Tempting Tuesday – China Adds More Stimulus to the Global Excess

What are they so afraid of?

I know I sound like an old curmudgeon, always looking at the downside of all these rallies but doesn't it seem odd that our Governments seem to find it necessary to add various forms of stimulus to economies they keep telling us are great – again?  This week it's China, with the PBOC cutting rates on its Repos for the first time since October of 2015 – sending the Shenzhen Index up 1.8% overnight and even Hong Kong's Hang Seng Index rose 1.5% to the sound of gunfire on the streets exchanged between students and the police.

“Having had a day to digest that news, investors seem to believe that the rate cut is indeed a sign of better liquidity on the way, lifting more sentiment-driven stocks in Shenzhen,“ said Bill Chen, CIO at Shenzhen Valley Asset Management Co.  As to the Hang Seng – it was in danger of failing 26,000 and turning negative for the year and China doesn't want it to look like the protests are affecting their business – even though they clearly are.  

In fact, the headline in the South China Morning Post is:  "Hong Kong's Stock Market Bulls Shrug Aside City's Street Protests" saying: "42% investors surveyed by Bright Smart Securities expect the Hang Seng Index to rise 5% next year, while only 6% see it declining from the current level." 

Apparently, 52% of the investors were hiding from the Government surveyors…  “The protests may have led Hong Kong’s economy into a technical recession in the third quarter, but the survey shows Hong Kong investors are cautiously optimistic about the stock market next year,” said Edmond Hui, chief executive of Bright Smart Securities.

Can you imagine living in a near-totalitarian state where the Government controls the news?  That must be creepy!  Almost as creepy as the fake world over at Fox where the mountains of evidence against the President are still being called a "Witch Hunt" and attempts to hold our leader accountable is "A Coup" when, not only is it IN the Constitution – IT'S THE WHOLE POINT OF HAVING A CONSTITUTION!!!

I mean, come on people – how much evidence do you have to hear?  For those of you having trouble following the bread-crumbs left by Team Trump on just the first likely count of Impeachment, the Ukraine call, here's Set Meyers to summarize:

Seems pretty clear, right?  And the witnesses aren't even done.  But, if you tune over to Fox, none of this is real.  In reality, 70% of Americans now believe Trump did, in fact, do something wrong with the Ukraine yet the same poll shows "only" 51% think he should be removed from office – so far.  It's still early innings in this ordeal but, unfortunately, the 30% who don't believe the evidence are also still buying into the market – as if none of this stuff matters or will matter.  I'm pretty sure it does.  

We are still mostly sitting out of this quarter but we did start a new Short-Term Portfolio and that's already up 46.9% – so it's not like we're sitting on our hands – just still waiting for the correction that never seems to come.  Meanwhile, at this pace (up 46.9% since 10/1), call it 30% a month and our $100,000 investment will become $2.3M by next October!  See how silly this is?  We're making TOO MUCH MONEY – this can't possibly be sustainable.

Still, let's enjoy it while it lasts…

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