Sad ide nastavak sage, ko je u stvari Bernanke :
Pf, ovo čak nije ni daleko - toliko razoružam protivnika, da on prosto mora da pređe u teme Scandalčeta.
Izgube se u ekonomiji, pa ono.
Nego to se sve objedini na finjaka
Soros favors US monetary policy, warns of "currency war" -CNBC
Published: Thursday, 24 Jan 2013 | 5:11 PM
George Soros: European Banking System Revived
Billionaire investor George Soros, provides perspective on Europe's banking crisis, U.S. debt and when he expects to see a spike in interest rates, with CNBC's Maria Bartiromo. The euro is transforming the European Union into something very different, he says.
NEW YORK, Jan 24 (Reuters) - Billionaire investor George Soros said on Thursday that he favors U.S. monetary easing policy, but warned of a "currency war" because of differences in how countries manage national deficits.
"I think the policy, basically, pioneered by Bernanke is actually the right policy," Soros told CNBC in an interview from Davos, Switzerland.
Soros was referring to the monetary easing policy of the U.S. Federal Reserve and its chairman, Ben Bernanke, of buying $85 billion in Treasury and agency mortgage securities per month.
Soros warned, however, that Germany's belief in tackling deficits through austerity clashes with other nations' preference for monetary easing, and could spur a "currency war."
"I think the biggest danger is actually, potentially, a currency war," Soros said.
"The rest of the world follows a different recipe from the Germans. Germans believe in austerity, and the rest of the world believes in quantitative easing," Soros added.
E, eno je Jovanka na Zvezdama Grandama, vozi bicikli.
A tek Greenspan, nobelovac
A koga je SiogaDjurica citirao kao kredibilan izvor:
Kažem, neuspešno ti ide, ustvari pokopavaš sam sebe.
Znaš već fazonče - nisam za Obamu, bullish sam na USA, pa valjda kapiraš koliko si promašio usled mog uragana i pobegao u oblast novi broj Scandala.
Zanimljivo, Kina je prva u obe kategorije, mada ovo nikog ne iznenadjuje
Nemačka je već godinama SCI market broj #1, pf, opet nisi bio ni blizu, ništa novo, ne zadovoljavamo se mrvicama
A sad da vidimo kompletan market, gde će Kini trebati aprox. 100 godina da stigne USA kao najveći market sveta
Pf, šteta samo što tih 100 godina neće doživeti
Ali dobro ni četvrto mesto nije loše
mada ovo nikog ne iznenadjuje
Nego da Jimmy nastavi sa brutalom, onako konkretnim stvarima, kidaju kao i uvek, naravno paradigmatično
China's bubble will burst - and take Asia with it, says Jim Chanos
By James McKeigue Feb 17, 2011
Comments (6) Print this article
"China is heading for a fall", says Jim Chanos - and it "will take Asia and resource economies like Australia and Brazil with it".
Chanos, the short seller who predicted the collapse of both Enron and the US housing market, believes the Chinese property boom is a bubble that will eventually burst. Speaking to CNBC, he says: "The property crash in China will be worse than it was in America or the UK."
He notes that "real estate values compared to GDP are like Japan in 1989 or Ireland in 2007", and that "construction accounts for 70% of Chinese GDP". Debt is "spiralling upwards" and there is "$4 of credit for every dollar of GDP growth".
Many investors seem unworried because they assume that "the Chinese government can do what it wants. This is a "misconception" - when the crash comes the government will not be able to stop it.
Chanos, the founder and president of Kynikos Associates hedge fund, first made the call to short China last year and admits that it is difficult "to get the timing exact... The catalysts are obvious afterwards but not so easy to spot at the time." He first began shorting the US housing market in 2005 and notes that the "turning point" came when "the cranes stopped multiplying and construction slowed".
So he is prepared to wait on China. In any case, "so far it has been a good trade. China might not have collapsed but equities were down 20% in 2010".
Chanos, who has used satellite images from Google Earth to highlight Chinese "ghost cities", has been criticised by some fund managers for never visiting China. But he thinks "being on the ground is overrated. In fact, people in China get bamboozled the other way. They see lots of activity and think things are booming... But if that isn't economic activity, you're going to have a problem, no matter how good it looks. People should spend more time studying the numbers."
Naravno naša dobra stara poznata kuhinja i dalje sabija
Is China faking economic stats?
HONG KONG – As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.
KEITH BRADSHER; The New York Times
Published: June 23, 2012 at 12:05 a.m. PDT
HONG KONG – As the Chinese economy continues to sputter, prominent corporate executives in China and Western economists say there is evidence that local and provincial officials are falsifying economic statistics to disguise the true depth of the troubles.
Record-setting mountains of excess coal have accumulated at the country’s biggest storage areas because power plants are burning less coal in the face of tumbling electricity demand. But local and provincial government officials have forced plant managers not to report to Beijing the full extent of the slowdown, power sector executives said.
Electricity production and consumption are considered a telltale sign of a variety of economic activity. They’re viewed by foreign investors and even some Chinese officials as the gold standard for measuring what is really happening in the country’s economy, because the gathering and reporting of data in China isn’t considered as reliable as it is in many countries.
Indeed, officials in some cities and provinces are also overstating economic output, corporate revenue, corporate profits and tax receipts, the corporate executives and economists said. The officials do so by urging businesses to keep separate sets of books, showing improving business results and tax payments that do not exist.
The executives and economists roughly estimated that the effect of the inaccurate statistics was to falsely inflate a variety of indicators by 1 or 2 percentage points. That may be enough to make very bad economic news look merely bad.
The executives and economists requested anonymity for fear of jeopardizing their relationship with the Chinese authorities, on whom they depend for data and business deals. The National Bureau of Statistics, the government agency in Beijing that compiles most of the country’s economic statistics, denied that data is overstated.
Some still express confidence in the official statistics. Mark Mobius, executive chairman of Templeton Emerging Markets Group, cited the reported electricity figures when he expressed skepticism that the Chinese economy had real difficulties. “I don’t think the economic activity is that bad – just look at the electricity production,” he said.
But an economist with ties to the agency said officials had begun making inquiries about the authenticity of some data after detecting signs that electricity numbers may have been overstated.
Questions about the quality and accuracy of Chinese economic data are longstanding, but the concerns now being raised are unusual. This year is the first time since 1989 that a sharp economic slowdown has coincided with the once-a-decade changeover in the country’s top leadership.
Officials at all levels of government, from provincial party secretaries down to county administrators, are under enormous pressure to report good economic results to Beijing as they wait for promotions, demotions and transfers to cascade down from Beijing.
A top corporate executive in China with access to electricity grid data from two provinces in east-central China that are centers of heavy industry, Shandong and Jiangsu, said electricity consumption in both provinces had dropped more than 10 percent in May from a year earlier.
Rohan Kendall, the senior analyst for Asian coal at Wood Mackenzie, the global energy consulting firm, said that coal stockpiled at Qinhuangdao port had reached 9.5 million tons this month, as coal arrives on trains faster than it is needed by power plants in southern China.
Au, pa strašno, ja mislim da će posle ovoga Kina biti poslednja komunistička zemlja - u istoriji.
Ono što se tamo bude dogodilo, a biće nešto jako bezobrazno, ima da izdresira svakog komunistu da čim pomisli na fotelju - odmah se seti Armagedona u Kini.
A sad da pređemo na malo detaljisanja i zašto nam Kinica štampa bezumno lovicu-momicu
China Economy: Debts
7 March, 2012, 16:35
Real estate bubble seems to be invariably tied to debt. It is almost as if you could not have any real estate bubble without debt. In China’s case, however households debts are probably relatively small as (especially after the Chinese government tried to curb home prices) it is difficult for households to borrow to buy properties. Thus this has been one of the major bulls’ arguments on why the real estate market of China is not a bubble. However, for a number of times, I have been pointing out that real estate developers in China are quite highly indebted, thus I have correctly predicted that it would be struggling real estate developers who would start offering flats at lower prices, setting up for the burst of the bubble. Besides that, government’s finance may not be as good as it seems.
More than anyone would know
The truth about the debt problem in China is that no one really knows the truth, and just because households’ balance sheets appear healthy does not mean that there is no debt problem, and that by no means suggests that real estate bubble can’t burst, or that there is no real estate bubble at all.
Since the 2008 financial crisis, the Chinese government has pledged to put in RMB4 trillion to stimulate the economy. The size of the Chinese economy at the time was roughly RMB40 trillion, so the stimulus was more than 10% of the economy. The Chinese government has basically encouraged banks to lend as much as possible (just like old time), and allowed local government to borrow as much as they wish through the local government financial vehicles (LGFVs), which is the centre of the first big debt problem in China.
To stimulate the economy, these local governments got their funding from state-owned banks through LGFVs and started investing, mainly in infrastructure and others. At the time when the developed world was still trying to get banks to lend, banks in China have already lent billions and trillions of RMB. It sounded like something pretty enviable, but the potential threats of such lending spree only surfaces recently.
Professor Victor Shih was among the first to raise the question on the practice of LGFVs borrowing. He first estimated that by the end of 2009 there was RMB11.4 trillion of LGFVs debt, with additional 12.8 trillion credit lines. That figure was shockingly large at the time, but it only raised the eyebrows of very few people, and even the government had very little clue on the matter. It wasn’t until earlier this year when 3 government agencies audited the debt and come up with 3 completely different estimates. As it turns out, the estimate by Prof. Victor Shih was pretty near it.
The highest end of the estimate is from the People’s Bank of China (PBOC), of which they later denied such an interpretation of the number. In the 2010 China Regional Financial Operation Report, they suggested that overall banks’ lending in different regions to LGFVs did not exceed 30% by the end of 2010. Based on the total loans outstanding of Chinese banks by the end of 2010, the upper limit of LGFVs borrowing would have reached RMB14.4 trillion. But to be fair, it could mean that there were no banks in the entire country which lend more than 30% to LGFVs, which meant banks in some regions can be lower than that. The second estimate was by the CBRC, which came up with the number RMB 9.1 trillion. Finally, the National Audit Office’s estimate was RMB4.97 trillion, which I believed was an understatement. However, the National Audit Office figures also told us that there are other kinds of debts outstanding which are not LGFVs debts, and non-LGFVs debts amounted to RMB5.746 trillion.
No one really knows how much loans there are in reality, and even government agencies couldn’t settle. The definitions of those loans in different reports also make things less comparable. Thus, if one would like to be optimistic, the LGFVs debts along with other local government debts would amount to RMB12-13 trillion range. If one would like to be more conservative (i.e. more pessimistic), the higher end would be closer to RMB20 trillion. At the higher end, the local government debt-to-total-GDP ratio would be about 50% of 2010′s GDP.
So what these LGFVs are supposed to do in order to repay its debt? Local governments sell land to property developers. As the real estate market boomed, property developers were more than willing to bid up the price of prime spots, thus these governments are able to raise money to repay its debt.
On top of looking at government debts, which should actually be closer to 100%, we could also gauge the leverage in the system regardless of what type of debts they are – whether they are to the governmental entities or not. Below is a quick comparison between China and the US in terms of bank credits, bank assets, and money supply. As you can see, all of those measures in China exceeded similar measures in the US. Of course it is not completely comparable as China does not have a significant bond market yet, while many of large US corporations raise debts financing from the bond market. It nevertheless gives an idea that China has a lot of debts within the economy. Certainly there are more debts than people who think Chinese like to save can ever imagine.
Monetary tightening and that shadow banking system boom
While households in China have relatively strong balance sheets (at least it appears so on the surface anyway), that is not the case for many real estate developers, as some of the fund raising in the debt market early this year and last year has shown. The effect of massive fiscal stimulus and ultra-loose monetary policy was high inflation. Not surprisingly, this self-inflicting “credit crunch”, while necessary as far as inflation and real estate bubble is concerned, creates some problems for local governments, real estate developers, and small businesses.
Real estate developers, as pointed, are quite leveraged. With tightening in-place, developers have been finding it difficult to obtain financing. Some bigger names have been able to raise money from the Hong Kong debt market at very high coupon rates, and these bonds have been sold-off. Smaller names, however, would not have that luxury of getting any funding.
As real estate market cools, local governments are also raising less money from land sales as developers are becoming less keen to bid up prices. So as these LGFVs debts come due in the years to come, it will not be surprising to see some defaults of LGFVs as the returns on their investments are low. In fact, some have already attempted to default, previous mentioned here and here. To avoid downright defaults, the government has basically resort to the old tactics that Japan has been trying out after the burst of Japan’s own real estate bubble: it asked banks to roll-over loans.
The side-effect of credit tightening last year, perhaps somewhat unexpectedly, was the growth of the shadow banking system, which has been outside of the formal banking system, thus not much regulated and not well understood.
The components of the shadow banking system includes trust loans, which are how many real estate developers get financing as banks are less willing to lend to the real estate sector. It also includes the underground/informal lending, which offers loans to businesses, primarily small and medium businesses. The reason why these businesses are unable to get funding is that banks have preferred to lend to state-owned companies as credit is tightened. As a result, these small businesses are forced to get loans from these underground channels, which often charge 20% or more in interest. Some of these businesses are also involved in real estate market speculations in hope to make a quick buck to repay the debt. Unfortunately, things are turning against them.
Another interesting bit is on the sources of fund. Some of the funding of these shadow banking are from depositors, who have been apparently quite unhappy about the low rate of return on bank deposits. Banks themselves have been packaging high-yield retail products, which were probably lent to real estate developers. Some funding of the underground lending might be from banks, so some people who can still obtain loans from banks have managed to re-lend the money at even higher interest rates. Some state-owned enterprises have also been involved in the shadow banking system lending.
There is little concrete statistics of how large the shadow banking system has become. Société Générale, for instance, estimated that the entire shadow banking system was RMB14-15 trillion large, of which 3.95 trillion is in entrusted loans, 1.49 trillion is in trust loans, 5.26 trillion is in bank acceptance bill, and 3-4 trillion is in underground lending. Thus on top the 20 trillion mystery of LGFVs debt, we have another 14-15 trillion mystery of the shadow banking system.
It might be tempted to think that the Chinese government has very little debt as the official number (~26%) would have led you to believe. Adding the local government debts (especially if you choose to pick the pessimistic case, which is 50% of GDP), Ministry of Railways (5%), policy banks (12%), asset management companies (4%), etc, the debt-to-GDP ratio would be close to 90%. Given the size of the state-owned sector in the economy, and assuming that the debts owed by state-owned enterprises are ultimately the obligation of the government, one can argue even argue that the public sector debt-to-GDP ratio on a consolidated basis could reach more than 200%.
The table below lists out some of the estimates of debts which are ultimately obligations of the government. Note that some of the figures below, while latest available, are not all for 2011 year-end, thus there is likely a slight understatement.
Debt deflation? Or just massive roll-over and over and over?
In a capitalist economy, a private entity would try to get more cash to reduce debt during economic uncertainties. A private entity (let us assume it is an individual for the moment) would probably sell assets to raise cash if it is desperate to reduce debt. If everyone is doing the same, collective selling of assets will drive asset prices lower, making more entities facing financial troubles, and more entities will have to sell assets to stay liquid.
The banking system creates money by extending credit. When one entity decided to repay its debt, money is extinguished by the action of repayment of debt. In normal time, it is alright for the economy as it is quite likely that someone else would borrow money to make up the fall in credit as debts are being repaid, so the overall money supply would be maintained. However, in a situation where debt has become unsustainable for the economy as a whole, most people would be selling assets and repaying debt (or going bankrupt). These actions would reduce money supply, and hence general price level. Because debt level became unsustainable, borrowing would be weak. The only possible way to counter the contraction would need central bank to create money, such that the purchasing power of money could be maintained, not increasing.
Of course, a central bank under a fiat currency regime (as the People’s Bank of China is, and particularly as it is not that independent) can create as much money as it wishes if it does not care about the long-term consequence. That may give optimists an illusion that the PBOC can manipulate the economy or the real estate market, the illusion that the Chinese government can stop the fall of real estate prices at 20-30% and let them stabilise, the likelihood of reality operating in that manner is next to impossible. When one asset bubble went bust, that asset wouldn’t come back strong easily. American house prices, for example, have not bounced back even with two rounds of quantitative easing. So did the burst of dot-com bubble, real estate bubbles in Asia in 1997, gold bubble in early 1980s, just to name few. They ended, and did not come back, sometimes for decades.
The coming burst of real estate bubble in China will not be stopped simply by printing money. It will just be the same. The central bank, however, does have the ability to print a lot of money such that purchasing power of each yuan can be maintained by countering the debt deflation spiral brought by the burst of bubble.
Chief Investment Officer, Investment Management Associates
China Bubble Today vs. Japan Bubble in the '80s
Posted: 04/30/2012 3:10 pm
I am back from San Francisco, where I had the great pleasure of attending and speaking at FAME Symposium, diligently put together by students at San Francisco University. One of the other speakers was a famous international investor, Charles De Vaulx. During a break Charles and I were discussing the Chinese bubble today vs. the Japanese bubble of the late '80s. This conversation got me thinking. In Japan the bubble was the most prominent in commercial real estate and to a lesser degree in residential real estate. The house-price-to-income ratio (just take the average house price and divide by average income) in Tokyo at the height of the bubble was nine, while in China in 2010, in the big cities this number was much greater (Beijing 15, Shanghai 13), and in fact the ratio for the whole of China was over eight. The commercial real estate bubble might have been greater in Japan; it is hard to tell. I remember reading that at the peak of the Japanese bubble the Imperial Palace was worth more than a state of California. But from different reports I've seen, China has plenty of empty skyscrapers.
But China also has a couple more bubbles, in industrial overcapacity and overinvestment in infrastructure. Japan did not have an infrastructure bubble, for several reasons: first, it was a more developed country than China. Second, the government played a much smaller role in the economy -- Japan did not have a command-control economy, and it did not try to build for social/political stability reasons. Japan had your garden variety real estate bubble: easy credit, inadequate banking laws, etc.
Also, and this point is hard to quantify, but the quality of Japanese construction is better than in China. There are many reasons for that: less corruption, no five-year plans (i.e., output-per-capita targets), and the Japanese put a higher value on human life. I remember reading an interview, just a few years ago (before the high-speed-train crash in China) with a Japanese high-speed-train executive. At the time the Chinese were showcasing their high-speed-train system and rubbing in Japanese faces the fact that their trains traveled at higher speeds. The Japanese executive said something along these lines: "Our systems are very similar, since the Chinese stole our high-speed railroad designs. We could run our trains at faster speeds, but we just don't think it's safe." Japan has a population of 130 million people, which is shrinking. China has over a billion people and its population is growing.
The quality of Chinese construction is horrible; you read stories of glass and masonry falling off of buildings, and the latest story was of a girl swallowed by capsized pavement. So they'll have to do a lot more rebuilding in the future, and thus their return on capital, which was already very low, will actually be even lower.
Japanese economy, despite government debt to GDP doubling, has been stuck in a rut for over two decades. Just saying...
If You Thought the 2008 Recession Was Bad, Wait Till China's Bubble Pops
by David Frum
Sep 13, 2012 11:00 AM EDT
In one of the most thought-provoking pieces I've read in a long time about China, a long-time British resident of that country, married to a Chinese woman, explains his decision to leave. Below is a long extract from a longer article. Trust me, you'll want to read the whole thing.
Social status, so important in Chinese culture and more so thanks to those 60 years of communism, is defined by the display of wealth. Cars, apartments, personal jewellery, clothing, pets: all must be new and shiny, and carry a famous foreign brand name. In the small rural village where we live I am not asked about my health or that of my family, I am asked how much money our small business is making, how much our car cost, our dog.
The trouble with money of course, and showing off how much you have, is that you upset the people who have very little. Hence the Party’s campaign to promote a “harmonious society,” its vast spending on urban and rural beautification projects, and reliance on the sale of “land rights” more than personal taxes.
Once you’ve purchased the necessary baubles, you’ll want to invest the rest somewhere safe, preferably with a decent return—all the more important because one day you will have to pay your own medical bills and pension, besides overseas school and college fees. But there is nowhere to put it except into property or under the mattress. The stock markets are rigged, the banks operate in a way that is non-commercial, and the yuan is still strictly non-convertible. While the privileged, powerful and well-connected transfer their wealth overseas via legally questionable channels, the remainder can only buy yet more apartments or thicker mattresses. The result is the biggest property bubble in history, which when it pops will sound like a thousand firework accidents.
In brief, Chinese property prices have rocketed; owning a home has become unaffordable for the young urban workers; and vast residential developments continue to be built across the country whose units are primarily sold as investments, not homes. If you own a property you are more than likely to own at least three. Many of our friends do. If you don’t own a property, you are stuck.
When the bubble pops, or in the remote chance that it deflates gradually, the wealth the Party gave the people will deflate too. The promise will have been broken. And there’ll still be the medical bills, pensions and school fees. The people will want their money back, or a say in their future, which amounts to a political voice. If they are denied, they will cease to be harmonious.
Meanwhile, what of the ethnic minorities and the factory workers, the people on whom it is more convenient for the government to dispense overwhelming force rather than largesse? If an outburst of ethnic or labour discontent coincides with the collapse of the property market, and you throw in a scandal like the melamine tainted milk of 2008, or a fatal train crash that shows up massive, high level corruption, as in Wenzhou in 2011, and suddenly the harmonious society is likely to become a chorus of discontent.
How will the Party deal with that? How will it lead?
Unfortunately it has forgotten. The government is so scared of the people it prefers not to lead them.
In rural China, village level decisions that require higher authorisation are passed up the chain of command, sometimes all the way to Beijing, and returned with the note attached: “You decide.” The Party only steps to the fore where its power or personal wealth is under direct threat. The country is ruled from behind closed doors, a building without an address or a telephone number. The people in that building do not allow the leaders they appoint to actually lead. Witness Grandpa Wen, the nickname for the current, soon to be outgoing, prime minister. He is either a puppet and a clever bluff, or a man who genuinely wants to do the right thing. His proposals for reform (aired in a 2010 interview on CNN, censored within China) are good, but he will never be able to enact them, and he knows it.
Av, av, av
Edited by JimmyM, 29 January 2013 - 23:40.