Is the stock market going to tank?

[Benny Profane]

China just grew 7.3% q/q. 7.3. A country with well over a billion people growing at 7.3%. Not contracting.

The middle eastern countries (Egypt Saudi Arabia UAE are each growing over 4%).

Mexico is near 3% overall. Brazil has been just below 0% recently but forecasts ~1% this year. So there's one.

Not to say mcdonalds is a great buy. I think less of a story is emerging growth and more is the push of Taco Bell/chipotle/etc along with low interest rates helping new businesses take share. Hits at revenues and will eventually hit at margins if they decide to lower prices to compete in these areas.

It's all relative

http://online.wsj.com/articles/china...ade-1413778141

http://online.wsj.com/articles/china...wth-1413893980

I know 7.3 sounds great, but, it's less than projected, and half of just a few years ago. Party over, major slowdown time. They have a few very serious issues to deal with, like most of the "middle class"wealth almost entirely held in a bubbled housing market that is popping, very bad demographics resulting from the one child policy, and a billion and more dirt poor peasants that know how to revolt.

Face it, the world wide recession/depression that should have happened after 08 but was stalled by our and China's massive stimulus is upon us. The commodity providing emerging economies have nobody to sell their resources to, now that China has more empty condos and trains to nowhere than they can deal with, and European residents are staring at serious deflation. Well managed American multinationals should fare the best in the tough times.

[4matic]

Crude oil WTI gonna break $80. Gasoline obliterated....again.

[Timberridge]

Crude oil WTI gonna break $80. Gasoline obliterated....again.

Just in time for the annual trustifarian migration to the mountains.

Long JAH, short refining.

[Bromontana]

I'm getting tired of this constant quest for growth, growth, growth, losing sight of the product itself in the meanwhile, which in the end seems to always result in loss of sales. I understand that McDs wanted to raise prices due to the rising costs of meat and other ingredients, but by doing so, they lost massive amounts of gross revenue. Even if it means lower net profits per unit, companies HAVE to suck it up and keep prices low if they want to keep their sales up.

With hordes of research and marketing experts, it's remarkable how little some of these companies seem to understand the majority of their customers.

The vampire squids won't rest until everything is consumed.

[Bromontana]

It's all relative..
Face it, the world wide recession/depression that should have happened after 08 but was stalled by our and China's massive stimulus is upon us. The commodity providing emerging economies have nobody to sell their resources to, now that China has more empty condos and trains to nowhere than they can deal with, and European residents are staring at serious deflation. Well managed American multinationals should fare the best in the tough times.

Fixating on a temporary period of excess supply in real estate ignores the forest.

[4matic]

Fixating on a temporary period of excess supply in real estate ignores the forest.

That's what gold bulls always say. Temporary can be a long long time.

[nickwm21]

Does this chart scare the shit out of anyone else?

[4matic]

Not in the context of long term interest rates.

[glademaster]

Crude oil WTI gonna break $80. Gasoline obliterated....again.

Gas prices up $0.10-0.20/gallon here in Utah over the last 7-10 days.

[4matic]

Gas prices up $0.10-0.20/gallon here in Utah over the last 7-10 days.

about a weeks lag:

http://futures.tradingcharts.com/chart/RB_/

[Benny Profane]

Fixating on a temporary period of excess supply in real estate ignores the forest.

Tell that to the Japanese.

[PNWbrit]

Gas prices up $0.10-0.20/gallon here in Utah over the last 7-10 days.

SHIT!!!

No wait a minute....that's good isn't it?

[Hugh Conway]

That's what gold bulls always say. Temporary can be a long long time.

Isn't this thread all about temporary? Or is it really the 30-somethings who think that any downturns temporary clusterfuck of mountain town 4-lyfe stupid?

[Bromontana]

Tell that to the Japanese.

If you think Japanese or US issues with real estate parallel those in China, I can't help you.

[Bromontana]

Isn't this thread all about temporary? Or is it really the 30-somethings who think that any downturns temporary clusterfuck of mountain town 4-lyfe stupid?

This thread is for pretending to be economists, pessimists, traders and investors. That, and 4matic's consistent real life market input. It's a fun place where we can all be experts.

[Hugh Conway]

If you think Japanese or US issues with real estate parallel those in China, I can't help you.

You don't think China has areas with massively overbuilt capacity and shoddy quality stock that's decaying in desirability and may never get occupied at the necessary price? I realize this is the junior MBA jump on benny thread (he often deserves it) but if you are generalizing about "China" you look just as fucking dumb. Unless of course this is the gweilo view of China - the first rank cities and only the first rank cities with everyone else in the country solely having savings to steal (negative real returns) and blood to spill on the factory floor for cheap shit. China's leaders stole from the population wholesale; the US got cheap trinkets, their people got script redeemable for a future that's unlikely to arrive for all. Mean reversion's a bitch.

Ahhh yes, the TGR middle manager script; the putdown mixed with the fellation in that oh-so neutral tone

[Bromontana]

I know that exists. It has for ten years. I expected it to crash then along with US housing, but it didn't. Why now Dr of Misanthropy?

[liv2ski]

Hugh....wait.....what? I am here because I slept at a Holiday Inn Express last night.

[Bromontana]

Not a manager either. That's 50% more work for 20% more pay. I dropped anchor at sr consultant

[Benny Profane]

If you think Japanese or US issues with real estate parallel those in China, I can't help you.

I didn't ask for your help, and want none of it.

Good luck.

Edit: Hugh explains China very well.

[Hugh Conway]

Schadenfreude. The reason other than autofellation to post.

Without the massive - on any scale - building/stimulus China committed to they probably would have crashed, no? And because it was deployed through the usual channels more of the public got exposed to the corruption/incompetence (HSR crash)? So it just gets bigger and more likely. But when? Who knows; people study the party as a matter of life and death and they don't know what the fuck goes on inside those hallowed halls, the fuck would I?

[Bromontana]

Agreed, he explains a problem. And you introduce the same non sequitur that it implies a pending cratering in growth. I say they have dealt with the exact issue for a decade and every year the problem becomes smaller in real $. So what is the thesis for it unravelling NOW. Or in the next five years? I suppose the progress they are making on corruption might trigger it, but the course isn't clear.

[4matic]

So what is the thesis for it unravelling NOW. Or in the next five years?

Income inequality on a grander scale. 250 million agriculture workers moving to cities (and ghost cities) with low/no wages. An Arab Spring in China would be messy.

[Hugh Conway]

Total Chinese debt has doubled since the GFC. How is that "smaller"? ~17% of GDP in debt servicing?

Sorry, the perma-bull thesis needs defending, not mean reversion.

Anyways, you might wish to look at the current events unfolding in Hong Kong to see why - and perhaps how - things could get quite ugly. Or they could just blame it on the Japanese (again).

[4matic]

Oil making new low with oil stocks well off their low shows relative strength and is positive. Negative is the list of mega cap companies missing earnings is growing. Boeing and ATT today. Both getting hammered.