Mish's Global Economic Trend Analysis Message Board

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Strategies & Market Trends : Mish's Global Economic Trend Analysis

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To: RealMuLan who wrote (26340)	3/26/2005 9:58:52 AM
From: russwinter	Read Replies (3) of 116555

<So as the end of 2004, only 3.7% of its asset is bad debt> Is that from the China Orwellian Ministry of Propaganda? I will refer you to Roubini's comment. CCB (and the others) will need a heck of a lot more than $22 billion (or $45 billion), to restore solvency. I'll bet the majority of their loans are bust, and it will get even worse when the real estate Bubble unravels: Further, the banking and financial system is still in shambles and the latest China Construction Bank (CCB) scandal - with the head recently stepping down for alleged corruption - signals that the financial system has still very serious problems. And $45b of recap funds for the two big banks is very little compared to NPLs that are likely to be 70% of GDP for the overall financial system; and these NPL will grow as many loans will go bust once the investment boom goes bust. Indeed, the CCB scandal and other evidence of systematic corruption and malfeasance throughout the banking system shows how the banking system is still significantly rotten and fragile.

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