UK:
More significantly, however, for "most members" the decision was
"finely balanced" and the committee was unusually forthright in
signalling the likelihood of QE2. October now looks like the most likely date
for a commencement of QE2.
"The Chinese government's balance sheet directly does not have a lot of debt. The state-owned enterprises of the local governments and all the other ancillary borrowing vehicles have lots of debt and its growing at a very fast rate. The assumption is that the state stands behind all this debt. We see that the debt in China, implicitly backed by the Chinese government, probably has gone from about 100% of GDP to about 200% of GDP recently. Those are numbers that are staggering. Those are European kind of numbers if not worse."
On how a Chinese property bubble will play out:
"I think that will be the surprise going into this year, and into 2012 - that it is not so strong. The property market is hitting the wall right now and things are decelerating. The CEO of Komatsu said last week that he is having trouble getting paid for his excavator sales in China. Developers are being squeezed. They're turning to the black market for lending, this shadow banking system that is growing by leaps and bounds like everything in China.
"Regulators over there are really trying to get their hands around the problem. In the meantime, local governments have every incentive to just keep the game going. So they will continue with these projects, continuing to borrow as the central government tries to rein it in."
Chanos on his long and short positions:
"We are short Chinese banks, the property developers, commodity companies that sell into China, anything related to property there is still a short."
"We are long the Macau casinos. It's our long corruption, short property play. We feel that there's American management and American accounting. They are growing at a faster rate even than the property developers."
On the IMF lowering growth estimates for China:
"A lot of people are assuming that half of all new loans in China are going to go bad. In fact, the Chinese government even said that last year relating to the local governments. If we assume that China will grow total credit this year between 30% to 40% of GDP, and half of that debt will go bad, that is 15% to 20%. Say the recoveries on that are 50%. That means that China, on an after write off basis, may not be growing at all. It may be having to simply write off some of this stuff in the future so its 9% growth may be zero."
Fed officials, however, believe that by shifting their bond
holdings they could encourage mortgage refinancing and push investors into
riskier assets, such as corporate bonds and stocks, without stoking a run-up
in consumer prices.
It looks like the Slovenian Government may collapse today.
International lenders told Greece on Monday it must shrink its public sector to avoid running out of money within weeks.
While widely expected, a Greek default would further unsettle already nervous financial markets, fuelling fears a precedent had been set for other struggling euro zone states and sending yields on other peripheral bonds sharply higher.
However, Fitch did not expect Greece to leave the euro zone, as some in markets have speculated in recent weeks.
"Concerns over the risk of a break-up of the euro zone are greatly exaggerated," David Riley, Fitch's head of global sovereign ratings said in a news release.
Fitch also said it did not expect any systematically important financial institution or sovereign to be allowed to default.
Contagion fears have put the spotlight on Italy and Spain's finances and yields on their benchmark bonds remain high despite austerity measures and regular European Central Bank purchases in the bond market over the past month.
"Restructuring Greece’s debt would cause “limited”
reaction in financial markets because they have been expecting a Greek default
for some time."
That would be a disaster - for Greece and for the euro-zone. The average debt in this case, cheating is not 50 but 80 to 90 percent. Greece's economy and its financial system would sink into chaos, at least for a time. And the speculation against the euro and its Member States would open the floodgates. Who keeps an outlet of Greece for the solution that is at best naive.
The art to live dangerously
the best is to have a risk 50-65%
there is a tribe very sauvage, 40% of males killed someone,
the best killers have 3-4 times more children
life satisfaction is better when we take risks
brain means taking risks
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