Morgan Stanley upgrades 2009

Morgan Stanley upgrades 2009 China market view to
Neutral on belief mini asset-economy upcycle could be developing, but says
still watching for signs liquidity growth wearing out, “which could see the
mini cycle end in tears.” Notes risk house’s cautious market view could be
pushed forward to 2010 for double-dip. “Relentless liquidity supply globally
seems to have gone beyond the capital markets and generated stabilization in
the world economy, and even reaccelerated China by stabilizing/reflating all
(potentially risky) assets’ prices.” But adds, mini-cycle unlikely to sustain
to multiyear recovery boom as China can’t sustain rest of world
single-handedly, world can’t afford high asset, commodity prices. “After the
asset bubble sucks in enough risk chasing capital and grows too expensive for
the underlying economy to afford, it usually busts.”