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I missed this last week: Alibaba!

I didn't so much as miss the whole September figures because by now any Chinese financial disclosure I take to be complete bunk.  This morning Zero hedge had a very interesting article about the "one day" performance of Alibaba on which they sold a total of US$ 25 billion in goods -- to give a sense of the scope of this it's equal to the ANUAL sales of Sears & Kmart -- granted not companies that are in the best of health.  That Alibaba shipped more than 800 million packages...yeah, that's not a typo 800,000,000 packages where shipped in one day -- oh and by the way, Alibaba doesn't use a logistical courier service.

Now, all that is just big numbers but here are two interesting statements:

1)  Alibaba announced that it's been one of its most profitable quarter (no numbers)
2)  Alibaba's delivery system is one of the best in the world...although it seems to be bicycles

More interesting is that Alibaba is coming back to the US bond market, for another US$ 5/8 billion -- because despite the profitability of Alibaba it needs more cash.   Now that's not the end of the world, cash and cash flow for capex are different things.  However, 90% of Alibaba's revenues are in China.  Dear reader, how much exposure do Chinese banks have to Alibaba?  Yeah, you guessed right, zero! 

The hottest tech company in China has zero Chinese banks backing up its operations, it's all foreign money.  Unfortunately, Alibaba is starting to look like Sinoforest (another Chinese company that used the foreign -- in that case, Canadian investors).  When the whole thing unraveled Canadian investors were left holding the bag, the CEO and CFO (both Chinese nationals) are still running free in China.  Their Canadian representative -- well he's in jail...In the case of Sinoforest it seems it was a scam from the very beginning.  The image of their 8 years old headquarters was a different company, their offices didn't seem to exist, nor did their wood plants or forest. 

In the past, the SEC asked some hard questions about Alibaba's results, but its US  legal representative certified that everything was above board...since he's now chairman of the SEC he should be safe since he's the principal enforcer of the US government.  Nice job if you can get it!

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