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

To: Rational who wrote (20317)	1/4/2005 9:48:17 AM
From: RealMuLan	Read Replies (1) \| Respond to of 116555

Thanks for the clarification. >>My model predicts that non performing bank loans must be rising exponentially as well as simmering social discontentment; both of these indicators could be measured/surveyed only by Chinese authorities.<< That is why your model is not going to work since the bad/non-performing loans will be controlled and reduced instead of "increasing exponentially". State banks already saw unprecedented profit in 2004. As they learn more and more from the US banks, start to charge all kinds of fees, their financial situation will bound to be improved. I remember last year, even if charging 10 Yuan fees on bank cards caused a lot of complains. Here in the US, all kinds of bank fees are charged and newly added, I never saw any open complains or discussions in the media about them. Another thing to save money for Chinese banks is to close on weekend instead of opening 24/7. >>A few weeks thereafter the two CB Chiefs recommended and the Chinese government accepted a proposal to create a NEW bank regulatory authority to monitor non-performing bank assets. Two months later they infused $40 billion to Chinese state banks to replenish capital. Now they have infused another $30 billion. << One reason and the only reason China infused billions to their state banks is they want offer them on the market and thus have to make their financial indicators eligible for the offering. Your recommendation was just a coincidence<g>. China has been preparing for this for quite some years, infusing money is the last step. And this year, or the latest next Jan., at least one, maybe two banks will be on the market. >>So do not be presumptuous that as a Chinese whatever you say about China is valid and the value that Chinese authorities attribute to policy suggestions of "non-Chinese" is zero.<< The jury is still out on whether what I said is valid or what you said is. So let us continue the conversation one year from now. There is no doubt China faces a lot of problems, but the prediction of the "banking sector melting down" or "economic collapsing" will always come short with the reality.