Hi Mish,
Maybe you didn't realize there was a specific article she
was referring to. I don't think she was referring to a
general raise in interest rates.
I thought it was totally rambling bullshit.
Take this nonsense if you would.
"Did you read the article that allows Chinese banks to charge more for interest on loans? That move means an incredible increase in the access to capital for investment purposes to companies that didn’t qualify earlier. The government is telling the banks to take more risk to accelerate growth."
Total garbage
China is raising interest rates NOT to increase capital for investment but to SLOW down the demand as their economy is overheating.
.
I believe she was referring to this article:
------
China Easing Controls of Bank Investments
By ELAINE KURTENBACH
AP Business Writer
SHANGHAI, China (AP)--China is easing controls on investments and credit by its commercial banks in moves that could boost lending to private business and make banks more profitable.
A proposal is headed for the national legislature that would end a ban on banks investing in China's stock markets, the state-run Shanghai Securities News reported Friday.
Chinese banks hold more than 21.5 trillion yuan ($2.6 trillion) in deposits but have limited options in putting that money to work.
In another reform this week, the central bank said it was loosening controls on interest rates charged by commercial banks for loans. That could boost profits and increase lending to fast-growing private businesses.
``The banks have too much money in deposits and not enough investment options,'' said Wei Yen, who analyzes Chinese banks for the ratings agency Moody's Investors Service. ``This potentially allows them to charge enough on loans to ensure they have enough earnings.''
The draft banking legislation has high-level support in Beijing, said the Shanghai Securities News, one of China's largest financial dailies.
``If the government doesn't change the current situation, that the banks only use deposits for lending, the commercial banks will have a hard time reducing risks,'' the newspaper quoted Zhou Zhengqing, deputy director of the finance committee of China's legislature, as saying.
The decision to widen the range of interest rates banks can charge on commercial loans, announced on the Web site of the central People's Bank of China, would help banks to diversify lending away from state firms.
State banks have been reluctant to lend to private businesses, despite their surging growth, because lenders weren't allowed to charge rates high enough to reflect their risks.
ajc.com.
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Otherwise I agree with you that her message contains a lot
of generalizations that may be quite incorrect. But I do
see pieces that make me try to see the bullish case.
Something which I haven't seen for quite some time.
It made me start thinking.
It suddenly helped me to see the Hang Seng in way that
makes me think they may have completed an ABC correction in
a long term chart like this one:
stockcharts.com[h,a]daclyyay[d19900101,20031212][pb20!b50!b200!c13!c20!c50!i!d20,2!f][vc60][iUb14!La12,26,9!Lg!Li10,10!Lh5,5!Lp14,3,3!Ll14]&pref=G
A= Sept '98
B= Mar '00
C= possibly Mar '03
The new 5 waves up could possibly been seen with the
explosive catalysts of which she mentions.
Anyhow, that's the bullish case that I'm using to counter
balance my heavily weighted bearish case that I've been
watching for so long now. |
