huangthomas

In the Year of the Ox, Will Things Be Bullish for FXI?

Big Mac Theory? Does anyone find beef patty in hamburger in China. I ask for it, but I only get pork, not beef.

In the Year of the Ox, Will Things Be Bullish for FXI?

GDP is adjusted for inflation already. World Bank data not only adjusted for inflation but also adjusted for PPP (purchasing power parity).

Taiwan is not an emerging economy anymore. It is a developed economy, It is elevated to the current status with South Korea.

Banks in FXI are all large solid state owned entities. Only Bank of China has $5 to 10 billion CDO. They are all healthy. I would not worried about Chinese banks.

How International Finance Affects Emerging Markets

According to HSBC, Chinese Banks' exposure to subprime CDO is ~10 billion. Let's try harder to export our "toxic brew" to China. A word of caution to American "expert" of China: Don't live in Beijing for too long. The air may not be good for your health or judgement.

How International Finance Affects Emerging Markets

I found it amusing to compare Chinese banks with Mexican banks because they are all in "emerging markets bank" category. Chinese banks are government owned monopoly. Consider:
1. For all practical purposes, there are no private banks in China. Banks in China are government-owned monopolies.
2. Government set the uniform interest rate paid to the savers. Six month ago, it was 2.5%.
3. Chinese government has foreign exchange control. Only government banks can turn around and lend out in American market for 5.5-6.0% interest rate (6 month ago). How can banks lose money when the spread is 3% of all Chinese saving in the banks?