Global Economy

[Guest]

[url="http://www.businessweek.com/news/2009-12-28/china-stocks-may-see-full-blown-bubble-in-2010-bofa-says.html"][size="5"]China Stocks May See ‘Full-Blown’ Bubble in 2010, BofA Says[/size][/url]

Dec. 28 (Bloomberg) -- [color="#FF0000"]China’s stock and property markets may develop into a “full-blown” bubble next year [/color]as inflation accelerates, according to BofA Merrill Lynch Research.



“Next year could be the year we see a full-blown asset bubble,” David Cui, the China strategist at Bank of America Corp.’s Merrill Lynch unit, said today in a phone interview from Sydney. “We’re likely to see massive savings migration as we head into real negative interest-rate territory,” where people “save less, spend more and invest more,” he said.



The Shanghai Composite Index has rallied 75 percent this year, and property prices climbed last month at the quickest pace since July 2008. Premier Wen Jiabao pledged yesterday to stop property speculation after the government’s 4 trillion yuan ($586 billion) stimulus spending and record lending helped spur a revival in the world’s third-largest economy

.....

acharya,

This I was talking.