huangthomas

Obama Does Little to Ease U.S.-China Economic Tensions

I still don't understand why Obama wants to go to China to be humiliated. He was served Chinese "cold dishes": 1) A carefully staged town hall meeting. 2) A censored press interview. A few pages are missing in the press release. 3) A lifeless joint press appearance with President Hu. Barack, please stay home. Your populist style and silver tongue can only go so far. There are no foreign markets for them, even with free trade, especially across the Pacific Ocean.

China Remains the Largest Foreign Holder of U.S. Treasuries

To be continued.

PetroChina: Potential Opportunity to Participate in China's Economic Recovery

PetroChina is a state-owned monopoly and carries a political risk of price control. When crude oil was at $150 a barrel, PetroChina was asked to sell petroleum products at a huge loss and had to beg for state subsidies. The share price tanked. For the foreseeable future of 2 to 3 years depending on the world economic recovery, I agree with the author that PetroChina is a good stoke to own.

Tongjitang Chinese Medicines Reports Another Bad Quarter

This is the time for investors to pause and examine how nascent Chinese health care reform will affect earning of drug companies. China just announced a standard formulary of more than 300 drugs and their fixed price. Any drugs outside of the formulary may not be reimbursed by the health insurance programs. Chinese herbal medicine usually contain ingredients of western medicine but sell for less. It may have a competitive edge, but it is wise to wait a while to see how things evolve

China Currency Issue: A Red Herring

The author knows so little about politic, he must be a good economist. Chinese "market" is officially called "socialism" with Chinese characteristic or "Bird(market economy) in a cage(communist party)". The party will never set the bird free. Go back to foreign exchange issue. It is easier to tackle.

Why Is China Booming? Surprise, It’s Not the Stimulus

Yuppies and dinkies may be kicking up a lot of dusts, but the domestic consumption is hardly moved by the dusts alone. The smoke screen put up by the government is the "retail sell", or more correctly "goods left factories". The figure includes inventories, goverment purchasing as part of the stimulus package, which is 15% of GDP, and real private consumption. It is obvious that the stimulus package is the prime mover of the Chinese economy so far.

Why Warren Buffett Loves Wells Fargo

Following are direct quote from "Economist" Sept 24 2009:

But Wachovia also brings credit problems that could take years to resolve. A big worry is its range of “Pick-A-Pay” retail loans, which allowed borrowers to defer principal as well as interest payments: of those that were still current at the time of the merger, 3.2% were seriously delinquent as of June 30th, up from 1.1% in March. The default rate on the bank’s $38 billion of property-development loans is several times the national average (though Wells argues that the official numbers do not reflect merger-related adjustments). A big chunk of its $127 billion commercial-property portfolio consists of interest-only loans with a balloon payment at the end, the wholesale equivalent of Pick-A-Pays. These will be hard to refinance.

Another worry is the large amount of credit protection that Wachovia is thought to have sold on risky tranches of mortgage-backed securities. Wells points to its latest filing, which shows $105 billion of protection sold and a similar amount bought. But the extent to which the latter really offsets the former is unclear.

End of the quote

Why Warren Buffett Loves Wells Fargo

Economist September 24 on Wells Fargo:

But Wachovia also brings credit problems that could take years to resolve. A big worry is its range of “Pick-A-Pay” retail loans, which allowed borrowers to defer principal as well as interest payments: of those that were still current at the time of the merger, 3.2% were seriously delinquent as of June 30th, up from 1.1% in March. The default rate on the bank’s $38 billion of property-development loans is several times the national average (though Wells argues that the official numbers do not reflect merger-related adjustments). A big chunk of its $127 billion commercial-property portfolio consists of interest-only loans with a balloon payment at the end, the wholesale equivalent of Pick-A-Pays. These will be hard to refinance.

Another worry is the large amount of credit protection that Wachovia is thought to have sold on risky tranches of mortgage-backed securities. Wells points to its latest filing, which shows $105 billion of protection sold and a similar amount bought. But the extent to which the latter really offsets the former is unclear.

End of quote

Why Warren Buffett Loves Wells Fargo

Here is an excerpt from September 24 issue of Economist. The title is "Ready to Blow"
..................
But Wachovia also brings credit problems that could take years to resolve. A big worry is its range of “Pick-A-Pay” retail loans, which allowed borrowers to defer principal as well as interest payments: of those that were still current at the time of the merger, 3.2% were seriously delinquent as of June 30th, up from 1.1% in March. The default rate on the bank’s $38 billion of property-development loans is several times the national average (though Wells argues that the official numbers do not reflect merger-related adjustments). A big chunk of its $127 billion commercial-property portfolio consists of interest-only loans with a balloon payment at the end, the wholesale equivalent of Pick-A-Pays. These will be hard to refinance.

Another worry is the large amount of credit protection that Wachovia is thought to have sold on risky tranches of mortgage-backed securities. Wells points to its latest filing, which shows $105 billion of protection sold and a similar amount bought. But the extent to which the latter really offsets the former is unclear.
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End of quote.

Why Warren Buffett Loves Wells Fargo

How come I received two thumb down just by asking questions? There must be something to hide regarding Wachovia and Wells Fargo. A few weeks ago, an article in "Economist" discussed the trouble Wells Fargo were in because of toxic assets from Wachovia. It took Wells Fargo 5 days to transfer cash from my account to another bank. It must be short of cash. Short of cash already?

Why Warren Buffett Loves Wells Fargo

Wow! I could not find the word "Wachovia", which Wells Fargo purchased at the end of 2008, through the article and discussion. What happened to the toxic assets of Wachovia and how they have been handled by Wells Fargo? Would someone help?

Two More Myths About Business in China

I want to make my criticism as transparent as possible, let me explain that "Anna move from Tokyo to Shanghai". Japanese sociologists describe the "Anna phenomenon" decades ago. The young single female get free loading of room and board from their parents and freely spending their income to promote their life style. The same phenomenon move from Tokyo to Shanghai or Beijing as the economy develops in China. I do not wish to impose any moral judgement to the life style, but I do call attention to the fact that the life style is not sustainable.

How about the unmarried single male? Well, they are not as lucky as single female. They have to consider three zi. They are fang-zi (house), che-zi (car) and ying-zi (silver ingot, which means money in China) before they can attract any niang-zi (young lady) to marry them. I don't really care how and how much money Anna make. It is simply a social phenomenon that we have to pay attention to.

Two More Myths About Business in China

The author has a tendency to use anecdotal evidence to generalize to the entire society. It is not a scientific study of the society, it is simply a story telling of subjective opinions. The story of Anna, she used to live in Tokyo, now move to Shanghai, is an example. How representative is she for Chinese? There are 800mill rural resident in China. They are completely forgotten by the author

Taiwan Pulls a Brazil

Yes, invest in Taiwan. Export account for 70% of GDP of Taiwan. As the world economy recovering from financial crisis, Taiwan will be the first beneficiary. Taiwan manufactures 80% of components used in personal computers and is a major exporter of flat panel TV display in the world. Don't mess around with foreign currency exchange. The Central Bank governor Peng is a very aggressive trader and can slaughter all currency players.

China's Improbable Economic Growth Figures

A healthy dose of skepticism is required to read Chinese official economic data, which is loaded with inconsistency.