Friday, July 4, 2008

"Airline stocks plunge as direct flights take off"

Oh the irony in the title "Airline stocks plunge as direct flights take off," is ridiculous. This title is of an article appearing on TaipeiTimes for today. Today (well yesterday in Taiwan) marks the first day which Chinese tourists will come into Taiwan via direct flights. The funny thing about all of this is that Ma and Wu have made many concessions to China in order to get these direct flights in order to boost Taiwan's economy. It seems that everytime the so called economic savior plan or thing is implemented, the corresponding stock falls.

Example, Ma Ying-Jeou inagurated on 5/20/08, and since then the TWII is down over 20%. Look at this wonderful chart for short sellers below:

Now, the inagural direct flights between China and Taiwan have sent Eva Air and China Airlines stocks down in a similar fashion with both trading down about 7% and 6.5% respectively today.

Critical supports have been broken on the TAIEX (^TWII) and I'm pretty sure we're going to see the 6000s before we see the 8000s again.

But, don't blame Ma, Wu, and company, because after all- this was never as bad as when Chen Shui-bian was in power, right? Right? Yeah, keep telling yourself that. Look at this chart of GDP growth rates for previous years compared to a few other countries. Since 2001, Taiwan was on par with many countries of the world, and with better GDP growth rates than countries like U.S., Japan, and France. Everyone has heard of the saying, "What goes up, must comes down." And it will be oh so fun for Taiwan when Taiwan gets it's economy so tied up with China that when China's boom, busts, so will Taiwan's economy.

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