Now that deposits are guaranteed, basically I as an investor have no incentive to hold equities so I sell them and put my money in bank deposits,"
http://www.cnbc.com/id/27397168
Tuesday, October 28, 2008
Europe Faces `Huge Threat' as Emerging Markets Slide (Update1)
http://www.bloomberg.com/apps/news?pid=20601068&sid=aE4VJ5EtLNHk&refer=economy
Oct. 28 (Bloomberg) -- The European economy's close ties to emerging markets are turning from a blessing to a curse.
Already skirting recession, the 15 euro nations face greater pain as economies which gave them an edge over the U.S. and Japan stumble. Neighbors to the east, that buy about a third of the region's exports, are faltering as their banks weaken and currencies slide. Meanwhile, the halving of oil prices since a July record is slowing demand from the Middle East.
European companies such as France's Schneider Electric SA and Finland's Kone Oyj are saying orders will weaken as emerging-market countries from China to Argentina succumb to the credit crunch. Citigroup Inc.'s economists now expect deeper interest-rate cuts and a recession in the euro region.
``It's a huge threat to the euro area,'' said Nick Kounis, chief European economist at Fortis in Amsterdam. ``It had been hoped these markets would hold up better and drive European growth.''
As recently as Oct. 6, European Central Bank President Jean-Claude Trichet was betting ``ongoing growth in emerging- market economies might support a gradual recovery'' next year. Yesterday, he said the bank may lower rates next week as the financial crisis damps inflation.
The 14-month credit crunch is prompting investors to sell riskier stocks, bonds and currencies, while punishing banks they view to be short of capital. Emerging-market stocks dropped to a four-year low yesterday.
Lines at IMF
Ukraine, Hungary, Belarus and Pakistan are seeking aid from the International Monetary Fund and Argentina's markets are in turmoil after its government tried to take over private pension funds. Russia has pledged more than $200 billion to stem its worst banking crisis since 1998 and China is slowing after expanding more than 10 percent for five years.
Europe's vulnerability to a downturn in emerging markets is reflected by how it benefited from their upswing. Exports to them were equivalent to about 6 percent of the continent's gross domestic product in 2006, compared with about 4.5 percent in 2000 and less than 4 percent in the U.S., says Juergen Michels, an economist at Citigroup Inc. in London.
The dozen, mostly Eastern European, nations which joined the broader European Union since 2004 account for 15.3 percent of the euro-area's foreign demand, up a third since the start of the decade, according to the ECB. The contributions of China and Russia have almost doubled. By contrast, the U.S. and U.K. portions have each dropped about 4 percentage points to 11.9 percent and 14.5 percent respectively.
`More Exposed'
``With a higher share of exports to emerging markets, the European countries benefited much more than the U.S. from booming emerging-market economies in recent years,'' said Michels. Now they are ``more exposed'' to their downturn.
The euro-area economy will contract for the first time since 1993 next year, forcing the ECB to cut its benchmark rate to at least 2 percent from 3.75 percent, he predicts. The Bank of England said in a report today that turbulence in emerging markets is posing heightened risks to Britain's financial stability.
Schneider Electric, the world's biggest maker of circuit breakers, now expects emerging markets to slow after four years. Even China ``isn't immune to external forces,'' Chief Executive Officer Jean-Pascal Tricoire said Oct. 22. Kone, a manufacturer of elevators, said the previous day that investment is slowing from Mexico to India to Qatar and that Russia is a ``question mark.''
Earnings Forecasts
Gareth Williams, an equity strategist at ING Bank NV in London, says more companies will downgrade earnings forecasts. Firms in Austria, Portugal and Spain have the most revenues from emerging markets, while Ireland, Greece and Italy have the least, he said in a report to clients yesterday.
Eastern Europe is ``rapidly becoming a key risk'' to the euro area, said Stephane Deo, chief European economist at UBS AG in London. He estimates 30 percent of euro-area exports at the start of this year went to its eastern trade partners, double the shipments to the U.S. Germany and the Netherlands are most at threat with 3.5 percent of their GDP accounted for by sales to the former communist bloc, he said.
Buoyant demand from Russia and the Middle East is ebbing as falling oil prices curb their purchasing power. Crude rose 625 percent from 2001 to a record $147.27 per barrel in July, enabling oil producers to buy equipment such as MAN AG's trucks and ``Made in Europe'' luxury goods including handbags from Gucci Group NV.
Oil Bill
The demand was strong enough for Europe to recoup two-thirds of its higher oil bill in the past five years, calculates Klaus Baader, chief European economist at Merrill Lynch & Co. While the drop in energy costs will ``be good in the short-term for domestic demand, over the medium term, reductions in demand for exports are going to weigh on the European economy,'' he said.
Already retrenching as they try to cover $221.8 billion in losses and writedowns, European banks also stand to be hurt more than most if emerging markets goes sour, said Stephen Jen, chief currency strategist at Morgan Stanley in London.
European banks lent $3.5 trillion to these economies, compared with $500 billion from the U.S. and $200 billion from Japan, according to his estimates. Those in Austria and Spain were particularly exposed, he said. Three quarters of loans to China and India originate in Europe.
``Pressures on emerging-market economies could have a particularly negative boomerang effect on European banks,'' Jen said.
Friday, October 24, 2008
Greenspan Concedes to `Flaw' in His Market Ideology
Oct. 23 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said a ``once-in-a-century credit tsunami'' has engulfed financial markets and conceded his free-market ideology shunning regulation was flawed.
``Yes, I found a flaw,'' Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. ``I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.'' Greenspan added he was ``partially'' wrong for opposing the regulation of derivatives.
Greenspan's contrition came after lawmakers and Fed watchers increasingly blamed the former Fed chairman for helping cause the crisis with lax oversight of the housing boom and derivatives markets. Normally afforded deference by Congress, he endured almost four hours of questions from lawmakers less than two weeks before a national election.
``Greenspan is finally taking some responsibility for his actions,'' said Paul Kasriel, director of economic research at Northern Trust Co. in Chicago and a former Fed official. ``The damage has been done. His reputation has definitely been tarnished.''
Greenspan, responding to questions, said only ``onerous'' regulation would have prevented the financial crisis. Stifling rules would have suppressed growth and hurt Americans' standards of living, he said.
Not Infallible
``We have to do our best but not expect infallibility or omniscience,' he said.
Part of the problem was that the Fed's ability to forecast the economy's trajectory is an inexact science, he said.
``If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,'' Greenspan said. ``Forecasting never gets to the point where it is 100 percent accurate.''
The admission that free markets have their faults was a shift for the former Fed chairman who declared in a May 2005 speech that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.''
Committee Chairman Henry Waxman, a California Democrat, said today that Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.''
`Paying the Price'
``You were advised to do so by many others,'' he told the man hailed in the 1990s as the ``Maestro'' of the global financial system and awarded a knighthood in 2002. ``And now our whole economy is paying the price.''
Greenspan's devotion to free markets was nurtured in part by his association with Ayn Rand, the libertarian novelist and philosopher who espoused laissez-faire capitalism. He met Rand in the 1950s, becoming part of her inner circle of followers meeting regularly in her Manhattan apartment.
``Greenspan in a very, very kind of unwise, left-brain way, imputed pure rationality to markets,'' James Grant, editor of Grant's Interest Rate Observer, said in an interview on ``Night Talk'' with Mike Schneider to be broadcast later today on Bloomberg Television. ``They are just as rational and just as efficient as the people that operated in them.''
Waxman echoed that sentiment to Greenspan: ``The mantra became government regulation is wrong. The market is infallible.''
Gramlich's Warnings
Former Fed Governor Edward Gramlich, who died in 2007, had urged Greenspan to strengthen oversight of banks during the record U.S. mortgage boom from 2004 to 2006.
Questioned about those warnings, Greenspan said ``Governor Gramlich said to me that he had problems'' and that he left the meeting expecting a Fed subcommittee dealing with consumer and community affairs to present recommendations, which didn't occur. ``I presumed at the time that essentially the subcommittee didn't think it rose to the higher level'' requiring action, Greenspan said.
Responding to criticism that he was too ideological, Greenspan said he sought as chairman to abide by laws passed by Congress, ``not my own predilections.''
He later added that he couldn't respond to every warning. ``There are always a lot of people raising issues, and half the time they're wrong.''
Regulatory Actions
Greenspan pointed out that he voted for every regulatory action the Fed moved on, drawing a rebuke from Waxman. ``On the other hand, you didn't get to vote on regulations that you didn't put before the Federal Reserve board, even though you had the legal authority for those regulations.''
Firms that bundle loans into securities for sale should be required to keep part of those securities, Greenspan said in prepared testimony. Other rules should address fraud and settlement of trades, he said.
Greenspan opposed increasing financial supervision as Fed chairman from August 1987 to January 2006. Policy makers are now struggling to contain a financial crisis marked by record foreclosures, falling asset prices and almost $660 billion in writedowns and losses tied to U.S. subprime mortgages.
Greenspan, 82, reiterated his ``shocked disbelief'' that financial companies failed to execute sufficient ``surveillance'' on their trading counterparties to prevent surging losses. The ``breakdown'' was clearest in the market where securities firms packaged home mortgages into debt sold on to other investors, he said.
Pricing Risk
``In this financial environment, I see no choice but to require that all securitizers retain a meaningful part of the securities they issue,'' Greenspan said. That would give the companies an incentive to ensure the assets are properly priced for their risk, advocates say.
Greenspan said the Fed didn't know the size of the subprime mortgage market until late 2005.
Securities and Exchange Commission Chairman Christopher Cox and former Treasury Secretary John Snow also appeared at the House committee hearing.
Snow said the economy is headed down a ``bad, bad path'' and he endorsed consideration of more fiscal stimulus. For the longer term, Snow said the global financial system should be reorganized by focusing on increasing transparency of ``excessive'' leverage to prevent institutions from creating too much risk.
The U.S. needs ``one strong national regulator'' to oversee firms and fix what Snow called ``a fragmented approach'' to regulation.
Addressing the trio that oversaw the U.S. financial markets as the housing bubble developed, Representative John Yarmuth, a Democrat from Kentucky, characterized them as ``three Bill Buckners,'' referring to the Boston Red Sox first baseman whose fielding error some fans blame for the team's loss in the 1986 World Series.
``Yes, I found a flaw,'' Greenspan said in response to grilling from the House Committee on Oversight and Government Reform. ``I was shocked because I'd been going for 40 years or more with very considerable evidence that it was working exceptionally well.'' Greenspan added he was ``partially'' wrong for opposing the regulation of derivatives.
Greenspan's contrition came after lawmakers and Fed watchers increasingly blamed the former Fed chairman for helping cause the crisis with lax oversight of the housing boom and derivatives markets. Normally afforded deference by Congress, he endured almost four hours of questions from lawmakers less than two weeks before a national election.
``Greenspan is finally taking some responsibility for his actions,'' said Paul Kasriel, director of economic research at Northern Trust Co. in Chicago and a former Fed official. ``The damage has been done. His reputation has definitely been tarnished.''
Greenspan, responding to questions, said only ``onerous'' regulation would have prevented the financial crisis. Stifling rules would have suppressed growth and hurt Americans' standards of living, he said.
Not Infallible
``We have to do our best but not expect infallibility or omniscience,' he said.
Part of the problem was that the Fed's ability to forecast the economy's trajectory is an inexact science, he said.
``If we are right 60 percent of the time in forecasting, we are doing exceptionally well; that means we are wrong 40 percent of the time,'' Greenspan said. ``Forecasting never gets to the point where it is 100 percent accurate.''
The admission that free markets have their faults was a shift for the former Fed chairman who declared in a May 2005 speech that ``private regulation generally has proved far better at constraining excessive risk-taking than has government regulation.''
Committee Chairman Henry Waxman, a California Democrat, said today that Greenspan had ``the authority to prevent irresponsible lending practices that led to the subprime mortgage crisis.''
`Paying the Price'
``You were advised to do so by many others,'' he told the man hailed in the 1990s as the ``Maestro'' of the global financial system and awarded a knighthood in 2002. ``And now our whole economy is paying the price.''
Greenspan's devotion to free markets was nurtured in part by his association with Ayn Rand, the libertarian novelist and philosopher who espoused laissez-faire capitalism. He met Rand in the 1950s, becoming part of her inner circle of followers meeting regularly in her Manhattan apartment.
``Greenspan in a very, very kind of unwise, left-brain way, imputed pure rationality to markets,'' James Grant, editor of Grant's Interest Rate Observer, said in an interview on ``Night Talk'' with Mike Schneider to be broadcast later today on Bloomberg Television. ``They are just as rational and just as efficient as the people that operated in them.''
Waxman echoed that sentiment to Greenspan: ``The mantra became government regulation is wrong. The market is infallible.''
Gramlich's Warnings
Former Fed Governor Edward Gramlich, who died in 2007, had urged Greenspan to strengthen oversight of banks during the record U.S. mortgage boom from 2004 to 2006.
Questioned about those warnings, Greenspan said ``Governor Gramlich said to me that he had problems'' and that he left the meeting expecting a Fed subcommittee dealing with consumer and community affairs to present recommendations, which didn't occur. ``I presumed at the time that essentially the subcommittee didn't think it rose to the higher level'' requiring action, Greenspan said.
Responding to criticism that he was too ideological, Greenspan said he sought as chairman to abide by laws passed by Congress, ``not my own predilections.''
He later added that he couldn't respond to every warning. ``There are always a lot of people raising issues, and half the time they're wrong.''
Regulatory Actions
Greenspan pointed out that he voted for every regulatory action the Fed moved on, drawing a rebuke from Waxman. ``On the other hand, you didn't get to vote on regulations that you didn't put before the Federal Reserve board, even though you had the legal authority for those regulations.''
Firms that bundle loans into securities for sale should be required to keep part of those securities, Greenspan said in prepared testimony. Other rules should address fraud and settlement of trades, he said.
Greenspan opposed increasing financial supervision as Fed chairman from August 1987 to January 2006. Policy makers are now struggling to contain a financial crisis marked by record foreclosures, falling asset prices and almost $660 billion in writedowns and losses tied to U.S. subprime mortgages.
Greenspan, 82, reiterated his ``shocked disbelief'' that financial companies failed to execute sufficient ``surveillance'' on their trading counterparties to prevent surging losses. The ``breakdown'' was clearest in the market where securities firms packaged home mortgages into debt sold on to other investors, he said.
Pricing Risk
``In this financial environment, I see no choice but to require that all securitizers retain a meaningful part of the securities they issue,'' Greenspan said. That would give the companies an incentive to ensure the assets are properly priced for their risk, advocates say.
Greenspan said the Fed didn't know the size of the subprime mortgage market until late 2005.
Securities and Exchange Commission Chairman Christopher Cox and former Treasury Secretary John Snow also appeared at the House committee hearing.
Snow said the economy is headed down a ``bad, bad path'' and he endorsed consideration of more fiscal stimulus. For the longer term, Snow said the global financial system should be reorganized by focusing on increasing transparency of ``excessive'' leverage to prevent institutions from creating too much risk.
The U.S. needs ``one strong national regulator'' to oversee firms and fix what Snow called ``a fragmented approach'' to regulation.
Addressing the trio that oversaw the U.S. financial markets as the housing bubble developed, Representative John Yarmuth, a Democrat from Kentucky, characterized them as ``three Bill Buckners,'' referring to the Boston Red Sox first baseman whose fielding error some fans blame for the team's loss in the 1986 World Series.
Monday, October 20, 2008
China's Economy Grows 9%, Slowest Pace in Five Years (Update3)
By Kevin Hamlin and Li Yanping
Oct. 20 (Bloomberg) -- China's economy, the biggest contributor to global growth, expanded at the slowest pace in five years as the financial crisis cut demand for exports.
Gross domestic product rose 9 percent in the third quarter from a year earlier, the statistics bureau said in Beijing today. That was less than any of the 12 estimates in a Bloomberg News survey and the 10.1 percent gain in the previous three months.
The fifth quarter of slowing growth may exacerbate declines this year in iron ore, copper and oil prices and undermine demand for exports within Asia, where economies are already contracting. The cabinet announced yesterday increased infrastructure spending and tax cuts for exporters and the central bank may be poised to cut interest rates for the third time this year.
``This will shake confidence and underscores that no one is immune,'' said Ben Simpfendorfer, an economist with Royal Bank of Scotland Plc in Hong Kong. He predicts three more rate cuts by the middle of next year and a further easing of lending restrictions.
Inflation cooled to 4.6 percent in September, the slowest pace since June 2007, on easing commodity prices.
The CSI 300 Index of stocks climbed 3.1 percent as of 2:54 p.m. in Shanghai on speculation that stimulus measures will aid companies' profits. The yuan traded at 6.8295 against the dollar from 6.8296 before the data was released.
`Spreading, Deepening' Crisis
Growth is slowing across Asia, where Japan's economy shrank in the second quarter and Singapore has tumbled into a recession.
Financial market turmoil and a global slowdown ``have started to have a negative impact on China's economy,'' Li Xiaochao, a statistics bureau spokesman, said. ``The subprime crisis that broke out last year in the U.S. is still spreading and deepening.''
China's expansion was the weakest since the severe acute respiratory syndrome, or SARS, epidemic slashed growth in the second quarter of 2003. The median estimate of the economists in the survey was for growth of 9.7 percent.
The contribution of trade to growth halved to 1.2 percentage points in the first nine months from a year earlier. Export growth may slow ``substantially,'' Li said.
Industrial production rose 11.4 percent in September, the slowest pace in more than six years excluding seasonal distortions, on weaker export orders and factory closures to clear the air for the Olympic Games.
Investment Growth Accelerates
Growth in urban fixed-asset investment accelerated to 27.6 percent in the first nine months from a year earlier, today's data showed, from 27.4 percent through August. Railway and earthquake reconstruction spending may help to sustain that pace.
Retail sales rose 23.2 percent in September, close to the fastest pace in at least nine years. Producer prices rose 9.1 percent last month, down from a 10.1 percent gain in August.
Urban disposable incomes for the first nine months rose 14.7 percent to 11,865 yuan ($1,737) from a year earlier. Rural cash incomes climbed 19.6 percent to 3,971 yuan. Those numbers were boosted by inflation.
The State Council yesterday cited slower growth in fiscal revenue and company profits and ``volatility and sluggishness'' in stocks as effects of the global crisis. The CSI 300 has fallen 65 percent this year.
Demand for Steel
Rio Tinto Group, the world's second-largest aluminum producer, last week flagged ``significantly weaker'' demand for the metal in China. Prices for Chinese imports of iron ore also fell to a 19-month low on cooling demand from steelmakers.
Oil has fallen 47 percent since the start of July and copper has tumbled 43 percent.
About half of China's toymakers have shut down this year, with 7,000 workers losing their jobs when Smart Union Group Holdings Ltd. closed factories in Guangdong province this month, state media say. A quarter of 70,000 Hong Kong-owned businesses in the Pearl River Delta may go bust, the Federation of Hong Kong Industries estimated today.
The central bank has stalled gains by the yuan against the dollar since mid-July, protecting jobs in export industries.
China's export growth may plummet from 22 percent in the first nine months of this year to ``zero or even negative growth'' in 2009, according to Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai.
China's `Resilience'
Still, China's economic growth remains the fastest of the world's 20 biggest economies and shows ``remarkable resilience,'' said Glenn Maguire, chief Asia economist at Societe Generale SA in Hong Kong.
Besides the darkening outlook for exports, weakness in the property market is a threat to the world's fourth-biggest economy.
Home sales by volume plunged 55.5 percent and 38.5 percent in Beijing and Shanghai in the first eight months from a year earlier, according to the official Xinhua News Agency. The State Council said that it would increase the supply of low-cost housing and reduce property transaction fees.
A fiscal surplus and a world record $1.9 trillion of currency reserves allow the government to step up spending. The International Monetary Fund estimated this month that China's economy may expand 9.3 percent next year compared with growth of 0.1 percent in the U.S., 0.2 percent in the euro area, and 0.5 percent in Japan.
Easing inflation cleared the way for two interest-rate reductions in a month, the latest on Oct. 8, when the U.S. Federal Reserve and five other central banks also made cuts in an emergency bid to thaw credit markets.
``Flexible and prudent'' economic policies are needed for steady and rapid growth, the statistics bureau's Li said.
http://www.bloomberg.com/apps/news?pid=20601068&sid=aJJBaErjZEqk&refer=economy
G-7 to Contract Most Since Great Depression, Deutsche Says
http://www.bloomberg.com/apps/news?pid=20601068&sid=arWh3Cp3XqQo&refer=economy
By Jennifer Ryan
Oct. 20 (Bloomberg) -- The economy of the Group of Seven nations will contract by the most since the Great Depression next year as tighter credit markets hurt consumption, forcing central banks to cut interest rates, Deutsche Bank AG said.
The combined G-7 will contract 1.1 percent in 2009 after expanding 0.8 percent this year, Deutsche Bank economists Peter Hooper and Thomas Mayer said in a research note. The U.S. will shrink 1 percent, the euro region will contract 1.4 percent and Japan will shrink 1.2 percent, they said.
The economic slump follows a yearlong credit squeeze that's toppled banks including Lehman Brothers Holdings Inc. and culminated in the Standard & Poor's 500 Index's worst weekly decline since 1933. Higher credit costs will strangle consumer spending and business investment just as unemployment rises, the Deutsche Bank economists said.
``We now expect a major recession for the world economy over the year ahead,'' Mayer and other economists said. ``A major cutback in credit to the real economy across the world has led to the deterioration in the outlook. We were not anticipating such a huge financial shock since our Oct. 3 forecasts.''
The G-7 consists of the U.S., Canada, Japan, France, Italy, Germany and the U.K. Growth across the world economy as a whole will slow to 1.2 percent from 3.2 percent this year, the slowest since the early 1980s, according to Deutsche Bank forecasts.
A global recession and cooling inflation will give the Federal Reserve, the European Central Bank and the Bank of Japan scope to help the economy with lower rates, Deutsche Bank forecast.
Fed Cuts
The Fed will cut the benchmark interest rate to 1 percent at its Oct. 29 meeting from the current 1.5 percent, Deutsche Bank said. It previously predicted rates to fall to that level over a period of 12 months and the economy to stagnate in 2009.
Mayer said he hasn't cut economic forecasts ``by such a large amount in such a short period of time'' in the 20 years he's been working in finance.
The ECB will lower its key rate to a record 1.5 percent over the next 12 months from the current 3.75 percent, Deutsche Bank said. The economists previously forecast the central bank to cut to 3 percent over the period and the economy to shrink 0.2 percent next year.
The Bank of Japan will lower its benchmark to 0.25 percent in early 2009, against an earlier forecast of no change, Deutsche Bank said. The rate is now 0.5 percent. The economists also said Japan's economy would shrink 1.2 percent, which compares with a previous forecast that it would expand 0.4 percent.
Global inflation will slow to 3.1 percent from 5.6 percent this year, Deutsche Bank said. The forecasts exclude data for economic growth during World War II, Deutsche Bank said.
Oct. 20 (Bloomberg) -- China's economy, the biggest contributor to global growth, expanded at the slowest pace in five years as the financial crisis cut demand for exports.
Gross domestic product rose 9 percent in the third quarter from a year earlier, the statistics bureau said in Beijing today. That was less than any of the 12 estimates in a Bloomberg News survey and the 10.1 percent gain in the previous three months.
The fifth quarter of slowing growth may exacerbate declines this year in iron ore, copper and oil prices and undermine demand for exports within Asia, where economies are already contracting. The cabinet announced yesterday increased infrastructure spending and tax cuts for exporters and the central bank may be poised to cut interest rates for the third time this year.
``This will shake confidence and underscores that no one is immune,'' said Ben Simpfendorfer, an economist with Royal Bank of Scotland Plc in Hong Kong. He predicts three more rate cuts by the middle of next year and a further easing of lending restrictions.
Inflation cooled to 4.6 percent in September, the slowest pace since June 2007, on easing commodity prices.
The CSI 300 Index of stocks climbed 3.1 percent as of 2:54 p.m. in Shanghai on speculation that stimulus measures will aid companies' profits. The yuan traded at 6.8295 against the dollar from 6.8296 before the data was released.
`Spreading, Deepening' Crisis
Growth is slowing across Asia, where Japan's economy shrank in the second quarter and Singapore has tumbled into a recession.
Financial market turmoil and a global slowdown ``have started to have a negative impact on China's economy,'' Li Xiaochao, a statistics bureau spokesman, said. ``The subprime crisis that broke out last year in the U.S. is still spreading and deepening.''
China's expansion was the weakest since the severe acute respiratory syndrome, or SARS, epidemic slashed growth in the second quarter of 2003. The median estimate of the economists in the survey was for growth of 9.7 percent.
The contribution of trade to growth halved to 1.2 percentage points in the first nine months from a year earlier. Export growth may slow ``substantially,'' Li said.
Industrial production rose 11.4 percent in September, the slowest pace in more than six years excluding seasonal distortions, on weaker export orders and factory closures to clear the air for the Olympic Games.
Investment Growth Accelerates
Growth in urban fixed-asset investment accelerated to 27.6 percent in the first nine months from a year earlier, today's data showed, from 27.4 percent through August. Railway and earthquake reconstruction spending may help to sustain that pace.
Retail sales rose 23.2 percent in September, close to the fastest pace in at least nine years. Producer prices rose 9.1 percent last month, down from a 10.1 percent gain in August.
Urban disposable incomes for the first nine months rose 14.7 percent to 11,865 yuan ($1,737) from a year earlier. Rural cash incomes climbed 19.6 percent to 3,971 yuan. Those numbers were boosted by inflation.
The State Council yesterday cited slower growth in fiscal revenue and company profits and ``volatility and sluggishness'' in stocks as effects of the global crisis. The CSI 300 has fallen 65 percent this year.
Demand for Steel
Rio Tinto Group, the world's second-largest aluminum producer, last week flagged ``significantly weaker'' demand for the metal in China. Prices for Chinese imports of iron ore also fell to a 19-month low on cooling demand from steelmakers.
Oil has fallen 47 percent since the start of July and copper has tumbled 43 percent.
About half of China's toymakers have shut down this year, with 7,000 workers losing their jobs when Smart Union Group Holdings Ltd. closed factories in Guangdong province this month, state media say. A quarter of 70,000 Hong Kong-owned businesses in the Pearl River Delta may go bust, the Federation of Hong Kong Industries estimated today.
The central bank has stalled gains by the yuan against the dollar since mid-July, protecting jobs in export industries.
China's export growth may plummet from 22 percent in the first nine months of this year to ``zero or even negative growth'' in 2009, according to Stephen Green, head of China research at Standard Chartered Bank Plc in Shanghai.
China's `Resilience'
Still, China's economic growth remains the fastest of the world's 20 biggest economies and shows ``remarkable resilience,'' said Glenn Maguire, chief Asia economist at Societe Generale SA in Hong Kong.
Besides the darkening outlook for exports, weakness in the property market is a threat to the world's fourth-biggest economy.
Home sales by volume plunged 55.5 percent and 38.5 percent in Beijing and Shanghai in the first eight months from a year earlier, according to the official Xinhua News Agency. The State Council said that it would increase the supply of low-cost housing and reduce property transaction fees.
A fiscal surplus and a world record $1.9 trillion of currency reserves allow the government to step up spending. The International Monetary Fund estimated this month that China's economy may expand 9.3 percent next year compared with growth of 0.1 percent in the U.S., 0.2 percent in the euro area, and 0.5 percent in Japan.
Easing inflation cleared the way for two interest-rate reductions in a month, the latest on Oct. 8, when the U.S. Federal Reserve and five other central banks also made cuts in an emergency bid to thaw credit markets.
``Flexible and prudent'' economic policies are needed for steady and rapid growth, the statistics bureau's Li said.
http://www.bloomberg.com/apps/news?pid=20601068&sid=aJJBaErjZEqk&refer=economy
G-7 to Contract Most Since Great Depression, Deutsche Says
http://www.bloomberg.com/apps/news?pid=20601068&sid=arWh3Cp3XqQo&refer=economy
By Jennifer Ryan
Oct. 20 (Bloomberg) -- The economy of the Group of Seven nations will contract by the most since the Great Depression next year as tighter credit markets hurt consumption, forcing central banks to cut interest rates, Deutsche Bank AG said.
The combined G-7 will contract 1.1 percent in 2009 after expanding 0.8 percent this year, Deutsche Bank economists Peter Hooper and Thomas Mayer said in a research note. The U.S. will shrink 1 percent, the euro region will contract 1.4 percent and Japan will shrink 1.2 percent, they said.
The economic slump follows a yearlong credit squeeze that's toppled banks including Lehman Brothers Holdings Inc. and culminated in the Standard & Poor's 500 Index's worst weekly decline since 1933. Higher credit costs will strangle consumer spending and business investment just as unemployment rises, the Deutsche Bank economists said.
``We now expect a major recession for the world economy over the year ahead,'' Mayer and other economists said. ``A major cutback in credit to the real economy across the world has led to the deterioration in the outlook. We were not anticipating such a huge financial shock since our Oct. 3 forecasts.''
The G-7 consists of the U.S., Canada, Japan, France, Italy, Germany and the U.K. Growth across the world economy as a whole will slow to 1.2 percent from 3.2 percent this year, the slowest since the early 1980s, according to Deutsche Bank forecasts.
A global recession and cooling inflation will give the Federal Reserve, the European Central Bank and the Bank of Japan scope to help the economy with lower rates, Deutsche Bank forecast.
Fed Cuts
The Fed will cut the benchmark interest rate to 1 percent at its Oct. 29 meeting from the current 1.5 percent, Deutsche Bank said. It previously predicted rates to fall to that level over a period of 12 months and the economy to stagnate in 2009.
Mayer said he hasn't cut economic forecasts ``by such a large amount in such a short period of time'' in the 20 years he's been working in finance.
The ECB will lower its key rate to a record 1.5 percent over the next 12 months from the current 3.75 percent, Deutsche Bank said. The economists previously forecast the central bank to cut to 3 percent over the period and the economy to shrink 0.2 percent next year.
The Bank of Japan will lower its benchmark to 0.25 percent in early 2009, against an earlier forecast of no change, Deutsche Bank said. The rate is now 0.5 percent. The economists also said Japan's economy would shrink 1.2 percent, which compares with a previous forecast that it would expand 0.4 percent.
Global inflation will slow to 3.1 percent from 5.6 percent this year, Deutsche Bank said. The forecasts exclude data for economic growth during World War II, Deutsche Bank said.
Thursday, October 16, 2008
英智库:美国是全球金融危机替罪羊 中国才是真根源
10月8日，交易员在美国纽约证券交易所外的街头交谈。全球主要央行同步实行降息以防止金融危机升级为全球性的经济衰退，但此举未能缓解投资者对经济基本面的忧虑情绪，当日纽约股市波动剧烈，收盘时三大股指连续第六天下跌。 新华社/路透www.6park.com
华尔街金融危机把全世界抛向未知，但至今美国从官员到银行家尚无人受处罚。要求华尔街揪出罪魁的呼声现在响彻世界，但忽然间，美英经济学界有人灵机一动，又想起了中国这个“替罪羊”，他们近日在媒体上抛出奇谈怪论，宣称以中国为首的世界顺差大国才是本次金融危机爆发的根源，并再次提出用人民币升值“ 纠正全球经济失衡”之类的损招。近些年来，西方把全球通货紧缩、通货膨胀等问题怪罪到中国头上的论调并不少，但都不如这次把华尔街金融危机归咎于中国的论调显得夸张和滑稽。按说华尔街出了这么大乱子，肩负着批判和监督责任的西方学界和媒体也应当自省。但现在美英少数精英还想着为华尔街遮羞，拿中国这样的受害国说事儿，这种做法不仅对中国不公道，更是对西方公众的毒害。瑞典一位学者接受《环球时报》记者采访时，认为美英个别财经媒体与华尔街的关系过于密切，他们本身成了“金融家俱乐部”的常客。 www.6park.com
美国成了金融危机的替罪羊？ www.6park.com
最近，美国向世界转嫁金融危机的做法受到多方质疑，但一些帮华尔街“洗罪”，向外部转嫁罪名的人也已行动起来。 www.6park.com
这是“亚洲的报复”，英国《金融时报》副主编兼首席经济评论员马丁·沃尔夫10月8日一篇文章的标题显得有些耸人听闻。文章认为，美国和其他发达国家“疯狂放纵的金融创新行为和借贷消费”，是被这些国家的超低利率鼓励出来的，而以中国为首的顺差大国把过剩的美元返投美英金融市场，直接导致美英能够压低利率，因此巨额顺差国是危机爆发的深层次原因之一。 www.6park.com
英国智库欧洲改革中心经济学家西蒙·泰尔福德更是把美国称为“此次金融危机的替罪羊”，并认为人们批判美国“很容易让其他国家逃脱掉责任”。泰尔福德说，很多欧洲和亚洲的经济体都在先前的信贷繁荣过程中获取巨大好处。他还说，如果没有中国、德国和日本“过度储蓄”的话，这场金融危机或许就不会发生。泰尔福德称，美英等国的信贷繁荣不仅仅是这些国家的政策和较差的商业习惯所致，它还是全球经济不平衡的一个副产品，“光凭美国自己是引发不了当前困难的”，那些超额储蓄的国家的巨大顺差导致了全球经济不稳定。 www.6park.com
这类观点还认为，既然金融危机是全球经济不平衡的必然体现，那么就应当纠正以中国为首的顺差大国 的内部失衡，比如中国应放松对人民币的汇率管制，让人民币加快升值等。 www.6park.com
沃尔夫等人的观点在西方被称为“储蓄过剩”理论，引起一些议论，大部分学者并不赞同这种观点。欧洲论坛网站编辑吉莱认为，“储蓄过剩”理论是试图转嫁当前这场金融危机根源的一种危险尝试，而造成金融危机的根本原因是一些国家的央行决策者、政治家和金融领导人“不计后果的玩忽职守”。吉莱认为，尽管亚洲一些国家没有保持资本账户赤字的愿望是真实的，但他们的“储蓄过剩”也在很大程度上是由西方国家的政策导致的，西方采取的政策只是制造了一个表面的繁荣，有效地把大量财富从多数人手中转移到了少数人手中，现在看来，过去几年西方大吹大擂的繁荣实质是虚假的，因为当前的危机暴露了真实情况。 www.6park.com
侧面袒护华尔街的论调在美国媒体上更多。最近《纽约时报》的一篇文章就引用大萧条时代的一个故事，劝人们不要“只想着惩罚华尔街”。文章说，1929年，迈耶·米什金在纽约经营一家商店，那年10月股市崩盘时，他还说“这是那些混账的富人罪有应得”。 www.6park.com
但后来华尔街的问题蔓延到更广泛的经济领域，米什金的商店也因此关门，他之后一直没找到一份稳定工作。《纽约时报》的文章说，现在华盛顿很多人担心美国正开始陷入可怕的经济衰退，更担心美国公众和国会议员会成为现代的米什金，“他们感兴趣的不是拯救经济，而是惩罚华尔街”。 www.6park.com
推卸责任的说辞 www.6park.com
谈到这次华尔街金融危机，斯德哥尔摩大学经济学教授尼尔森告诉《环球时报》记者，美国那种“爷爷花孙子钱”的习惯，早在中国还不是一个重要经济体时就如此了；美国出现房产市场的泡沫，都是美国人自己哄抬物价的结果，甚至在中国有巨额外汇储备以前就开始了。 www.6park.com
尼尔森认为，按理说，《金融时报》这类国际知名的财经媒体是不会犯如此错误的，他们这样做，最可能的解释就是为西方推脱责任，寻找替罪羊。因为如果严格追究起来，包括美国等国家的政府至少负有金融监管不力的责任，并在制度设计上倾向华尔街那些所谓“金融精英”，即使现在的救市，也像一些美国批评家说的那样，真正获救的是雷曼兄弟那些企业的高管们，而不是最底层的百姓；至于那些财经媒体，其实与那些“精英”们有着千丝万缕的联系，甚至他们本身就是华尔街“金融家俱乐部”的常客，所以很少见他们在金融危机前对华尔街进行指责，现在也仍是对华尔街百般维护。 www.6park.com
美国全球策略信息杂志社的菲利普·鲁宾斯坦接受《环球时报》记者采访时也认为，中国在华尔街金融危机中也是一大受害者，认为中国是华尔街金融危机根源的说法十分矛盾和荒谬。 www.6park.com
鲁宾斯坦说，西方个别学者和媒体之所以把华尔街金融危机的责任推给中国，是因为这些学者和媒体代表的是大金融财团的利益，必须要为他们说话，掩盖事实真相；目前受危机冲击的民众把愤怒的矛头对准了操纵金融市场的金融寡头，如果把责任归咎于中国，便可以转移民众的注意力，减少金融财团面临的压力，还容易被反华势力所接受。鲁宾斯坦说，这种说法还意在维系西方金融财团对国际金融市场的控制权，以便为今后继续进行投机操作奠定基础。 www.6park.com
有中国专家认为，即使有全球经济金融体制失衡，这个体制也是由西方发达国家建立起来的，中国在这个体制中基本没有什么话语权，现在让中国当替罪羊，是极不负责任的，也无益于这个体制的改革和调整。 世界反思危机根源 www.6park.com
自次贷危机发生以来，世界上绝大多数经济学家都认为，尽管从大背景看，有全球经济长期失衡的问题，但导致这次危机的直接原因显然主要是美国的消费模式和监管的松懈。哈佛大学的经济学家肯尼思·罗格夫称，美国的消费者“消耗地球上的一切却从不储蓄 ”。他还说，“拜美国无与伦比的财政制度所赐，其消费者可以几乎不用首付就购买豪华轿车。他们能够以房产的价值作抵押，每年都贷更多的款，并花光每一分钱。他们能以自己越来越少的积蓄享受越来越早的退休生活。”这样的消费模式与华尔街的贪婪结合在一起，迟早是要出问题的。而美国管理层在“9·11”后又刻意纵容这种疯狂的消费，以期带动美国经济的回升，对华尔街的监管正是在这样的思路的指导下，变得越来越松懈，而评级机构更是严重失职，没有及时发出预警信息，这就给华尔街贪婪的投机者制造了前所未有的机会。 www.6park.com
在欧洲，从政界到媒体大部分把矛头对准了美国。法国著名经济学家让·蒂罗在《扩展》杂志上逐点分析了引发这次危机的机制，认为从微观上来讲，危机的根本原因在于美国金融当局的监管不力，让大量风险贷款债券进入金融流通领域，从而扩散到整个国际金融体制，引发了危机。 www.6park.com
欧洲媒体认为，从宏观讲，问题在于美国体制的深层原因。法国总理菲永10月3日面对多数派议员时就指出：危机并不是法国的危机，而是世界性的危机，而始作俑者就是不负责任的“金融资本主义”，明确点出了美国。《费加罗报》把美国式金融体制形容为“赌场式”体制，认为时下的金融危机深深触动了美国，打碎了半个世纪以来的美国意识形态——国家自由放任政策。 www.6park.com
法国总统萨科齐日前在记者会上说，这场金融风暴根源在于“对冲基金”之类以套利为主要目的的资本的出现，这类基金的操控者将资本主义股票市场导入纯粹的投机歧途而无法自拔。萨科齐说：“有人说，我们不知道谁应为此负责。是吗？怎么在赢利的时候，他们就一个个都出来拿红包了？”他强调必须对金融危机的责任者“进行检查和惩罚”。 www.6park.com
“德国之声”电台把危机根源归结为美英等国“无视风险的疯狂投机行为”，“金融业游离于经济大环境之外自成一体的尝试必须得到制止。银行和股市必须脚踏实地，回到现实经济环境中来，毕竟动辄15%至20%的高回报率在现实经济中是很不现实的。银行高管们的贪欲也应有所节制”。 www.6park.com
“西方这次批评中国，我们不排除给中国施加压力，让中国埋单的意图。”中国现代国际关系研究院的江涌说，西方那种要求中国在这次金融危机中“承担更多责任”的观点，是根本站不住脚的。中国把自己的事情做好，把中国的金融形势稳定住，就是对区域经济稳定与全球经济的贡献。
华尔街金融危机把全世界抛向未知，但至今美国从官员到银行家尚无人受处罚。要求华尔街揪出罪魁的呼声现在响彻世界，但忽然间，美英经济学界有人灵机一动，又想起了中国这个“替罪羊”，他们近日在媒体上抛出奇谈怪论，宣称以中国为首的世界顺差大国才是本次金融危机爆发的根源，并再次提出用人民币升值“ 纠正全球经济失衡”之类的损招。近些年来，西方把全球通货紧缩、通货膨胀等问题怪罪到中国头上的论调并不少，但都不如这次把华尔街金融危机归咎于中国的论调显得夸张和滑稽。按说华尔街出了这么大乱子，肩负着批判和监督责任的西方学界和媒体也应当自省。但现在美英少数精英还想着为华尔街遮羞，拿中国这样的受害国说事儿，这种做法不仅对中国不公道，更是对西方公众的毒害。瑞典一位学者接受《环球时报》记者采访时，认为美英个别财经媒体与华尔街的关系过于密切，他们本身成了“金融家俱乐部”的常客。 www.6park.com
美国成了金融危机的替罪羊？ www.6park.com
最近，美国向世界转嫁金融危机的做法受到多方质疑，但一些帮华尔街“洗罪”，向外部转嫁罪名的人也已行动起来。 www.6park.com
这是“亚洲的报复”，英国《金融时报》副主编兼首席经济评论员马丁·沃尔夫10月8日一篇文章的标题显得有些耸人听闻。文章认为，美国和其他发达国家“疯狂放纵的金融创新行为和借贷消费”，是被这些国家的超低利率鼓励出来的，而以中国为首的顺差大国把过剩的美元返投美英金融市场，直接导致美英能够压低利率，因此巨额顺差国是危机爆发的深层次原因之一。 www.6park.com
英国智库欧洲改革中心经济学家西蒙·泰尔福德更是把美国称为“此次金融危机的替罪羊”，并认为人们批判美国“很容易让其他国家逃脱掉责任”。泰尔福德说，很多欧洲和亚洲的经济体都在先前的信贷繁荣过程中获取巨大好处。他还说，如果没有中国、德国和日本“过度储蓄”的话，这场金融危机或许就不会发生。泰尔福德称，美英等国的信贷繁荣不仅仅是这些国家的政策和较差的商业习惯所致，它还是全球经济不平衡的一个副产品，“光凭美国自己是引发不了当前困难的”，那些超额储蓄的国家的巨大顺差导致了全球经济不稳定。 www.6park.com
这类观点还认为，既然金融危机是全球经济不平衡的必然体现，那么就应当纠正以中国为首的顺差大国 的内部失衡，比如中国应放松对人民币的汇率管制，让人民币加快升值等。 www.6park.com
沃尔夫等人的观点在西方被称为“储蓄过剩”理论，引起一些议论，大部分学者并不赞同这种观点。欧洲论坛网站编辑吉莱认为，“储蓄过剩”理论是试图转嫁当前这场金融危机根源的一种危险尝试，而造成金融危机的根本原因是一些国家的央行决策者、政治家和金融领导人“不计后果的玩忽职守”。吉莱认为，尽管亚洲一些国家没有保持资本账户赤字的愿望是真实的，但他们的“储蓄过剩”也在很大程度上是由西方国家的政策导致的，西方采取的政策只是制造了一个表面的繁荣，有效地把大量财富从多数人手中转移到了少数人手中，现在看来，过去几年西方大吹大擂的繁荣实质是虚假的，因为当前的危机暴露了真实情况。 www.6park.com
侧面袒护华尔街的论调在美国媒体上更多。最近《纽约时报》的一篇文章就引用大萧条时代的一个故事，劝人们不要“只想着惩罚华尔街”。文章说，1929年，迈耶·米什金在纽约经营一家商店，那年10月股市崩盘时，他还说“这是那些混账的富人罪有应得”。 www.6park.com
但后来华尔街的问题蔓延到更广泛的经济领域，米什金的商店也因此关门，他之后一直没找到一份稳定工作。《纽约时报》的文章说，现在华盛顿很多人担心美国正开始陷入可怕的经济衰退，更担心美国公众和国会议员会成为现代的米什金，“他们感兴趣的不是拯救经济，而是惩罚华尔街”。 www.6park.com
推卸责任的说辞 www.6park.com
谈到这次华尔街金融危机，斯德哥尔摩大学经济学教授尼尔森告诉《环球时报》记者，美国那种“爷爷花孙子钱”的习惯，早在中国还不是一个重要经济体时就如此了；美国出现房产市场的泡沫，都是美国人自己哄抬物价的结果，甚至在中国有巨额外汇储备以前就开始了。 www.6park.com
尼尔森认为，按理说，《金融时报》这类国际知名的财经媒体是不会犯如此错误的，他们这样做，最可能的解释就是为西方推脱责任，寻找替罪羊。因为如果严格追究起来，包括美国等国家的政府至少负有金融监管不力的责任，并在制度设计上倾向华尔街那些所谓“金融精英”，即使现在的救市，也像一些美国批评家说的那样，真正获救的是雷曼兄弟那些企业的高管们，而不是最底层的百姓；至于那些财经媒体，其实与那些“精英”们有着千丝万缕的联系，甚至他们本身就是华尔街“金融家俱乐部”的常客，所以很少见他们在金融危机前对华尔街进行指责，现在也仍是对华尔街百般维护。 www.6park.com
美国全球策略信息杂志社的菲利普·鲁宾斯坦接受《环球时报》记者采访时也认为，中国在华尔街金融危机中也是一大受害者，认为中国是华尔街金融危机根源的说法十分矛盾和荒谬。 www.6park.com
鲁宾斯坦说，西方个别学者和媒体之所以把华尔街金融危机的责任推给中国，是因为这些学者和媒体代表的是大金融财团的利益，必须要为他们说话，掩盖事实真相；目前受危机冲击的民众把愤怒的矛头对准了操纵金融市场的金融寡头，如果把责任归咎于中国，便可以转移民众的注意力，减少金融财团面临的压力，还容易被反华势力所接受。鲁宾斯坦说，这种说法还意在维系西方金融财团对国际金融市场的控制权，以便为今后继续进行投机操作奠定基础。 www.6park.com
有中国专家认为，即使有全球经济金融体制失衡，这个体制也是由西方发达国家建立起来的，中国在这个体制中基本没有什么话语权，现在让中国当替罪羊，是极不负责任的，也无益于这个体制的改革和调整。 世界反思危机根源 www.6park.com
自次贷危机发生以来，世界上绝大多数经济学家都认为，尽管从大背景看，有全球经济长期失衡的问题，但导致这次危机的直接原因显然主要是美国的消费模式和监管的松懈。哈佛大学的经济学家肯尼思·罗格夫称，美国的消费者“消耗地球上的一切却从不储蓄 ”。他还说，“拜美国无与伦比的财政制度所赐，其消费者可以几乎不用首付就购买豪华轿车。他们能够以房产的价值作抵押，每年都贷更多的款，并花光每一分钱。他们能以自己越来越少的积蓄享受越来越早的退休生活。”这样的消费模式与华尔街的贪婪结合在一起，迟早是要出问题的。而美国管理层在“9·11”后又刻意纵容这种疯狂的消费，以期带动美国经济的回升，对华尔街的监管正是在这样的思路的指导下，变得越来越松懈，而评级机构更是严重失职，没有及时发出预警信息，这就给华尔街贪婪的投机者制造了前所未有的机会。 www.6park.com
在欧洲，从政界到媒体大部分把矛头对准了美国。法国著名经济学家让·蒂罗在《扩展》杂志上逐点分析了引发这次危机的机制，认为从微观上来讲，危机的根本原因在于美国金融当局的监管不力，让大量风险贷款债券进入金融流通领域，从而扩散到整个国际金融体制，引发了危机。 www.6park.com
欧洲媒体认为，从宏观讲，问题在于美国体制的深层原因。法国总理菲永10月3日面对多数派议员时就指出：危机并不是法国的危机，而是世界性的危机，而始作俑者就是不负责任的“金融资本主义”，明确点出了美国。《费加罗报》把美国式金融体制形容为“赌场式”体制，认为时下的金融危机深深触动了美国，打碎了半个世纪以来的美国意识形态——国家自由放任政策。 www.6park.com
法国总统萨科齐日前在记者会上说，这场金融风暴根源在于“对冲基金”之类以套利为主要目的的资本的出现，这类基金的操控者将资本主义股票市场导入纯粹的投机歧途而无法自拔。萨科齐说：“有人说，我们不知道谁应为此负责。是吗？怎么在赢利的时候，他们就一个个都出来拿红包了？”他强调必须对金融危机的责任者“进行检查和惩罚”。 www.6park.com
“德国之声”电台把危机根源归结为美英等国“无视风险的疯狂投机行为”，“金融业游离于经济大环境之外自成一体的尝试必须得到制止。银行和股市必须脚踏实地，回到现实经济环境中来，毕竟动辄15%至20%的高回报率在现实经济中是很不现实的。银行高管们的贪欲也应有所节制”。 www.6park.com
“西方这次批评中国，我们不排除给中国施加压力，让中国埋单的意图。”中国现代国际关系研究院的江涌说，西方那种要求中国在这次金融危机中“承担更多责任”的观点，是根本站不住脚的。中国把自己的事情做好，把中国的金融形势稳定住，就是对区域经济稳定与全球经济的贡献。
Wednesday, October 8, 2008
Monday, October 6, 2008
Yen Unbeatable as Credit Seizure Kills Carry Trades
Oct. 6 (Bloomberg) -- The same credit market collapse that drove Lehman Brothers Holdings Inc. into bankruptcy and sent bank borrowing costs in Europe to record highs is making the yen unbeatable.
Japan's currency was the best-performer in September and the only currency to appreciate against the dollar. Deutsche Bank AG, the biggest trader of foreign exchange, says the yen will rise 5 percent in coming months. New York-based Morgan Stanley is telling clients to buy the currency versus the euro and pound.
After seven years of providing the cheapest source of funds for investors buying higher-yielding New Zealand dollars, Australian dollars and Brazil reais, the yen is appreciating as $587 billion of subprime mortgage-related losses force banks to restrict credit. It strengthened 4.4 percent on a trade-weighted basis in September, according to the Bank of Japan's effective exchange rate, the most since August 2007, when the seizure in capital markets began.
``We are in a multi-year trend reversal,'' said Paresh Upadhyaya, a senior vice president at Putnam Investment LLC in Boston who helps manage $50 billion in currency assets. ``We are going to see a global central bank easing cycle. The yen is the place to be in this environment of economic slowdown and heightened volatility.''
This year will be the first since 2002 that the economies of the U.S., euro-region and Japan all expand less than 2 percent, according to data compiled by Bloomberg. The BOJ's effective exchange rate rose 5 percent from April through September of that year, the best six-month performance since the end of 1999.
`Counter-Cyclical Currency'
Strategists are turning more bullish, forecasting the yen will end the year at 107 to the dollar, compared with an expectation of 109.15 on Sept. 12, according to the median of 40 estimates compiled by Bloomberg.
The currency rose to 103.88 per dollar as of 12:46 p.m. in Tokyo from 105.32 late in New York on Oct. 3. Japan's currency also climbed 3.3 percent to 67.56 per New Zealand dollar and gained 4.3 percent to 78.10 against the Australian dollar. It advanced to 50.7812 versus the Brazilian real from 51.5240.
``The yen is a counter-cyclical currency,'' said Richard Benson, who oversees $14 billion of currency funds at Millennium Asset Management in London. ``When the global economy looks bad, the yen should do well.''
211 Percent Return
The currency lost 60 percent against the Australian and New Zealand dollars in the seven years ended June 30, and depreciated 24 percent versus the real and 20 percent to the British pound. The main cause was the so-called carry trade, where investors took out loans in Japan to take advantage of the lowest benchmark interest rates among the Group of 10 industrialized nations. They then sold the yen and invested the proceeds in high-yielding assets outside the country.
Investors who used the strategy to buy the New Zealand and Australian dollars, euro and pound, would have generated a return of 211 percent on average in the past seven years, according to data compiled by Bloomberg. The trades would have lost 13 percent this year.
The collapse of Lehman, the government takeovers of Fannie Mae, Freddie Mac, American International Group Inc. and Washington Mutual Inc. and the forced sales of Merrill Lynch & Co. and Wachovia Corp. reduced confidence in the world's financial system.
Payback Time
That in turn has made banks wary of lending to each other, pushing the three-month London interbank offered rate in dollars to 4.33 percent from 2.81 percent on Sept. 15, the day New York- based Lehman filed for bankruptcy protection, according to the British Bankers' Association in London. The increase in rates and drop in credit is forcing speculators to close out carry trades and pay back yen-denominated loans. The currency's biggest gain the past month has come against the real, rising 20 percent.
The slowing world economy is also helping the yen by boosting expectations that central banks will lower borrowing costs. Policy makers in Europe, Australia, New Zealand and Brazil will cut interest rates next year, according to the median estimates of economists surveyed by Bloomberg.
Futures on the Chicago Board of Trade showed an 84 percent probability yesterday the U.S. Federal Reserve will lower its 2 percent target rate for overnight lending between banks by a half-percentage point at its Oct. 29 meeting. Traders saw no chance of a cut a month earlier.
Carry Trade `Dead'
``The carry trade is dead,'' said Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi in London. ``The world is deleveraging.''
The yen rose to 141.24 per euro today, the highest level since May 2006, and 182.31 versus the pound, the strongest since November 2003. It reached a four-month high of 103.54 against the dollar last week and was recently at 103.74.
Hedge funds and speculators increased bets that the yen will appreciate versus the dollar to the highest level since July 18, data from the U.S. Commodity Futures Trading Commission show. Wagers on an advance in the yen outnumbered those on a drop by 43,022 on Sep. 30. As recently as Sept. 2 they were betting on a decline in the yen.
Morgan Stanley strategists turned bullish last week, saying in an Oct. 2 report to clients thy yen may strengthen to 135 per euro and to 165 per pound from 188.10. Frankfurt-based Deutsche Bank expects it to rally to 100 to the dollar. Bank of Tokyo- Mitsubishi UFJ Ltd, Japan's largest bank by market value, raised its forecast last week to 100 per dollar by March from 102. It predicts the yen will gain 11 percent versus the pound in a year.
Bank Rescue
Further gains may depend on whether U.S. Treasury Secretary Henry Paulson's $700 billion plan to revive credit markets by purchasing depreciated assets from banks boosts investor confidence.
The carry trade ``is a strategy that has a good track record,'' said Pablo Frei, a money manager at Quaesta Capital in Switzerland, which oversees $1.2 billion in currency funds. ``You have to unwind carry during times of high risk. There will be a day that it will be put on again. The question is when.''
Quaesta Capital's currency funds have reduced the amount of money in carry trades to less than 5 percent of assets, from about 30 percent a year ago, Frei said.
Japanese Investment
Investors in Japan will continue to invest internationally to diversify their holdings as risk appetites return, capping the yen's strength, said Rebecca Patterson, global head of foreign exchange in New York for the private wealth management unit of JPMorgan Chase & Co.
Japanese mutual funds increased purchases of overseas assets to 36.89 trillion yen ($369 billion) by the end of last year, from 3.06 trillion yen in 2000, according to Japan's Investment Trust Association.
``What's happened in Japan in the last two, three years has been a structural shift of the Japanese mindset,'' said Patterson. ``They view these as long term investments. The yen negative flows will slow in times of trouble like this. But I don't see a lot of this is a longer-term shift.''
Carry trades became popular as swings in exchange rates fell to record lows because there was less risk that rapid changes would wipe out profits.
Now, that is changing. Implied volatility on major currencies rose to 16.69 percent on Sept. 17, the highest level since 1998, according to the JPMorgan G7 Volatility Index. The gauge of price swings touched 5.76 percent in June 2007, the lowest since the index's inception in 1992.
Yen Reserves
The percentage of currency reserves held in yen by foreign central banks increased for a third straight quarter through June, according to the International Monetary Fund.
Yen now accounts for 3.4 percent of global reserves, compared with 2.8 percent a year earlier, the lowest amount since at least 1999. The dollar is the world's largest reserve currency at 62.5 percent, IMF figures show. Morgan Stanley strategists said in their Oct. 2 report that the yen may overtake the pound, which is No. 3 at 4.7 percent, in ``coming quarters.''
``There are many risks in the United States and Europe,'' said Satoshi Okumoto, a general manager at Fukoku Mutual Life Insurance Co. in Tokyo, which has $54.1 billion in assets and is Japan's eighth-biggest life insurance company. ``Fund managers are starting to shift their money to yen. They are starting to overweight yen in terms of currency allocation.''
Japan's currency was the best-performer in September and the only currency to appreciate against the dollar. Deutsche Bank AG, the biggest trader of foreign exchange, says the yen will rise 5 percent in coming months. New York-based Morgan Stanley is telling clients to buy the currency versus the euro and pound.
After seven years of providing the cheapest source of funds for investors buying higher-yielding New Zealand dollars, Australian dollars and Brazil reais, the yen is appreciating as $587 billion of subprime mortgage-related losses force banks to restrict credit. It strengthened 4.4 percent on a trade-weighted basis in September, according to the Bank of Japan's effective exchange rate, the most since August 2007, when the seizure in capital markets began.
``We are in a multi-year trend reversal,'' said Paresh Upadhyaya, a senior vice president at Putnam Investment LLC in Boston who helps manage $50 billion in currency assets. ``We are going to see a global central bank easing cycle. The yen is the place to be in this environment of economic slowdown and heightened volatility.''
This year will be the first since 2002 that the economies of the U.S., euro-region and Japan all expand less than 2 percent, according to data compiled by Bloomberg. The BOJ's effective exchange rate rose 5 percent from April through September of that year, the best six-month performance since the end of 1999.
`Counter-Cyclical Currency'
Strategists are turning more bullish, forecasting the yen will end the year at 107 to the dollar, compared with an expectation of 109.15 on Sept. 12, according to the median of 40 estimates compiled by Bloomberg.
The currency rose to 103.88 per dollar as of 12:46 p.m. in Tokyo from 105.32 late in New York on Oct. 3. Japan's currency also climbed 3.3 percent to 67.56 per New Zealand dollar and gained 4.3 percent to 78.10 against the Australian dollar. It advanced to 50.7812 versus the Brazilian real from 51.5240.
``The yen is a counter-cyclical currency,'' said Richard Benson, who oversees $14 billion of currency funds at Millennium Asset Management in London. ``When the global economy looks bad, the yen should do well.''
211 Percent Return
The currency lost 60 percent against the Australian and New Zealand dollars in the seven years ended June 30, and depreciated 24 percent versus the real and 20 percent to the British pound. The main cause was the so-called carry trade, where investors took out loans in Japan to take advantage of the lowest benchmark interest rates among the Group of 10 industrialized nations. They then sold the yen and invested the proceeds in high-yielding assets outside the country.
Investors who used the strategy to buy the New Zealand and Australian dollars, euro and pound, would have generated a return of 211 percent on average in the past seven years, according to data compiled by Bloomberg. The trades would have lost 13 percent this year.
The collapse of Lehman, the government takeovers of Fannie Mae, Freddie Mac, American International Group Inc. and Washington Mutual Inc. and the forced sales of Merrill Lynch & Co. and Wachovia Corp. reduced confidence in the world's financial system.
Payback Time
That in turn has made banks wary of lending to each other, pushing the three-month London interbank offered rate in dollars to 4.33 percent from 2.81 percent on Sept. 15, the day New York- based Lehman filed for bankruptcy protection, according to the British Bankers' Association in London. The increase in rates and drop in credit is forcing speculators to close out carry trades and pay back yen-denominated loans. The currency's biggest gain the past month has come against the real, rising 20 percent.
The slowing world economy is also helping the yen by boosting expectations that central banks will lower borrowing costs. Policy makers in Europe, Australia, New Zealand and Brazil will cut interest rates next year, according to the median estimates of economists surveyed by Bloomberg.
Futures on the Chicago Board of Trade showed an 84 percent probability yesterday the U.S. Federal Reserve will lower its 2 percent target rate for overnight lending between banks by a half-percentage point at its Oct. 29 meeting. Traders saw no chance of a cut a month earlier.
Carry Trade `Dead'
``The carry trade is dead,'' said Derek Halpenny, European head of global currency research at Bank of Tokyo-Mitsubishi in London. ``The world is deleveraging.''
The yen rose to 141.24 per euro today, the highest level since May 2006, and 182.31 versus the pound, the strongest since November 2003. It reached a four-month high of 103.54 against the dollar last week and was recently at 103.74.
Hedge funds and speculators increased bets that the yen will appreciate versus the dollar to the highest level since July 18, data from the U.S. Commodity Futures Trading Commission show. Wagers on an advance in the yen outnumbered those on a drop by 43,022 on Sep. 30. As recently as Sept. 2 they were betting on a decline in the yen.
Morgan Stanley strategists turned bullish last week, saying in an Oct. 2 report to clients thy yen may strengthen to 135 per euro and to 165 per pound from 188.10. Frankfurt-based Deutsche Bank expects it to rally to 100 to the dollar. Bank of Tokyo- Mitsubishi UFJ Ltd, Japan's largest bank by market value, raised its forecast last week to 100 per dollar by March from 102. It predicts the yen will gain 11 percent versus the pound in a year.
Bank Rescue
Further gains may depend on whether U.S. Treasury Secretary Henry Paulson's $700 billion plan to revive credit markets by purchasing depreciated assets from banks boosts investor confidence.
The carry trade ``is a strategy that has a good track record,'' said Pablo Frei, a money manager at Quaesta Capital in Switzerland, which oversees $1.2 billion in currency funds. ``You have to unwind carry during times of high risk. There will be a day that it will be put on again. The question is when.''
Quaesta Capital's currency funds have reduced the amount of money in carry trades to less than 5 percent of assets, from about 30 percent a year ago, Frei said.
Japanese Investment
Investors in Japan will continue to invest internationally to diversify their holdings as risk appetites return, capping the yen's strength, said Rebecca Patterson, global head of foreign exchange in New York for the private wealth management unit of JPMorgan Chase & Co.
Japanese mutual funds increased purchases of overseas assets to 36.89 trillion yen ($369 billion) by the end of last year, from 3.06 trillion yen in 2000, according to Japan's Investment Trust Association.
``What's happened in Japan in the last two, three years has been a structural shift of the Japanese mindset,'' said Patterson. ``They view these as long term investments. The yen negative flows will slow in times of trouble like this. But I don't see a lot of this is a longer-term shift.''
Carry trades became popular as swings in exchange rates fell to record lows because there was less risk that rapid changes would wipe out profits.
Now, that is changing. Implied volatility on major currencies rose to 16.69 percent on Sept. 17, the highest level since 1998, according to the JPMorgan G7 Volatility Index. The gauge of price swings touched 5.76 percent in June 2007, the lowest since the index's inception in 1992.
Yen Reserves
The percentage of currency reserves held in yen by foreign central banks increased for a third straight quarter through June, according to the International Monetary Fund.
Yen now accounts for 3.4 percent of global reserves, compared with 2.8 percent a year earlier, the lowest amount since at least 1999. The dollar is the world's largest reserve currency at 62.5 percent, IMF figures show. Morgan Stanley strategists said in their Oct. 2 report that the yen may overtake the pound, which is No. 3 at 4.7 percent, in ``coming quarters.''
``There are many risks in the United States and Europe,'' said Satoshi Okumoto, a general manager at Fukoku Mutual Life Insurance Co. in Tokyo, which has $54.1 billion in assets and is Japan's eighth-biggest life insurance company. ``Fund managers are starting to shift their money to yen. They are starting to overweight yen in terms of currency allocation.''
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