China heading for "Massive Credit Crisis"!

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LOVE CHINA DESTROY CCP

Surrey, Canada

#1 Feb 13, 2013
GMO: China Is Marching Toward A Massive Credit Crisis

Mamta Badkar|Jan. 27, 2013, 11:30 PM|80,969|20

Colum Murphy/WSJ

China has passed many reforms aimed at easing capital controls. But these are being rolled out slowly.

A meager deposit interest rate has forced people to turn to wealth management products and other risky investments. And the recent credit crunch forced many into the unregulated shadow banking system.

In a new report, GMO's Edward Chancellor and Mike Monnelly warn of "acute fragility" in China's financial system, and write, "the public appearance is of a banking system with negligible levels of bad debts, ample liquidity, and low leverage. The reality, on closer inspection, looks rather different".

Read more: http://www.businessinsider.com/gmo-chinas-cre...
LOVE CHINA DESTROY CCP

Surrey, Canada

#2 Feb 13, 2013
...

China has created too much credit too quickly.

The last big surge of credit came in 2009 when China unleashed 4 trillion yuan to help spur economic growth and employment.

"Since that date, China’s economy has become a credit junkie, requiring increasing amounts of debt to generate the same unit of growth. Between 2007 and 2012, the ratio of credit to GDP climbed to more than 190%, an increase of 60 percentage points." In 2012, new credit to the non-financial sector totaled 15.5 trillion, that's equivalent to 33 percent of 2011 GDP.

Read more: http://www.businessinsider.com/gmo-chinas-cre...
LOVE CHINA DESTROY CCP

Surrey, Canada

#3 Feb 13, 2013
The short of it is that Chinese "growth" for the last six years has been contrived, and sustained only by a credit binge.

Like an insolvent consumer living by putting everything on his credit cards, this crash is inevitable and will be very, very bad!

LOVE CHINA DESTROY CCP

Surrey, Canada

#4 Feb 13, 2013
CCP China's "asset backed paper" is growing at a fantastic rate! Sound familiar?

Chinese Securities Firms Are Ballooning And That Has Experts Worried

Mamta Badkar|Feb. 13, 2013, 12:18 PM|989|2


Chinese securities firms saw their assets under management (AUM) balloon to 1.2 trillion yuan at the end of 2012, up from 280 billion yuan at the start of 2012, according to the latest data from Securities Association of China.

And 80 - 90 percent of that is coming banks, according to Caixin Online, which has some China watchers worried.

As Chinese regulators forced trust companies to scale back their cooperation with banks, securities firms have benefited.

Banks have been increasingly invest their money and their clients' money in a wider range of financial products like the controversial Chinese wealth management products (WMPs). And banks have taken advantage of the fact that loans made through the securities firms don't impact their loan quota. Caixin Online explains how this works:

"In a typical bank-to-securities company asset management agreement, the bank entrusts the securities firm with funds raised from wealth management products, and the securities firm uses the money to buy the bank's notes or invest in other types of financial instruments.

The arrangement allows the bank to shift assets off its balance sheet and circumvent lending restrictions. The securities firm, in return, charges the bank a fee for using its service."

A quick reminder: The Chinese trust industry more than doubled in the past two years to about six trillion yuan by the end of September 2012 and got on the radar of regulators.

GMO's Edward Chancellor and Mike Monnelly have previously pointed out that "given their generally low credit quality and widespread exposure to real estate, trust products can be seen as China’s equivalent to subprime mortgage-backed securities."

But these trust companies were highly leveraged and considered risky, and in an effort to curb shadow banking, Chinese regulators ordered them to cap the value of trusts tied to bank loans at 30 percent of their total outstanding products and required banks to include loans made through trust companies on their balance sheets.

The way securities firms are working with banks, however, is reminiscent of the cooperation between banks and trust firms. This practice of moving money off banks' balance sheets is adding to concerns about China's shadow banking system and its impact on China's economic recovery.

Experts point out that regulators could change their stance on security firms and crack down on them as well.

Read more: http://www.businessinsider.com/risks-in-china...
LOVE CHINA DESTROY CCP

Surrey, Canada

#5 Feb 13, 2013
Here "Comrade Ick". Read and learn (if you still CAN after a lifetime of stupifying Chinese Communist Party propaganda lies...).

:)
lct

Beijing, China

#6 Feb 13, 2013
china is a 52 trillion yuan gdp economy.

1.2 trillion yuan security backed asset is just assets involved other asia nations wall street sold to us.

they have to sell it to us to bring real money to their masters. idiot.

all asia nations do make money. unlike your loser country.
Snowflake

San Francisco, CA

#7 Feb 13, 2013
Is Miro really a Chinese? If he is China does not need enemies. He is just another traitor like Gordon Chang, Henry Kao, Gary Locke et al. The thing about China is this, they do have a lot of traitors
lct

Beijing, China

#8 Feb 13, 2013
Snowflake wrote:
Is Miro really a Chinese? If he is China does not need enemies. He is just another traitor like Gordon Chang, Henry Kao, Gary Locke et al. The thing about China is this, they do have a lot of traitors
you list are american, not chinese.
RayH

Shenzhen, China

#9 Feb 13, 2013
Snowflake wrote:
Is Miro really a Chinese? If he is China does not need enemies. He is just another traitor like Gordon Chang, Henry Kao, Gary Locke et al. The thing about China is this, they do have a lot of traitors
Mirolyuba is an Indian woman.

Since: Jun 12

Location hidden

#10 Feb 14, 2013
lct wrote:
china is a 52 trillion yuan gdp economy.
1.2 trillion yuan security backed asset is just assets involved other asia nations wall street sold to us.
they have to sell it to us to bring real money to their masters. idiot.
all asia nations do make money. unlike your loser country.
Countries including China are benefiting from funds intended to help the world’s poorest, despite a pledge for it to go only to the neediest from the EU
RayH

Shenzhen, China

#11 Feb 14, 2013
dreadman82 wrote:
<quoted text>
Countries including China are benefiting from funds intended to help the world’s poorest, despite a pledge for it to go only to the neediest from the EU
Have you checked the latest economic data from EU for 2012?-0.5 % economic growth.
LOVE CHINA DESTROY CCP

Surrey, Canada

#12 Feb 14, 2013
FUNNY, eh?

Note how the backwards and stupid Wu Mao Red Guards of the DYING Chinese Communist Party can only scratch their heads trying to decide which lies to use to "denounce" the "class enemy" who has merely brought attention to FACTS about China today?

This Chinese Communist Party is SO BACKWARDS it is still stuck in the crude politics of Mao.

The CCP will never change.

It can't.

It must be thrown out with the rest of the obsolete and poisonous trash.
LOVE CHINA DESTROY CCP

Surrey, Canada

#13 Feb 14, 2013
Now one of these CCP losers is spamming his usual "hate USA and ignore CCP incompetence and crimes"!

Hey, CCP Dummy! This is the CHINA forum!

Such LOSERS, these CCP traitors to China!

Since: Jun 12

Location hidden

#14 Feb 14, 2013
RayH wrote:
<quoted text>
Have you checked the latest economic data from EU for 2012?-0.5 % economic growth.
Uh, keep your pants on Ray whore, we in austrity remember? It is what I always say, Developedd countries like Germany, the UK and France need deficits, cuting deficits and surplus' lead to crisis. BTW Norway is doing just fine, grew by 1.7 and we not exactly in the EU but our banks are a little exposed.

But don't worry remember I told the Euro crisis would continue for a little longer.. Euro-area panic had one useful side effect: the euro tumbled against other major currencies, providing a boost to euro-area exporters and an uptick in external demand for the single currency's desperate economies.

German activity showed an outright expansion in January and contraction in Spain has slowed dramatically from late last year, just a little while longer.

This is what we get for giving to chinese, they hope for our dimise yet we feed your fathers and mothers when china was poor and we continue to send money to you disabled and your orphans

Since: Jun 12

Location hidden

#15 Feb 14, 2013
Even despite our idiotic leaders, the EU and Euro zone countries will be just fine. Don't buy into the media hype, it is serious but is not the end of the world and Europe as we know it.
LOVE CHINA DESTROY CCP

Surrey, Canada

#16 Feb 14, 2013
Yes, Europe is still many, many times richer than China, and its people are far better educated than the Chinese.
LOVE CHINA DESTROY CCP

Surrey, Canada

#17 Feb 14, 2013
Also, Europe is not routinely HUMILIATED by the idiocy of a backwards Leninist dictatorship like China is!
LOVE CHINA DESTROY CCP

Surrey, Canada

#18 Feb 14, 2013
CCP China's "asset backed paper" is growing at a fantastic rate! Sound familiar?
lct

Beijing, China

#19 Feb 14, 2013
dreadman82 wrote:
<quoted text>
Countries including China are benefiting from funds intended to help the world’s poorest, despite a pledge for it to go only to the neediest from the EU
you guys don't even love your own kind, that is too ugly, and too sick.

listen, we don't need your fund.

Since: Jun 12

Location hidden

#20 Feb 14, 2013
lct wrote:
<quoted text>
you guys don't even love your own kind, that is too ugly, and too sick.
listen, we don't need your fund.
Then tell start taking care of your orphans, your migrant children and your handicaped you banana republic dictators.

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