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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Real Man who wrote (81589)	5/8/2007 2:22:45 PM
From: Tommaso	Respond to of 110194

I wonder how one says "irrational exuberance" in Mandarin and how it translates back into English. Perhaps "mad giddiness." In any case, the shenanigans of the Shanghai market make the United States markets look like a very sober teaparty. Furthermore, there are four interacting "markets" for Chinese stocks: 1. Shanghai "A" shares traded mostly by Chinese citizens. 2. Shanghai "B" shares traded by foreigners and not necessarily moving in sync with the "A" shares. 3. Shares listed on the Hong Kong market. 4. ADRS traded in the U. S. and elsewhere. It's either an arbitrageur's Paradise or Inferno--I wouldn't know. I do know that have have gone short the whole thing using puts on FXI, a 25-stock index loosely linked to what goes on in Shanghai. I keep being warned that the P/E of FXI is a lot lower than the Shanghai market's but so far those puts look like the best way (for me, anyway) to play this thing. I am holding VHFMT, strike 100, expiration January 2009, allowing seventeen months for a crash.

To: Real Man who wrote (81589)	5/8/2007 2:24:10 PM
From: bart13	Read Replies (2) \| Respond to of 110194

It's just a technical level. Agreed. It's just a short term trade. I think they may say something this time about fighting inflation and the dollar, again, but I don't think they will do anything about it, like raise interest rates, although who knows, with record April printing. Raising rates to support the dollar, and printing so that the credit bubble does not collapse, has been their game. They might just raise, after all their printing I do have an odd feeling about the meeting tomorrow, and expect a significant surprise... and won't trade it ahead of time, although I do have a long S&P futures position today based on a $3.5b billion TIO this morning.