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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: mishedlo who wrote (16843)	11/26/2004 11:38:11 AM
From: yard_man	Respond to of 116555

pretty big cut there Message 20802203 who do you suppose made up the slack -- someone had to or rates would be up further, dontcha think??

To: mishedlo who wrote (16843)	11/26/2004 9:07:20 PM
From: TobagoJack	Respond to of 116555

QUOTE The website sina.com reported that a member of Monetary Policy Committee (MPC), Yu Yongding, said that China has cut its holdings of US treasuries to USD180bn. According to our senior contacts involved in China's reserve management, this report of China becoming a net seller of US treasuries is "groundless." We do not know whether Yu's speech was misquoted, but as an academic member of the MPC, he does not represent any policy making bodies and should not have any detailed information on China's reserve balances. Moreover, assuming the USD180bn quoted by sina.com is true and it refers to the end-October balance, it actually represents an increase in China's holdings of US treasuries in the month. According to the US Treasury Department, China held USD174.4bn in US treasuries as of end-September and, between end-June and end-September, China's holdings rose by USD9.5bn. This increase was 22% of the total increase in China's FX reserves during the same period, and is somewhat lower than China's US treasuries holdings as share of total FX reserves as of end-June (35%). These figures suggest China has modestly reduced its weighting for US treasuries but continued to increase the absolute level of its holdings. We think China will likely to continue this strategy in the foreseeable future, by balancing the main criterion for reserves management (safety and liquidity) and considerations of profitability. Jun Ma Chief Economist, Greater China Deutsche Bank Hong Kong 852-2203-8308 UNQUOTE