Monday April 23, 2007 - 10:33:49 GMT
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Black Swan Capital - www.blackswantrading.com
Can 10 million a month be wrong?
BEIJING (XFN-ASIA) - China will step up efforts to rein in rapid growth in the stock market, with controls intended to bar those funds that should not be invested in stocks, the official China Securities Journal reported, citing Zhang Yutai, deputy director of the State Council's Development and Research Center.
Zhang added that a short term correction is "unavoidable" if the market grows at its current pace.
"Regulators will tighten their grip on banking funds that are forbidden in the market as well as on stock price manipulation... to prevent market volatility," the newspaper quoted Zhang as saying.
Zhang said he expects several negative factors to kick in towards the second half that may lead to economic growth easing slightly, adding that the slowdown will be good for the economy, the newspaper said. Zhang said more controls are needed on credit growth, pollution, and the property market.
â€˘ Australiaâ€™s final producer price index (PPI) for commodities, excluding exports, was unchanged in the March quarter from the December quarter
â€˘ Key Reports Due (WSJ):
8:30a.m. Mar Chicago Fed Natl Activity Index. Previous: +0.03.
â€śâ€¦in a freely fluctuating exchange rate system, speculative transactions assume progressively greater weight and, as they do, speculation becomes more trend-following in character, leading to progressively greater swings in exchange rates.â€ť
FX Trading â€“ Can 10 million a month be wrong?
â€śIn the past week alone, more than 1m new accounts have been opened, taking the total for the past four months to in excess of 10m - more than the previous four years combined,â€ť according to the Financial Times last Thursday.
Square this from Guy Sorman, â€śThe Truth About Chinaâ€ť, taken from The Wall Street Journal on Friday, April 20th [our emphasis]:
â€śThe Western press is full of stories these days on China's arrival as a superpower. A steady stream of Western political and business delegations visit Beijing, confident of China's economy, which continues to grow rapidly. Investment pours in. Crowning China's new status, Beijing will host the 2008 Summer Olympics.
â€śBut after spending all of 2005 and some of 2006 traveling through China -- visiting not just her teeming cities but her innermost recesses, where few Westerners go, and speaking with scores of dissidents, Communist Party officials, and everyday people -- my belief that the 21st century will not belong to the Chinese has only been reinforced. True, 200 million of China's subjects, fortunate to work for an expanding global market, are increasingly enjoying a middle-class standard of living. The remaining one billion, however, are among the poorest and most exploited people in the world, lacking even minimal rights and public services. The Party, while no longer totalitarian, is still cruel and oppressive.â€ť
Then of course the Shanghai Composite stock index tells us all is right in the world:
Link to graph: http://finance.yahoo.com/q/bc?s=000001.SS&t=1y&l=on&z=m&q=l&c=
So, we watch our global â€śrisk appetite monitorâ€ť for clues:
Chart AUDJPY Daily
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