John Lounsbury
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Goldman Reversal: Avoid China [View article]
As noted in my article, Goldman said a China rebound second half 2011 is a possibility. Therefore, I'd say this is clearly a trade call, not a long-term investment call.
Goldman Reversal: Avoid China [View article]
There are two unrelated factors involved:
1. Both you and GS are using a rear view mirror, GS to project the future and you to Monday morning quarterback.
2. GS obviously, in the forward looking part of their process, has come to the conclusion in the past few weeks that China's efforts to put the brakes on budding inflation will slow their economy more than previously thought.
With regard to the second point, 2011 is the year of yin-yang for China (see Dirk Ehnts - econintersect.com/b2ev...). The yin is the need for a weak yuan to support export business and the yang is the need for a strong yuan to fight inflation and increase domestic living standards and consumption. Dirk developed this theme very succinctly.
This year will see some crossroads. Some think they will be crossroads of crisis. (See GEFIRA annual report econintersect.com/b2ev....)