Mario Cavolo

As usual, beware of statistics. It might sound like American consumers are becoming much more frugal and diligent with their spending as we find the Federal Reserve data reports a 90 billion drop in outstanding credit card balances.

Encouraging news indeed but not so fast as 90% of that drop was due to consumers defaulting on their credit card balances. Scary stuff...Cheers, Mario

CHICAGO (MarketWatch) -- Credit-card debt has been falling for 16 straight months but consumers aren't paying off their financial obligations as much you might think. Instead, they're walking away from the debt, forcing credit-card issuers to write off as much as 90% of that reported drop, according to a new report by CardHub.com.

Full MarketWatch Article Here

Here's a clue to consider....Chang An Auto recorded a 432% profit rise year on year, has 10% of the market and expects to sell 1.8 million autos in 2010 totaling consolidated revenue of 39 billion yuan. So what about the other 30+ auto manufacturers in China?...Unbelievable!!...Cheers, Mario

Chongqing Changan Automobile (000625) recorded a 432.3 percent year-on-year surge in 2009 net profit to 1.078 billion yuan, reports China Securities Journal, citing a company filing.

Earnings per share was 0.46 yuan. The company declared that it will distribute cash dividends of 0.65 yuan for every ten shares held.

Consolidated operating revenues for 2009 hit 25.2 billion yuan. The company produced and sold 1.387 million vehicles and 1.369 million vehicles respectively in 2009, representing increases of 66.87 percent and 64.07 percent from the previous year. Sales of minivans rose 86.69 percent year-on-year to 675,200 units.

The company has a 10.03 percent share of the domestic auto market, representing an increase of 1.13 percentage points year-on-year. By sales volume, it is ranked amongst the top four in the Chinese auto market.

Chongqing Changan Automobile recorded a gross margin of 20 percent in 2009, an increase of 4.69 percentage points from 2008.

The company is targeting to produce and sell more than 1.85 million units in 2010 with consolidated revenue of about 39 billion yuan.

Article at CapitalVue

All risk assets including equities, gold and oil continued their uptrend this week, continuing their denial of economic reality and fundamental banking crisis which exists globally. While the uptrend line on the daily charts remains in plain view, as of Friday's close, the S&P500 is definitely in overbought territory in terms of price and sentiment, due for a nasty, quick sell off at any moment. In fact, the S&P is at double resistance at 1140 and after Friday's rally riding its upper Bollinger band...

I've said, long-term investors should be out of the U.S. indexes, so if you are in, keep your stops in place to protect your precious profits. Gold and oil markets remain on the uptrend with the same caveats; expectations of swift declines on profit-taking sentiment or any of the high potential debt-related crisis announcements could easily send the markets plunging downward over several days.

For example, the Asian markets sold off on Friday with the Shanghai Composite leading the way down 2.5% on the day. A bounce off resistance at the 200 day MA would suggest a continued correction in the Asian market indexes, which would most likely lead oil and gold downward too, with the USD continuing its upward safe-haven status trajectory.

Cheers, Mario

Inquiring minds want the answer to that question...

From this recent article, Following Our Neighbor's Lead, by Michael Lombardi, CFP, MBA of Lombardi Publishing...

During the global recession, Canada's economy was the least
affected. Canadian banks came out unscathed from the crisis.
Canadian real estate is still rising in price, while jobs were actually
up in some months of 2009.

Why can't we do the same thing in the United States?

Canada is a geographically larger country than the U.S. Its
population at 35 million people is much less than the U.S. -- so it has
less people paying taxes. As a businessman that has run businesses
in both the U.S. and Canada, I can tell you the Canadian system
favors and helps small businesses over big business.

If we come to realize that 70% of all employment in the U.S. comes
from small business, then why did the U.S. government bail out Wall
Street and "too big to fail" corporations as opposed to small
business? I get letters every day from my readers who are small
business owners telling me that the government has done nothing
during the recession to help their businesses keep the people they
employ.

We need to take a step back as a country and follow our neighbor's
lead and show fiscal restraint. Otherwise, not only will our currency
feel the wrath of a national deficit gone wild, but so will our children
and their children.

Thanks Michael, we couldn't agree more...Cheers, Mario

Over the years based here in China, I have found my time and energy well-rewarded by the variety of commentary, reports and articles which I regularly research and publish. Besides at this website, they have been published both privately for clients and publicly at a variety of international business and investment websites both in English and Chinese. Even more enjoyable has been the new radio and video show project with Grassroots Talks, co-hosting their weekly radio talk show at live365.com, also shot as our video talk show at the popular ustream.tv site. Its been a barrel of fun and powerful platform to reach people.

I appreciate many long time friends and clients encouraging me to start a "Markets and China Advisory" newsletter and am pleased to inform you it is now definitely in the works for launch in the next month. We're teaming up with one of the most successful and established market and newsletter services in the world, planning to offer an annual subscription cost rate at around $119 per year; a great value for insightful, straightforward commentary and analysis on business, the markets and China.

If you have read my articles, listened to my radio show and videos, you are familiar with my approach to watch the pulse of the equity markets, gold, oil, and currencies. Integral to this main overview of global business and investment markets, my primary theme is to make sure you truly understand China: her business environment, cultural and business practices, and impact on the world economy in both a macro and micro sense. Nothing infuriates me more than the misunderstandings and biased media commentary out there when it comes to the subject of China. As found in the research and commentary I've written over the years, you can expect more of the same from the monthly newsletter with occasional flash updates on timely announcements and topics that will go out as quickly as possible.

I encourage you to register and drop us an email to keep in touch if this newsletter is of interest to you. We will announce when we have finished setting up the format and website structure to implement the newsletter subscription.

Kindest Regards, Mario

Let's tell a story about how to utterly destroy the holiday plans of good, hard-working families. Your family holidays are a welcome and needed break from the daily hustle and bustle of life's routine. Memorial Day. Fourth of July. Labor Day. The Thanksgiving/Christmas/New Year Season. All an important part of your life.

Now imagine waking up one morning to find that the $150 per night rate at the 5 star Newport Beach Hyatt or San Diego Sea World Marriott or the Hilton Resort Sanya was specifically priced during your family's main holiday week at an outrageous, price-gouging, insulting $1100 per night. An American would say "Whoa dude." A Chinese would utter, "Ai Ya!" The difference is: its real in China, where the spirit of a country's most important national holiday seems no more than rich man's game benefiting few, rather than building and supporting a proud, national spirit.

Back in the West, if it happened, how to comprehend and explain it? Immediately your brain cells start firing off, your mind sweeps for answers. Perhaps financial Armageddon has finally arrived. The Euro has collapsed? Another Asian currency crisis? Another 911 attack, but worse? Maybe you run to check downstairs at the grocery store and find the prices of everything went up triple and all bank accounts have been frozen. How else can you explain such a disproportionate price increase? If we wake up to news on the TV that suddenly a hotel room rate is multiplied not just by double or triple, but six to ten times the normal daily rate, we wonder on the edge of panic, "What the heck else is going on with prices of other things? It must have some other meaning too!"

Indeed, our family holiday plan is utterly destroyed. In our budget, we knew airfares would be high. We knew there won't be any discounts to snatch up.

But we didn't expect to be raped in the name of national holiday spirit.

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