So…I was too a bit too busy in the past 2 days to come up with my pre-market report, but I do feel obliged to write something, and a piece of Bloomberg news just caught my attention.
And before I tell you which article that is, here is a very simple story I want to tell.
In the hometown where I grew up, there are some local mafia-like organizations selling the instant bowls (those white, one-time plastic bowls used by the food stalls). Those bowls are definitely not high in quality, but because the way they “sell” their products, that is only option available and the stalls have to buy them.
Now, this is bad, but not bad enough. Since the organizations now have the monopolistic rights in the bowls, they raise the price of the bowls. It used to cost, say, 10 for 1 dollar before they came, and now a dollar could buy only 5 of the bowls.
This is even worse, correct? But for some reason, the food stalls, due to their great tastes and small profit margins, actually managed to survive the ordeal, some even proper.
So, the organization has to think of the new ways to ripe the stall owners off.
And they did it by simply telling the helpless store owners: right now, the price you are selling the food are too cheap. Instead of 5 dollars for a bowl of rice, you will need to sell it for 10 dollars, because there are just too many people who want to buy the rice from you and not from us (which tastes bad and cost, say, 50 dollars).
I guess by now you are probably laughing at me for my poor creativity.
So I have 2 confessions to make:
1. The story is fake. I lived in a very peaceful country when I was a boy with no oppression that I am aware of, other than some greedy people in demand for a passport from a Western country and are too lazy to get them out of their own merits.
2. If you could translate rice bowl to be US T-Bills, bowl of rice to be the Chinese currency, and the food store owner to China, then please read the story below:
http://www.bloomberg.com/news/print/2010-11-08/china-s-trade-surplus-likely-swelled-to-25-billion-in-challenge-to-g-20.html