China to take stakes in US automakers

It maybe hard to believe but American cars are not doing too bad in China.┬áChinese 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┬áproblem 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.

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