HaavBline

China: Consequences of the Sleeping Lion Awakened

You do not own the English language, my friend. You are not even from England.

Go to India and you will know what I mean instantly.


On Nov 16 09:23 AM Tony Petroski wrote:

> The title said "Consequences of the Sleeping Lion Awakened."
>
> I missed reading anything about that. Instead I read an article touting
> the mightiness of China and the Chinese economy.
>
> Note to the communist handlers: In english the phrase is "sleeping
> giant."

Opportunity in the Brazilian Real and Chinese Renminbi

I agree the long term bullish cases for both Chinese RMB and Brazillian Real. But ‘non-deliverable forward contract’ seem like a rather complicated and cumbersome investment vehicle for lazy investor like me.

What about the ETFs? There are CNY and CYB for the RMB and BZF for the Real. WisdomTree has been running ads for CYB on CNBC recently.

Want to Protect the Dollar? Move to China

The concept of PPP is useful in economic analysis, but dangerous if applying incorrectly to investment strategy.

The is not much PPP in goods, especially low-value-added commodities. The PPP lies in services. One gallon of gasoline cost as much in India as it does in the US at wholesale. But $20 buys you a basic haircut in the US might buy you 15 basic haircuts in China and 50 basic haircuts in India (just guessing).

But equalization of PPP in service happens in a very slow pace, may 50 to 100 years, if ever. The most important factor being the population density and the ACCUMULATED wealth of that whole country through history. A few years even decades of high growth will not change that.

Geithner to Get a Spanking in China

Why limit your totalitarian idea at banning Chinese restrurants? There are so much policy flexibility if US turn totalitarian.


On Jun 01 11:40 AM carey_jim wrote:

> I propose a ban on Chinese restaurants until this currency mess gets
> under control.

Nouriel Roubini's Bullish on the Chinese Yuan: Think Twice Before Buying It in ETF Form

If you really use immigration and musical trend as investment guides, you would be late by not just years but decades, so late that you may even luck out.

Decades after US took over from GB as the new empire of the world, Americans remain feeling inferior culturally to GB, until they won the cold war in the 80s. Just think about all those British rock groups, are they really that great?


On May 15 10:10 AM max12345 wrote:

> When people from all over the world start trying to emigrate to China
> to live there permanently because they love the freedom there, or
> when Chinese rock and roll music is danced to in the discos of this
> world, maybe then I will buy lots of Chinese Yuan and sell short
> the U.S. dollar. Until then I am going to stick with the Greenback.
> (Sorry Nouriel if I don't follow your phenomenal logic)
>
> The power of countries or of empires...the British Empire, the U.S.
> Empire....and the Chinese Empire that Mr. Roubini foresees and predicts
> for the future (he ranks right up there with Cassandra) is a very
> complex ongoing interplay of political, economic, social, cultural
> and military power and the related forces and influences ....that
> allow a country to run things either because people like it or because
> they are too afraid of it. In the case of China it's unlikely it
> will be able to muster up enough of either for at least another couple
> of centuries. And by then planet earth will be dead and buried due
> to the continuing environmental assault by the "human" race. And
> so I do rank right up there with Nouriel in terms of pessimism?

China's Economic Growth Claims Lack Credibility

Exactly. One simple sentence prick this seemingly reasonable but very erroreous 'analysis'.

I am not arguing that China is not padding their numbers. They may. But if they did, it is not going to be this silly.


On Apr 27 10:15 AM jacago wrote:

> 6.1% is 1Q2009 over 1Q2008, not 4Q2008.

China: Bank Lending Out of Control

I am glad you finally noticed that Chinese regulators are a lot more proactive than you have been assuming.


On Apr 16 09:05 AM William Gamble wrote:

> It ain't just me. The Chinese are concerned
>
> Chinese regulators probe burst in loan growth
> By V. Phani Kumar, MarketWatch
> Last update: 2:40 a.m. EDT April 16, 2009
>
> HONG KONG (MarketWatch) -- Chinese regulators are investigating some
> of the nation's largest banks to see whether the recent boom in lending
> has included illegal loans for stock speculation, according to reports
> from the region Thursday.

China: Bank Lending Out of Control

Your fondness of this ONE report from E&Y back on 2005 is touching, but foolish. As China focused on financial industry reform, MUCH has changed since then.

ALL big four Chinese banks have received tens of billions of goverment funds to clean up their bad debt and ICBC, BoC, CCB have went public successfully.

There are two side when the banks remained on a leash from goverment control. Unlike Greenspan, the Chinese goverment does not just keep loosening its leash, it tightens them when it felt necessary. In 2007 and early 2008, the overheated Chinese real estate market began to correct ONLY after China tightens the leash on bank lending policies repeatedly.

Your bias is glaring because you are clearly unable to see two sides of the same coin. This will mean a lot of lost opportunities.

On Apr 14 09:13 AM William Gamble wrote:

> In 2005 Ernst & Young published a survey estimating that the
> bad loans in the Chinese banking system equaled close to $900 billion.
> Since then there has been enormous speculation in both the stock
> and real estate market. According to Cao Jianhai, professor at the
> Chinese Academy of Social Sciences, average urban residential property
> prices to fall by 40 to 50 per cent over the next two years from
> their levels at the end of 2008. Of course, by the end of 2008 they
> had already fallen from there 2007 highs. You cannot have real estate
> fall that much without having bad loans.
>
> According the prospectus for the Commercial Bank of China, it is
> illegal in China to foreclose on residential property. I wrote an
> article for the Harvard International Review in 2004 about the difficulty
> of collecting debts in China. It is still true.
>
> Besides, the Chinese Banks have not even gotten of the bad loans
> from the last recession (see Really Bank Banks article)
>
> The reality is that no one knows exactly how bad the situation is
> in any bank. Information has value and is not disclosed unless required
> by law or for consideration. Since the banks in China are owned by
> the state, there is no legal requirement. Why would the Chinese government
> say that they have a pile of bad loans? So no one knows, probably
> not even the leadership in Beijing
>

China: Bank Lending Out of Control

You are quoating the exact same researcher, Cao Jianhai, as William Gamble did, to "back up" EVERTHING he said. Does it make any sense?

People should know that there are MANY Chinese researchers in every economic subjects these days. If you read any Chinese on-line news portals, everyday you will see reports of dozens of experts of various stripes fighting for limited headline spaces. Just like in western media, this situation has led to much publicity seeklng tactics through shocking predictions.


On Apr 14 03:34 PM Sober Realist wrote:

> Mr. Gamble,
> An article I read today backs up everything you are saying. Here
> are some highlights:
>
> "Property prices in China are likely to halve over the next two years,
> a top government researcher has predicted in a powerful signal that
> the country’s economic downturn faces further challenges despite
> recent positive data.
> Cao Jianhai, professor at the Chinese Academy of Social Sciences,
> a leading government think tank, said an apparent rebound in the
> property market was unsustainable over the medium term and being
> driven by a flood of liquidity and fraudulent activity rather than
> real demand.
> He told the Financial Times he expected average urban residential
> property prices to fall by 40 to 50 per cent over the next two years
> from their levels at the end of 2008.
> “Prices may not fall in the near term but I expect a collapse starting
> next year, followed by many years of stagnation,” said Mr Cao, known
> as one of the “three swordsmen” of the real estate market because
> of his influence as an official economist.
> Real estate agents in the residential property bellwether of Shanghai
> said the market seemed to have bottomed out as a result of government
> stimulus measures, falling prices and pent-up demand from owner-occupiers.
>
> But Mr Cao said preliminary government investigations had turned
> up numerous examples of real estate developers using fake mortgages
> to offload apartments on to the books of state-run banks facing enormous
> pressure from Beijing to rapidly increase lending to boost the economy.
>
> Sales are also being driven by real pent-up demand from urban citizens,
> but Mr Cao said many were jumping into a false rebound because they
> had never seen house prices drop before."
>
> www.ft.com/cms/s/0/9a3...
>
>
>
>
>
>

China Wants to Transfer Currency Risk Back to the U.S.

Excellent explanations. The problem is since the US is unlikely to accept this proposal voluntarily, China will NOT be able to transfer the currency risk back to the US unless they resort to a buyer's strike, an unlikely event.

So these are all politically posturing in the midst of intense behind-the-scene negotiations about the amount and the terms of changes in IMF and Chinese (and other cash-rich but powerless-in-IMF countries) contributions to the US-controlled organization.

Geithner on Yuan: Misstep or Warning Shot?

If this was intended to be a warning shot, it worked wonderfully.

Given global media and market responses to Geithner's comments, it is clear the world is watching Obama's administrations potential missteps very nervously. We are in the midst of a US Treasury bubble which smart monies are already betting against. The nervousness of the market shows that the Treasuries are in a very delicate situation. Any signn that the Chinese will retaliate could cause a big sell off of the Treasuries.

I have been adding to short positions agaisnt mid and long term Treasuries expecting big rewards in one to two years, but it seems the potentials for big short-term gains on my short positions is increasing very quickly.

Good job, Tim.

Geithner on Yuan: Misstep or Warning Shot?

Chubese currebcy appreciation will help some other Asian countries a great deal, Vietnam, Cambodia, India, Bangladesh will be happy to pick up a lot of the low end manufacturing, none of those low-pay, polluting jobs will be coming back to the US, as those politician would like you to believe.

On Jan 23 11:04 AM lonestar1 wrote:

> Can anybody explain to me how Chinese currency appreciation would
> benefit US economically in any particular area? A thorough analysis
> would show NONE. 40% appreciation WILL NOT help US to rebuild manufacturing
> sector, while $ may spiral down.
>
> The currency fight is an issue both sides will lose badly on eocnomic
> terms. You have to wonder why politicians keep pedalling this. <br/>

Main U.S. Creditors Rub Shoulders

The author is reading way too much in a meeting like this one.

The meeting has been initiated by South Korea. What for? Korea, which traditionally adopts a riskier, high growth strategy and China and Japan, has been in a crisis in recent months, seeging the deep drop in the Korean Won and its currency reserve. The urgent objective of this meeting is really a call for help from South Korea's two bigger neighbors.

At a time of financial nuclear winter, it is natural for neighbors to get closer to draw some mutual support, and share some notes about their biggest common concern, their biggest common customer and common debtor, USA.

All three company is seeking very pragmatic things: world economic stability, increased voting power conssitiant with their rising economic contributions, but NOT a new world order.