Thursday, April 23, 2009

Goldman's upgrade of China

April 22 (Bloomberg) -- China’s economy will expand faster than previously forecast this year and next as the government’s 4 trillion-yuan ($586 billion) stimulus package spurs domestic demand and boosts investment, Goldman Sachs Group Inc. said.

The world’s third-largest economy will expand 8.3 percent in 2009, from an earlier estimate of 6 percent, Hong Kong-based economists Helen Qiao and Yu Song wrote in a note published today. CLSA Asia-Pacific Markets also increased its estimate for growth this year to 7 percent from 5.5 percent earlier, according to an e-mailed note.

Last night on Fast Money, one of the traders recommended shorting Potash into today's numbers. My question is---if China is going to grow faster, and stock markets are getting healthier, when is China going to negotiate their magic potash contract--the one that Goldman Sachs analyst Bob Koort was so concerned about on Mosaic's earnings conference call two weeks ago?

Today, Wall Street will get some clarity from Potash on the fertilizer situation around the world.

Quite frankly, shorting these numbers down here, on the lowered guidance today just doesn't make sense. It makes as much sense as buying these numbers when they were up there just one year ago--at 3X today's prices!

Don't be Wall Street's stool pigeon!

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