Six Fortune 500 Companies including Vale, Walt Disney and Kraft, Move Regional HQ to Shanghai
by ilene - July 16th, 2010 9:11 pm
Six Fortune 500 Companies including Vale, Walt Disney and Kraft, Move Regional HQ to Shanghai
Courtesy of Mish
When you have a tax policy that begs corporations to move workers and profits overseas, this is what you should expect: 24 multinationals move HQ to Shanghai
24 multinational companies, have decided to move their regional headquarters to Shanghai, including 6 Fortune 500 companies such as Vale, Walt Disney and Kraft Foods.
This will push the total number of companies with regional headquarters in Shanghai to nearly 300. Nearly 500 have regional research and development centers there.
Shanghai has been China’s top destination, for multinationals. Even during the world economic slump, the city’s foreign direct investment still increased. Data shows Shanghai’s foreign direct investment has already surpassed more than 5 billion US dollars in the first half of this year.
US Tax policy allows deferral of taxes on corporate profits held overseas. Tax policy, in conjunction with global wage arbitrage, practically begs corporations to move jobs and profits overseas.
Meanwhile, small businesses struggling in the US face higher taxes and increased medical expenses thanks to the Obama administration. It’s a lose-lose situation for small businesses vs. larger multinationals.
The worst part of this sorry situation is small businesses are the real economic driver for jobs.
For further discussion of small businesses, job creation, and our inept policies, please see Bleak Outlook for Small Businesses and Job Creation; Where Obama Went Wrong, and What to do About It.
Addendum
A couple people pointed out the word "Regional." Offices did not move out of the US.
True enough.
However, the likelihood those regional offices are bigger at the expense of US is high, but admittedly there is no way of knowing. However the underlying message on tax policy is valid regardless.
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DiggUgly 2010 for China’s Stock Market
by ilene - May 18th, 2010 3:11 pm
Collective effort, Ugly 2010 by Rom at Bondsquawk, with introduction by Pragcap:
We’ve often noted the fact that China’s equity market has served as a very reliable leading indicator over the last few years. They led the way with a dramatic market crash that started in 2007 and they bottomed several months in advance of the 2009 bottom in the S&P. We recently highlighted the bearish action in Chinese stocks while U.S. investors continued to pile into the S&P (one of three primary reasons we built short positions for the first time in 2 years prior to the recent stock collapse). Ultimately the market faltered and China’s equity market is once again looking prescient. China is displaying classic post-bubble market action. Our friends at Bondsquawk ask the important question that should be on everyone’s mind:
"Could the Chinese markets lead the rest of the world back down?"
[BEWARE THE BIG RED LEADING INDICATOR, The Pragmatic Capitalist]
Ugly 2010 for China’s Stock Market
Courtesy of Rom at Bondsquawk
China’s Shanghai Composite Index has led the rally in the global markets after sinking in late October 2008, almost 5 month ahead of the lows seen in the US markets. However, the rally has stalled as China’s equity markets have declined by 20.9 percent in 2010. Could the Chinese markets lead the rest of the world back down?
China’s Shanghai Composite Index 2-Year Historical Chart
The New York Times reported the following:
After a spectacular rise last year, China’s stock market has plummeted on growing concerns about Europe’s debt crisis and expectations that Beijing is about to take strong action to slow the nation’s booming economy and prevent it from overheating, analysts say.
Investors are worried that Chinese exports to Europe will slow in the coming months and that government efforts to tame this country’s economy by tightening credit will hamper a wide array of industries, including the nation’s fast-growing real estate market.
Read the Full Article>>
New home loans up 1,600pc in Shanghai
by ilene - January 20th, 2010 3:58 am
No bubble here. You may need to register with scmp.com to read the entire articles. – Ilene
(Thank you, Terry)
New home loans up 1,600pc in Shanghai
Mainland banks in Shanghai’s red-hot housing market lent 99.58 billion yuan (HK$113.2 billion) in new mortgages last year, up dramatically from 5.8 billion yuan in 2008, as home seekers rushed to buy and prices hit new highs.
The banks lent 38.93 billion yuan to buyers of new residential properties and 60.65 billion yuan to buyers of second-hand homes, the Shanghai office of the People’s Bank of China said yesterday.
Lending soared more than 1,600 per cent compared with 2008, when the property market and overall economy were hit hard by the global financial crisis, the central bank said.
Beofre you start worrying, know this. (Classic Chinese oxymoronic title.)
No sign of bubble despite soaring home prices in Shanghai
Shanghai’s residential market shows no signs of a bubble despite a hefty price increase because demand remains strong, according to Jones Lang LaSalle.
Price increases "do not mean that the market has reached extreme valuations that typify a bubble", the real estate service firm said in a report yesterday. "Overall, the policy environment will evolve to keep prices from growing too quickly."..
Soaring home prices on the mainland have sparked asset bubble worries among the country’s top leaders, including Premier Wen Jiabao who promised to take action.
According to Shanghai Uwin Real Estate Information Services, average housing prices in the city jumped 65.3 per cent last month from a year earlier, hitting a record 20,187 yuan (HK$22,930) per square metre.
Shanghai Securities News reported earlier this month that the mainland would probably start imposing property tax in selective cities this year, a heavy-handed move to cool the red-hot housing market…
And rest assured, the non-bubble is going to be curbed.
Mainland to curb lending binge, says chief regulator
Mainland will slow its massive lending spree and step up monitoring of banks as it tries to prevent speculative bubbles in real estate and other assets while keeping the country’s economic recovery on track, a top regulator said on Wednesday.
Mainland’s banking system is healthy despite last year’s explosive growth in credit and regulators could manage the risks, said Liu Mingkang, chairman of the Chinese Banking Regulatory Commission…
After handing out some
…
Fall Down Friday for China – Shanghai Down 3%
by Phil - August 28th, 2009 8:06 am
The Shanghai Composite fell 3% this morning.
That drops them to 328, down from 398 on August first (-17.5%), which is almost a perfect 20% retrace off the run from the last consolidation at 250 in March. As you can see from the chart, we are about midway between the high for the year and a 50% retrace of the entire run from the bottom at about 280, which happens to be the 40-week moving average. This is significant in many ways as the Chinese market has been the driver of the global recovery and our global markets (and our local stocks and indexes) are all flying high above their 200 dmas, just about where China was 30 days ago.
I am sorry to be the annoying voice of caution the past two weeks but, when I was a kid, "Spinning Wheel" was a hit song and "what goes up must come down" is etched into some very deep neural pathways in my brain. We’ve been using the FXP (ultra-short China) as a cover for almost exactly a month as I had put my foot down when the Shanghai hit 400 and the Hang Seng hit 21,200, up exactly 100% from their November lows.
As David Fry points out in his daily S&P chart, the volume for the days is DOWN volume and, once the sellers get their fill, the auto-bots come out to play and run the markets back up. I pointed out on Wednesday, close to 40% of the entire volume of the markets is centered around 4 stocks (C, FNM, BAC and FRE). Throw in AIG’s 150M shares and we’re getting close to ONE HALF of the total market volume in 5 stocks.
While that may be shocking and ridiculous and has now been pointed out by several analysts, what I’m not seeing discussed is the implication that holds for the rest of the market. If those 5 stocks are 50% then the market, which is already trading at historically low volumes, is actually trading 50% LOWER than that! Then we have the well documented indications that GS, CS and a handful of other firms account for 40% of all trading volume. That means, if GS and other manipulators aren’t trading those 5 stocks, then they are accounting for 80% of all remaining transactions!
More likely the real number is somewhere in-between. Perhaps half their trades are in the Big 5 so that would…
RANDOM THOUGHTS ON MR. BIPOLAR
by ilene - August 21st, 2009 2:55 pm
RANDOM THOUGHTS ON MR. BIPOLAR
Courtesy of The Pragmatic Capitalist
- As I traded HK time last night I mentioned that this market is like a bewildered drunk who can’t find his way home. There was no way those 80 points down were going to hold on….The bears never had a chance with Mr. Bipolar hitting the bottle so heavily in recent days.
- My concerns about “better than expected” this week couldn’t have been more right. So how come my portfolio is flat on the week?
- How long can the market trade higher on a crashing dollar and soaring oil prices – both of which are an inherent negative for the U.S. consumer?
- The Baltic Dry Index continues to crash. Does it even matter to Mr. Bipolar?
- The assault on the commercial paper market is relentless.
- Hong Kong finished in the red again last night. How long can this be ignored? Or is it Shanghai we should be worried about? Or is it the Shenzhen we should focus on? What about the A shares, H shares….Don’t worry, it took me years to understand the markets in Asia….
- Is the Goldman Sachs 1060 price target 2009’s destiny? Lord knows they’ve gotten everything else they asked for this year….
- It’s amazing how quickly sentiment changed last week….
- Was I being too conservative with my SP 1,000 target?
- The urge to jump in the water is strong, but robots don’t function well in water. I remain mechanical in my trading. Is the risk of the next 5% worth a potential 10% decline?
Fibonnaci Stops Rally in China?
by Chart School - August 15th, 2009 6:31 pm
Fibonnaci Stops Rally in China?
Courtesy of Trader Mark at Fund My Mutual Fund
I asked an online buddy, Jeff over at Zentrader.ca, to post a Fibonnaci chart for Shanghai. For those unfamiliar with the mathematician and how it affects stock trading please see [Aug 5, 2009: Fibonnaci Calls: The 38.2% Retrace is Approaching]
Since the main Chinese market dropped 10% from its high, bounced for 1 day (Thursday), and then fell through the 50 day moving average Friday with another 3% loss, I was curious to see what sort of pullback the Fibonnaci "method" would call for.
My request was not specific enough and he actually posted 2 charts, with some quite amazing results.
Here is the chart I actually had been asking for with my vague request for a Fibonnaci chart… after spiking close to 3500, the 3 levels of retrace would show as below. So "best case" if this works out, from the close of 3047 Friday China potentially has another 8.4% to fall according to the Italian methodology. Obviously the pullback could of be of the 50% or 61.8% varieties as well but we’re looking for "best case".
There was nothing amazing about that data… but the other chart he posted, which was not my original request actually makes one shake their head. Remember in that August 5th piece we said the US markets had retraced 38.2% of their 1.5 year drop (October 2007 – March 2008) and it would be a sensible place to pullback if indeed Fibonnaci still rules over HAL9000. Here is what the chart looked like at the time – since then we’ve made a 2nd run at the 38.2% level (1014) middle of last week and then pulled back yet again Friday.
Now for the amazing… China pulled back exactly at its 38.2% retrace as well. Compare this chart below to the one above… striking similarity with about a 2 week lag. (note the US chart is a weekly chart, whereas the Chinese chart is daily – hence why the US one is so compressed)
And after the original pullback (see chart at very top of page) China made a 2nd run at…
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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...
Ilene is editor and affiliate program
coordinator for PSW. She manages the Favorites backup site
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