BSE trades and ends above the 20000 mark all day! Yeah, next target 40000!

SENSEX 20,290.89 +360.21 +1.81
MIDCAP 9,186.98 +69.54 +0.76
SMLCAP 11,667.84 +136.92 +1.19
BSE-500 8,360.75 +120.18 +1.46



China up marginally 13 points to 5175.08

HK yoyos up 725 points to 29226.84.

Main Europe indices down. Dow and Nasdaq futures up. The contention is in anticipation of the interest rate cut today.
Those of you who have a mixed bag of investments in equities and bonds will be in 7th heaven as both are expected to go up.
Brazil in record territory.

If any of you want some good investment funds check out the BRIC (Brazil, Russia, India China) funds out there.

Hope you guys are enjoying the kinda holiday spirit in the air.

And then last night there was the Dada reunion concert- Led Zeppelin in England!
And mind you they played "Kashmir" - I mean how can there be a Led Zep concert w/o Kashmir?
Wholle lotta love and Stairway to Heaven!

This is getting too routine. Fails to excite anymore. A couple days down a day up and then a day down...

HK loses 705 points to 28521.06

China down 79 points to 5095.54

BSE up 85 points to 20375.87


SENSEX 20,375.87 +84.98 +0.42
MIDCAP 9,339.49 +152.51 +1.66
SMLCAP 11,884.99 +217.15 +1.86
BSE-500 8,452.26 +91.51 +1.09

MAIN eUROPEAN INDICES THOUGH TRADING DOWN earlier HAVE PICKED UP and are now in positive territory.

Dow futures up 200+ points! Yesterday it lost heavily due only marginal interest rate cut.
TSX will also follow Dow today.
Cand up from yesterday's fall.
Oil up, gold up. watch silver.

http://www.globeinvestor.com/servlet/story/RTGAM.20071212.wreynolds12/GIStory/

Now here's another important report on China from the Carnegie Endowment. A couple of weeks ago, it was political scientist Minxin Pei and his warning that pervasive government corruption in China will bring the country's rapid economic expansion to an abrupt end. This week, it's economist Albert Keidel and his calculation that China remains poorer - far poorer - than the world thinks. China's economy, he says, will turn out to be 40-per-cent smaller than present statistics suggest.

Mr. Keidel is an authority on China's economy. He has worked in China, Japan and South Korea, serving in Beijing as a senior economist with the World Bank before joining the Office of East Asian Nations (as director) at the U.S. Treasury Department. He has worked for the Carnegie Endowment in Washington since 2004. In 1994, he wrote China: GDP Per Capita, an early stab at the complicated task of determining the size of China's economy.

Now, anticipating revised numbers from the next World Bank report on national wealth, Mr. Keidel says that official survey results indicate that the number of Chinese who live on less than $1 (U.S.) a day probably exceeds 300 million - three times as many as current calculations indicated. One Chinese in four, in other words, still lives in abject poverty.

How could China's economy remain so stunted after three decades of rapid growth? Mr. Keidel thinks that China's official statistics have been based for years on assumptions - wrong assumptions - made more than 20 years ago. For example, the World Bank estimated in 1980 that 300 million Chinese lived in dollar-a-day poverty. The real number was, in fact, closer to 500 million. Complicating the task, China has never previously permitted the World Bank price surveys that have been used to determine GDP (and purchasing power parity) in other countries.

Downward revision of the GDP numbers wouldn't necessarily take anything away from China's flat-out economic performance since the mid-1970s - or diminish the country's remarkable advances. It would, however, compel people to look at China from a dramatically different perspective. "China has made enormous strides in lifting its population out of poverty," Mr. Keidel says, "but the task was more gargantuan than people thought. China's progress has been overstated."

The diminished China that Mr. Keidel describes would modify the prospect of an ascendant Communist state that will quickly overtake the United States as the world's biggest economy. The U.S. Government Accountability Office had itself calculated that China would pass the U.S. by 2012 - at least on the basis of purchasing-power GDP.

"With the corrected [purchasing power] figures," Mr. Keidel says, "the whole question is moot. China is just not that big and it will not get that big any time soon."

Even with the old numbers, China was advancing slowly - when compared with the rest of the world. Take the index that the UN uses to measure comprehensive change in living standards. The Human Development Index takes many factors beyond GDP growth into account - longevity, education, human rights. In 2001, the UN index ranked China as 87th in the world. By 2007, it had elevated China only to 81st place. In the intervening years, China scored as poorly as 104th.

Even now, China's per-capita GDP (expressed as purchasing power) varies significantly, depending upon which authority you use.

The International Monetary Fund puts it at $7,722, only a few dollars less than the Central Intelligence Agency's estimate of $7,800. At this level, China ranks 86th in the world. The University of Pennsylvania, which publishes an authoritative analysis of its own, puts the country at $5,772, pushing China down to 94th.

In either case, subtract Mr. Keidel's exaggeration factor of 40 per cent from these numbers and China slides further than it has climbed in the last few years. The IMF number becomes $5,790 and puts China in 100th place; the University of Pennsylvania number becomes $4,379 and puts China in 114th place, just above Uzbekistan.

In his 1994 report on China's GDP, Albert Keidel noted that extreme poverty in China had risen since it introduced elements of capitalism 15 years earlier. He also noted - from a nutritional perspective, at least - China was as rich in 1949 (when the Communists took over) as it was in 1978. In the vast rural regions of China, one in three had lived through Mao's reign in abject poverty. Now things are better. Only one in four lives in abject poverty - an unfortunate mass of people that equals the population of the United States, whose own per-capita PPP is more than $40,000 and rising.



© The Globe and Mail

http://www.globeinvestor.com/servlet/story/RTGAM.20071212.wibasia12/GIStory/

Marcus Gee


Wednesday, December 12, 2007

Jim Walker may be Asia's biggest killjoy. As others rush into the big China party, he stands by the door like the Ancient Mariner telling tales of woe. Or potential woe, anyway. Sure, China is going great guns now, but can the boom that is shaking the world really last? Mr. Walker, a hard-headed Scot who watches China from his skyscraper perch above Hong Kong harbour, has his doubts.

"There's a love affair with China just now in global financial circles," he said when I met him recently in the offices of Credit Lyonnais Securities Asia, where he has worked as an economist and resident skeptic for many years. "That will last until we see the first Chinese recession."

Recession? Even to utter that word in the same breath as China seems bizarre. This is, after all, the world's fastest-growing major economy. In the first three quarters of this year, China recorded growth of 11.5 per cent, even higher than last year's 11.1 per cent. The flood of Chinese exports flowing out to the rest of the world has widened its trade surplus to $238.9-billion (U.S.) for the first 11 months of the year, up by more than half from the same period in 2006.

Beijing's foreign exchange reserves, earned partly through those booming exports, have reached a staggering $1.46-trillion, enough to wallpaper the Great Wall of China with U.S. $1 bills, with a few left over to do the spare bedroom. A Chinese energy producer, PetroChina, became the world's biggest company by market valuation when it was first listed on the Shanghai Stock Exchange last month, another vivid sign, surely, of China's economic health.

Instead, say China skeptics like Mr. Walker, these are signs of trouble ahead. China is recording such high growth rates and such huge trade surpluses in part because it has set its currency, the yuan, at an artificially low rate. That makes Chinese goods cheaper for foreigners to buy and contributes to China's trade surplus. That in turn brings floods of money into China in the form of foreign exchange reserves, a subject I explored in last weekend's Globe.

When that money is changed into local currency, the money supply goes up like a balloon. That money, lent out by banks, fuels big investments by companies in expansion they may not need. It also sends stock and real estate values soaring and causes domestic prices to rise. It's an unhealthy cycle and it's terribly hard to break. China's leaders are terrified of inflation, which has often fuelled unrest in China throughout its history. They're equally afraid of doing anything to choke off job-breeding exports. Mass unemployment is just as scary as runaway inflation.

"It's very uncomfortable for them," Mr. Walker said. "They are really painted into a corner."

How do they get out of it? Beijing has been trying all sorts of halfway measures in recent months to cool the economy without letting the currency rise too high or slow exports. The government has boosted interest rates and raised bank reserve requirements several times this year to try to curb the growth in money supply, which is running well above official targets. Last week, China even took the extreme step of capping the growth of bank lending, an attempt to control credit expansion.

Faced with doing what's really needed, such as allowing the yuan to float higher, "they tend to back off," Mr. Walker says. "Instead, you get these inadequate measures to relieve the pressure." The interesting thing about authoritarian regimes like China's is that they find it hard to make tough decisions. Lacking democratic legitimacy, they fear the upheaval that might follow if they make a wrong step and make people angry. So, in a funny way, they are less decisive than supposedly namby-pamby democracies.

Sooner or later, though, China must act. Pressure from the outside world is mounting. The United States has recently formed a united front with Europe to make Beijing do something about its undervalued currency and huge trade surplus. The U.S. Congress is up in arms, with an election year approaching. Internally, Chinese inflation soared to its highest rate in 11 years last month, the latest sign of overheating. If the global economy slows in the coming year over troubles in the United States, China's huge investment-driven industrial expansion could be like a thundering train that suddenly runs out of track.

Mr. Walker - who is moving on to become an independent consultant - is not a harbinger of doom, just a sensible bloke with his head screwed on right. China's economic rise has been a marvel, no doubt, but "it's imprudent to wear rose-coloured glasses." No one could accuse Jim Walker of doing that.



© The Globe and Mail

So, looks like the dollar steroids the conglomerate of banks and govts pumped in yesterday to ease the markets and boost Europe and the Americas, hasn't had lasting effects.

China down 48 points to 5047.27
HK down 776 points to 27744.40

BSE also loses ground to 20104.39

SENSEX 20,104.39 -271.48 -1.33
MIDCAP 9,375.94 +36.45 +0.39
SMLCAP 12,007.33 +122.34 +1.03
BSE-500 8,388.34 -63.92 -0.76

Europe's main indices in the red.

Let's see TSX and Dow today.

Cand down from from yesterday's high.

The primary asset of any business is its organization."
-William Feather


Yesterday, Santa (do I hear "which one?" )painted the world's stock market red!

Today we have

SHANGHAI (XFN-ASIA) - China A-shares closed lower as sentiment remained fragile, with weakness in PetroChina dragging the market down, dealers said.

PetroChina Co Ltd (SHA 601857; HK 0857), the market's heaviest-weighted stock, tumbled 2.5 pct to a new closing low of 29.24, offsetting gains in some blue chips such as coal and steel companies.

The benchmark Shanghai Composite Index closed down 40.59 points or 0.83 pct at 4,836.17, extending a 2.62 pct fall in the previous session.

'The market fell but the downward momentum decreased,' said Cao Yan, an analyst at Soochow Securities. 'Overall buying interest was dampened by weakness in PetroChina.'

Turnover fell significantly to 64.86 bln yuan from 101.52 in the previous session.

'The shrinking turnover indicated investors were very cautious. They consider the market to be unsteady,' said Wang Sai, an analyst at Wanguo Consulting.

The Shanghai Composite Index hit a high of 4,905 points in the morning buoyed by bargain-hunting, with some investors expecting the market to be boosted by fresh inflows after the return of subscription funds to unsuccessful China Pacific IPO applicants.

http://www.forbes.com/afxnewslimited/feeds/afx/2007/12/18/afx4450932.html

BSE is at 19079.64!Down like crazy from 2 days ago. Yesterday it cracked almost 800 points. Today down 181 points.


SENSEX 19,079.64 -181.71 -0.94
MIDCAP 9,093.84 -11.74 -0.13
SMLCAP 11,818.12 -21.90 -0.18
BSE-500 8,000.88 -31.28 -0.39

Hk up 136 points.

TSx, Dow, Europe up. So is Brazil.

BEIJING, Dec. 19 (Xinhua) -- Chinese share prices closed sharply higher Wednesday with bargain hunting, ending two consecutive days of decline.

Analysts said the rebound also came after a report that the companies owned by the central government will not massively sell shares of their listed units.

The state-owned giants seek to provide share holders sustainable returns, Wednesday's Shanghai Securities News citing Li Rongrong, head of the State-owned Assets Supervision and Administration Commission, as saying. This helps allay fears that the giants will sell shares to lock in profits at the high price levels.

The benchmark Shanghai Composite Index, which covers both A and B shares, rose 105.61 points, or 2.18 percent, to finish at 4,941.78.

The Shenzhen Component Index on the smaller Shenzhen Stock Exchange climbed 312.90 points, or 1.95 percent, to 16,387.01.

The Hushen 300 Index, which accounts for 60 percent of the nation's stock market value, jumped 116.38 points, or 2.41 percent, to 4,946.29.

The rises in mainland share prices echoed advance in Hong Kong. The benchmark Hang Seng Index closed up 1.11 percent at 27,029.26 after modest gains on Wall Street overnight.

Winners led losers by 754 to 39 in Shanghai and by 562 to 35 in Shenzhen. The combined turnover of the two bourses expanded by a large margin to 125.71 billion yuan from 96.47 billion yuan in the previous session.

http://news.xinhuanet.com/english/2007-12/19/content_7280564.htm
BSE only up 12 miserable points!

SENSEX 19,091.96 +12.32 +0.06
MIDCAP 9,080.39 -13.45 -0.15
SMLCAP 11,915.36 +97.24 +0.82
BSE-500 8,002.18 +1.30 +0.02

Europe, Nasdaq and Dow up.

We have the other Christmas colour today- green!