Is All the Bad News In the Market Yet?
The statistics and trend lines have already had almost all of the impact they are going to have in the US. My mother just told me that the recent stock market drops left her so upset that she couldn’t sleep. When retired grandmothers on Long Island are going sleepless because of the Dow Jones Industrials, then - as they say on Wall St- ”all the bad news is in the market”. In other words, any more bad news won’t have an impact because things are already as bad they can get.
We’re probably approaching that point in the US. Christmas has some potential to dissappoint, and if we lose the auto industry to uncontrolled bankruptcy and collapse then that could also leave a mark. But by February or March, this recession isn’t going to be about statistics — it will be about sentiment. If people believe that things will get worse, then they won’t spend or invest — and then things really do get worse as deflation feeds upon itself and devalues real assets.
In China, sentiment is still relatively good — though it’s showing signs of wearing thin in spots. That’s why I was a little suprised to see CNN poking the bear with a stick this morning — and trying out their own completely original spin on the recent protests and rioting in Gansu.
CNN’s headline was, “China Fears Job Riots”
BEIJING, China (CNN) — China’s job outlook is “grim,” and the global financial crisis could cause more layoffs and more labor unrest until the country’s economic stimulus package kicks in next year, the nation’s minister of human resources and social security said Thursday.
Xinhuanet, the official government news agency took a different approach:
LONGNAN, Gansu Province, Nov. 20 (Xinhua) — Police arrested 30 people involved in a violent protest in northwest China’s Gansu Province, a local official said at a press conference here on Thursday.A group of 30 petitioners, who opposed a resettlement project in the Wudu District of Longnan City, initiated the protest on Monday. Eventually, more than 2,000 people became involved.
Ok, it’s no surprise that XinHua missed the jobs-riot angle, but what about the New York Times? They’ve been anti-China longer then they’ve been anti-Bush, but even they seemed to dropped the ball on this one.
CaiJIng, which is developing a nice little reputation as a local upstart willing to say unpopular things didn’t really see it as a labor issue — though they did up the number of people injured in what they viewed as:
Violent Protest in Gansu
What started as a protest over forced relocations erupted into chaos on November 17, leaving 60 people injured.
A crowd of 2,000 gathered outside the offices of the party committee in Longnan City, Gansu Province, on November 17 to protest forced relocations and a rumor that the city’s administrative center was moving towns. Early in the morning on the following day, the crowd lost control. Offices were raided and several cars parked nearby were damaged. According to the official report, a number of policemen and cadres were beat up, and 60 people were injured.
It’s all bad news, but let’s not make it worse by spreading rumors of chaos and anarchy. Shanghai is fine. It’s a little subdued, a little anxious — but no one is worried about the system breaking down. We’re soon going to reach a point where statistics are less important than sentiment. People will panic because they’re afraid of panic — or have faith that there will be something to have faith in. It’s a hard thing to monitor — especially for those of you who are trying to guage China from overseas. Be careful who you listen to, and have lots of sources. News in China gets politicized more than other places — and not always by the government.
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Posted: November 21st, 2008 under China economics.
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