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Shanghai Index surges 3% as food price index dives
With investors focusing on more or less irrelevant news out of Europe, regarding whether Slovakia, Malta or some other irrelevant country will vote on the EFSF or not, one risks of losing sight of what’s going on in other markets. Despite our bearish stance, we warned of this squeeze a week ago. Cheap or expensive, markets move aggressively in short time frames. SPX is reaching some short term resistance, but look out for a squeeze in China.
We would like to point out China’s strong performance overnight, where index put on a 3% gain. Note how the big formation has reached the long trend line, and we can expect further gains. Compare the two charts below. Last time food price index took a dive (circle), the Shanghai index put on a close to 30% gain in a matter of weeks.
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Will the PRC gubberment become the entire mortgage market like our gubbermnent is here?
http://www.doctorhousingbubble.com/wp-content/uploads/2011/10/mortgage-o...
From The Good Doctor:
<<But look at the above chart and you will realize what banks are realizing. The entire U.S. financial system is being supported by the government. In other words, investment banks and the too big to fail are largely wards of the state only alive because of taxpayer bailouts.
Yet look closer at the graph. Notice that blue line? Those are those low down 3.5 percent FHA insured loans. Even in the non-bubble year of 1995 FHA made up roughly 10 percent of the entire mortgage originations for that year. This year it is well over 20+ percent. Current default rates are not good on these documented loans because of the poor economy. In essence banks are like a Hollywood set for the public pretending like they have money and making loans but in reality are nothing more than a shell that is empty.>>
Let em eat plastic rice with plastic pork instead. That can definitely bring down the index.
Food price indices may be the most fragile of indicators. The same upside encouragement this week, could be Starvin; Matvin, the next. With the growing institutional animosity toward independent food production, the same influences that spread famine on Africa over the past 60 years, are still at work in the world, today.
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`Hats off` for the squeeze call last week - accurate or what!
Did Paulson lose any money over this? Personally I would love to buy more Chinese scam companies like Sino Forest and the others. The Chinese are devious but look like pikers compared to The Goldman Sack.
Perhaps if it started raining Big Macs we could get the Shanghai Composite up another 10 percent.
and when the recent limit up jumps in corn, wheat, etc catch up what will happen then.
The bullish argument that slowing inflation is good drives me insane. The cost of food isn't going down it just isn't rising as fast as it was before.
Even if the price does go down a little bit it doesn't matter due to the previous massive increase. Wow a can of corn dropped to $3.21 from $3.34 I should be dancing in the streets. Only it was $.99 just a short while ago.
We are living in a bizzare situation where traders can't comprehend that increasing the cost of commodities leads to a collapse in consumption and recession. Hope that something is going to be fixed in the future to help growth causes a 15% rise in oil in a few days. The rise in oil destroys any hope for the future growth s oil drops back down. The drop in oil sends future growth expectations soaring so oil jumps back up again, rinse and repeat.
Are we still talking about China?
Interesting chart. Paves the way for more phony gains moving to the end of the year. I just hope we can all catch the turn when reality sets in. If ever.
So 10% yoy food inflation is ok?
Incomes will need to rise pretty damn quick to stay ahead of that steamroller.
maximum deregulation has always been the capitol way, wish it would be our way.
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