(This is not a legal transcript. Bloomberg LP cannot guarantee its accuracy.)
PAUL SCHULTE, CHIEF REGIONAL EQUITY STRATEGIST AT NOMURA INTERNATIONAL, TALKS TO BLOOMBERG'S BERNIE LO ABOUT CHINESE ECONOMIC FUNDAMENTALS.
JANUARY 26, 2010
SPEAKERS: BERNIE LO, BLOOMBERG NEWS
PAUL SCHULTE, CHIEF REGIONAL EQUITY STRATEGIST, NOMURA INTERNATIONAL
PAUL GORDON, BLOOMBERG NEWS
18:24
BERNIE LO, BLOOMBERG NEWS: Paul Schulte, my good friend, Managing Director at Nomura, a long time bull in the China markets for I don't know how many iterations on the shows that we did here, and our top show, Asia Confidential, says this could be a buying opportunity. But it is kind of like half dozen, one sixth of the other.
Read it as you may. You give a set. It is like a Rorschach test, isn't it? Everybody is going to interpret where we are on a moving average in a different way.
PAUL SCHULTE, CHIEF REGIONAL EQUITY STRATEGIST, NOMURA INTERNATIONAL: Well, here's the deal. Our 200-day moving averages, they are important because people think they are important.
LO: When they talk about it in the news.
SCHULTE: Everyone looks to them.
LO: Okay.
SCHULTE: Everyone looks at 50. Everyone looks at 200. As I mentioned in my piece today, we have six major markets in the world that are all, everyone of them right on their 200-day moving averages, US, UK, Euro stocks, Japan, or as other, China, Korea and Taiwan.
Every one of them is right now at their 200-day moving averages. People are very focused on technicals right now. Fundamentals are being thrown out the window, even though we think the fundamentals in China - of those six countries I just mentioned, -
Versace BagsLO: Yes.
SCHULTE: - far and away, the fundamentals in China are better than any of those six countries.
LO: Okay. So you are still a consummate bull then?
SCHULTE: Yes.
LO: You don't read this the wrong way. You don't - even you write that the next few days are very, very important.
SCHULTE: Yes.
LO: We do not hold these levels, we could fall off the cliff a little bit. But then - how do you translate that? That means, oh great, I hope it does that because then they are even cheaper. And then we can snap up bigger board locks of all this stuff.
SCHULTE: Well, we have to deal with fundamentals. And we deal with technicals. The fundamentals in China are better than any of the six countries I mentioned. Technicals are such that if we bounce off these 200- day moving averages, we could get a big rally. The next two to Casio Replica Watch three days are very important.
LO: The fundamentals in China, though, point to the negative in many ways. You are getting warnings. You are hearing clarion calls from the central bank. There is already talk that they have already lent more in the first couple weeks than they were supposed to do in all of 2010, if you believe the parameters of the people who have oversight on the banks.
There seems to be this very, very hardcore concern that things have completely got
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