As you might expect people might live lots of places, but the last few days they got China on their mind if they're investors.
One of the concerns is will the China mess spread.Some might suggest that is past tense. It already has. And one of the things you hear financial journalists and market strategists say, as a WSJ columnists wrote this morning: "Falling Chinese stock indexes mostly affect local investors, since foreigners are mostly excluded from domestic Chinese stocks."
That columnist apparently doesn't realize just how right he is. Tons of local investors on Monday and again partly on Thursday in localities from Europe to Japan to the U.S. saw their holdings take a good old fashion drubbing.
It's amazing what people will say and believe to make things look better than they are. At least part of the selloff in Chinese stocks stems from fear about the slowing Chinese economy, a MSM media and stock market meme for months. China for years has been the Big Daddy Buyer of last resort, gobbling up materials and assets like a famished big dog. Check out real estate prices in certain California cities pushed up by wealthy Chinese investors who've profited greatly from their home market's bloated stock prices. All cash perchasers.
But emerging markets depended on that well for water once too often and for too long. Governments fudge their numbers, a proven historical fact. The IMF forecasts 6.3 % GDP growth in China for 2016, down from 10% in 2010. If you want to believe both of those number be our welcome guests.
The ongoing devaluation of the yuan should have alerted many to just how bogus those numbers are. China's voracious imports from around the globe fell for a reason. The numbers over the past year are staggering. A weaker yuan comes with its drawback, however, one of which is weaker purchasing power.
It might make the buyers are Walmart giddy, but don't try to sell that to all those suffering emerging markets.
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