China to take stakes in US automakers

It maybe hard to believe but American cars are not doing too bad in China. Chinese automakers are working very hard to “learn” from American car manufactures. While American copy-cat cars may sell in domestic Chinese market but they’ll never be able to export them. Even if they somehow find a loophole and export them, I don’t know about you, but I’m not buying a Great Wall sedan anytime soon. A Ford made in China, however, I may be interested. Contrary to many westerners believe, Chinese made foreign brand cars are highly reliable (same production line, skilled workers, no union, you do the math). I’ll buy a Chinese made Ford over a American made Ford any day. The Chinese are no doubt eyeing to take stakes in the struggling American automakers. The questions can they do it in the next few months? Henry Paulson is China talking things over with the Chinese officials. I have no idea what they actually talk about, but I believe encourage investment by Chinese and American companies in each other should be one of the subjects. China has an over production under consumption problem while America has the exact opposite problem. Chinese auto manufactures buy stakes in US companies to gain instant sales channel into American markets. American banks buy stakes in Chinese banks to tap into their huge saving to bring more liquidity to the market and once the debt and loan markets returned to normal, all kind of business can began to be revitalized.

Ford (F) under $3 and General Moters (GM) under $5 isn’t too bad if the Chinese might buy them. I’ll put down a few thousand dollars on some Mar call options for this trading idea.

Make Babies Not Love

Japanese birth rate has been falling for more than 30 years. Keidanren, Japan’s biggest business organization is worried the Japanese are not having enough sex because long work leave them with too little energy. I think the Japanese are f***ing ok. They’re just not engaging in baby making sexual activities. Bras for boys are bestseller in Japan?

Stop Day Trading Oil

I’ve been day trading oil all week with tide stops and taking profits as little as $.50. This is hard work. I have to actually sit in front of the monitors all day to make very little money. As oil stabilized around $50 I think I can prepare to pick a direction and trade it long term. I’m in the camp of people who think oil is heading back to above $100. The questions is will we see $40 or even $30 before we see $100. Some big bets have been made on both directions. I’m going to deleverage a bit by closing some currency positions and prepare to buy oil contracts. Deleveraging gives me more headroom to absorb loss…lesson learned form the investment banks. I want to be fully prepared to take a big hit before oil bounce back. I usually like to buy in the up swing: buy high and sell higher. But this one is different, the bounce may be volatile and there are money to be made on both side of the V curve.

Light Crude Pop

China’s stimulus package has helped oil up to above $65. I didn’t get to buy more because I thought it may move lower before it moves higher. I started to pickup a few contracts here and there when light crude traded just above $60 last Wednesday hoping it may move lower before I jump in with a big position but it didn’t. $65 is a fair price in my model. I should take half of my profit now and let the other half ride and see how it goes today. If market condition doesn’t change and it moves above $67, I’m taking the other half of my profit and wait for a pull back.

Buy Light Crude

Light Crude is at $60.70. I’m going to buy a little and see what happens tomorrow. I’m going to long it all the way down to $50. If it goes down to $55 range tomorrow, I’ll buy more.

Here we go again. Light crude below $64.

Light Crude is at $63.79, below $64 again. I’m going to wait a little bit to see if it goes down some more before putting on my trading range trade which has worked well for me so far.

Intel Core i7

Benchmarks for Intel’s latest Nehalem chip, official name Core i7, is out and it was impressive. I began buying INTC back in mid Oct, and I was able to pick-up some cheap shares. I still stand by my initial assessment of server upgrades cycle and Intel earning should pickup as early as mid 2009. After going through the benchmark results, I believe Hollywood and Wall Street will be among Intel’s first customers. Content creaters, large or small, can see substantial productivity boost with the new Core i7 chips. With Intel’s aggressive pricing, the new machines pay for themselves in days not months. Wall Street quants will also want the new chip as soon as multi-processor support hit the street because the new Core i7 chip means running the same model in half the time and doing twice as many simulations. If the quant know what he/she is doing, the new machine pay for itself in micro seconds. I’m going to get one to run my simulations as soon as I can get my hand on one! If you have to ask, of course I’ll pay for it with money I made from buying INTC shares.