Category Archives: China
Apparently I’m not the only one to notice Ben Bernanke’s comment last week where he indicated the chances of more QE (after QE2) are dropping because the trade off with inflation is “getting less attractive”. The Economist April 30th 2011 issue pointed this out too. 1Q earnings season is mostly complete (435 of 500 done). As expected, earnings have been strong. In fact, the only quarter […] Read the rest of this entry
• German central banker Axel Weber announced he will quit the post at the end of April. Mr. Weber was highly critical of the Fed’s QE and irresponsible spending by PIIGS countries. He was also the person most likely to assume the role of the European Central Bank later this year — arguably the most important role in the European financial system. His departure, […] Read the rest of this entry
The US Treasury released data on November bond sales. China sold $11B in US Tbonds that month, leaving them with $895B of our Tbonds ($1T if you include Hong Kong’s reserves as well). Russia sold $9B, leaving them with $122B. We won’t hit the panic button yet. That was just 1 month. Apparently Caribbean banking centers (home to a lot of hedge funds) saw US Tbond positions rise […] Read the rest of this entry
Looks like the Santa rally is coming to a close. Tomorrow, markets will be open. They’ll treat the most recent interest rate rise in China like a lump of coal in their Christmas stocking. This will be the second time this month the PBOC has taken an action to drain liquidity from the banking system. This time it came in the form of raising […] Read the rest of this entry
It is a pretty good bet that the European banking system will melt down in the first half of 2011. That is unless someone with a pot of cash can ride to their rescue. Enter China… • China will trade roughly $0.5T with the EU this year. More than anywhere else. • in the past few months, Chinese officials toured Europe and spent a […] Read the rest of this entry
Modern cars are equipped with airbags and ABS brakes as standard features. The ABS system helps us maintain control of the car under heavy braking, and the airbag helps reduce the damage to the most important part (the occupants) when collision occurs. It is clear that Chinese authorities are searching for an effective ABS system in the form of short term interest rate hikes […] Read the rest of this entry
When people consider investment opportunities in Asia, China is frequently at the top of the list. Those not paying attention to Japan’s debt and demographics may additionally be attracted to Japan. But India does not usually come up until 3rd, 4th or 5th position. I have written extensively about Japan over the previous few years –about why it is an accident waiting to happen — so […] Read the rest of this entry
China has been a place where we’ve invested in the past, and it will likely be a place where we invest in the future. But right now, I think the downside risk outweighs the upside potential in the near to intermediate timeframe. There are 3 core areas of concern: Banking & Finance: In 2008 & 2009, the central Chinese government told Chinese banks to […] Read the rest of this entry
The last time we had strong signals from the Chinese central government regarding a link between banking and stock markets, we sold our China ETF and then watched the Chinese stock market lose 60% of its value. That was 2007-2008. What’s got the Chinese spooked now is a warning for banks to tighten their lending practices further. Data Chinese banks have sprayed money around […] Read the rest of this entry
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