources engine of Australia is hanging on something turning up in China!
dean, bunkie – I don’t care if he IS a wingnut; their “time machine” seems to be right about 75% of the time. As for gold – well, you just try to find any for less than 30% over spot and if you do, let us all know where it is available from, ‘mkay? Bearing in mind that I’ve been putting up a little here and ther (and paying 3-5% over spot) for several years. I’d like to retire some day – not die in harness at 91 with a palsied “welcome to mal wart” on my lips as my last words. (I come from a family of “old” people – exceptionally long life expectancy).
So, this particular “wingnut” has outdone my 401k by several thousand percent with a little self control, discipline and foresight (as well as not spending every frickin’ penny I earned). Started buying silver at $3 an ounce, and gold for $150 an ounce, for example.
Interestingly, the Chinese and Indians (in India – not “native Americans”) also like to put up real gold. I’ve mentioned it here before for the benefit of the fellow car-guys and gals known herabouts as the B&B (best & brightest) but I’m not talking about it except a little bit incognito, now.
And yes, I do have a little extra food put up but living in an area where I’ve literally been snowed in for nearly a week at a time, that’s just sensible planning.
Menno, if there’s another New Madrid Earthquake like back in 1811-1812
http://en.wikipedia.org/wiki/New_Madrid_Earthquake
it’ll ruin our whole day. At least.
Correctomundo, 50merc. The substance of the earth under foot in flyover country is much denser than California, apparently, and a big quake in the New Madrid fault would be catastrophic for about a 500 mile radius, where literally millions of people live. The shock waves would travel far larger distances than in California, I understand.
More than a potential bucket load of not good.
Worst case scenario would see major cities such as St. Louis and Louisville, Nashville, Memphis, Little Rock – with major damage. Buildings there are not constructed to handle 6.5 quakes.