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Strategies & Market Trends : True face of China -- A Modern Kaleidoscope -- Ignore unavailable to you. Want to Upgrade?

To: RealMuLan who wrote (9192)	11/9/2010 12:52:36 PM
From: RealMuLan	Read Replies (1) \| Respond to of 12464

From Art Cashin, on China and QE2 and the mess of the U.S. foreclosure: " China And QE2 – Inflation in China is beginning to flare up and some officials are blaming it on the recent weakness in the U.S. dollar since Bernanke began talking up QE2. Chinese officials are taking steps to raise rates and force banks to hold more foreign reserves to prevent “leakage” into the Chinese domestic market. There is even talk of instituting capital controls to battle what China sees as QE2’s purposeful weakening of the dollar. As the dollar has weakened, the Chinese have sustained a massive “paper loss” on their huge holdings in U.S. Treasuries. Dick Bove seems to thinks some of China’s concerns are justified. In a recent piece he suggests that with QE2, the Fed may have declared “financial war with China”. Additionally, Bove thinks the plan may also be a Bernanke conceived attempt to create credit outside the banking system. We’ll carefully monitor Chinese comments as the G-20 meeting approaches. Keep your side-arms handy." ... " An Amazing Assertion – Last week one of the FoF regulars brought a friend to one of the plenary sessions. The gentleman, in addition to being quite personable, was a lawyer who had a lot of experience in asset backed securities. Naturally, I tried to pick his brain on the real status of the foreclosure fiasco. In the middle of the discussion, I avowed that I had become very concerned when several large servicers suspended mortgage foreclosures. It smacked of wholesale legal protections to avoid exposure to court reversals and possible sanctions for undecipherable records of true ownership. I remarked to our guest that it was with a large sigh of relief I greeted the announcement that foreclosures would resume – not in a scrooge-like manner, but only because resumption suggested the records might be in order. That’s when our guest blew me away. He asserted that they had only “announced” foreclosures would resume and, in fact, were still in stand-by mode. He claimed that the announcement of suspensions had prompted many mortgage payers to consider defaulting since there would be no punishment. The guest said that, sensing that suspending foreclosures could lead to a tsunami of new defaults among “current” mortgagors, they simply announced resumption as a warning. He claimed that foreclosures were not resuming because the records remain murky and would promote challenges and, perhaps, legal penalties. We certainly hope he was wrong since things could turn very ugly. We’ve begun checking around to see if we can get some hard data on the status of the foreclosure process. Stay tuned." zerohedge.com