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Strategies & Market Trends : Booms, Busts, and Recoveries -- Ignore unavailable to you. Want to Upgrade?

To: TobagoJack who wrote (49821)	5/11/2004 11:05:51 PM
From: elmatador	Respond to of 74559

China is trying to slow down like Elmat skying in Innsbruck!! <<Beijing rules out 'sudden braking' in economy By James Kynge in Beijing Published: May 11 2004 14:42>> Will stop just like Elmat? I kept going, I need to diminish the speed and the slope never levelled. Trees left and right. Crowds on the way. Knees frozen stiff. Picture of tendons bloody making the snow red rpotruding out of a bone crossed my mind. I didn’t have to do anything to stop. I just did. When I opne my eyes, the sky was where the ground should have been. It looked funny but when I tried to laugh, I have a molten ice cream inside my mouth as I have eaten 200grs of snow. Then I looked to the legs and they were still there and only one sky still attached. Two Austrian ladies laughing their butt off, grabbed my armpits and were tried to pull me on an standing position. But I wanted to keep on the horizontal rather than slide down the hill once again!! Port that to China trying to slow down and you'll get the picture. Beijing rules out 'sudden braking' in economy By James Kynge in Beijing Published: May 11 2004 14:42 \| Last Updated: May 11 2004 14:42 .l { visibility: hidden; display: block; } China's central bank announced on Tuesday that it was "closely watching" inflation and expected consumer prices to climb in the second quarter of this year but stopped short of giving any clear indication of an early adjustment in interest rates. "The next stage in our healthy monetary policy will be an orientation toward appropriate tightening," said the People's Bank of China quarterly monetary policy report released on Tuesday. It named the main aims of its monetary policy as "curbing circulation within the financial system, controlling excessively fast credit and money supply expansion, closely watching changes in price trends and smoothly promoting marketisation reforms to interest rates". Economists said that none of the language used in the central bank's report constituted an unambiguous signal that it was preparing to raise interest rates. However, it was clear that a rate hike was an option if prices rose beyond expectations, the economists added. Stock and commodity markets in the region and beyond have been rattled by concerns that a Chinese rate hike could dampen consumer demand and precipitate a "hard landing" for the world's fastest growing large economy. But the central bank's report made clear that China was not planning any drastic steps to tighten credit. "We need to guard against sudden braking, avoid booms and busts and promote smooth economic development," the report said. It mentioned that in the second quarter strong year-on-year rises in gross domestic product and consumer prices were expected, but mainly because they would be compared with an unusual period last year during which severe acute respiratory syndrome (Sars) virus swept China and drove quarterly economic growth down to 6.7 per cent. But there were signs that in some areas, inflationary pressures were already easing. The spot prices of zinc, aluminium, some key steel products, copper and nickel have all fallen on the Shanghai market over the last few days, according to statistics collected by the Financial Times from several industry sources. The rising prices of such metals over the past six months has been one of the m ain forces behind producer price inflation, a key concern of the central bank and other government agencies. Executives in the steel and aluminium industries said the main reason for the subsiding prices was an excess of supply over demand as construction projects across China were mothballed. In the past few weeks, China has issued a flurry of administrative orders to slow down fixed asset investment and cool off overheated sectors such as steel, aluminium, cement and construction. It has also tightened monetary policy by raising banks' reserve requirements on two occasions. In another move toward monetary tightening, banks have been permitted to charge higher lending rates up to 1.7 times the fixed benchmark rates. China's GDP grew at an official 9.7 per cent in the first quarter, down slightly from 9.9 per cent in the fourth quarter of 2003. The consumer price index grew by 2.8 per cent year on year in the first quarter, nudging close to the central banks' 2004 forecast of 3 per cent.

To: TobagoJack who wrote (49821)	5/12/2004 3:12:51 PM
From: Taikun	Read Replies (2) \| Respond to of 74559

Hi Jay, I am really interested in your position (both opinion and investment-wise) on Japan, as I note here: achamchen.com that you sold your equity positions 11/03, you hold some Yen, and you borrow in Yen for investing in Canadian Trusts. In favor of Japan recovery: 1. Proximity to India/China for trade 2. Domestic economy improving 3. Domestic demand up 4. Land prices appearing to bottom 5. Possibly at the and of a 13yr secular bear cycle that began in 1991 6. Low P/E for the Nikkei vis-a-vis the US 7. Japanese excel at Nanotechnology OR against Japan recovery: 1. Large holding of US T-Bills=large exposure to high $/weak US economy 2. China faltering will hurt Japan 3. Ageing society is too much of a drag on economy 4. Foreigners have been larger net buyers of Japanese equity, land, so Japanese don't believe in their own recovery 5. Japanese Debt, in GDP terms, is worse than US 6. Aside from Toyota, Canon, not many Japanese firms are doing as well as they once did (Sony, Mitsubishi Motors) 7. Japanese CAPEX is still low (witness Steel Partners forcing cash out of companies - in dividends by ramping ownership up then demanding dividends, or they'll Buyout) 8. High oil costs Personally I have Yen cash but sold my Japanese equities which now look positively cheap against the high USD EWJ, in USD terms, is back to Dec 03 levels, just like the US indexes, but while US indexes currently appear downward-trending, do you think the Japanese indexes could be at the start of a secular bull, whilst in a cyclical bear? Jay, what do you see?