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On That 'China Is At 52-Week Highs' Meme

Tyler Durden's picture





 

It appears once again that the behavior of a liquidity-constrained high-beta market-price is encouraging excitement among some of the world's 'smartest' media mavens. "But, but, but, 'China' at 52-week highs must mean something?" we hear. Well three things on that meme: 1) the 52-week high Hang-Seng is not reflective of 'China' fundamentals per se - instead a far faster-money inflow/outflow liquidity indicator; 2) China's Shanghai Composite remains extremely weak; and 3) the Hang-Seng has had three false (and dramatic) swings in the last three years which have all reverted painfully fast (1 bearish and 2 bullish) - do you believe this time is different? Fall 2010 and Spring 2012 both looked great - until they crashed and burned...

 

 

Chart: Bloomberg

 


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Wed, 10/24/2012 - 18:41 | Link to Comment Silver Bug
Silver Bug's picture

The Global slowdown is going to accelerate and the printing presses are going to go into hyperdrive. The currency wars continue.

 

http://jimrickards.blogspot.ca/

Wed, 10/24/2012 - 18:46 | Link to Comment ekm
ekm's picture

 

I read somewhere that Politburo has given order to the chinese stock market regulator that Shanghai stock exchange should NOT be allowed to drop under 2000 until leadership change takes place.

 

Wed, 10/24/2012 - 18:51 | Link to Comment Yen Cross
Yen Cross's picture

You are absolutely correct Tyler. One should be watching the "mainland" Shanghai composite. The Heng Seng "Hong Kong" based exchange is due for a nasty correction.

Wed, 10/24/2012 - 18:52 | Link to Comment Heyoka Bianco
Heyoka Bianco's picture

The big difference: the Hang Seng is Hong Kong (or Xianggang for all the Putonghua speakers in the audience). It is a far more diverse index, at least in that it is not totally Chinese company dominated. Of course, it also includes HSBC, so it turn turd pretty fucking fast.

Wed, 10/24/2012 - 18:59 | Link to Comment Cash2Riches
Cash2Riches's picture

It's never truly different. The next slowdown always comes. This time will be no different.

 

Protect your wealth with Gold and Silver.

Wed, 10/24/2012 - 18:59 | Link to Comment Ham-bone
Ham-bone's picture

Ummm...I guessed I missed who these "smartest" mavens are and what exactly they said...anything new (links)?

Wed, 10/24/2012 - 19:43 | Link to Comment LongSoupLine
LongSoupLine's picture

US, Europe, China...whatever, they're all manipulated and blotted fiat fed jokes.

Wed, 10/24/2012 - 22:20 | Link to Comment Milton Waddams
Milton Waddams's picture

I feel for the average Chinese 'J6P'.  There's a rude awakening coming when s/he realizes it's all an (imported) illusion.  NINJA economy, indeed.  Let's hope their leadership turns the inevitable inward.  I feel for the average Chinese 'J6P'.

Thu, 10/25/2012 - 02:38 | Link to Comment Capitalist
Capitalist's picture

Don't forget that Hong Kong is also printing money to defend its currency trading band!

Just another asset bubble in the making.

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