For months the news has been floating around that a Real Estate bubble has been forming in China. Recently 60-Minutes did a piece on this theme (Watch China Real Estate Bubble Video here)
Is a slow down in the building process in China causing the challenges below for the Shanghai index?
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Regardless of the cause, Real Estate bubble or the 800 pounds of resistance that comes into play at (1), the Shanghai index continues to struggle, making a series of lower highs. We have heard the promise that the Emerging markets are great places to invest, yet over the past few years, they have greatly underperformed the S&P S&P 500. Is the situation in China, what is causing the BRIC countries to be relative weak performers?
Could a Real Estate slow down in China be causing these commodities to be weak and continue to make lower highs?
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I doubt that you are hearing that China could be facing a Real Estate bubble for the first time here. I do have to say the 60-minutes piece does put a unique perspective on things. Should they have done the show in May of 2011 when most commodities were at a peak?
U.S. Stock markets are at/near all-time highs, yet key global commodity index’s continue to create lower highs since May of 2011. Who is telling the truth….Doc Copper? Shanghai? S&P 500?
If history is a good guide, keeping an eye on what these assets in the 4-pack above due in the near future, will tell us a ton to confirm or dispel that a Real Estate bubble in China is popping and if “So Goes China, So Goes Global Growth!”
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