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Bank Of China Representative: "The Real Economic Crisis Is Just Starting"
Interview with Zhu Min, Bank of China Vice President:
Q. Is overconfidence the biggest risk to the recovery?
A. It's not only overconfidence, it's overmyopic: Wall Street feels the crisis never happened. It seems to me the financial crisis is not over yet, but it has stabilized from a cliff drop. That's one thing. The real economic crisis is just starting.
(Fast forward to the last 40 seconds of the clip).
h/t Jonis
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Funny how you need to get the real poop on what is going on from the Chinese government.
The US is stealing from future sales w/cash for clunkers and China is building roads and bridges.
What happened to shovel ready jobs? To many Sopranos gotta get their cut first.
Obama never had shovel ready jobs. It was a give away to special interests.
That is what the clueless masses got for their vote.
yeah but you think McCain/Palin would have done any better?
'China’s economic rebound is unstable, unbalanced and not yet solid ...' -China’s Premier Wen Jiabao
'The potential risk is that a lot of liquidity goes to the asset market. So you see asset bubbles in commodities, stocks and real estate, not only in China, but everywhere.' -Bank of China Ltd. Vice President Zhu
'It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose.” -Lou Jiwei, the chairman of the CIC, China’s sovereign wealth fund
Oh dear.... Me no think Lou Jiwei clever like Confucius.
why you all think lou jiwei clever like confucius?
but i really have the oppose idea~~Flour Grinder
why you all think lou jiwei clever like confucius?
but i really have the oppose idea~~Flour Grinder
+1
...and the 10y yld just crossed to 3.29...how interesting.
Yeah... very astute observation, deadhead.
I'm really puzzled by the Treasury rally with the USD still in a weakening mode.
Anyone know what's going on here?
Google three peaks and a domed house
What's a better bear hideout than Treasuries?
Guns
( DJ ) 09/11 11:03AM *DJ Fed Buys Par Value of $2.793 Bln in Agency Securities ....
Just in time for skyrockets in flight.....afternoon delight
Hey lizzy - what do you think of HND given your comment on an earlier post re Nat Gas?
thanks
unfortunately, i cannot and will not comment on any particular product.
let me rephrase - you do think that nat gas is going to roll over in the next few days? ( if I understood your comment from yesterday correctly) thanks
rumor also has one of the largest hf players in the space squeezing the market and causing untold pain. given what their positions are rumored to be, this could continue until nattie hits $3.75/$3.80.
there is nothing fundamental in the move, just one very smart player squeezing a very, very short market.
lizzy: unfortunately, i cannot and will not comment on any particular product.
----------
Hah. You'd comment on particular retail consumer goods and services. Like if Krasting and Project Mayhem started arguing about different brands of Stevia products.
stevia = ? DNA mutations ?
Metabolically activated steviol, the aglycone of stevioside,
is mutagenic
http://www.pnas.org/content/82/8/2478.full.pdf
Get outta here with that jive. A paper from 1985? Millions use that stuff with no negative effect. That's why coke, pepsi and cargill are targeting it as their new neutracutical replacement sweetener of the future.
A paper from 2008 (doi:10.1016/j.fct.2008.05.002) claims they didn't find any mutagenic effect from steviol, and points to problems with that 1985 paper. Just FYI.
So on Monday Mr. President will be landing on the aircraft carrier deck, as it were, to declare victory in the financial crisis.
http://www.france24.com/en/20090911-obama-give-major-speech-about-econom...
Someone posted here or somewhere the notion that with a victory declaration any subsequent turmoil in the markets will likely be assigned to some sort of external event. e.g. SwineFlu, Israel Iran etc...
(even though many believe that this so called victory is hollow and merely kicking the can down the road.)
Paul Tudor Jones recently opined that the swine flu will be a factor in a bigger market correction later this year.
That was me
pewpew
I suggested the elites will want to blame the crash on something, anything really, so I am looking for some sort of event to occur, whether war, swine flu, dollar collapse -- whatever ... just something on which a crash can be blamed for foiling our wonderful 'recovery'.
so the President's big speech on Monday will be the 'full stop' marking the end of the financial crisis
http://4.bp.blogspot.com/_jp34JCG91Os/Rjgx66KOeHI/AAAAAAAABIs/ZhMX1fQrTR...
If he blames Bush's deficit spending one more time I'm throwing a brick through my TV screen...
And then go out and buy a new flat screen to bolster retail.
bonddude: "And then go out and buy a new flat screen to bolster retail." More Chinese stimulus? F-dat. TV's are the equivalent of syringes for herion addicts -- they deliver our fix.
Chuck the brick, toss the tv, and decide what you'll do with the 3 hours a day you used to spend in front of it!
Hey, it's in my office man. I can actually multi-task. Stimulus that.
Studies have shown most people who think they can multi-task, are very bad at it. I won't bother posting the source, no idea where I read it. Believe it or not, focus is actually benificial, and multi-tasker is an NWO code word for SLAVE.
Ah, traders have been been doing it for years but I appreciate the opinion sans link.
Get Tivo, download all the episodes of Cops with Tasers and life doesn't get much better.
TV="works" great analogy
:-) ONE MORE TIME, ladies and gentlemen, it's BUSH'S DEFICIT SPENDING! (-: Why not just get one of those new big-screen Apple computers and play Hulu and Netflix on it?
Should I be going long vaccine makers, particularly CSL Ltd. (Australian company that just published vaccine trial results = CMXHY.pk according to Yahoo Finance). I think I will just for the sheer gambling of it all.
The stock market is my new blackjack table
That's what I believe. Being that the Obama Administration and the boobs on CNBC have gone so far out on a limb to declare that the economy is recovering, the only way they'll get off the hook is by using an external event. It's the sort of thing that's discussed in Naomi Klein's book, The Shock Doctrine.
If the Chinese reneg on the OTC derivatives contracts, the financial implosion would begin immediately. So, the banksters may try to pre-empt this with an event.
Israel attacking Iran fits the bill quite nicely, as the timing is implicitly within the PTB's control.
"Sadly, the sinking of dozens of tankers by counter-striking Iranian forces and the subsequent skyrocketing of oil prices has derailed our economy's glorious recovery."
kind of like when israel attacked the world trade center on 911 and then tried to blame it on some nonexistent man, called osama, or , you know, its those eveil muslims , stupid or etc. same game, different name. mossad, by way of deception, thou shall do war........
+1 for Shock Doctrine. good book.
Or maybe he will announce some sort of holiday for another quick-fix.
does this mean that the patent pending Obama short play is back?
The problem with victory declarations are those shoe throwers. LOL That would be totally hilarious if china or saudia arabia bombed the speech with hush puppies.
Tyler-
Can't remember if it was you or one of your contributors who had previously discussed this but I thought it was notable to bring up again.
Check out the chart. Not sure a comment is needed.
http://finance.yahoo.com/echarts?s=%5ETNX#chart2:symbol=^tnx;range=3m;compare=^gspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined
Equities up, treasuries up, gold up.
Dollar down, down, down.
Big money is fleeing the dollar for anything that might mitigate its descent.
the chinese are becoming more & more conspicuously vocal about reality. i'll read between the lines, & will be expecting something "earthshaking" in the near. thanks for the heads-up, Min:|
- SEPTEMBER 11, 2009, 10:40 A.M. ET
GM Rescinds Pay Cutshttp://online.wsj.com/article/SB125267786858503127.html?mod=rss_whats_ne...
I knew there would a substantial reward for the great minds at GM...and why not?
Let's all say these words together, because several countries will haul us in front of the WTO very soon for this reason: Government Protected Monopoly. Ahhhh protectionism.... reminds me of the good ole great depression.
I think "Monopoly" might be a bit of a stretch. It implies you have/make something other people want. Looks more like welfare to me, and well paid welfare at that.
Why not, they're like the banks now - unlimited funds.
Thanks, but seriously TD. would you get off the negativity? Can't the consumer just be happy??? dammit man.
Dollar/Yen implode is making me happy. Sub 90 soon hopefully. Euro/Yen down through 132. All good.
Economy tanks, market skyrockets. Sounds about right.
Without jobs and a manufacturing base asset appreciation is all we have left to generate wealth.
I believe "asset appreciation" is just a subset -- what is left is continuing massive financial fraud coupled with massive speculation using floating funds.
great article from Bloomb if you missed it
Lehman Monday Morning Lesson Lost With Obama Regulator-in-Chief
http://www.bloomberg.com/apps/news?pid=20601109&sid=aUTh4YMmI6QE
Dubai's SWF is halting investments. Wonder who is going to bail them out.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aB7Po3XKk7HI
Sept. 11 (Bloomberg) -- Istithmar World, the Dubai sovereign wealth fund, is halting investments as part of a restructuring effort after spending more than $25 billion this decade on stakes ranging from a yacht marina to luxury retailer Barneys New York, according to people familiar with the plan.
The process may result in a sale of the fund or its assets, they said. Istithmar, run by David Jackson, said this week that co-chief investment officers John Amato and Felix Herlihy would leave the firm.
Maybe China should get their own house in check. If the real crisis is just starting, then the decouple will go out the window and china's inflated property and stocks will crumble.
don't be so US centric. In June, the ECB made 440 billion Euro available to the market - that caused the strange recent leg up in the markets out of the head-and-shoulder pattern.
When you have them by the balls, their hearts and minds will follow. - Charles Colson
I agree with the likes of Jim Willie and others who say that China is in control of the situation. A quick look at the facts as I see them:
1. China has a large stash of treasuries and other USD denominated assets that are destined to decline in value. They cannot sell tresuries on the open market or buy gold/commodities without causing disruptions.
2. China has been on a spending spree, except instead of using HELOCs to by TVs and ipods, they are buying large stakes in natural resource companies using large pools of UST-bonds and also currency swaps with oil producers.
3. Everyone in the financial and mainstream media assumes that China won't stop supporting the US because "They Need Us"....this will be the ultimate blindside that catches the talking heads by surprise. This type of argument might make sense in the short-sighted western way of thinking, but China is far older and wiser a people than is recognized.
I believe that China is in the final phase of knocking the dollar and the US/London banking system from top of the financial world. It is true that China would be hurt by letting/causing the US to fail, but they stand to gain in the long run if they position themselves to be one of the strongest players after the fact.
In the last three weeks we have seen the Chinese govt allow its citizens to purchase gold and silver for the first time since the revolution. If an economic storm is comming I would want my constituents to be prepared...lest they get silly ideas when they can't afford food. China decided to default on commodity derivatives they believe to be fraudulent. These two developments will make big waves in a very small investment pool...with 80 paper certificates for every ounce of Gold according to many gold pundits one can see how a short squeeze/commercial signal failure is definately in the cards. They have bought SDR bonds, they have issued their own Renembi denominated bonds on the international market. The pace and scope of their actions are impressive.
While I understand that many will always say that China has too much to loose by letting the US Dollar system implode, I believe the facts and the recent developments will show that China has decided they are finally in position to bennefit in the long run. The west's preocupation with the short term will always cloud the clear logic the Chinese are using. China pulls the strings, and can cut them when they believe it is to their bennefit.
DAMN. His last words in this video: "The real economic crisis is just starting." WHAT does he mean by that?? The video ends.
The VP meant that with derivatives laced throughout the financial system in a global matter, and those derivatives are securitized instruments which may be at the end of multiple layers of securitization, and since the subprime securitization was a scant drop in the bucket, and this global securitization gambit is what accounts for all the massive amount of billionaires and now approximately $2 quadrillion USD of the derivatives market, things don't look too good....
Josey Wales:
You point about the Chinese potential losses if the US$ fails is well-taken.
Has anyone one a cost benefit comparison of our accomplishments in Iraq relative to the cost and compared that to the benefits the Chinese would receive if they brought the US to its knees in exchange for writing off its UST protfolio?
Read Sun Tzu.
The entire Chinese economy is based on manufactuing junk to be sold here. If they break the US consumer, we get hurt -- but they nuke themselves. All those shining cities created to employ 10's of millions of new middle class workers -- suddenly unemployed. Never forget China's elite want only to remain in power, and this would guarantee the revolution.
Sun tsu my ass. They're in a box and they know it.
If the Chinese economy has heretofore been based on manufacturing Chinese goods for sale to Americans, then perhaps they are smart enough to see our end of that deal has begun to sag, and it is time to move on. They may be dependent on us, but dependency alone presents a reason to move towards diversifying the economy and weaning themselves as quickly as they can from the dependence. By the way, I don't see this as nefarious, just good business. If I were the Chinese, I'd be swapping USTs and dollars for hard assets at a hefty discount (i.e., pay "full price" in USD despite lower dollar exchange values) just to speed up the diversification: it maintains asset values at the current levels and no one gets spooked. Plus they rid themselves of an asset (USD) that is depreciating in value.
Once the third party event that will be the catalyst starts, all bets are off. Equities down, Treasuries (think of a bank surounded by nuclear weapons) will skyrocket, as well as gold.
maybe they know something we can only wonder about - that US consumers are already broke & not about to come back with another load of MEW debt to exchange for their junk, & that in fact the American middle class is about to morph into a brand spanking new & much cheaper entitlement-free feudal class just like them. Peas in a pod.
if the bank of china is saying this what message SHOULD that send to the rest of the world? jesus. its really, relly bad when CHINA says this.
Jet Li is "Inscrutable".
Substitute "Lucent" when you see China, and "pets.com stock" wherever you see US T bonds, and you get the picture. Who needs who worse? I guess whosever economic system would collapse faster if the trading partner is withdrawn.
China isn't the saviour of the world. Here's why:
Reason 1. Numbers coming out from China need to be taken with large doses of salt
The fact that China (like most other governments) cook their books to a certain extent shouldn’t surprise anyone. It’s the politically correct thing to do. But the extent to which China – being a centrally managed economy – puts the numbers in a wok and fries it over high heat leads to distorted numbers that don’t add up.
Take one example: retail sales. China calculates retail sales figures by including government purchases and shipments to retailers – even before these shipments are sold to customers.
Here’s another: GDP calculations. There’s a recent post on my blog on “Lies, damned lies, and the Chinese GDP“
Reason 2. China is still addicted to exports
Exports fell for a tenth straight month. The decline in imports in August was the biggest in three months and more than economists estimated. The rate of decline in exports increased to 23.4% in Aug compared to last year, after dropping 23% in July.
At last count, exports still constituted about 35% of the Chinese economy.
Reason 3. Adding a new drug to the cocktail: government stimulus
According to a recent article on Reuters, Lou Jiwei, the chairman of the CIC, China’s sovereign wealth fund, said in response to a question about his expected performance: “It will not be too bad this year. Both China and America are addressing bubbles by creating more bubbles and we’re just taking advantage of that. So we can’t lose.”
If that doesn’t send a shiver up your spine, then you must be an investment banker.
Reason 4: Industrial capacity and real estate are booming. But who is buying?
Fixed asset investment inched up to a rate of increase of 33% over last year’s August, after expanding by 32.9 per cent in July. Investment in real-estate development grew 14.7 percent in the first eight months after an 11.6 percent gain in the first seven months, according to NBS.
Yes, overcapacity is now a serious problem in China. According to a recent report authored by the Financial and Economic Affairs Committee (FEAC) of the National People’s Congress (NPC), nineteen industries are currently plagued by problems of overcapacity.
And while house prices are going up, many remain empty.
Add to this the fact that some of the world’s largest office buildings in the world are being built in China, but are currently in serious need of some occupants - any occupants.
Last but not least, remember the biggest – and emptiest – shopping mall in the world, located near Guangzhou?
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