New Risks Chinese Investment $PEK, $FXI, $EWH, $SINA, $YHOO, $BIDU, $TCTZF

Several Chinese companies are about to IPO in America. Mao Tse Tung’s grandchildren want to cash in some chips for western cash. Understandable we would all do the same. Weibo and Alibaba will issue IPO’s soon. Demand is strong. The market expects the IPO to increase making even more wealth for the lucky participants.

Once we get past that noise lets take a look at the fundamentals. The Chinese economy is difficult to fathom. Transparency is nowhere close to western standards. Everything is nuanced and has alternative meanings.

Following Weibo and Alibaba will give additional information into the true state of the Chinese economy. China may wish to manage the economy but these two companies will be providing some raw information. Watch for guidance and executive interviews; lots if tidbits will be falling off the table.

Just remember “Statistics is like a Bikini. What it shows is enticing. What is conceals is critical”

George Gutowski writes from a caveat emptor perspective.

Starbucks walks into Chinese Buzz Saw. Does cultural icon get it? $SBUX

Starbucks (Nasdaq:SBUX) is expanding all over he world. Starbucks is pretty cool and has been reasonably clever with cultural issues. But they just stepped on a Chinese land mine. State owned media has criticized Starbucks for over charging compared to other prices for comparable products around the world.

Normally who cares? Charge what the market will bear. It is free choice.

China is not a free market. There are reactionary forces who are suspicious of globalism and western influences. Apparently they have some editorial influence in state media.

Starbucks may be guilty of the same mistake Google experienced in China. Not understanding the game properly. Starbucks is in a consumer business where PR and public perception is critical to short and long-term success.

Starbucks has walked into a Chinese buzz saw. They should have seen it coming. The question becomes how do they fix it? How fast can they fix it?

China is too big for Starbucks to abdicate.

George Gutowski writes from a caveat emptor perspective. Follow him on Twitter @financialskepti