Tuesday, July 19, 2005

China - the Black Swan

As I stated below about the real risk of the market -- i.e. the black swan that has low probability of happenning but nevertheless exist, please read China's bad debt crisis and Chinese State Enterprises. These articles confirm for me that the risk of Chinese economy dragging down the global economy is higher than Chinese bulls that think China will be the next superpower soon. My contention has always been, yes, China may be the next Superpower but it may not be in my lifetime. They may have to go thru' what the Americans went through, the Great Depression, clean up the mess and then rise from the ashes.

For now, the risk is increasing that the hyperleverage Chinese economy could kick off the this hyperleverage global economic dominos.

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