CNY reval to the (temporary) rescue or not?

* CNY reval is on the agenda again. From a Chinese perspective it might become a necessity as steps are taken to try and manage this leveraged economy.

On that note, got some info re counterfeiting in China. Alledgedly, if one deducted Chinese growth stemming from counterfeiting, the annual GDP growth would be zero. If one applied "green accounting" all current GDP Chinese growth would be erased as well. So, all in all, deducting these two variables, the remaining net Chinese GDP growth would be negative.
Add to this a highly leveraged, centralised and very corrupt regime and a cowboy style economy you end up with,,,, Russia in the nineties? Only, the variance in livingstandards in China is even greater than in Russia back then, hence the risk of socialtensions and massive political turbulence is higher in China.

What Im trying to say is; In the "short" run the Chinese economy is overvalued and overexposed.


*Oh yes, the Chinese reval.
Well, although there are some bearish winds blowing again, a CNY reval should actually be good for riskappetite. This would definitely disturb the AUD case shortterm. Especially since the AUD would likely be one of the currencies benefitting most from such an event.
Ill return on this issue later on.


* Was a bit quick in going short CBA and Westpac - its just not doable. These stocks are stilll under a shortingban. Wonder why,,,,,, Oh well, Ill try the index instead then - if possible!




* New positions and positionchanges
No changes.



* Other
- Still trying to add a short Australian equity position - well see.
- Pondering the deflation vs inflation, stagflation outlook. Been a deflation "fan" but am currently reassessing.
- CNY revaluation timing. Not good for AUD bears when it happens. Stay posted.
- JPY intervention; Not before 80 in Usd/Jpy. Stay posted.


As usual, good luck






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