China's Space Program Launches Moon Shot

Will they make it? I'd give them an 'A' for effort. Still no sell signal but gawd this is worrisome. I don't know if any of you have seen the recent economic data showing China is more of a paper tiger than a dragon but their economy is now anticipated to be about half as large as the fearmongers had everyone believing. Realistically, it is likely half again as large as the experts believe using a basis of sustainability. There is so much overinvestment and building for the sake of insanity that there is a high probability we will see their economy shrink by double digits in the aftermath of their bubble popping. And their own banking crisis waiting in the wings. Additionally, we now find out Chinese corporate profits are actually about half of what pundits originally thought. So, we have a Chinese equity market with valuations of 3-5x what the U.S. was in 1929 and an associated financial system built on toothpicks. It's hard to get a handle on reality because we have to wade through communist party propaganda instead of real data in an opaque society.

What does a repressive society do when they are already experiencing chronic unemployment and underopportunity for 1.3 billion people and the economy starts shrinking by double digits? And, how does a repressed society react? An interesting perspective that might be applied to this situation is found in one of my favorite books, "The True Believer", written by a vagrant hobo by the name of Eric Hoffer. Might I add one brilliant vagrant hobo. His writings are timeless. It's hard to find and seldom available from regular sources but the last time I checked, Amazon does have it.

Wall Street is headlong invested in China. So are many international companies. And, many of their investments are not liquid. In other words, they will take the same bath Chinese society takes when this bubble pops. And, they will be exposed to the same uncertainties and volatility that develops in Chinese society. That is, unless we have a graceful exit from the crisis building in China and we all discuss it calmly over tea and crumpets. China is definitely one of the big turds floating in the pool.