Thoughts on politics and economics ... in China.
There is a headline out today suggesting the latest data on manufacturing et al means China will forgo a stimulus package. That begs the question: is that good news bad news? Consider the highly publicized quantitative easing in the US (and elsewhere). It buoys the stock market and risk assets via new liquidity. But QE is only seen to be necessary if the economy is determined to need assistance. If the economy improves, then assistance may not be needed and risk assets may struggle without new liquidity.
Will Chinese stocks suffer if stimulus is officially put on the back burner? Maybe. It depends on where investors set their focus ...
Market Vitals | 6 November 2012 [http://blackswantrading.squarespace.com/storage/market-vitals/110612_mv_china_political_transition.pdf] ~ ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
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