Other Chinese stocks such as CEO are doing just as bad. What worries me is that the recent drop may be from institutions.
I doubt very much that it will drop below $10. At the same time I like to ask those who are counting on China economy a simple question: What have you been smoking?
In a reply to one of my posts, somebody stated "China is going to continue to build out. It has lots of people and they need homes and infrastructure. China isn't about profits, it is about breaking even. They substitute growth for margins." Please allow me to explain the effects of USA economy on China.
BOBO printed $7T, that is $20K per person. If you have a spouse and 2 kids, he forced you to spend $80K. Do you have extra $80K in your pocket? USA economy should have increased $140K per person, or $560K per family if we apply a 7X multiplier. The 7X factor comes because when you spend $1 extra on grocery, the grocery employees will spend some on gas, and XOM is going to spend some on exploration etc and the GDP goes up by 7X$1. Clearly the average USA family does not receive extra $80K networth or $560K revenue. What happened?
On the day BofA received bailout, it spent $8B to buy a Chinese bank. We sent most of the $7T to China, resulting in an incredible inflation there. Small apartments in Hong Kong, Singapore, Shanghai, Beijing, Canton, Taipei all priced at $5M each. The cheapest apartment at HK is $500K for a 150 sf hole, smaller than my closet. Seniors there not owning a home cannot survive. China has such a good headache that she has to crash her economy to control the inflation.
Until the inflation is under control, there is no construction, no steel, no cement. This is why the US$ is going back to USA. Now, do you think that you can convince BOBO to stop printing funny money?
Actually it is worse than that. China Steel hadn't default because several loans were waived.
Wish I can do that. I cannot afford my mortgage, and bank forgives the money. Magically I am solvent now.
Yes, it is state owned. There is a possibility that the CEO received $ and wanted to run the company to the ground so that another Chinese steel company can buy it cheap.
BOBO is "inviting" China to attack IS, fighting with US soldiers side by side. What would happen to the USA defense contractors if the US soldiers find certain Chinese technology to be more advanced?
Not a chance? Chinese missile defense has successful intercepted hypersonic missiles. Turkey wants to buy Chinese missile defense system because they are better and cheaper.
I have been hoping that VALE can find support at $12.5, but the current price drop can be critical. The 5-years plot shows that there is no support if $12 level does not hold. NONE.
For those who complain VALE dropping like a rock, Chinese stocks dropped a lot more.
A poster stated that VALE is opposite of the market, in that when the market goes up, VALE goes down. This is 50% better than my stock investment. When the market goes up, my stocks go down. When the market goes down, my stocks go down further.