Thrilling Thursday Morning – Beijing Bop
by phil - September 3rd, 2009 8:28 am
That is, of course, what residents of Macau are required to chant every morning in honor of Stanley Ho, who held the monopoly on casinos in China until 1992. This morning it turns out Macau's economy contracted by 13.7% in Q2, it's 3rd consecutive quarter of shrinkage. It's possible that the restrictions placed on civil servants in 2008 to stop them from gambling and to curb money laundering has caused much of the decline why is the decline accelerating if things are so good in China? One thing about Macau is that all the US businesses that are now there make it harder for the Chinese government to pad the statistics and, taken at face value, Maccau is underperfoming the rest of China by 22%.
This is worth noting today as China is leading the market bounce as the vice chairman of the China Securities Regulatory Commission, said the authorities will promote a “stable and healthy” market, tempering investor concern that the government wants to curb equity and property speculation. Ministers from the Group of 20 nations are likely to suggest the global economy is healing when they meet in London this weekend, while the European Central Bank probably will keep interest rates at a record low today. The Shangai composite index ran right up to the 5% rule today and has pulled a turnaround in global equities. As noted in David Fry's chart, we were oversold and due for a little bounce anyway.
As noted by Ben over in our Chart School section, copper has climbed back into the "stupid zone" on that news but still has a ways to go before getting stupid enough to short again. We'll be keeping an eye on the copper miners like PCU, FCX and RTP as well as BHP, who got a nice pop on a UBS upgrade this morning but it's a little early to short until we see jobs reports today and tomorrow.
This is not surprising to us as we read the Fed minutes yesterday and the greenest shoot they could find was that things were picking up in other countries, a favorite ploy we discussed in Monday's post as the Shanghai was falling 6.7% that day. Fortunately, we were playing bullish into the close as we know how…