China In Focus : Remember that Ferrari Wedding ?
I was wrong when I thought there was just 1 supercar wedding in China and now I cannot find that article because if you type “supercar wedding China” in the Google search, you will find there is just about 1 a month, or a week for that matter.
Nonetheless the story I had wanted to get from 2 or 3 years back has been surpassed by a new one I found where a Shanxi coal tycoon spent US 11.1 mio on his daughter’s wedding which included booking 3 hotels – Ritz, Marriott and Hilton, hosting a star studded concert and of course, the supercar motorcade of which the groom got to keep 6 Ferraris as the dowry besides his hot bride (check out her selfies during her student days in the US).
A year later, the chap filed for bankruptcy. http://sinosphere.blogs.nytimes.com/2013/12/18/a-chinese-coal-baron-tumbles-into-debt/?_r=0
I like this article better – http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20131220000065&cid=1103
He is not the only one. The Shanxi guys are always on the run. Before this richest tycoon went bust, another formerly the richest one was on the run back in 2010 – http://blogs.wsj.com/chinarealtime/2010/10/25/shanxis-richest-coal-miner-on-the-run/
I am not sure what brought this thought on and whether it was the PBOC rate cut because my view of the rate cut is – ARE THINGS REALLY THAT BAD ?
And I know my dear friend, Dialastrategist, has a more optimistic take on it that you should definitely read about – https://tradehaven.net/market/fx/chinas-rate-cut-killing-many-birds-with-one-stone/
But if you think that 6 Ferraris are good enough dowry for yourself. Think again. There is a US 160 mio dowry given just last year, although I am not sure where the market levels are for India. http://article.wn.com/view/2013/01/02/Meet_the_Chinese_businessman_who_gave_daughter_100_mln_dowry/
The headline is not the rate cut that I am focusing on but rather the trial of the former Vice chairman of the Military Commission, General Xu, who was arrested back in June. http://www.straitstimes.com/news/asia/east-asia/story/former-top-china-military-officer-xu-caihou-hoarded-cash-jade-basement-phe
It is the same in Brazil and the corruption probe in Petrobas much of which centres on activities that occurred during the time when the Current Recently Elected Presiden of Brazil Was The Chairwoman of the Board of Directors. http://www.reuters.com/article/2014/11/17/brazil-petrobras-corruption-idUSL2N0T70MP20141117
My philosophy when viewing China has been What You Don’t Know Won’t Kill You.
But now we are asking – Are Things Really That Bad ?
Because China is really like a Ferrari wedding. The recent Shanghai-HK stock connect fizzling out just after 2 days of max-ing out the trading limits.
“Nov. 17 (Bloomberg) — Investors piled into Shanghai shares on the first day of exchange-link trading, buying the maximum amount allowed in a sign of global demand for mainland equities as China opens up its $4.2 trillion market.”
“Nov. 19 (Bloomberg) — The flood of buy orders for Shanghai shares through the Hong Kong exchange link has slowed to a trickle two days after the program’s debut.”
The spike next week will be opportune for profit taking for bonds and equities.
Good luck !
CNH Bond Prices (Indicative)