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

To: Hawkmoon who wrote (61414)	2/22/2010 9:55:09 PM
From: TobagoJack	2 Recommendations Read Replies (1) \| Respond to of 217654

100% of all deposits (without maximum) in hkg and china banks are systemically guaranteed since the start of the great financial crisis. re a hk real estate investor, he buys real estate at 30-50% downpayment, rents out at 3.5-4% yield, suffers a 1.85-2.15% mortgage rate, and does so year after year with excess savings and surplus capital, leasing out on english common law based lease contracts with recourse to everything the renters have, and when markets go down, he buys more, and when markets go up, he adds less yes, he is levered at 50-70% on any new purchase, and levered at 50% or less on refinancing or any existing holdings; and the bank has recourse to everything he has, on top of any mortgaged property equity. the interest rate on all mortgage contract is adjustable monthly. and you think hk bank is in danger? china mortgage schema is effectively no different than that of hk, with exception of legal regime that favors the banks even more and neither banking regimes foolishly packages any innovative mortgage-based derivatives product, pilfers bonuses, and then leaves the entire society together with entire babyboomer generation and generations hence to hold the toxic bag. hawk, banking illiquidity is one easy thing. banking insolvency is entirely something else harsher, as you are and will continue to learn. so, again, be warned, as i am still trying, after all these years, to save your soul ;0)

To: Hawkmoon who wrote (61414)	2/23/2010 11:56:40 AM
From: elmatador	Read Replies (1) \| Respond to of 217654

Hawk China aims to better coordinate urban and rural development, the central government said on Sunday. budget priority should be given to infrastructure construction in rural areas and programs which are aimed at improving rural residents' livelihood. China pledges new efforts to boost rural development Updated: 2010-02-01 13:54 China will put more investment, subsidies, fiscal and policy supports into vast rural areas this year . The aim is to better coordinate urban and rural development, the central government said on Sunday. The government will continue to enhance financial support to agriculture and farmers, improve agricultural subsidy systems and maintain a good order in farm produce market, said the first document of the year issued jointly by the Central Committee of the Communist Party of China and the State Council, China's Cabinet. The central government said budget priority should be given to infrastructure construction in rural areas and programs which are aimed at improving rural residents' livelihood. More subsidies will be channeled to increase the output of crops, potato, highland barley and peanut, as well as the purchase of agricultural machinery, said the document. The government would implement more policies for purchasing and stockpiling major agricultural products, including corn, soybean and oilseeds, to stabilize prices of major farm produce. More efforts will be made to strengthen financial services including micro-credit loans and insurance service in rural areas, according to the document. It promised that basic banking services would be available in all villages and towns in the next three years. It called for more efforts to develop village banks, loan-lending companies, and mutual funds in a bid to guide more capital flows into the rural financial market. The central government also asked for further expansion of rural consumption market as part of the country's accelerating measures to boost consumption.

To: Hawkmoon who wrote (61414)	3/13/2010 2:09:59 PM
From: elmatador	1 Recommendation Read Replies (1) \| Respond to of 217654

Is China Actually Bankrupt? Friday, March 12, 2010 The nation has erected a complex system for magically making its debts disappear, but a look up China's sleeve shows that its IOUs may equal its GDP. Is China broke? It seems like a silly question, right? China's foreign exchange reserves stood at $2.4 trillion at the end of 2009. Yes, China announced that its proposed annual budget for 2010 would produce a record deficit, but the deficit is just $154 billion, or 2.8% of China's gross domestic product. In contrast, the Congressional Budget Office projects the US budget deficit for fiscal 2010 at $1.3 trillion. That's equal to 9.2% of GDP. But remember the theme of my column earlier this week: All governments lie about their finances. At worst, as in Greece and the United States, the lies are bold and transparent. Everybody knows the emperor has no clothes, but no one wants to say so. At best, as in Canada and China, the lies are more subtle—more like a magician's misdirection than a viking raider's ax. Look at these great numbers, the lie goes, but don't look at those up my sleeve. There's a good argument to be made that if you look at all the numbers, instead of just the ones the budget magicians want you to see, China is indeed broke. More Debt Than Meets the Eye Want to see how that could be? If you look only at the current position of China's national government, the country is in great shape. Not only is the current budget deficit at that tiny 2.8% of GDP, but the International Monetary Fund projects the country's accumulated gross debt at just 22% of 2010 GDP. US gross debt, by comparison, is projected at 94% of GDP in 2010. The lowest gross-debt-to-GDP figure for any of the Group of Seven developed economies is Canada's 79%. But China has a history of taking debt off its books and burying it, which should prompt us to poke and prod its numbers. If we go back to the last time China cooked the national books big time, during the Asian currency crisis of 1997, we can get an idea of where its debt might be hidden now. The currency crisis started in 1997 with the collapse of the Thai baht—and then, like dominoes, the currencies of Indonesia, South Korea, Malaysia, and the Philippines collapsed. In each case, the country had built up an export-led economy financed by foreign debt. When the hot money that had been flowing in instead flowed out, that sent currencies, stock markets, and economies into a nosedive. China escaped the first stage of the crisis because the country's tightly controlled currency and stock markets, and its economy, had kept out hot money from overseas. China had built its export-led economy on domestic bank loans instead. The majority of bank loans, then as now, went to state-owned companies—about 70% of the total, the Congressional Research Service estimated in a 1999 examination of the period. Those loans were all that kept the doors open at many of China's biggest state-owned companies. In its review, the Congressional Research Service estimated that about 75% of China's 100,000 largest state-owned companies lost money and needed bank loans to continue operating. That became a problem when, in the aftermath of the currency crisis, China's exports fell. That sent revenue plunging at state-owned companies that were already losing money. Suddenly, China's banks were sitting on billions and billions of debts that anybody who'd taken Bookkeeping 1 in high school could tell were never going to be paid. This was especially a problem for China's biggest banks, all of which had ambitions to raise more capital—and their international profile—by going public in Hong Kong and New York. But no bank could go public with this much bad debt on its books. What to do? Why not bury the bad debt? moneyshow.com continues on Page 2 \| Page 3 \| Page 4 \| Next

To: Hawkmoon who wrote (61414)	3/13/2010 2:30:52 PM
From: elmatador	Respond to of 217654

Fear of Chinese bubble reverberates worldwide By John Authers Published: March 13 2010 02 Over the next few days, the Financial Times will be holding a series of "Great Debates" in Beijing, Shanghai and Hong Kong, asking whether China will be a superpower in 2020. Viewed from New York, it seems a strange question. The investors in what is still the world's biggest financial centre are acting on the assumption that China is already a superpower, if not a hyperpower. They have been doing so for some time. And perceptions are important: if people believe you are a superpower, they will let you behave like one. The perception that China is a superpower is now deeply ingrained in US popular culture. Late-night comedy shows recycle jokes about the amount of money the US has borrowed from China. Conspiracy theories about the Chinese currency, which has been kept fixed against the dollar for almost two years now, and about Chinese foreign reserves are omnipresent. If China wanted, it could sell its Treasury bonds and crash the US economy, the theorists say - neglecting to mention that such actions would wreak deep damage on the Chinese economy as well. It is plausible to view all the ebbs and flows of risk appetite of the past few years as emanating from China. A local bubble in Shanghai stocks accompanied the top of the global credit market, and it burst just before the world's stocks peaked in October 2007. Almost a year later, the Chinese stock market was the first to turn and then lead the world's markets out of their post-Lehman slump. With the Chinese authorities committed to aggressive new spending, and slashing the price of money, it appeared that at least one global economic superpower was able to respond to the crisis. In the rally of 2009, countries and markets could almost be put on a continuum according to their exposure to China. Those who most benefited from Chinese growth, such as Latin American commodity exporters, or the countries on the Pacific Rim that export goods to China, have done best. Those in most direct competition with China have seen the least impressive rebounds. World markets then ran out of steam and started to move sideways in the autumn, as China began, ever so slowly, to put on the brakes, with technical measures such as adjusting the reserves that banks were required to hold. This spoke to fears. The first was that China must at some point exit from easy money. This might be called the "business as usual" fear - traders never like the part of the business cycle when rates are rising. The second, much greater fear is that China has created a bubble and is now trying to get that bubble to deflate gently. Few things are harder to do. But both in stock markets and real estate, at least when viewed from a distance, the risks seem real. Per capita spending on real estate has grown at 27 per cent a year during the past decade. Even when starting from a very low base, this sounds like a bubble. The parallel with Japan 20 years ago is also discouraging. Then Japan, like China now, had an economic model that seemed unstoppable. It responded to the Black Monday market crash of 1987 with cheaper money - and suffered a market implosion a little more than two years later. All of this helps explain how Chinese fears helped halt the world stock rally in the autumn. If there is an argument against China's status as a market superpower, it comes from the past few months. Stocks in Shanghai headed downwards in the summer and continue to lag stocks in the US, which have returned to full robust optimism in the past few weeks. Greece, and not China, has been the focus of investors' concerns during this year's sell-off and subsequent recovery. Does this mean that China no longer preoccupies investors? No. The latest numbers from China suggest neither an acceleration nor an imminent collapse, which is reassuring. Its huge trade surplus is narrowing. The authorities appear to be preparing to let the currency appreciate a little, which is just what many in the west want. Retail property sales have dropped a little in the past few months, while the relatively subdued performance of the stock market at least suggests once more that prices are staging a calm retreat from bubble-like conditions. In short, those worried about a bursting Chinese bubble had reason for more hope in the past few weeks. That is a factor in returning global optimism. None of this means that the risk of a bursting Chinese bubble has gone away. It remains a possibility, and if it were to happen, there would be every reason to expect a return to crisis conditions across the world. But investors now think China might, somehow, be able to make a bubble deflate slowly. That remains to be tested, but the belief in the country's economic superpower status remains firmly intact. john.authers@ft.com ft.com

To: Hawkmoon who wrote (61414)	4/15/2010 3:25:08 AM
From: elmatador	Respond to of 217654

GDP 11.9% 1st quarter of this year over the same period in 2009. China refuses to cool down! That growth rate, the highest in three years, not only topped most economists’ forecasts, but handily beat the 10.7 percent expansion that had been recorded in the last quarter of 2009. nytimes.com While stimulus in the West does not do anything to kick start economies, in emerging markets sends it to the stratosphere.

To: Hawkmoon who wrote (61414)	8/10/2010 9:21:31 AM
From: elmatador	Read Replies (2) \| Respond to of 217654

Making the case for China: There's no stopping China Its growth passes Japan in economic might By JAMES ALTUCHER Last Updated: 4:41 AM, August 1, 2010 Posted: 1:29 AM, August 1, 2010 China has surpassed Japan to become the globe's second-largest economy, behind only the US, a leading Chinese government economist said on Friday. "China, in fact, is now already the world's second-largest economy," Yi Gang, China's chief currency regulator, said. The milestone comes with a big caveat: China's per-capita income of about $3,800 a year is a fraction of Japan's or America's. Will this bring new enthusiasm for US investors in Chinese markets or is the country a Ponzi-fueled powder keg ready to blow up? Here are some reasons to believe in the growth engine, which, depending on how fast its exchange rate rises, is on course to overtake the US and vault into the No. 1 spot sometime around 2025, according to projections by the World Bank and Goldman Sachs. AP As China announces it's now the second-largest economy, there are many signs including huge infrastucture projects for investors to buck the trend and look to invest in the Asian giant. * China's GDP is growing at 9% (down from 11%), versus probable 3.5% growth in the US. Many people have worried that China's central bank was putting the brakes on the economy to prevent it from overheating. All that means is that growth is going from an overheated 11% to slightly less than 10%. But growth is still growth. Meanwhile, the Chinese central bank has already signaled that it is more interested in growth than cooling the economy and there will be no more tightening. Steel production is up 15% year over year. This is a leading indicator of the type of growth we'll be seeing from China over the next year. * 50 million people per year are being added to the middle class. The Chinese middle class has gone from 5% of the country to 25%. This is a huge demographic tidal wave that has ramifications in almost every industry, both in China and in the US. To ignore this tidal wave is to ignore stocks that will be multiplying their revenues and profits by tenfold over the next several years. Chinese auto, luxury, travel, and gaming stocks will all benefit. * China is now No. 1 in the world ranked by energy consumption, passing the US. Additionally, China is spending more on clean energy alternatives to oil than the US. Even Warren Buffett has invested in electric car company BYD in China. * Credit crisis risk is minimal. Famed short seller Jim Chanos is worried that China is in a real estate boom/bust cycle similar to what the US has experienced. However, in China the minimum down payment for a residence is 30%. In the US during the credit boom many people were doing 0% down with no income to back it up. What Chanos is seeing is the surge in lending in Chines market. But a large part of that is not due to easy credit but the 50 million-plus people a year being added to the ranks of the middle class. These folks are buying houses, cars, jewelry, computers, and other pricey goods. * Many question the honesty of the government's numbers on things like GDP growth, etc. The recent episode with Google demonstrates that the government is still not comfortable being completely open and transparent. However, what is transparent is the size of China's currency reserves (over $2 trillion in US dollars), which are generated by export growth. These currency reserves will enable China to avoid a lot of the "shock and awe" that occurred in the US in 2008. In order for the US to solve its problems it had to go enormously in debt. The same scenario won't occur in China due to the massive surplus of currency. Read more: nypost.com