When will the China bubble pop?

N

noregrets

"Where Will it End? China's Looming Credit Crisis"
http://online.barrons.com/article/S...578541251070413678.html#articleTabs_article=0
(can view for free by searching from Google)

Pretty scary stuff. For example:

"Yet even with the overbuilding, market prices of apartments haven't cracked, at least according to government reports. Developers can still borrow money for new projects even while trying to roll over and carry debt on their inventory of unsold apartments.

Faith remains undiminished that continued migration from the countryside to the cities will cure all housing oversupply. Besides, apartment purchasing has become the No. 1 investment game in China after the stock market crapped out in 2007, with the Shanghai Index falling nearly 70% since.

<b>Apartments are now more than living space -- they have become a store of value and an insurance policy against penury in old age. Living in them or even renting them out is deemed to diminish property value should someone ever show up to lease one. So they remain vacant.</b> Press reports recently said a party official was busted for, among other things, secretly owning some 50 apartments."
 
When it comes time to short, what is the best thing to short?


I watched a documentary on those vacant cities built, they are like ghost towns.
 
Quick google search

"The best China ETFs to short seem to be Guggenheim China Real Estate ETF (TAO), EGS INDXX China Infrastructure ETF (CHXX), and Global X China Materials ETF (CHIM). These three ETFs are directly related to China’s real estate market and should decline the most in the event of a collapse in the construction and infrastructure industry. Alternatively, one can short broader Chinese ETFs to profit from this too. When the real estate bubble popped in the US, everything went down. iShares FTSE/Xinhua China 25 Index (FXI), the most widely held Chinese ETF, is arguably best-placed to capitalize on a rise/fall of China’s fortunes. SPDR S&P China (GXC), Market Vectors China ETF (PEK), Hong Kong Index Fund (EWH). Guggenheim/AlphaShares China All-Cap Fund (YAO), Guggenheim/AlphaShares China Small Cap Index ETF (HAO), iShares FTSE NAREIT Asia ETF (IFAS), and RMR Asia Pacific Real Estate Fund (RAP) are among the other alternatives."

Read more at http://www.insidermonkey.com/blog/7...-real-estate-bubble-3026/#kTHwjdE255LocJsj.99 "
 
I think the Shanghai index is telling us the truth about what is happening now and what will happen to the Chinese economy, which is a growth rate of the GDP lower than 7.5% valued by the Government.
 
My call is that we will have a Bear Stearns like event over the next 1-2 months that will mark the beginning of the end. The PBOC will come in and soothe everyone's fears and the market will rebound
 
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