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Strategies & Market Trends : Strictly: Drilling II -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (20996)	10/30/2002 9:14:06 PM
From: terry richardson	Respond to of 36161

Joe: Re: China is really a basket case and about to collapse setting off worldwide deflation. His argument made a lot of sense if you accepted his underlying claims that 70% of all chinese bank loans to domestic businesses were were in nonperforming status Sorry can’t help you there... yet, but am currently looking for US listed tech companies who have moved to China with their manufacturing from other low cost areas. Figure that if there is a melt down to more reasonable P/E ratios they will stand a better chance going forward. But not looking at investing in them yet. Just want to be ready when the time comes. Surprised to see just how many have done so. Kind of have a timetable (hope) of jumping from golds as they go higher into tech and offshore services in a melt down. Also figure that with the Yuan being tied to the USD as the USD corrects those companies will do well in the recovery (well ya gotta fantasize occasionally guys). Would be interested in what you learn though. T. EDIT: Now there's an omen 21 used to be our street number when I was a kid.

To: Little Joe who wrote (20996)	10/30/2002 9:15:56 PM
From: t4texas	Read Replies (1) \| Respond to of 36161

it is true, but nothing to be alarmed about. "his underlying claims that 70% of all chinese bank loans to domestic businesses were were in nonperforming status." i don't know about the 70% number, but most chinese bank loans to chinese companies are non-performing. then they loan them some more. almost all these loans are to chinese government companies. many of the companies are being shut down, but the bad loans are there. i just saw a deal where some broker (don't remember the name anymore, but morgan stanley, goldman sachs, or merrill syndicate, etc.) was the buyer of a huge chunk of chinese non-performing loans for about 10 cents or less on the dollar). all this sounds bad on the surface, but china has almost total currency control (yes, plenty large black market too.). china's four aces in its hand are that hard currency is coming in every day to do the world's manufactuing (the rmb is not convertible). hard currency is gotten by all the exports too. all those banks with the bad loans are also owned by the government. so the guys with the banks are also the guys with all that hard currency too. (of course those same guys have a lot of gold now too.). so don't get too worked up about bad loans the chinese banks have to the chinese govt. industries. it is all just a bunch of domestic rmb anyway.