China's CPI rise 6.3% but PPI rise 10%

China's CPI is receeding to 6.3% but PPI come in at 10%. The market did not like it and contnued to sell, the excuse was higher PPI means cost increased was not pass on to consumers thus hurting corporate profits. Shanghai Composite Index closed at 2,457today. Is it true? No, it has to do with unwinding of speculative funds. I think the market is trying to find all kind of excuse to let the market to fall to 2,000 points, 18% more to go.

So-called "B-shares," which are denominated in U.S. dollars and take up only a small segment of market volume, fell sharply in Shanghai, dropping 9% and helping to pull the composite index lower.

Stricter foreign exchange controls and a strengthening of the U.S. dollar against the Chinese yuan could be leading speculative investors to pull out investments that had been targeting gains in the local currency, said Zhang Linchang, a strategist at Guotai Junan Securities in Shanghai.

Fundamentally, nothing has changed. Sentiments have changed. Most people think post- Olympic will be a disaster. Think about this. Many of the factories, KTV, hotel, street vendors, "copy stuffs" were closed during Olympic. These efforts started since early July, I won't be surprise the main stream media will continue to amplify the fear of demand collapse. As soon as all the foreigners leave China by mid September, the factory of the world will churn out products again. The worst should be pre and not post.....8-9% GDP? On-track!