May 26, 2006

Enron - the Stepping Stone to CHINA


CNBCheese was commenting how about the Lay and Skilling sentence being the end of an era marred by sloppy accounting and dealmaking.

Good point - ass pukes.

Enron was a stepping stone. As the bankers see it, the one flaw in Enron was that it was too small. THEY COULD BE ALLOWED TO FAIL.

While the US has followed the delightful Lay, Skilling fall from grace and ensuing trial, the banker's have cooked up their COUP DE GRACE - CHINA with a splash of Russia and a hint of Brazil; or as the analysts at Van Eck described in a recent note to clients - CHINA, INC. (I will leave Russia and Brazil out of this for now).

I hate being cynical, I am a capitalist and entrepreneur. I believe in America the good. Always will. We get shit done - good and bad, mostly good. I only invest in America. If you can't find something to sell and make money off here, you probably won't do to well in China, Russia or Brazil.

I just don't trust big media, the big banks and big business for the last - forever. Too many conflicts to manage (to be polite). The little guy doesn't have to either. You ever see those little pilot fish swimming under sharks. Not a bad life. You know they get to do some trash talking. You can too. Just don't lose sight of the freak@#g shark.

Seeing the global meltdown the last two weeks will hopefully reming the individual investor that TRENDS DO END. You can play, but you can't play without strict personal rules. It can be fun or it can be fatal. CHOOSE FUN. If you properly managed the emerging market price trends, you made gobs of money despite this recent massacre. You have nothing to complain about. My stops were not actually violated but are close. If and when I get stopped out, it will still have been a good ride.

Some loose facts - There are 700 million Chineses that will be looking for work along the Chinese portal coast. For us math whizzes - THAT'S A LOT OF PEOPLE. Will all the businesses China is taking our money for work? - PLEASE. That is what you are being pitched based on today's prices. Of course, they could build more "see-through" buildings in Shanghai. You can see through them, but no one can see the sky for the pollution. That saves money on skyroofs though.

The Chinese cheat. It is their culture. They cheat on exams, they cheat in business. They view the acts of theft and cheating as BEING CLEVER. I have friends that have been going to China for school and business for 16 years. These are their words, not mine. Yes, of course, that is a bit of a generalization, but 90 percent software piracy? China, Inc. is cleverly taking your money to fund projects that will not all be successful.

The Chinese are proud as well. This has proved to be a wonderful part of their boom. It will likely mean many more boom's ahead for them as they taste wealth, BUT it will not be as smooth as the last 5 years. We had the roaring 20's - they were followed by the Great depression. I go back to my timeline post. Your investing life is a speck on this timeline . Enjoy some of your profits and don't be the last one on the inevitable train wreck ahead.

Comments:
I love it when you make the maths easy Howard. 700 million is indeed a lot. We have a lot of chinese entrepreneurs in Australia and all the ones I've worked with say the same thing - they won't work with a chinese partner because they don't trusts them.
 
They are clever.


Like Seinfeld says


"You know how to take the reservation, you just don't know how to hooooolllddddd the reservation."
 
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