Janice16

What Increased U.S. Savings Means for China

LCACM, I am afraid there is absolutely no empirical evidence that i have ever seen that suggests that credit bubbles vary systematically according to a country's land mass, population or access to natural resources, and given the very long history of financial crises I would be pretty surprised if any such evidence were to turn up. Similar types of financial crises have occurred in countries with both larger and smaller land masses than China and Japan, in countries with populations much smaller than either, in countries with both more dense and less dense population distributions, and in countries that are richer and poorer. They have also occurred throughout history, with the first well-recorded one taking place in 33 a.d. in ancient Rome. It is not enough to acknowledge that since two countries vary by random factor X that they cannot share possibly experiences.

China: Debt Is Up, Trade Is Down

I've seen other of his comments and I am pretty sure that if Pettis had said that the Chinese banks had lots of equity Coreopsis would have attacked him just as viciously. I think he is just a stalker obsessed with Pettis as a way of getting close to someone famous. No need to take his comments seriously, and most other commenters don't.

By the way, Pettis is right that except for the Big 4 most Chinese banks depend heavily on purchased funds becasue their deposit bases aren't big enough. That is why whenever money market rates rise they complain so much. I wouldn't expect most people to know this, but if Coreopsis is as much of a China banking expert as he claims he should have known that.

China: Debt Is Up, Trade Is Down

Actually Coreopsis, for someone as certain and rude as you one would expect some accuracy. Most independent analysts believe that Chinese banks have very little, or even negative, capital if the loan book is correctly accounted for. Even the PBoC has publicly worried about insufficient capital. No one except you and perhaps the journalists who report the government position believes that Chinese banks are underpinned by enormous levels of equity. That is merely stupid. If you have ever spoken to bankers here it wouldn't take long to discover this. Also it was the dormouse, not the Mad Hatter, that they tried to put into the teapot, and not the teacup.