Let’s just see how “safe” those investments in China are….

[Coronita]

Well I've been saying that investing in China is highly speculative, with RE investing even more absurd than here in the states. Well, perhaps this is the start of a crack in the Chinese economy. I'm just wondering what other things have been swept under the carpet until now…

If things are starting to show just because of the subprime here in the U.S., I can't wait to see what happens once the domestic real estate in China starts to sag. I'm guessing what is considerably worse in china is that they probably took the  packaged securities from the U.S. ,treated them as guarenteed loans, and underwrote their own dodging debt for the local RE market…Only time will tell…

I'm curious how well the Chinese economy will handle a meltdown if it happens, as there is very little regulation, rules,etc. Frankly, they've been paving a road as the go along, so it will be interesting to see how things unravel.

 

 

Chinese Bank Shares Fall Sharply on Reports Lenders Facing Possible Subprime Writedowns

BEIJING (AP) — Shares in China's banks fell sharply Monday after news reports said its No. 2 lender, Bank of China, might write down holdings of U.S. mortgage securities and two others increased reserves for possible losses.

The reports were the first indication that Chinese lenders, which have so far avoided damage from the U.S. credit crisis, might face problems due to their holdings of subprime securities.

Also Monday, China's banking regulator warned that lenders might face risks from fluctuations in fast-rising real estate prices.

Bank of China is expected to announce a "significant writedown" on its $7.95 billion in U.S. subprime mortgage securities, Hong Kong's South China Morning Post newspaper reported, citing unidentified sources.

Bank of China spokesman Wang Jianping declined to comment. He said the bank would release details of its assets in late March when it announces annual earnings.

Bank of China shares fell 4.1 percent in Shanghai market and by 6.4 percent in Hong Kong. China's biggest banks are listed in both cities, with shares in Shanghai off-limits to most foreign investors, while Hong Kong is open to global traders.

The fall in bank stocks helped to drive overall market declines in both cities, with Shanghai's main index sinking 5.1 percent and Hong Kong plunging 5.5 percent — its biggest percentage drop since 2001.

"The subprime woes in the U.S. have raised concerns at home about risks in the domestic mortgage market and prompted selling in banking and real estate companies," said Wang Junqing, an analyst at Guosen Securities in Shanghai.

Bank of China, China's biggest owner of subprime mortgage securities, said in October they were 3.05 percent of its total holdings. The bank said it had set aside $473 million for potential writedowns.

Bank of China reported profits of 15.9 billion yuan ($2.12 billion) for the July-September quarter, up 23 percent from the same period of 2006. It says it has more than 5.8 trillion yuan ($775 billion) in assets.

Two other major lenders, Industrial & Commercial Bank of China and China Construction Bank, are increasing reserves for possible writedowns on subprime mortgage holdings, the respected Chinese business magazine Caijing reported.

ICBC, China's biggest commercial lender, raised reserves to cover 30 percent of its subprime holdings, while Construction Bank's reserves covered 40 percent of its holdings, the magazine said, without citing sources.

The two banks' subprime holdings are much smaller than those of Bank of China, at about $1 billion each, and writedowns should not affect their profits, the magazine said.

Phone calls on Monday to the press and investor relations offices at both ICBC and Construction Bank were not answered.

ICBC shares fell by 7.8 percent in Hong Kong and 3.8 percent in Shanghai, while Construction Bank was down 6.4 percent in Shanghai and 4.1 percent in Hong Kong.

China's banks have seen revenues and profits soar in recent years, driven by a fast-growing economy and rising real estate prices.

But the country's industry regulator warned in a report released Monday that they might face higher risks from fluctuating real estate prices and financial conditions.

"Property market price fluctuation possibly could increase credit risks facing the banking industry," said Jiang Dingzhi, vice chairman of the China Banking Regulatory Commission, said in a report on the agency's Web site.

Jiang gave no details but called on banks to improve risk management.

Chinese regulators have raised interest rates repeatedly over the past year and tightened lending standards in an effort to cool a boom in investment in real estate and other assets. They have warned repeatedly that runaway spending could lead to a debt crisis if investors in ill-conceived plans default on loans.

Bank of China: http://www.boc.cn

Industrial & Commercial Bank of China: http://www.icbc.com.cn

China Construction Bank: http://www.ccb.com.cn

China Banking Regulatory Commission: http://www.cbrc.gov.cn

 

[Coronita]

..and as such, you won't find a bank representative talk, especially since the banks are still somewhat tied to a state run agency.

 Despite how screwed up things are here in the States, just remember, things can be screwed up a heck of a lot more overseas.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

..and as such, you won't find a bank representative talk, especially since the banks are still somewhat tied to a state run agency.

 Despite how screwed up things are here in the States, just remember, things can be screwed up a heck of a lot more overseas.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

..and as such, you won't find a bank representative talk, especially since the banks are still somewhat tied to a state run agency.

 Despite how screwed up things are here in the States, just remember, things can be screwed up a heck of a lot more overseas.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

..and as such, you won't find a bank representative talk, especially since the banks are still somewhat tied to a state run agency.

 Despite how screwed up things are here in the States, just remember, things can be screwed up a heck of a lot more overseas.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[Coronita]

..and as such, you won't find a bank representative talk, especially since the banks are still somewhat tied to a state run agency.

 Despite how screwed up things are here in the States, just remember, things can be screwed up a heck of a lot more overseas.

[img_assist|nid=5962|title=selfportrait|desc=|link=node|align=left|width=100|height=80]

—– Sour grapes for everyone!

[nostradamus]

China’s market is directly tied to the markets of her two largest exportees: the U.S. and Japan. At the same time, China has a huge domestic consumer market which is rapidly growing in terms of wealth and income. The decline of western civilization will serve as a catalyst for a shifted focus to domestic markets, a switch to a gold-backed RMB, and a decoupling from the dollar and yen. I wouldn’t want to hold Chinese securities at the moment but I’m keeping my eyes on them for future long-term growth.

[stockstradr]

The Shanghai exchange moved up like a rocket from ~1000 points up to 6000 points in only a few years, and has since fallen about a thousand points in a few months.

The Asia markets will crash and burn. It will be very ugly.

[Allan from Fallbrook]

stockstradr: Wow. All of Asia encapsulated in two pithy, trenchant sentences!

So, all of the Asian markets will crash and burn? Are we talking a redux of the ’97 debacle, or did you have something more serious in mind? You’ll need to be a just a bit more specific to have any sort of credibility with that kind of prognostication.

Nost: It will be interesting to see how a country known for its statist tendencies will react to the sub-prime crisis hitting China. I agree with your call as to what they should do, but do you really believe they will do it? We have seen years of them stockpiling dollar denominated assets as nothing other than a means of hedging the yuan. Their attempts to cool the Chinese economy have been ham handed (which is not to say that our monetary and economic policy is any better) and not terribly effective. I don’t get the sense that there is a clearly defined strategy at work here. Of course, I don’t get that sense here in the US, either.

[nostradamus]

Hi Allan,
You’re right, that is what I think China *should* do but whether or not she will is yet to be seen. I’ll keep my eyes on it though.

[kewp]

Man, Peter Schiff must be taking it in the shorts these days.

I wonder what his response is going to be?

I suspect he considers this all just a symptom of deleveraging on a global scale.

[kewp]

Man, Peter Schiff must be taking it in the shorts these days.

I wonder what his response is going to be?

I suspect he considers this all just a symptom of deleveraging on a global scale.

[kewp]

Man, Peter Schiff must be taking it in the shorts these days.

I wonder what his response is going to be?

I suspect he considers this all just a symptom of deleveraging on a global scale.

[kewp]

Man, Peter Schiff must be taking it in the shorts these days.

I wonder what his response is going to be?

I suspect he considers this all just a symptom of deleveraging on a global scale.

[kewp]

Man, Peter Schiff must be taking it in the shorts these days.

I wonder what his response is going to be?

I suspect he considers this all just a symptom of deleveraging on a global scale.

[Allan from Fallbrook]

Nost: In my mind, it has always been a question as to how a centrally planned communist government will react when (somewhat) free market forces start exerting real pressure on their economy.

Add to that the inevitable backlash once these various businessmen, entrepeneurs, and financiers start demanding an equal voice in the running of the country.

In the background, you have a large and very disaffected peasantry, all of whom are watching their way of life becoming progressively more disenfranchised.

Throw in pollution, endemic AIDS in certain parts of the country, a growing and vocal cadre of former Chinese Army officers that don’t like the present government and are agitating for its ouster, no rule of law to protect intellectual property and a yawning gap when it comes to lawyers and upper management.

You now have a real interesting soup pot bubbling.

[stockstradr]

Regards Asian stock marketes…

When Asian stock markes are hyper-appreciated to the tune of 600% in three years (Shanghai,for example) I don’t need to defend my opinion those markets are prime for a 1929-style crash. In fact, the % drop will be far more severe than our 1929 stock market collapse.

Go read Barron’s round table discussion from two weekends back. When you have multiple widely respected Asia-sector experts like Marc Faber saying he thinks EVERY Asia index is in a bubble, then you should worry.

[Allan from Fallbrook]

stockstradr: I wasn’t asking you to defend your opinion; I was asking you to support it. Two sentences about a supposed meltdown in the Asian markets does not a prognostication make.

You’re an engineer, and should be familiar with the concept of showing your math. I run a specialty engineering company, and I know that without support, our “opinions” would have the substance of wind.

[Allan from Fallbrook]

stockstradr: I wasn’t asking you to defend your opinion; I was asking you to support it. Two sentences about a supposed meltdown in the Asian markets does not a prognostication make.

You’re an engineer, and should be familiar with the concept of showing your math. I run a specialty engineering company, and I know that without support, our “opinions” would have the substance of wind.

[Allan from Fallbrook]

stockstradr: I wasn’t asking you to defend your opinion; I was asking you to support it. Two sentences about a supposed meltdown in the Asian markets does not a prognostication make.

You’re an engineer, and should be familiar with the concept of showing your math. I run a specialty engineering company, and I know that without support, our “opinions” would have the substance of wind.

[Allan from Fallbrook]

stockstradr: I wasn’t asking you to defend your opinion; I was asking you to support it. Two sentences about a supposed meltdown in the Asian markets does not a prognostication make.

You’re an engineer, and should be familiar with the concept of showing your math. I run a specialty engineering company, and I know that without support, our “opinions” would have the substance of wind.

[Allan from Fallbrook]

stockstradr: I wasn’t asking you to defend your opinion; I was asking you to support it. Two sentences about a supposed meltdown in the Asian markets does not a prognostication make.

You’re an engineer, and should be familiar with the concept of showing your math. I run a specialty engineering company, and I know that without support, our “opinions” would have the substance of wind.

[stockstradr]

Regards Asian stock marketes…

When Asian stock markes are hyper-appreciated to the tune of 600% in three years (Shanghai,for example) I don’t need to defend my opinion those markets are prime for a 1929-style crash. In fact, the % drop will be far more severe than our 1929 stock market collapse.

Go read Barron’s round table discussion from two weekends back. When you have multiple widely respected Asia-sector experts like Marc Faber saying he thinks EVERY Asia index is in a bubble, then you should worry.

[stockstradr]

Regards Asian stock marketes…

When Asian stock markes are hyper-appreciated to the tune of 600% in three years (Shanghai,for example) I don’t need to defend my opinion those markets are prime for a 1929-style crash. In fact, the % drop will be far more severe than our 1929 stock market collapse.

Go read Barron’s round table discussion from two weekends back. When you have multiple widely respected Asia-sector experts like Marc Faber saying he thinks EVERY Asia index is in a bubble, then you should worry.

[stockstradr]

Regards Asian stock marketes…

When Asian stock markes are hyper-appreciated to the tune of 600% in three years (Shanghai,for example) I don’t need to defend my opinion those markets are prime for a 1929-style crash. In fact, the % drop will be far more severe than our 1929 stock market collapse.

Go read Barron’s round table discussion from two weekends back. When you have multiple widely respected Asia-sector experts like Marc Faber saying he thinks EVERY Asia index is in a bubble, then you should worry.

[stockstradr]

Regards Asian stock marketes…

When Asian stock markes are hyper-appreciated to the tune of 600% in three years (Shanghai,for example) I don’t need to defend my opinion those markets are prime for a 1929-style crash. In fact, the % drop will be far more severe than our 1929 stock market collapse.

Go read Barron’s round table discussion from two weekends back. When you have multiple widely respected Asia-sector experts like Marc Faber saying he thinks EVERY Asia index is in a bubble, then you should worry.

[Allan from Fallbrook]

Nost: In my mind, it has always been a question as to how a centrally planned communist government will react when (somewhat) free market forces start exerting real pressure on their economy.

Add to that the inevitable backlash once these various businessmen, entrepeneurs, and financiers start demanding an equal voice in the running of the country.

In the background, you have a large and very disaffected peasantry, all of whom are watching their way of life becoming progressively more disenfranchised.

Throw in pollution, endemic AIDS in certain parts of the country, a growing and vocal cadre of former Chinese Army officers that don’t like the present government and are agitating for its ouster, no rule of law to protect intellectual property and a yawning gap when it comes to lawyers and upper management.

You now have a real interesting soup pot bubbling.

[Allan from Fallbrook]

Nost: In my mind, it has always been a question as to how a centrally planned communist government will react when (somewhat) free market forces start exerting real pressure on their economy.

Add to that the inevitable backlash once these various businessmen, entrepeneurs, and financiers start demanding an equal voice in the running of the country.

In the background, you have a large and very disaffected peasantry, all of whom are watching their way of life becoming progressively more disenfranchised.

Throw in pollution, endemic AIDS in certain parts of the country, a growing and vocal cadre of former Chinese Army officers that don’t like the present government and are agitating for its ouster, no rule of law to protect intellectual property and a yawning gap when it comes to lawyers and upper management.

You now have a real interesting soup pot bubbling.

[Allan from Fallbrook]

Nost: In my mind, it has always been a question as to how a centrally planned communist government will react when (somewhat) free market forces start exerting real pressure on their economy.

Add to that the inevitable backlash once these various businessmen, entrepeneurs, and financiers start demanding an equal voice in the running of the country.

In the background, you have a large and very disaffected peasantry, all of whom are watching their way of life becoming progressively more disenfranchised.

Throw in pollution, endemic AIDS in certain parts of the country, a growing and vocal cadre of former Chinese Army officers that don’t like the present government and are agitating for its ouster, no rule of law to protect intellectual property and a yawning gap when it comes to lawyers and upper management.

You now have a real interesting soup pot bubbling.

[Allan from Fallbrook]

Nost: In my mind, it has always been a question as to how a centrally planned communist government will react when (somewhat) free market forces start exerting real pressure on their economy.

Add to that the inevitable backlash once these various businessmen, entrepeneurs, and financiers start demanding an equal voice in the running of the country.

In the background, you have a large and very disaffected peasantry, all of whom are watching their way of life becoming progressively more disenfranchised.

Throw in pollution, endemic AIDS in certain parts of the country, a growing and vocal cadre of former Chinese Army officers that don’t like the present government and are agitating for its ouster, no rule of law to protect intellectual property and a yawning gap when it comes to lawyers and upper management.

You now have a real interesting soup pot bubbling.

[nostradamus]

Hi Allan,
You’re right, that is what I think China *should* do but whether or not she will is yet to be seen. I’ll keep my eyes on it though.

[nostradamus]

Hi Allan,
You’re right, that is what I think China *should* do but whether or not she will is yet to be seen. I’ll keep my eyes on it though.

[nostradamus]

Hi Allan,
You’re right, that is what I think China *should* do but whether or not she will is yet to be seen. I’ll keep my eyes on it though.

[nostradamus]

Hi Allan,
You’re right, that is what I think China *should* do but whether or not she will is yet to be seen. I’ll keep my eyes on it though.

[Allan from Fallbrook]

stockstradr: Wow. All of Asia encapsulated in two pithy, trenchant sentences!

So, all of the Asian markets will crash and burn? Are we talking a redux of the ’97 debacle, or did you have something more serious in mind? You’ll need to be a just a bit more specific to have any sort of credibility with that kind of prognostication.

Nost: It will be interesting to see how a country known for its statist tendencies will react to the sub-prime crisis hitting China. I agree with your call as to what they should do, but do you really believe they will do it? We have seen years of them stockpiling dollar denominated assets as nothing other than a means of hedging the yuan. Their attempts to cool the Chinese economy have been ham handed (which is not to say that our monetary and economic policy is any better) and not terribly effective. I don’t get the sense that there is a clearly defined strategy at work here. Of course, I don’t get that sense here in the US, either.

[Allan from Fallbrook]

stockstradr: Wow. All of Asia encapsulated in two pithy, trenchant sentences!

So, all of the Asian markets will crash and burn? Are we talking a redux of the ’97 debacle, or did you have something more serious in mind? You’ll need to be a just a bit more specific to have any sort of credibility with that kind of prognostication.

Nost: It will be interesting to see how a country known for its statist tendencies will react to the sub-prime crisis hitting China. I agree with your call as to what they should do, but do you really believe they will do it? We have seen years of them stockpiling dollar denominated assets as nothing other than a means of hedging the yuan. Their attempts to cool the Chinese economy have been ham handed (which is not to say that our monetary and economic policy is any better) and not terribly effective. I don’t get the sense that there is a clearly defined strategy at work here. Of course, I don’t get that sense here in the US, either.

[Allan from Fallbrook]

stockstradr: Wow. All of Asia encapsulated in two pithy, trenchant sentences!

So, all of the Asian markets will crash and burn? Are we talking a redux of the ’97 debacle, or did you have something more serious in mind? You’ll need to be a just a bit more specific to have any sort of credibility with that kind of prognostication.

Nost: It will be interesting to see how a country known for its statist tendencies will react to the sub-prime crisis hitting China. I agree with your call as to what they should do, but do you really believe they will do it? We have seen years of them stockpiling dollar denominated assets as nothing other than a means of hedging the yuan. Their attempts to cool the Chinese economy have been ham handed (which is not to say that our monetary and economic policy is any better) and not terribly effective. I don’t get the sense that there is a clearly defined strategy at work here. Of course, I don’t get that sense here in the US, either.

[Allan from Fallbrook]

stockstradr: Wow. All of Asia encapsulated in two pithy, trenchant sentences!

So, all of the Asian markets will crash and burn? Are we talking a redux of the ’97 debacle, or did you have something more serious in mind? You’ll need to be a just a bit more specific to have any sort of credibility with that kind of prognostication.

Nost: It will be interesting to see how a country known for its statist tendencies will react to the sub-prime crisis hitting China. I agree with your call as to what they should do, but do you really believe they will do it? We have seen years of them stockpiling dollar denominated assets as nothing other than a means of hedging the yuan. Their attempts to cool the Chinese economy have been ham handed (which is not to say that our monetary and economic policy is any better) and not terribly effective. I don’t get the sense that there is a clearly defined strategy at work here. Of course, I don’t get that sense here in the US, either.

[stockstradr]

The Shanghai exchange moved up like a rocket from ~1000 points up to 6000 points in only a few years, and has since fallen about a thousand points in a few months.

The Asia markets will crash and burn. It will be very ugly.

[stockstradr]

The Shanghai exchange moved up like a rocket from ~1000 points up to 6000 points in only a few years, and has since fallen about a thousand points in a few months.

The Asia markets will crash and burn. It will be very ugly.

[stockstradr]

The Shanghai exchange moved up like a rocket from ~1000 points up to 6000 points in only a few years, and has since fallen about a thousand points in a few months.

The Asia markets will crash and burn. It will be very ugly.

[stockstradr]

The Shanghai exchange moved up like a rocket from ~1000 points up to 6000 points in only a few years, and has since fallen about a thousand points in a few months.

The Asia markets will crash and burn. It will be very ugly.

[nostradamus]

China’s market is directly tied to the markets of her two largest exportees: the U.S. and Japan. At the same time, China has a huge domestic consumer market which is rapidly growing in terms of wealth and income. The decline of western civilization will serve as a catalyst for a shifted focus to domestic markets, a switch to a gold-backed RMB, and a decoupling from the dollar and yen. I wouldn’t want to hold Chinese securities at the moment but I’m keeping my eyes on them for future long-term growth.

[nostradamus]

China’s market is directly tied to the markets of her two largest exportees: the U.S. and Japan. At the same time, China has a huge domestic consumer market which is rapidly growing in terms of wealth and income. The decline of western civilization will serve as a catalyst for a shifted focus to domestic markets, a switch to a gold-backed RMB, and a decoupling from the dollar and yen. I wouldn’t want to hold Chinese securities at the moment but I’m keeping my eyes on them for future long-term growth.

[nostradamus]

China’s market is directly tied to the markets of her two largest exportees: the U.S. and Japan. At the same time, China has a huge domestic consumer market which is rapidly growing in terms of wealth and income. The decline of western civilization will serve as a catalyst for a shifted focus to domestic markets, a switch to a gold-backed RMB, and a decoupling from the dollar and yen. I wouldn’t want to hold Chinese securities at the moment but I’m keeping my eyes on them for future long-term growth.

[nostradamus]

China’s market is directly tied to the markets of her two largest exportees: the U.S. and Japan. At the same time, China has a huge domestic consumer market which is rapidly growing in terms of wealth and income. The decline of western civilization will serve as a catalyst for a shifted focus to domestic markets, a switch to a gold-backed RMB, and a decoupling from the dollar and yen. I wouldn’t want to hold Chinese securities at the moment but I’m keeping my eyes on them for future long-term growth.

[Author]

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