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?


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?


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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