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Observations:

• Stay Away From Chinese Stocks: I’m assessing some serious future market turmoil coming out of Southeast Asia. For this reason I’m staying clear of as many Chinese & heavily Chinese affiliated stocks as reasonably possible in the US market.

• Why the Uncertainty: In addition to China being downgraded by the ratings firms, China regulating the hell out of their publicly traded corporations, Chinese construction going down the tubes (Its spreading beyond Evergrande folks), & China’s energy crisis, China has also been violating Taiwan’s airspace at a record rate.

• Indicators of Desperation: The Chinese are likely messing with Taiwan for four reasons I can think of.

  • 1) To distract the world from their economic crises at home

  • 2) To test international reaction both militarily & diplomatically for strategic purposes

  • 3) To aid in training (war gaming) an eventual takeover of Taiwan (No secret folks)

  • 4) To generate some leverage for future US talks and negotiations

• The Distraction Game: The Chinese modus operandi when they have serious turmoil at home is to play the distraction game. The grander the distraction the larger their issues at home.

• In Chinese Media: Reviewing the various Chinese government media outlets (all media out of China is government media), I see a lot of stories about Taiwan, trade with the US, and friction with the US, but very little about their energy crisis and the seemingly company by company domino like collapse of their construction sector.

• What May Happen: If Chinese construction fails, then the banks are next. And if the banks fail, so too does the Chinese economy. However the Chinese economy is a command economy and enjoys the benefit of not really caring about the welfare of her people (The state supersedes the peoples welfare in China) so they will have more options available to them than we would in such a scenario. Indeed printing and devaluating their currency is among them. But that will still have a horrible outcome for the Chinese people and international trade relations.

• I'm Out of Chinese Stocks: So I’m staying away from Chinese & Chinese affiliated stocks which means no $DIS no $NKE no $AAPL no $TSLA no $WMT. Certainly no $NIO

TL;DR: You better bet your ass financial institutions and hedge funds are paying close attention to the economic state of China, and we had better too lest they pull the rug out from underneath us leaving retail traders, like us, with the bag.

I am not long nor short any Chinese stock, nor heavily Chinese affiliated US companies. In fact I am not short any stock right now.

More Reading:

• Chinese developer misses bond payment as stress spreads beyond Evergrande crisis (Domino Effect)

• Empty Buildings in China’s Provincial Cities Testify to Evergrande Debacle

• Economic headwinds expected to weigh on China’s construction output this year

• The End of a ‘Gilded Age’: China Is Bringing Business to Heel

• Biden says he and China's Xi agree to abide by Taiwan agreement

• Empty buildings in China’s provincial cities testify to Evergrande debacle

• Mounting tensions between U.S., China raise new fears of threat to Taiwan

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IMPORTANT DISCLAIMER: I am NOT a registered investment adviser, broker dealer, or member of any other association for research providers in any jurisdiction whatsoever & I am NOT qualified to give financial advice. Investing/Trading in securities, particularly microcap securities, is highly speculative & carries an extremely high degree of risk. The information, analysis, & opinions listed above are my own & may not properly reflect the underlying conditions of a company or security. You should do your own Due Diligence. If you trade based on anything I have written YOU ACCEPT FULL RESPONSIBILITY AND LIABILITY for your own trades & actions & hold the author of this publication harmless. If that isn’t clear enough DO NOT TRADE, ACT, OR INVEST, BASED UPON ANYTHING I WRITE OR RECOMMEND. There, we should be solid now.