What else can I say, if CEA bulls do not want to hear any bad news? Since all China plays are close to record low, I don't want to post any bad news to scare CEA "investors" out even though I heard these news 2 weeks ago. The bank manager my wife talked to is our high school classmate. It's a 4th largest bank in a small city (>100K though) next to Canton. He said that 30% of the bank loans are bad ones--the bank has no hope to recover them. Only new depositors' money has kept the banks alive. If 30% of small depositors want their money back, China banks will go to hell. My wife's aunt could not get her 10K RMB withdrew the same day--it happended more than 1 time!
Canton needs 40 billion RMB this yr for large projects (Zhu's big deal), and Canton cannot locate 1/4 of these funding. These projects include the new airport for Canton.
Only the stock market can tell if I'm telling the truth. CEA and ZNH will see new low by Aug 15; and CEA has no chance to stay above 9; and ZNH not above 8.
Japan's new PM might be the last hope to the next rebound. BTW I do not short ADRs since they're too low, and no volume. Any news would worth 50 cents jump, and I'll play the rebound game if China plays hit new low with good volume.
Bad bank loans are not news. They have been there for many years and have been kept piling up. The key is confidence. Without confidence, every bank in the world will go bankrupt, even US banks. China is obviously experiencing difficulties, and one way to overcome these difficulties is to further privatization, which means these public traded blue chips will dominate the market. I am still long term bullish. Again, I have small position in these ADRs which lost about 30% percent of its value, but I have never really worried about them. What would you say about air travel market in next five years? Will the market grow or shrink?
And why do bad bank loans affect airlines more than other companies?
from Guangchou, all I was told was 'no money to go around', too much bad debts. Chinese are thinking about diluting whatever amont of shares of stocks if they can put their hand on cash. However, with such a big bad debt 'black whole', they are putting the good money after the bad. I was talking with some major telecommunication companies there about their previous orders, everyone of them said they had delay or cancel. The bank refused to open L/C. Some say some banks can not pay interest any more, advise their customer not to deposit new funds. The question is what can be the solution, not mention about how they can complete the solution.