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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Pogeu Mahone who wrote (41213)	10/12/2008 3:28:18 PM
From: energyplay	Read Replies (1) \| Respond to of 217881

Let me guess - About 10 - 12 years ago, Banks in China had extensive non-performing loans, almost all to "state enterprises" which were implicitly subsidized with loans and by other means. Over the course of about 5 to 7 years, most of those state enterprises were reformed, merged, rationalized, or put on a profitiable path China's growth and a lot of hard work by managers and bankers. So that a few years ago, China's non-performing loans NPLs had been considerably reduced, almost every bank was in better shape, their credit ratings were raised, and many banks were able to go public. Now the banks have managed to get NEW NPLs ... during past few years of very high growth - essentially they found a way to make bad loans during a boom period. I expect much if this commercial real estate, along with some new private companies, plus their old friends, the state enterprises. I trust that the new NPLs are a much smaller percentage of the banks captial than the old problem - right ? This should be a much smaller problem than the old non-competitive state enterprise problem. Right ? Okay, I am disapointed that no one - even China- seems to know how to play the capitalism game.

To: Pogeu Mahone who wrote (41213)	10/12/2008 7:51:09 PM
From: TobagoJack	Respond to of 217881

all nations will weather the storm, emerge in what shape is the issue, and that is partly a function of what the officialdom can and is willing to do i had commented on china banking in letter to editor to economist magazine some time back in 1999-2000, informing them that british banking will collapse before that of china banking - the script is playing quite well. china npls are nonsensical, as 100% of deposits are guaranteed by fiat inlation mechanism, because the political loans were and are merely 'loans' in the sense that banks are the conduits i had noted on si that ipos would help the comrades with mathematical resolution of banking npls, and so it has happened to a large degree additionally, there is a substantive and qualitative difference between a bad loan that resulted in a productive asset as opposed to ended up in a vaporized share or housing market china share mkt is tiny relative to gdp, and its housing mkt, while used to be frothier, is under-owned on per capita basis, and is needed by 400 millio more folks to be urbanizd china is where usa was perhaps in 1880-1910, broad brush speaking