Archive for the ‘China Macro-Economy’ Category

I am fear again

About six months ago, I wrote a listing: I am fear , I reported the price of real estate department  rising craze, Now, Six months later, the price of real estate in shanghai, beijing ,shenzhen, is higher then New York, London, or Paris. If you hope living in the city of shanghai, you need pay 30000Yuan/M, it means 4200$/M, or it means if you hope living in the city, you need pay 4,000,000 Yuan for  120 M, in hot area of ShangHai, the price is 70,000 /M or 100,000 /M , it means at least $10,000/M. Last month, AIG sale their Manhattan(New York) Office , it is only $1100  /M , please remember, the salary of a normal chinese is 1/10 or 1/20 of a normal American…..

Now in china, the half amount of consumption is used to buy real estate, and we extreme lack of Social Security, if we have a cold, it will spend half of our salary! How can chinese consume like american? We do not dare consume , because we have NO MONEY!

Does I meaning we should feel fear for the price of real estate? NO!

Today,what I am fear is VEGETABLES , or FOOD.

Yesterday, I try to buy vegetables, I found the price of greengrocery is at least double of the 2 years ago! Meat, Eeg, Vegetables, Oil…., all of their price is rising crazy!

Now some official , or some real estate business who own huge money ,said china have not inflation, and some “famous economist” said from “helicopter drop of money” to inflation, there at least need one year,we are safe, and, the number told us, CPI just become positive number in last month.

OK, I do not care CPI or PPI,If we always waste huge money to duplication create factory, how can we let the price of these industry always keep rising? In my post :China, making the same mistake with Japan?, I had reported CCTV said, In current stage, we only need not mroe than 5 Polysilicon factory, but we have plan to build 80 factory …. , now in many industry , official said overcapacity is a big problem, but we still build new overcapacity, and these plan allowed by these official, WHY?

I do not care CPI or PPI, because I know now the FOOD is a problem for normal people, I am a normal person living in china, I had to face the real pain of the life, not face the number, as a normal person, I found the price of MEAT , EGG, OIL , VEGETABLS, had become a problem for me,it is not a problem in 10 years ago.

I do not care CPI or PPI, because this time,although we said we had drop 10,000,000,000,000 Yuan from our bank, but I did not get one cent, also no anyone of my friends got one cent, we only know the price of every thing rising crazy now, it had began let we face real pain in real life, We not living in numbers.

I do not care of CPI or PPI, because  as a normal person, I found the price of everything (what is the basic requirement of a normal person’s life )  are still rising crazy ,the price of eggs is double of last year.

I am fear, becaue there have huge reporter said, in many many area, the price in china had over usa(now it was not a news) , but our salary is only 1/10 or 1/30 of person living usa, In many site, a little news is a worker died in BEIJING becuase hungry and sleep in the street under -10C ,  as a normal person still living in china, as a chinese person which love my country, I AM FEAR!

I AM FEAR!

I AM FEAR!!

I AM FEAR!!!

I AM FEAR!!!!

I AM FEAR!!!!!

There are many huge voice told us now there are not inflation, if inflation come, what will happened?

I AM FEAR.

China investor market scanning

China, the price of sugar is still rising up, although the government will sale 200,000 ton at tomorrow, the price rising craze yet,now the price of  sugar futures is 5500 Yuan / tun…, the price of food rise quickly in recent weeks.
China , the price of real estate is still rising up yet, in some city, house price rise more than 90%, we read report which said in Lan Zhou , the price of house rising 200% in 5 years, the price of BeiJing ShangHai had higher than USA Or, London. Now,the amount of real estate transaction is the half of the whole amount of consumer in China. In some city , for example in ChangSha, HuNang, China, which the price is 4500Yuan/M , sale out about 3000 house in last week, but in some city , for example Yangzhou, JiangSu ,China, the price is 8600Yuan/M, only sale out 600 house in last week, the price in BeiJing is 30000Yuan/M…. , in many city, thereare more than 50% house , although sale out, but nobody living in it, some body buy these house, but actually it is empty …

Now somebody say there are not inflation in china and there will not inflation in next year, and last month , the CPI is still 99.5, not more than 100%, but as a normal people who living in china, the egg, Oil, sugar , vegetables, OR, the price of rent and the price of house is still rising, we do not care about the number of CPI again,because we had began feel what is the real pain in the life.

In short term of last week, the price of china bond and stock is stable, center bank is still recycling money in market yet,but the amount is little. In USA, since the black Friday, seems have some little good news, although we can not sure what will happen after Christmas, Seems the adventure emotional is come back, Dollar is rising, gold is dropping, and the price of bond is dropping too, What is it really meaning?

China, making the same mistake with Japan?

Alexei Kudrin , Russian Minister of Finance said yesterday: “China is making the same mistake with Japan” . He said there are a hyperstimulation plan in economy area, it will bring huge risk to China, in current China have many problems, but them can not feel it because this plan.

OK, at first I think as a Chinese we should thanks for Alexei told use his really thought, We can found there many other people praise Chinese just for get more profit, at lease Alexei is not a  pretense person.

Then let’s face our problem, in current months, although CPI shown it is negative growth , but in really life we found the price of many thing is still rising, there have report said in recent one year, the price of house rise up more then 75%, in many city, the price of house had over USA and UK! Now the price of water and price of power is still rising up , eggs, meat…, the price of many many things is still rising…..

Because we have a huge plan in macroeconomic, but we lose the control in microeconomic , we offten heard sad stories, that make us angry, for example: CCTV reported, in china, we only need not mroe than 5 Polysilicon factory , but we have plan to build about 100 factories, the profit of this industry is more than 300%, but in a short time, the price of Polysilicon dorp 50%. It let me remember the sad story of “VC”.We must improve our efficiency, in some hot area of big city ,the housing vacancy rate more than 50%, but the city is still build skyscraper crazing! Why! The most of people have not money to buy a house, but the housing vacancy rate more than 50%, WHY?

These money is come from debt, it’s the result of chinese work hard  more than 30 years after reform, somebody are waste people’s money. We muse believe the power of people, if these in people’s wallet, they will create company,consumption…, and because these money is belong themself, the plan of every people will more efficiency then these agent.

Now, the most of people can not support buy a house, can not get a efficiency health care system, lack of social security, so every body had to store they money, but the truth of the savings is, the average deposits of every chinese is not more than $1000 …..

I have no time to write more, I had to go out now, but I think we should thank Alexei Kudrin , we must really face the require of people, face the truth, not just read report or believe numbers , and say we is powerful, that is not the truth.

china investor events in last week

I had reported china will not stop the export of rare earths 2 weeks ago , but china will reduce the numbers of the factory which produce rare earths, because many factory have a very low extraction degree. This week china accounced will reduce 80% numbers of factory which produce rare earths, and build two industry group in the north and south of  china . China get too many lesson in the negotiate with ore produce group, they control the price, this is a example for china,  in some point of view , this is a big improve in this industry, the price of rare earths will rise up in future years, we can not sold gold as potato , the reouse is limited and the reserve is very little now.

2. Green bubble: Green has been everywhere. With observers saying the “Age of Cleantech and Biotech” will be the next major economic revolution, and Washington pouring billions of dollars into alternative energy projects, you’d think a bubble would have already formed. But, as we noted this spring, it did not, at least from an investment perspective.

Still, as the economic recovery takes shape, alternative energy could see excess investment on hopes of big future returns. There’s plenty of hype left, and if investors regain the cash to get in the game, could green become the next internet or housing bubble?

3. Gold bubble: Gold prices just keep going up. They’ve risen for seven straight years, recently breaking $1,000 per ounce.

Is it a bubble? Right now, it doesn’t look too bad. Gold is good in both inflationary and deflationary periods, as it holds wealth tangibly. And, as the Telegraph notes, there’s real demand, especially from China.

But with some predicting a doubling of prices to $2,000 an ounce, too many people could jump in and spike the real value of the precious metal. The “rise forever” mentality usually means trouble.

4. Federal Reserve bubble: Is the Fed saving the financial system or creating another dangerous credit bubble by snapping up mortgage-backed securities?

At first glance, the Fed’s effort to clean up mortgage-backed securities is a winner. But, as Heidi Moore wrote for Slate’s The Big Money, the Fed is actually creating a bubble similar to the one it’s trying to do damage control on. By eagerly trying to save banks and stabilize the housing market, Washington is taking on too much: $1.25 trillion of mortgaged-backed securities, including both the original toxic assets and products of foreclosures to come. So who would bail the Fed out? You.

Click here to view the 10 bubbles in the make slide show.

5. Trash stock bubble: There’s a rush to trash going on. Stocks like Fannie Mae (FNM), Freddie Mac (FRE), AIG (AIG) and even GM made big runs in August — trading in trash financials made up nearly one-third of NYSE’s August volume.

So why are people buying junk? Charlie Gasparino says shares of junk financials — companies like Fannie, Freddie, AIG, Citi and Bank of America — are being pushed up by a short squeeze. The Wall Street Journalsuspects its high frequency traders. And others say its retail speculation and day traders getting their way while Wall Street went on vacation.

6. Education bubble: More people are going back to college and taking on huge debt to do it, despite questions about what the degree is really worth.

Last year, the amount borrowed by students and received by schools grew some 25% over the previous year, to $75.1 billion. That’s a huge amount, especially with weak, low-paying job prospects for graduates in this economy.

As we’ve noted, all this student loan debt is crazy. Despite the desire to see more subsidization of college, we suspect there will be a collapse in student loan debt availability and desire to take on new debt.

Short of telling kids not to go to college, something’s going to give.

The pop may be starting already. As Bloomberg reports, as many as one-third of all private colleges surveyed said they expected enrollment to drop in the next academic year. And almost 40 percent of those colleges said some of their students dropped out due to personal economic reasons and a quarter said full-time attendees switched to part time. Half said families had to cut back their expected contributions as the value of college savings plans dropped 21 percent last year.

7. Subprime bubble, 2.0: What are banks doing with all those subprime mortgages? They’re repackaging with a higher rating — “re-securitization of real estate mortgage investment conduits” — and selling them.

As we’ve noted, it’s a plan nearly identical to the complicated investment packages of the financial crisis a year ago. That being said, the problem was not strictly securitization, but the underlying housing bubble. So the return of complicated products isn’t necessarily the end of the world.

8. Life insurance securitization bubble: In its search for new profits, Wall Street is planning on securitizing “life settlements” — policies that the sick and elderly can sell for cash while they’re alive — much like it did subprime mortgages. The New York Times warns that we could be looking at subprime all over again.

Maybe. As we’ve noted, it wasn’t securitization that caused the financial meltdown. It was the bursting of the housing bubble. Yes, there was a feedback loop, whereby securitization allowed more money to flow towards housing, but it seems unlikely that “life settlements” would get big enough to infect all portions of the financial world.

9. Commercial real estate bubble: This bubble is already hissing, if not popping outright.

While the economy is improving and some home sales are slowly coming back, the commercial real estate market could get far worse.

As The New York Times reports, “Even though industry lobbyists were able to persuade Congress to extend a loan program aimed at prodding the stalled securitization market back to life, several analysts said it was unlikely to head off a spate of defaults, foreclosures and bankruptcies that could surpass the devastating real estate crash of the early 1990s.”

As UPI notes, commercial mortgage defaults could reach 4.1 percent by the end of the year, up from 2.25 percent in the first quarter, and Real Capital Analytics estimates commercial property loans worth $83 billion have been involved in default, foreclosure or bankruptcy in 2009.

Badly hit will likely be malls. “The next financial tsunami to hit will be the widespread failure of shopping center mortgages,” says Peter Monroe, co-chair of REOMAC, a not for profit trade association to CNBC. “Half a trillion dollars of commercial loans financed on historically low rates, are due for refinancing in the next three years,” says Monroe. “The negative impact of these shopping center mortgages is enormous.”

monetary policy exit mechanism

Just 20 mins ago, I read a news subtitles under CCTV, which said england will think about monetary policy exit mechanism, it confused me, because I just read a report from reuters.com which said england add £ 50,000,000,000 to support “Quantitative easing program” .

Actually , I read a chinese report from cfi.net.cn which said The Central Bank Of China is talking about the monetary policy exit mechanism. The report said  somebody think there are a obvious sign of economy recover, and finical crisis nealy ended.

I very trust CCTV, but these information shown different way , it really confused me. But from my eyes, there are more important problem then about will england add or reduce money from the market. This problem is Efficiency Of Monetray Policy . I read many report said in england or USA, The bank do not hope give factory loan , do not hope give people loan to support house and custom , but these bank had accept many many money from country and people to pass “THEIR CRISIS” . But the result is these bank take money from people , but not return money to people , The multiplier effect of monetary stopped, at the same time, these bank distribution of high salary to their staff in the “PEOPLE’S CRISIS” . Now the controler just take people’s money to support self-service , but many many people lost job and living the street .  If these bank can not support the goal to help factories and woker, why we give money to them? From Greed to Fear, it just only 8 months. I believe the bank system should not only pay attention to owner’s profilt, but also the bank system should pay attention the “Social Responsibility”. If these bank can not support social responsibility, the center bank should build another way to support the facorties.

OK, In china, also I think the most important problem is employment ,we should let demographic dividend be a good thing, not a burden, many people born after 1949, from 40,000,000 to 1,300,000,000 , just a short time! The first baby borned in 1949 will retirement in this year , and in a short time, china will have many many old people…..

China can not only depanded export or depanded Houst to support today and feature, we must change our model of economy growth, we must let people can get house in 5 years , not 30 years, we must let young people become worker and customer, not unemployed youths . The money should been use build the jobs, not used to support house price.The focus of monetray policy should changed to increase the job , change the structure of economy, let university graduates become researcher and high-tech workers, not unemployed youths or nanny. The focus is not amount, The focus is efficiency! Do not waste valuable asset to build a “Asset bubbles” , we should let people easy to get house and easy to get job, let china become more civilization and more high-tech, realease the power of creative ability in china people, not help a littler people get more money, that is not the goal of reform.

China raise the prices of refined oil

Media report, National Development and Reform Commission release the notice,of raising the price of refined oil, gasoline and diesel prices would increase 400 yuan per ton.

China promote the development of Chinese traditional medicine

China’s State Council recently issued documents on supporting Chinese medicine development,the county for the units, establish Chinese traditional medicine institutions, Chinese medicine services are arranged in public health services. China has accumulated in thousands of years a great deal of experience of traditional Chinese medicine, some of the modern Western medicine are difficult to treat disease,while Chinese medicine has a better effect.

Chinese alternative proposal about US dollar supported by the United Nations

Chinese alternative proposal about US dollar supported by the United Nations

People’s Bank of China Governor Zhou Xiaochuan on the 23rd of this month promoted to set up a new international reserve currency to replace the US dollar, at present, this proposal was echoed not only by Russia, Brazil and other emerging markets, but also by the United Nations and the International Monetary Fund ( IMF) and other international organizations.

China is not the first who give the proposal, but China’s official support for this proposal, would restrict the United States who manipulate the exchange rate for their own country to seek the benefits, and restrict the possibility of some international speculation Groups to the global economic crisis .

China didn’t manipulate exchange rate

A important economic official of USA said last week,  Obama think china is manipulating exchange rate.His words make many Chinese angry and unfair,as we all know,It seems China  never changed  exchange rate policy since 1997.when most of country in Asia depreciated currency in 1997,China stick to the high exchange rate level to maintain the Asian economic growth.In last three years,Chinese currency has increased over 20 %,but at the same period,US dollar,pound,and lot of currency depreciated sharply.

Now,decline in exports and rising unemployment in China,if Chinese exchange rate continue to rise at this time,that means suicide,but this will result in the rising CPI of USA,and China will have to take back the capital to support the domestic economy.as we all know,USA must issue a  large number of bonds,therefore this behavior will damage China and USA.

So many Chinese wonder why this official said so,if his aim is to force China use his money to support USA economy,he should  respect  much China.

The abolition of restrictions on fertilizer prices

China recently abolish restrictions on fertilizer prices, change the government supervise price to market price,  the specialist saidfertilizer prices are unlikely to rise after reformed fertilizer price mechanism form.