Comments from friend in China

THE BELOW COMMENTS ARE FROM A FRIEND IN CHINA WHO WAS RESPONDING TO ONE OF MY EMAILS. I THOUGHT YOU'D FIND IT INTERESTING. THINGS ARE NOT SO GREAT IN CHINA. READ ON....

Spot On Holmes!

I keep hearing the same garbage about Buffett too. The fact of the matter is, the current rally is going to prove very painful for the bulls. On another matter, I am currently studying for my FSA and CFA exams, while living with my Girlfriend's family in Shanghai. Immediately we arrived in Shanghai from London (last week), the economic troubles were obvious, the worry is on everyone's face over here. The Japs are divesting and moving back, the Western firms are cutting jobs (McKinsey, PWC, KPMG, you name it). Local markets have been flooded with goods previously destined for export at 50% discount. If there is a recovery underway here, I certainly cannnot see it. The shopping malls are basically deserted, apart from a few stray Americans. The people here are very smart and cautious, be it on official television or one of the many housewives I have spoken with: they know a crash is coming. As for the talk of reserve currency, I find it very interesting when people begin to check even small bills as the market has been flooded with counterfeits. Makes me pause to think very hard. This is my Third visit to China and it is indeed a wonderful place (as is India), but be sure of one thing: Most people here do not believe a recovery is likely, not in the near future. And if you talk about a V-Shaped recovery you will be laughed out of the tea shops by the housewives.

Best,

Vinay