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I've got to be able to buy some time, MRT144!
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I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891 -
The Q4 revision isn't as bad as it looks at first sight though, for the same reason the advance estimates weren't as good. Inventories were a strong contributor to the advance estimates of GDP, indicating that a correction in those may have become a drag on Q1 '07 GDP. Now that inventories were revised downward, it appears they'll less likely form a drag.Originally posted by DanS
And 4Q GDP growth was revised down sharply.
Mostly, I think Shanghai was a convenient trigger for New York to sell off. The valuations in the US are rich.
The U.S. economy is doing so-so. Some signs of weakness. Manufacturing is close to recession, if not already in recession.DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.Comment
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Hot money usually refers to foreign capital inflows that can be withdrawn quickly. That's not the case in China because of currency controls.Originally posted by Kidicious
These things have more to do with each other than that. There's a lot of hot money in China and if the US goes into a recession it's going to put a lot of pressure on the market there and the govt to do something that the market won't like.
If you're talking about the excess liquidity in China, a slowdown in the U.S. would actually do China some good. China has a major problem with growing cash liquidity. A slowdown in the U.S. would reduce that problem. In other words, it would reduce the need for the Chinese government to intervene.Golfing since 67Comment
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Originally posted by Bkeela
Sell you fools, sell. I will be waiting to profit from your foolishness.
Golfing since 67Comment
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I think it makes more sense to say the durable goods numbers was more likely the trigger.Originally posted by DanS
And 4Q GDP growth was revised down sharply.
Mostly, I think Shanghai was a convenient trigger for New York to sell off. The valuations in the US are rich.
The U.S. economy is doing so-so. Some signs of weakness. Manufacturing is already shedding jobs, if not technically in recession.
The mainland China markets are controlled and largely limited to mainland investors, unlike the other China market in Hong Kong.
So a drop in the mainland markets has very little relevance to other markets.Golfing since 67Comment
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This ****ed up my day yesterday. I was working well into the night fixing systems overloaded by retarded investors.
"The issue is there are still many people out there that use religion as a crutch for bigotry and hate. Like Ben."
Ben Kenobi: "That means I'm doing something right. "Comment
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dpLast edited by Kidlicious; February 28, 2007, 15:45.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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AFAIK, this is not quite true. Even though Shanghai has only A shares, the H shares selling on the Hong Kong market have been moving in like measure to the A shares.Originally posted by Tingkai
I think it makes more sense to say the durable goods numbers was more likely the trigger.
The mainland China markets are controlled and largely limited to mainland investors, unlike the other China market in Hong Kong.
So a drop in the mainland markets has very little relevance to other markets.
For instance, I am invested in the exchange trade fund FXI, which holds H shares of companies who list A shares in Shanghai. The ETF moved in like measure to the Shanghai market. I "lost" money on my investment yesterday, so what happens in Shanghai does have a knock-on effect.
Now I agree that AFAIK, the magnitude of the shares externally held is dwarfed by those held internally. But as an excuse to sell, it served quite well this time around.
The European markets were down big yesterday too. It would be interesting to see if they were down big before the US durable goods figure was released at 8:30 am Eastern. That would probably answer our question.Last edited by DanS; February 28, 2007, 16:01.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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I deleted that last post because I found out that I wasn't up to date on what was going on. I found two more recent articles that say that hot money has stopped flowing into China. In fact one says that some is leaving. Does anyone know anything current on this? I think this is interesting considering this recent crash in the Shanghai market.
China stems inflows of hot money
CMW: Hot money leaving China - reportChina stems inflows of hot money
By Richard McGregor in Beijing
Published: October 18 2006 22:07 | Last updated: October 19 2006 05:49
China looks to have stopped hot money speculation on a revaluation of the renminbi as the growth of its foreign currency reserves over the past four months no longer exceeds its trade surplus.
In the four months to September, China’s trade surplus totalled $63.2bn (£34bn), almost exactly matching its increase in reserves over the same period of $62.9bn.
With net foreign direct investment still flooding into the country at a rate of $5bn a month, the balance between the trade surplus and reserves growth suggests that capital has begun to flow out of China.
China has now had four successive months in which it has had net capital outflows, excluding the trade surplus and incoming foreign investment.
For the past three years, Beijing has had to buy enough foreign currency to cover its trade surplus, foreign direct investment and hot money flows to prevent the renmimbi from rising.
In this period, China’s foreign exchange reserves grew much faster than its trade surplus, often by as much as $15bn a month.
Speculative flows of hot money were therefore a big contributory factor in the build-up of China’s foreign exchange reserves, which reached $987.9bn by the end of September.
But the figures are open to interpretation, with economists divided over whether they provide cast-iron evidence that speculative inflows have dried up.
Shi Jianhuai, professor at Peking University, said claims that hot money had dried up were overstated, because speculative funds were able to enter China through the trade account.
“Local companies may over-report exports to obtain foreign currency to speculate on real estate,” said Prof Shi. “There’s still strong motivation for the inflow of hot money, as the revaluation pressure on renminbi remains unchanged.”
Nevertheless, Beijing’s efforts to open some holes in its closed capital account to ease upward pressure on the currency, plus higher overseas interest rates, both appear to have had a substantial impact on capital flows.
Qing Wang, of the Bank of America in Hong Kong, said in a research note that the authorities had made “systematic efforts to encourage major financial institutions to keep their foreign exchange assets offshore”.
This includes allowing state companies, such as the banks that have listed overseas, to leave some of the billions raised in initial public offerings offshore.
Another factor has been the determination of the People’s Bank of China to allow only a gradual appreciation of the renminbi, which some economists argue has reduced the incentive to bring money into the country.
“The market has reached a consensus that the renminbi’s revaluation will only be slow and gradual, making it hard to use hot money for an arbitrage play,” said Gao Shanwen, chief economist of Everbright Securities in Shanghai.
I can't tell the date on the second one because it's in Chinese characters.Shanghai - As much as 24 billion USDs left China in the first half of this year using illegal ways, according to a report by Standard Chartered, quoted in the China Securities Journal on Tuesday.
A report issued by Mr. Wang Zhihao and Mr. Chang Zhong, two economists fo the Standard Chartered Bank, claims that they have found evidence for hot money pulling away from China.
The government's policy of cooling down the real estate sector is cited as the main reason .
I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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Tingkai: I admit readily that there are other possibilities for the big trigger, such as Greenspan's comments about a possible US recession or the unraveling of long-held positions due to Japan's interest rate rise last week. But the headlines yesterday morning in the US were all Shanghai.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Anyhow, things are getting fun again. It had been a dull few months.
Expected a stronger reaction to the new home sales report though.DISCLAIMER: the author of the above written texts does not warrant or assume any legal liability or responsibility for any offence and insult; disrespect, arrogance and related forms of demeaning behaviour; discrimination based on race, gender, age, income class, body mass, living area, political voting-record, football fan-ship and musical preference; insensitivity towards material, emotional or spiritual distress; and attempted emotional or financial black-mailing, skirt-chasing or death-threats perceived by the reader of the said written texts.Comment
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You've got to remember this: In Tingkai's world, the entire planet could blow up, and it would still be good for China. Also, that he's been caught lying numerous times, I don't see how anyone takes him seriously. Even his first post contained an outright lie that he's now backed away from.Originally posted by DanS
Tingkai: I admit readily that there are other possibilities for the big trigger, such as Greenspan's comments about a possible US recession or the unraveling of long-held positions due to Japan's interest rate rise last week. But the headlines yesterday morning in the US were all Shanghai.“As a lifelong member of the Columbia Business School community, I adhere to the principles of truth, integrity, and respect. I will not lie, cheat, steal, or tolerate those who do.”
"Capitalism ho!"Comment
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Quite the yoyo we have here. Shanghai recovers by 4% yesterday, but closed down 3% today. Wall Street recovered slightly yesterday and was fairly calm, but opened down 2% today.
It seems to me that Shanghai and the US markets are reacting to some of the same information and forces.I came upon a barroom full of bad Salon pictures in which men with hats on the backs of their heads were wolfing food from a counter. It was the institution of the "free lunch" I had struck. You paid for a drink and got as much as you wanted to eat. For something less than a rupee a day a man can feed himself sumptuously in San Francisco, even though he be a bankrupt. Remember this if ever you are stranded in these parts. ~ Rudyard Kipling, 1891Comment
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Yeah, or people are reacting to the Shanghai market in the US markets.Originally posted by DanS
Quite the yoyo we have here. Shanghai recovers by 4% yesterday, but closed down 3% today. Wall Street recovered slightly yesterday and was fairly calm, but opened down 2% today.
It seems to me that Shanghai and the US markets are reacting to some of the same information and forces.I drank beer. I like beer. I still like beer. ... Do you like beer Senator?
- Justice Brett KavanaughComment
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The problem with the A-shares are the mainland investors pouring money into a market excessively. The h-shares, which the mainlanders cannot buy, have not been as inflated as the h-shares.Originally posted by DanS
AFAIK, this is not quite true. Even though Shanghai has only A shares, the H shares selling on the Hong Kong market have been moving in like measure to the A shares.
I have H-shares in ICBC (ASIA), which have not changed that much this week, certainly there was no 10% correction.
Petrochina dropped after Shanghai dropped, but by about 4%.
My main point is that what happens in mainland China is insulated. Now if Hong Kong crashed 10% in a day, that would cause a big shock effect.Golfing since 67Comment
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