October 01, 2010
China Moves Towards Credit Default Swaps
Two significant reforms underway this week in China: Beijing approved expanding Shanghai's interbank market to a "National Interbank Loan Trading System" with 21 big banks signed up for interbank lending and word in Lujiazui is that real Credit Default Swaps are coming. And Reuters reports today that short-term commercial paper will be traded in the interbank market creating a new vehicle for short term financing and away from dependence on bank lending.
Bank lending has expanded enormously in China in answer to the Panic of '08. Today over 45 trillion Yuan or $6.8 trillion US dollars in bank lending are outstanding a number not far off that in the USA....
Labels: banking, financial news, money, panic of 2008
October 13, 2009
One Third of China's Super Rich Are Communist Party Members
The annual Hurun Report of the The Richest People In China is out and shows that China is second only to the USA in the number of billionaires (130). China has more than three times the number of super rich than Russia and five times as many as India. Of the 1,000 citizens on the list around 1/3 are members of the Chinese Communist Party....
Labels: economic impact, money
December 15, 2008
As Economy Slows China Speeds Financial Reforms
A noted Chinese economist forecasts economic growth declining in China to the third quarter of 2009.
Over the weekend China's all-powerful State Council released a series of reform measures to the country's financial system.
The headline grabber is an increase of M2 money supply of 17% next year but more important are some rule changes that could boost the Shanghai and ShenZhen stock markets:
New futures in steel and grain
A big push for corporate bonds particularly of companies in infrastructure building and supply. For example, insurance companies are encouraged to invest in such bonds and banks will be allowed to buy and sell bonds offfered on the exchanges.
Creation of Real Estate Investment Trusts (REIT) on a trial basis.
And further reform of the Yuan including trade settlement in Yuan with neighboring countries.
Morgan Stanley in Hong Kong believes the actions taken to date by Beijing will be enough to keep China out of recession but plenty of risks remain.
Labels: financial crisis, money, panic of 2008, yuan
November 26, 2008
China Rate Cut Boosts Commodities
The Chinese central bank cut interest rates over 1% today in a surprisingly strong move that partly accounted for rescuing the price of oil, copper, and other traded commodities. In related news Bosai Minerals, a privately owned Chinese mining conglomerate, announced a deal to build a $1 billion (US Dollars) aluminum oxide plant in Guyana.
Labels: banking, foreign trade, money, panic of 2008
October 10, 2008
G7 Puffery Won't Fix Financial Mess
Speaking on Italian televison, the Finance Minister of Italy said the current proposal being discussed by the G7 emergency summit in Washington changes nothing and Italy won't sign on.
The Panic of '08 is not isolated to the Atlantic Alliance. Washington and New York big wigs need to put down their worn out copies of Churchill's memoirs, stop listening to Henry Kissinger, and bring China to the table. It is apparent that Europe cannot operate as a group. France is busy courting Russia, Germany embittered, and Italy in a tantrum. The EU can't function as one.
Carlos Slim Helu, alternately the richest man in the world, asks why China isn't buying up American assets. Many others are calling for coordination with China on the global financial meltdown. Here's a good summary.
Labels: financial crisis, money, panic of 2008
September 18, 2008
Will China Rescue Morgan Stanley?
Already the China Investment Corp., China's sovereign wealth fund, owns close to 10% of Morgan Stanley. The latest speculation is a bigger investment maybe even a partial take over is in the works.
Labels: china, money, morgan stanley, sovereign wealth fund, swf
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