Boiling Point

[Andy Xie, South China Morning Post]

-Only major policy action can contain China's speculative property bubble and avert a major crisis

Chinese Property Bubble

The rental yield in Shanghai is about 2% now, a serious bubble! It's close to the return of 1 year fix deposite. Considering the most recent CPI figure was over 2%, the rental yield is actually negative. This will affect the Chinese economy in many aspects, if not a pending crash in the economy. Be very cautious at investing in any assets in China now.

If you want to know more about the property bubble, look at the following link.

Is China Headed Toward Economic Collapse?


The conventional wisdom in Washington and in most of the rest of the world is that the roaring Chinese economy is going to pull the global economy out of recession and back into growth. It’s China’s turn, the theory goes, as American consumers — who propelled the last global boom with their borrowing and spending ways — have begun to tighten their belts and increase savings rates.

Why You Shouldn’t Follow Buffett

There is a big hoopla around Buffett’s most recent investment in North America's largest rail company (by market capitalization): Burlington Northern Santa Fe (BNI, news, msgs). Suddenly railway companies become big stars around world. Any company related to railway got a rise on its price, even for the one not owning a single section of railway, on the Shanghai stock exchange. Well, a good investment for Buffett may not be a good investment for everyone. There are 2 reasons.

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