china takes a dump, page-19

Its quite simple to work out which way a market is heading firstly look at the data and conflict between and reality.

1 Fistly China is injecting trillions into the market yet steel producers collapse 28% in 3 months, isnt that a bit of conflict with the market sentiment. Iron is really the building block of economies. Why would one of chinas larges steel producers crash in the middle of a billion dollar plan to put rail between all chinese cities.

2 Multiple reports of china over stocking commodities, well doesnt that indicate that the market is over heated, especially when the LME stocks are high.

3 Economic reports of a second crash forcasted time and time again by commentators. Dont you think that those people tend to have a hand on the pulse of the economy and know its overheaded again. There was even reports of an economic slowdown in 2006 before it all crashed but noone took action to protect themself.

I listened to those reports and thought that I had protected myself with low percentile cost producers but what I didnt realise was the banks had no nerve and started to call in loans.

4 Reports of China tightening credit to prevent asset bubbles. This would indicate even China is trying to put a stop to a specultive recovery that would fuel another large crash.

5 Most of the recovery is artifically created so noone really knows what the true market position or the real market low.