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Old 03-05-2009, 11:05 AM   #1
Steve_A
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Default Chinese Stimulous Package

Hi Everyone

It was interesting to see the DOW rally yesterday because of a possible Chinese stimulous package.

George Green predicted this, to the day, however he gave a different reason.

It will be interesting to see where the Chinese government will get its' money from. Could it be by selling US treasury bonds?

That would simply cripple the US.

Let's sit back and see what happens.

Best regards,

Steve
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Old 03-05-2009, 11:42 AM   #2
Dominic
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Default Re: Chinese Stimulous Package

I thought the rally was from the long awaited announcement of the new world order. The NWO is out of the bag now and on CNN.
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Old 03-05-2009, 04:17 PM   #3
peaceandlove
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Default Re: Chinese Stimulous Package

More empty statements?

No second stimulus plan for China

Thursday, 5 March 2009 15:46

The Chinese prime minister has said the country is facing unprecedented difficulties in the face of the global financial crisis. However, Wen Jiabao said the government was still aiming for 8% growth this year backed by a massive stimulus package.

International stock markets had rallied strongly yesterday on rumours that Prime Minister Wen Jiabao would unveil a second stimulus package in his address to the National People's Congress.

While no second stimulus plan was forthcoming, he did give further details of the €470 billion package that China is is investing to try to make up for the fall in its exports.

Wen's assessment of the situation was blunt. The global crisis continues to spread and get worse he said, and demand in continuing to shrink.

But he said China would ride out the recession, and repeated the country's target of 8% economic growth. That is the minimum the leadership thinks is needed to avoid social unrest because of unemployment.

Most of China's stimulus package will focus on infrastructure but there is also an increase in social spending to try to persuade the Chinese public to spend rather than save.

Source: http://www.rte.ie/business/2009/0305/china.html


China targets 8% growth despite crisis

By Geoff Dyer in Beijing
Published: March 5 2009 02:09 | Last updated: March 5 2009 12:43

China will meet its goal of 8 per cent economic growth this year, Premier Wen Jiabao said on Thursday, although he did not outline any new spending proposals to revive the economy.

In his annual “work report” to the National People’s Congress in Beijing, Mr Wen said that the global financial crisis was deepening but that the goal of 8 per cent growth, which has been an unofficial target for months, was still realistic.

Need to subscribe to see rest of article: http://www.ft.com/cms/s/47bce284-092...3Dchannel_page


China's stimulus plan aims to get poor farmers spending

China's prime minister is to set out plans for a massive stimulus intended to prompt its hundreds of millions of poor farmers to spend more money.

By Richard Spencer and Peter Foster in Beijing
Last Updated: 9:59PM GMT 04 Mar 2009

Excerpt:

Arthur Kroeber, who runs the Dragonomics economic research consultancy in Beijing, said he doubted a doubling of the stimulus package would be announced immediately. But he said the decline in exports and the property market made a boost inevitable if the government wanted to keep its target of eight per cent growth this year.

He estimated that health spending was set to rise by about 30 per cent a year for three years, but cautioned that it would take three or four years to see any effect on consumer confidence. "This is a long-term effect," he said.

Comlete Article: http://www.telegraph.co.uk/finance/f...-spending.html
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Old 03-15-2009, 08:27 AM   #4
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Default China’s Premier Wen ‘Worried’ on Safety of Treasuries

China’s Premier Wen ‘Worried’ on Safety of Treasuries

March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.

“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”

White House National Economic Council Director Lawrence Summers, asked about Wen’s remarks, said overseas “confidence” in Treasuries would be hurt without the administration’s steps to end the economy’s decline. President Barack Obama is relying on China to sustain buying of Treasuries amid record amounts of debt sales to fund a $787 billion stimulus package.

“China’s purchases of American debt have been one of the few bolts keeping the wheels on the global economy,” said Phil Deans, a professor of international affairs at Temple University in Tokyo. “If China stops buying, where does Obama’s borrowing to fund his stimulus come from?”

Article continues: http://www.bloomberg.com/apps/news?p...zoY&refer=home


Karl Denninger response to above article:

Blog and charts at: http://market-ticker.denninger.net/a...009/03/12.html

Excerpts:

Quote:
Uh, what part of being a banker and making loans do you think you're exempt from? Banking is a tremendously profitable enterprise, provided you're prudent; if your banking policy is simply "we'll loan you money to buy our ****" without regard for whether the borrower is overlevered or asset prices are getting totally out of rational relationships to income, then you're headed for bankruptcy as a bank, because inevitably your borrower will default.

China loved the United States when our citizens were spending more than they made, treating their homes as ATM machines to finance their consumption, lapping up cheap DVD players and widescreen TVs. They were direct enablers of this nonsense by buying securitized paper of all sorts including mortgages, without analyzing the credit-worthiness of those consumers behind that paper. They didn't do this to help us, they did it to help themselves sell their goods into our market without regard for whether we could afford the level of consumption we were engaged in.

China wants to both have and eat it's cake - sorry, no can do Wen-do-wu. If they wish to act as a mercantilist without regard to their customer's ability to pay, pumping cash into our debt without examining what they're buying and the sustainability of the practices they're fueling, they deserve to lose money and the correct answer from Obama and company is best expressed with one finger raised erect.

In fact we must stop attempting to spend more than we can afford, both as a government and as individuals. China should be looking square at the sustainability of not only our consumer debt but our government debt as well, and were I Mr. Wen I'd be erecting my middle finger in the direction of Washington DC in terms of purchasing any debt instrument that does not have a demonstrated ability to pay not only the interest but also principal from ongoing cashflow! Since the Federal Budget hasn't been in that state for a few decades I would not be doing any buying, and in fact would be using the current "panic-driven strength" as an opportunity to sell.
Quote:
Balance sheet games, however, are just another unsustainable fraud. Eventually cash flow (or lack thereof) wins - always. So the real question becomes whether these firms, banks and other finance companies, can "earn their way out" by effectively getting people to take on more debt at higher interest rates but which they can actually pay, and therefore cover the losses with those earnings.

That's a good question for the peanut gallery, and my suspicion is that the answer is "not a snowball's chance in Hell."

If you remember back on March 3rd I warned about a sharp snapback rally that appeared imminent. Four days later......

How do you square that call, and what's going on now, with my "worst case scenario" Ticker?

Simple: 1933.

The stock market doubled during A Depression!

Did that mean The Depression was over? Nope. In fact, some of the worst misery lay dead ahead. If you study The Depression you will find that there was actually a Depression within a Depression - that is, there was not one but two major steps downward in GDP.

Do not confuse economics with the stock market. They're not the same thing. Further, do not confuse trading with investing - they are also not the same thing.

Last edited by peaceandlove; 03-15-2009 at 05:51 PM.
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Old 03-15-2009, 10:20 AM   #5
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Default U.S. Insists China Fears Over Debt Unfounded

U.S. Insists China Fears Over Debt Unfounded

MARCH 14, 2009

By ANDREW BATSON and ANDREW BROWNE in Beijing and MICHAEL M. PHILLIPS in Washington

The Obama administration rejected China's concerns that its vast holdings of U.S. assets might be unsafe, in an unusual diplomatic exchange that underscored the global importance and the potential fragility of the Sino-U.S. economic relationship.

In a coordinated response to blunt comments from Chinese Premier Wen Jiabao, White House officials said Friday that Mr. Obama intends to return the country to fiscal prudence once the crisis passes.

"There's no safer investment in the world than in the United States," said presidential spokesman Robert Gibbs.

Article continues: http://www.campaignforliberty.com/wire.php?view=3370
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Old 03-15-2009, 10:39 AM   #6
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Default Re: U.S. Insists China Fears Over Debt Unfounded

Quote:
Originally Posted by peaceandlove View Post

"There's no safer investment in the world than in the United States," said presidential spokesman Robert Gibbs.
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Old 03-15-2009, 01:18 PM   #7
alyscat
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Default Re: Chinese Stimulous Package

Who on earth, in their right mind, would buy them?
alys

Quote:
Originally Posted by Steve_A View Post
It will be interesting to see where the Chinese government will get its' money from. Could it be by selling US treasury bonds?

That would simply cripple the US.
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Old 03-15-2009, 04:47 PM   #8
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Default Re: Chinese Stimulous Package

Chinese Stimulous = Acupuncture, LOL!
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Old 03-23-2009, 01:16 AM   #9
peaceandlove
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Default Foreign Capital Flees the U.S.

Foreign Capital Flees the U.S.

MARCH 17, 2009
Wall Street Journal

Outflow Hits Record $148.9 Billion as China Reloads

Foreigners withdrew funds from U.S. assets in record amounts in January, but China continued to add to its stockpile of U.S. government debt.

Already the largest foreign creditor to the U.S. government, China raised its Treasury holdings another $12.2 billion in January, taking its total holdings to $739.6 billion, according to the latest data from the Treasury Department released Monday. China held $492 billion in Treasurys in January 2008.

Foreigners sold a net $60.9 billion in long-dated U.S. securities in January, after buying $24.3 billion in December. Including changes in banks' dollar holdings, short-term securities and nonmarket transactions, net foreign ...

For complete article a person needs to subscribe: http://online.wsj.com/article/SB123720924692940901.html



World Bank Lowers Its Forecast for Growth in China

New York Times
By BETTINA WASSENER
Published: March 19, 2009

Exports, like motorbikes from a factory in southeast China, have driven the nation’s growth. Some economists say new domestic demand will help China weather the global downturn

HONG KONG — The World Bank lowered its forecast for economic growth in China on Wednesday to 6.5 percent in 2009, reflecting the influence of the global slowdown.

The figure, down from the bank’s earlier forecast of 7.5 percent growth, is well below the 8 percent projected by the Chinese government for its market, the fastest-growing major economy. It is more in line with what many independent economists expect for China, which has the world’s third-largest economy after the United States and Japan.

China’s banks have been largely unscathed by the international financial turmoil, and the authorities still have plenty of leeway to enact additional stimulus measures on top of steps already announced by Beijing.

Recent economic data has shown, however, that exports — a significant factor behind China’s stellar growth — have fallen sharply.

The Chinese prime minister, Wen Jiabao, called on Wednesday for rapid adoption of policies meant to stimulate growth, saying “big difficulties” continued to confront the nation, Reuters reported.

Some industrial sectors and geographical areas were improving, Mr. Wen said at a regular meeting of the cabinet, according to the central government’s Web site. But, he added, the government should waste no time in starting stimulus measures.

In its quarterly review of China, the World Bank stressed that the country’s economy was holding up relatively well in the face of the most severe global downturn in decades.

“China is a relative bright spot in an otherwise gloomy global economy,” the World Bank’s country director for China, David Dollar, said in a statement Wednesday, adding that the bank still expected China to continue to outgrow most other countries.

The World Bank also echoed what many other China watchers were saying: that greater domestic consumption and a reduced reliance on exports were crucial to China’s long-term growth prospects.

Only 5 of 12 economists polled by Reuters say they think the government’s 8 percent goal is achievable; the average expectation is for growth of 7.8 percent.

The Reuters poll, published Wednesday, also found that economists expect India, Indonesia and the Philippines to be the only other emerging Asian economies to grow this year. Worst hit in the region will be Singapore and Taiwan, which are both expected to shrink 4.9 percent, according to the poll.

Despite Wednesday’s revision, the World Bank’s comments on China also reflect a broad consensus that the country is better placed than many others to get through the downturn relatively well — even if a tangible recovery remains some way off.

This has also been reflected in China’s stock market — one of the world’s best performers so far this year.

While most indexes around the world have fallen more than 10 percent so far this year and the Dow Jones industrial average is down 15.7 percent, the Shanghai stock exchange is up 22 percent since Jan. 1, and added a further 0.3 percent on Wednesday.

Jonathan Garner, chief equity strategist for Asian and emerging markets at Morgan Stanley, speaking to reporters in Hong Kong on Tuesday, said he believed much of emerging Asia — outside Japan, which is in a recession — was better positioned than other regions of the world, and that stock markets here might have bottomed out last October.

By contrast, the market in the United States “could still see new lows before it troughs,” he said.

Source: http://www.nytimes.com/2009/03/19/bu...hina.html?_r=1



China’s Stimulus Spending to Help Growth Reach Target

By Irene Shen

March 22 (Bloomberg) -- China’s stimulus spending may add as much as 1.9 percentage points to economic expansion and help the government achieve its growth target this year, according to the State Council’s research group.

“China has the ability to become the first in the world to step out of the crisis and keep stable growth for the mid and long term,” Zhang Yutai, director of the Development Research Center of the State Council, said in a live broadcast from the China Development Forum in Beijing today.

Vice Premier Li Keqiang reaffirmed China’s goal of 8 percent growth at today’s forum, saying some industries “have seen signs of recovery.”

China is targeting expansion in 2009 even as economies from the U.S. to Japan contract. The nation’s economy is showing “early signs” of stabilizing as government-backed investment counters a slump in exports, the World Bank said March 18.

Vice Premier Li Keqiang reaffirmed China’s goal of 8 percent growth at today’s forum, saying some industries “have seen signs of recovery.”

China is targeting expansion in 2009 even as economies from the U.S. to Japan contract. The nation’s economy is showing “early signs” of stabilizing as government-backed investment counters a slump in exports, the World Bank said March 18.

Investment in China rose 26.5 percent in the first two months of 2009 and bank loans quadrupled in February, indications the government’s 4 trillion yuan ($585 billion) stimulus plan is starting to feed into the economy.

Article continues: http://www.campaignforliberty.com/wire.php?view=3561
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Old 03-23-2009, 01:19 AM   #10
alyscat
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Default Re: Chinese Stimulous Package

Now, why is it that I think China owns us already?
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Old 03-23-2009, 01:10 PM   #11
Steve_A
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Default Re: China’s Premier Wen ‘Worried’ on Safety of Treasuries

Hi peaceandlove,

If Mr. Wen is voicing his worries in the public eye, imagine what is being said behind closed doors.

Best regards,

Steve



Quote:
Originally Posted by peaceandlove View Post
China’s Premier Wen ‘Worried’ on Safety of Treasuries

March 13 (Bloomberg) -- China, the U.S. government’s largest creditor, is “worried” about its holdings of Treasuries and wants assurances that the investment is safe, Premier Wen Jiabao said.

“We have lent a huge amount of money to the United States,” Wen said at a press briefing in Beijing today. “I request the U.S. to maintain its good credit, to honor its promises and to guarantee the safety of China’s assets.”
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