This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
TheStreet Open House

Clouds Gather as China Bulls Celebrate

Note that the current freight rates are virtually at the crash lows of 2008, the depth of the global crisis. At that time, world trade came to a virtual standstill. The current lows mean either that ocean shipping firms have found the secret of transporting goods at very low cost, such as solar-energy or perpetual motion, or there is a huge oversupply of ships, or not as many goods are being shipped.

We believe the problem is the latter.

Over the long term, true economic growth will be very hard to come by in China. That's contrary to popular opinion. The huge post-2008 financial stimulus is over and created only bubbles in real estate, inflation and speculation. China won't repeat that. Entrepreneurial freedom is required at this stage of the long-term cycle. But communism and corruption stand in the way of that. Phony GDP growth numbers don't create actual growth.

Andy Xie, a great observer of the Asian economic scene, writes in a recent report:

The statistics in emerging economies are not accurate. The GDP data in China and India, for example, do not reflect their 2012 slowdown. My estimate is that the growth rate in emerging economies declined by half in 2012 from 2011. It could be seen in trade stagnation and weak commodity demand.

This concurs with our view that the emerging markets are very vulnerable right now. But that's where most analysts recommend investing.

However, governments can play their flim-flam game for a long time before the masses catch on. We are now of the view that the decision has been made at the highest levels in China to whitewash all official numbers, making everything look beautiful. The statistics will continue to be positive for awhile and the negatives will be hidden.

Don't be fooled!

Wishing you successful investing.

For free periodic reports, go to and just enter your email address.

2 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Jim Cramer and Stephanie Link reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

Jim Cramer's protégé, David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
Try it NOW
Try it NOW
Try it NOW

Check Out Our Best Services for Investors

Dividend Stock Advisor

Jim Cramer's protégé, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
Try it NOW
Try it NOW
Try it NOW
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,164.95 -251.90 -1.45%
S&P 500 1,994.99 -26.26 -1.30%
NASDAQ 4,635.24 -48.1670 -1.03%

Partners Compare Online Brokers

Free Reports

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs