China stocks, the future, and your input

First and foremost, I am a specialist at a top investor and public relations firm called Redchip Companies. We specialize in small cap stocks and have many companies based in China and emerging markets. My question to you all are what are your thoughts on the future of the Chinese economy, their overall market strength, and whether China is going to be looked at as an investment hub for years to come?

WEMU and LLFH

Worldwide Energy and Manufacturing: WEMU is now up 80% in the last two weeks. L&L International Holdings, Inc.: LLFH, a profitable coal producer should move up quickly to the $2.00 range, as well, has the potential for a 100% move. Triple digit revenue and earnings growth, small-float, like WEMU.

http://www.redchip.com/visibility/investor.asp?symbol=WEMU

http://www.redchip.com/visibility/investor.asp?symbol=LLFH

The Big Three

Just comparing F to GM and TM. TM is obviously best off. By Google Finances acct, TM total eq. is 122B, GM s -59B and F is a not so bad -1.9B. Its too bad evryone is in crsis mode. Its almost inevitable that a similar phenomenum will happen in the autos as it did in fnancials. They let one die, and it grabs the ankle of the next one on the way down the dran and so on. So its possible Ford could become collateral damage if GM goes down.

Wish I understood float. I look on Bloomberg, TM outstanding shares to float or identical. Does that mean they could sell as many new shares as there are exsisting shares and double their mkt cap if they chose to? Or does it mean they can't sell new shares. I am gonna guess the first choice, because F has more outstanding than float by a little over 100M. And GM is about the same. So if they have that many shares left to sell, seems like all they need is investor confdence. Well GM needs 59B/Qtr first. Ford only needs a measly 2B/ Qtr. TM just needs consumer confidence, and for the mob mentality to end. I used a currency calculator online, not sure how accurate it was, and got that TM tot. eq last Q was 122B. Alot of meat of that bone.

So I also noticed Ford has 70% institutional ownership, and GM for somereason is 91% owned. TM is only 2%. The short interest according to Bloomberg is 1.97M, I calculated that was about 1%, how can that kill the company alone? Still alot for them to get thru obviously, for that and mb the short interest its only 2% institutonally owned. Maybe someone out there has an explaination, thats the best I can do. F is 306M about 10% short and GM is short 102M about 30% of outstanding shares. Maybe my numbers are wrong or I misinterpreted something. I wasn't allowed to short at my brokerage, so I don't even know if there is a recent ban on shorting GM, or if its just my brokerage. If there is a hold on shorting GM, then when was 30% short interest accumulated? Obvously the shorts there are holding on for more in GM, F are realizing it may be getting too risky to short, and re heading over to TM perhaps.

My pont is F is better than GM. Id say its the best buy right now. But if this crisis in autos improves to some point that is favorable to F, the shorts in TM will be done, and interest in TM will return. Ford will still be a good growth story if it survives. GM has a lot of assets apparently, buy they have even more expenses. Not only that but GM needs some rediculous amount of money to even start to tread water. GM will suck up all the proposed money or will fail regardless if the money is spread out evenly. Ford needs so little it seems to be carried thru this safely to the otherside. GM is too big for itself. They could be hurting Ford, an american company fairly well positioned, well-managed, and somewhat streamlined, because they were dealing with this before the real bad stuff started happening. GM has mortgage exposure too.

I hate to say it, but maybe the Govt should use that 25B to bail out F, just what they need each Qtr, and the autoparts and related businesses, and let the big hungry,inefficient, lumbering giant GM file bankruptcy. They can cut some of those 16 models, lay off a few billon employees so they can pay the ones they keep a little more. Start a little competitive wages in the auto industry. And Ford can fill in the blanks GM leaves behind, until they are about the same size. This is only the nature of things. Fighting this is fightng the inevitable. Helping GM may just cause it to take the whole american auto industry down with it.

Bottoming??? What exactly is happening here?

I liquidated most of my porfolio yesterday (My real portfolio). My losses had been in-line with Dow losses. When the Dow loses 500 I lose 500. I lost $150 today on an almost 700pt drop. So I did something right. Now I am strongly considering reducing most of my remaining stocks to MMA to wait an collect interest on cash. Listening to CNBC, in the past 2 weeks, I have heard alot of guests stating they have gone to cash. I thought I could recover, but I didn't heed the warning and in the past 5 days I lost 25% of my portfolio, half of it was margin. I caught a small bounce yesterday, and sold at levels pretty much calculated the night before to gaurantee liquidation. This is just my reaction to this situation.

As for my topic. What is happening here? Is this a bottom? First I should discredit myself, I am a noob, this is my third year investing, and I have lost alot of money. Mostly because I haven't learned how to quit while ahead. If your still with me, I am getting to my point.

"Pure Panik", "Indiscriminate selling", "Capitulation?" I don't know what capitulation is really. Here is what I gathered... oil prices were the straw that broke the camels back, i.e subprime. This caused banks to fail, then brokerages found themselves suddenly overleveraged when their underlying assets losty value. 2002 some legislation allowed brokerages to leverage upto 40:1 (please correct me if I've misunderstood something) That money never really exsisted then right? So I ask what part of this unrealistic growth since 02 do you think might have been bought with essentially monopoly money? With this observation I look at the low in 2002 (7700+/-) and then I figured some of this growth must be real so I said to myself 8500 sounds good. That was a few weeks ago (take my word) and now here we are. Now I am hearing some estimates putting the bottom at 7500pts.

So are we gonna see a retracement? I gotta ask, does the money even exsist now to retrace much? The 40:1 leveraging in done. Do global economic conditions support an influx of investment? Also are hedgefunds,investors, etc, done deleveraging? ( I know I am) I really think once the financial market finds a bottom, it doesn't recover much. We are definately in a recession. http://www.econlib.org/library/Enc1/Recessions.html, recessions last from 6-43 months according to this link. What kind of a recession are we in? I don't see retracement, I think this recession should be moderate in length, 18 months maybe due to the severity of the situation.

I think there is more to come, the U.S pres. election results may reestablish some stability, but speculatively, there is an arguement against the effectiveness of both candidates economically. Some analysts feel we are bottoming here. I'd feel better @7500 to buy however, and even then cautiously. The monopoly money is gone, hedgefunds and brokerages are crippled, so are investors. The deleveraging has sucked alot of investors dry.

Just some of my thoughts, I was hoping to inspire some debate and discussion.

Thanks.

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