- Friend John Taylor's excellent WSJ op-ed highlighting danger the Fed is out of control. http://t.co/ePIc8gkb http://t.co/EecS6u6f #
- Will be on #cnbc #cnbcfastnoney Monday noon-1PM EST talking about #china growth news out this weekend. Hint-China is not collapsing. #
- Daughter Elizabeth, who IS brilliant, posted slideshow re software she designed to track soccer team player data http://t.co/BhBqFufk #
- Chops to @pamelarutledge. Her @psychtoday column updating Maslow was subject of Steve Denning's @forbes.com column http://t.co/yR4WHcjR #
- China March PMI unexpectedly jumps to 53.1, 11-month high – China Business Watch: http://t.co/yZDVg3XC via @AddThis #
- This is a huge opportunity! Wenzhou #China pilot zone for fin reform, allow residents to make foreign investments. http://t.co/mjXnEd4m #
- Will be on CNBC's Fast Money Monday noon-1PM Eastern re worries about China growth. hint: March PMI report today 11-month high 53.1
- BRICS 20% ($13.6 trillion) of global GDP 2011, 42% of world population. tough to invest there but very interesting. http://t.co/cGFwNmK4 #
- "China to cut import duties" Part of policy to rebalance Chinese econ by incr consumption relative to exports, capex http://t.co/mnbw72Gz #
- 3 storm systems on financial weather map 1) Fed liq breakout into ending, growth, inflation, 2) EU bank shrink, mezzanine, 3) China growth #
FYI: I will be on CNBC’s Fast Money Monday from noon-1PM EAstern time to discuss the China growth news released this weekend. As you know, many people are worried about a hard landing for the Chinese economy. The March PMI, released today, should help them exhale. The National Bureau of Statistics said on Sunday China’s official Purchasing Managers’ Index (PMI) jumped to an 11-month high of 53.1 in March from 51 in February, beating analyst forecasts of 50.5. My take: China is slowing some, maybe from 9.2% last year to 8-8.5% this year, but don’t hold your breath for a crash. I expect more gains in dollar-based security markets, including China, for the remainder of this year as the tsunami of liquidity created by the Fed since 2007 beaks through to global asset prices.
Hope you can be there.
- Fed bought 61% of new govt debt last yr. When they turn seller to shrink reserves expect huge spike in bond rates http://t.co/JzAA6Gun #
- Fed took 61% of new govt debt last yr. When they sell to shrink res expect spike in rates http://t.co/JzAA6Gun #
- Fed now biggest storm system for economy & why I'm increasing inflation bets. "Bernanke Pledges to Keep Rates Low" http://t.co/vOu8mtXu #
- Bernanke is a major cluster and the poster child for why to never put a professor in charge of the Fed. #
- My friend Scott Grannis updated chart http://t.co/HTMilfzq on tangible assets and inflation we 1st did in 1970s http://t.co/yZBRvV9c #
- FYI: I will be on @CNBC today at noon Eastern talking with Scott Wapner about today's weak China growth (PMI) news & how to invest in China. #
- RT @johnrutledge @CNBC spot with Scott Wapner today on China growth news & how to invest in China changed to 12:30PM eastern time #
- Did a @CNBC Fast Money spot today. China slowing but not crashing. Ways to bet on growth; RIO, BHP, FCX, PTR, CAT, EWY, EPP, YUM #
- RT YUM more direct way to make bet @FuegyMoney: @optionmonster @johnrutledge @CNBCfastmoney If China becoming consumer econ, why not $SBUX #
- China Feb fixed asset inv +21.5% but private firms +29%. Private now 67% of total, up from 42% in 2004 per CLSA's Andy Rothman. #
- RT It's not Kansas there folks-careful! @ChinaBizWatch: Deloitte Quits China Firm Sparking Fears of Auditor Exits http://t.co/5zGiSz37 ~CNBC #
- RT FYI: Shale gas will require $38 trillion capex over 25 years @ChinaBizWatch: Shell in shale gas pact in China http://t.co/FqjZP4zu ~BBC #
I did a spot today on CNBC’s FastMoney where the topic was reports of declining China growth. Here are the talking points I used to brief the anchors for the spot FYI.
China is slowing somewhat this year due to
-weak growth in Europe (China’s biggest trading partner and
-shrinking property market (residential property prices falling in all major markets)
-policy is also pushing fixed asset investment spending down, consumer spending up as a way of changing the structure of the economy over time
-Western observers are making too much of the slowdown. When they do, they sell China stocks. Slowdown will be modest, from 9% last year to 8-8.5% this year.
-income growth is strong in cities, even stronger in rural areas
-government finances are very strong (tax revenues growing 2x GDP)
-monetary policy is easing
-restrictions on owning property, mortgage loans, being eased
-It’s not Kansas out there. Investing in China is still very risky
-rule of law still weak (property rights, courts, judges)
-transparency still lacking (audits, financial statements, insider dealing)
-so be careful investing directly into the Chinese market
Safer way to invest in the China growth story
-buy companies in safer places that make their money in China.
-China growth is driven by flows of resources.
-natural resources from south Asia (Australia, NZ, Indonesia)
-technology from north Asia (South Korea, Singapore, Taiwan)
-capital from Hong Kong, Singapore
-build a portfolio of stocks from these areas to mirror China growth
-Stocks in my portfolio today on this theme are down big today on the weak growth news. I will be buying more. They include:
-RIO, Rio Tinto, aluminum, copper, iron, energy
-BHP, BHP Billiton, coal, iron, aluminum
-FCX, Freeport-McMoran, copper, gold
-EWY, ETF for South Korea, (Samsung is 21% of the index), Chinese cell phones
-EPP, ETF for Pacific ex-Japan, i.e., Australia, NZ, Singapore, Hong Kong
-EWS, ETF for Singapore
-CAT, Caterpillar, (China infrastructure investment moves a lot of dirt)
-PTR, Petrochina, (Chinese stock, bet on rising oil consumption inside China)
-EMR, Emerson Electric, US capital goods exports to China
-YUM, Yum Brands, US company owns KFC franchises in China
- Did @CNBC Kudlow spot tonight on US/China rare earth mineral trade & subseq political chest thumping. Here is the link: http://t.co/wD1Kx53p #
FYI: I will do a spot on CNBC’s Kudlow & Company tonight at either 7:30PM Eastern time or 4:30PM Pacific time. The topic will be US/China trade. As you may have seen, the US, EU, and Japan filed a complaint today with the WTO alleging that China is restricting its exports of rare earth minerals (tungsten, molybdenum, etc.), which was quickly followed by tribal chest-thumping contest by both Obama and Romney.
Wait, somebody wants China to export MORE of something? I will try to interject a little logic into this emotional topic tonight. Hope you can tune in.
PS: Here is the link to the CNBC video of the spot.