Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Hawkmoon who wrote (61400)	2/22/2010 7:13:07 AM
From: TobagoJack	2 Recommendations Read Replies (2) \| Respond to of 218776

Hello hawkmoon, you wrote a lot. You can if you're using that overpriced RE as collateral on outstanding loans … … the entire point is that china financial system is barely at all leveraged, full stop, at all levels, for that is what excess savings and surplus capital tend to result in. But homes are money pits. They require maintenance … Hk homes are savings, and equivalent to a dozen or less good meals. <<Andy Xie>> … know him, and he lost it when let go by morgan stanley. “China’s asset markets are a Ponzi scheme,” said Xie, now a Shanghai-based independent economist. “Property is heading for one huge bust that will take a year and a half to unfold.” … How? Who is selling? Why? Who is buying secondhand homes? Why? And yes.. you can have bubbles without leverage.. The Tulip bubble was achieved without leverage. … rubbish. The tulip bulb crazy featured huge leverage in the form of promises to pay full purchase amount in the future. You must read your history books much more carefully than you obviously are What's the equivalent "FDIC" coverage in a Chinese bank? … Chinese banks is a money moving utility, not a hedge fund. All real estate purchases are secured by at least 30% down payment. Most folks buy real estate with full ability to service the debt for several years without rental income. When has any bank in the people’s republic failed? Which politician dare to allow such to happen? The problem with America is that the politicians are not afraid of the population. The issue with china is that the population know full well how terrified the politicians fear them. chinese mayor kneeling, begging protesters to return to homes. can you picture any usa mayor doing such in supplication? of course not. Bear in mind something else.. China's effective stimulus (compared by GDP) was more than THREE TIMES what Obama undertook. THREE TIMES!! … is it not wonderful!? China inc did such because china inc could do such, as the such is a perfectly viable option, and the money by and by is put to proper use, as opposed to ending up in bankers’ pockets. What happens when that liquidity is drained from China's capital markets? … they are draining, because the stimulus worked and needs to be tapped off, as events should have worked out and did in fact do so

To: Hawkmoon who wrote (61400)	2/22/2010 10:01:47 AM
From: elmatador	Respond to of 218776

exit from unprecedented emergency lending measures — but the process has been going on for months in the Asia-Pacific region, underscoring the two-speed path of the global recovery. Countries from Australia to China have been leading the global march away from easy credit as their economies rebound strongly, while Europe and the United States are still trying to find a solid footing. nytimes.com

To: Hawkmoon who wrote (61400)	2/22/2010 10:03:06 AM
From: elmatador	1 Recommendation Respond to of 218776

In China, where growth has once again reached breakneck levels and inflation is becoming a worry, the authorities have deployed a different tool to cool an economy that some believe may be in a bubble. Rather than raise interest rates outright, the country’s central bank has instructed state-owned banks to set aside a larger portion of their reserves — a move that limits the amount they can lend to consumers and businesses. Idem

To: Hawkmoon who wrote (61400)	5/9/2010 2:17:27 AM
From: elmatador	Read Replies (1) \| Respond to of 218776

Faber: China May?‘Crash’?Within Year “The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.” Faber: China May?‘Crash’?Within Year By Shiyin Chen and Haslinda Amin, Bloomberg Friday, May 07, 2010 Investor Marc Faber said China’s economy will slow and possibly “crash” within a year as declines in stock and commodity prices signal the nation’s property bubble is set to burst. The Shanghai Composite Index has failed to regain its 2009 high while industrial commodities and shares of Australian resource exporters are acting “heavy,” Mr. Faber said. The opening of the World Expo in Shanghai last week is “not a particularly good omen,” he said, citing a property bust and depression that followed the 1873 World Exhibition in Vienna. “The market is telling you that something is not quite right,” Mr. Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong today. “The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.” An index tracking Chinese stocks traded in Hong Kong dropped 1.8 percent Monday, the most in two weeks, after the central bank raised reserve requirements for the third time this year. The Shanghai Composite has slumped 12 percent this year, Asia’s worst performer, as policy makers seek to rein in a lending boom that’s spurred record gains in property prices. China’s markets are shut for a holiday Monday. Copper touched a seven-week low and BHP Billiton Ltd., the world’s biggest mining company, fell the most since February on concern spending in the world’s third-largest economy will slow and after Australia boosted taxes on commodities producers. Rio Tinto Ltd., the third-largest, slid as much as 6 percent. Mr. Faber joins hedge fund manager Jim Chanos and Harvard University’s Kenneth Rogoff in warning of a crash in China. China is “on a treadmill to hell” because it’s hooked on property development for driving growth, Mr. Chanos said in an interview last month. As much as 60 percent of the country’s gross domestic product relies on construction, he said. Mr. Rogoff said in February a debt-fueled bubble in China may trigger a regional recession within a decade. The government has banned loans for third homes and raised mortgage rates and down-payment requirements for second-home purchases. Prices rose 11.7 percent across 70 cities in March from a year earlier, the most since data began in 2005. The government has stopped short of raising interest rates to contain property prices. Within an hour of the central bank announcement on reserve ratios, Finance Minister Xie Xuren said that officials remained committed to expansionary policies to cement the nation’s recovery. Stocks ‘Fully Priced’ The nation’s economy grew 11.9 percent in the first quarter, the fastest pace in almost three years. The government projects gross domestic product growth for the year of about 8 percent. The clampdown on property speculation may prompt investors to turn to the nation’s stock market, Faber said. Still, shares are “fully priced” and Chinese investors may instead become “big buyers” of gold, he said. BlackRock Inc. is among money managers reducing their holdings on Chinese stocks on expectations that economic growth has peaked. The BlackRock Emerging Markets Fund has widened its “underweight” position for China versus the MSCI Emerging Markets Index to about 7.5 percent from 4.6 percent at the end of March, the fund’s London-based co-manager Dan Tubbs said. Industrial & Commercial Bank of China Ltd., China Construction Bank Corp. and Bank of China Ltd, the nation’s three largest banks, are trading near their lowest valuations on record as rising profits are eclipsed by concern bad loans will increase. Local Governments Citigroup Inc. warned in March that in a “worst case scenario,” the non-performing loans of local-government investment vehicles, used to channel money to stimulus projects, could swell to 2.4 trillion yuan by 2011. Housing prices nationwide may fall as much as 20 percent in the second half of the year on government measures to curb speculation, BNP Paribas said April 23. Under a stress test conducted by the Shanghai branch of the China Banking Regulatory Commission in February, local banks’ ratio of delinquent mortgages would triple should home prices in the country’s commercial center decline 10 percent. Shanghai is projecting as many as 70 million visitors to the $44 billion World Expo, more than 10 times the number who traveled to the 2008 Beijing Olympics. More than 433,000 people visited the 5.3 square-kilometer (3.3 square-mile) park on its first weekend.