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China the monster.
nipper
post Posted: Jul 10 2014, 09:16 AM
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Chinese 'washing cash' in Australia
  • Peter Cai and Fergus Ryan
QUOTE
THE China state broadcaster CCTV has launched an extraordinary attack on the Bank of China, one of the country's most powerful government-­controlled financial institutions, accusing it of money-laundering in Australia and other countries.

Australia has emerged at the centre of the allegations bexause of the Significant Investor Visa program, which offers an accelerated pathway for wealthy ­investors to gain permanent residency by investing $5 million in Australian bonds, funds or a small business. Chinese nationals account for nine out of 10 applicants since the program was introduced under the former Labor government.

Under China's stringent foreign exchange law, citizens are allowed to send only $US50,000 ($53,000) abroad per annum. Australia has been repeatedly mentioned as the destination of "grey money" coming out of China in relation to the visa ­program.

In the CCTV report, undercover footage shows the Australian national flag on a Bank of China stand at a busy emigration fair, advertising Australia as an important destination for investors. Social media posts from major media outlets about the story were featuring prominently a map of Australia.

"We don't care where your money is from or how you earn it, we can help you get it out of the country," a Bank of China employee is quoted as saying at the fair. "We don't care how black your money is or how dirty it is, we will find ways to launder it and shift it overseas for you."

Bank of China declined a request for comment.

It is understood the China Banking Regulatory Commission has intensified its investi­gation into money-laundering and has recently signed an agreement with US authorities that allows greater information-sharing about bank accounts.

The CCTV report accuses the Bank of China of money-launder­ing via a scheme called You Huitong, translated as You Uncapped, which lets wealthy Chinese circumvent Beijing's strict currency controls. "You Huitong is a shadowy business," CCTV says. "It is unbelievable that such a big bank is violating the law to fill its own pockets."

It is understood some private bankers from Australia's big four banks have been aware of the You Huitong service for a year. Media reports in November detailed allegations of Chinese businessmen using private jets to ferry suitcases of cash and deposit them at a Bank of China branch in Melbourne. A senior manager reportedly with one of the big four Aus­tralian banks told CCTV that the Bank of China was crucial to the bank's migration business. "The money is very safe and will leave the country in a very grey ­channel.

"The Bank of China is the same as an underground bank (a Chinese term for black market operators that launder money)," the unnamed official said. He said only the Bank of China could carry out operations on such a large scale.

BUSINESS SPECTATOR




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"Every long-term security is nothing more than a claim on some expected future stream of cash that will be delivered into the hands of investors over time. For a given stream of expected future cash payments, the higher the price investors pay today for that stream of cash, the lower the long-term return they will achieve on their investment over time."
- Dr John Hussman

Said 'Thanks' for this post: triage  Brierley  
 
triage
post Posted: Jun 29 2014, 09:59 AM
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I think it is useful from time to time to step away from the daily flurry and take stock of where things stand.

For instance even the village idiot has caught on to the notion that China has been on a tear for the last three and a half decades, and if one is willing to use straight line extrapolations it is quite possible to conclude that China will become THE dominant force in the world sometime next week. And sure it is indeed possible for that to happen, if not soon than within our children's life-times. But in every single case when a developing nation attempted to transform into a super-power it either stumbled badly, as in the case of the US in the 1890's, 1930's and 1970's, or fell, as in the case of Japan, Germany, the USSR, and Argentina (remember in the 1890's it was Argentina, not the US, that was expected by many to emerge as the dominant force).

Here is an attempt to take stock of China's current position in the world. Basically the author argues that quantitatively but not qualitatively China is already there or thereabouts but that its current structure is such that it may be unable to address its qualitative weaknesses.

QUOTE
This is the dangerous cocktail that many China watchers see gripping the country today. It is a sobering and daunting set of challenges for the people and government of China to tackle. Thus, observers should not blindly assume that China’s future will exhibit the dynamism of the past thirty years, or that its path to global-power status will necessarily continue.


http://nationalinterest.org/feature/the-il...ese-power-10739

This article reminds me of one written by a keen China watcher, Gerald Segal, just before his death (from cancer) in 1999. His argument back then was that China was not the really big thing that some in the west were assuming. The fact is that 15 years later China still has not stumbled or fallen but still has not transitioned out of being a regional power.

http://www.foreignaffairs.com/articles/554...es-china-matter

I'm not suggesting that either author got it right but both are worth a read imo.



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"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
Barra
post Posted: May 28 2014, 09:00 AM
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In Reply To: Barra's post @ May 15 2014, 02:22 PM

While the US market climbs to dizzying heights (propelled last night by long lasting goods orders which were negative if not for military spending wacko.gif ) the following bit of news was posted in the WSJ

It feels like nearly everyone is blind to China's impending property market collapse.

http://blogs.wsj.com/chinarealtime/2014/05...housing-market/

This would be about the 3rd property developer I have heard spilling the beans in recent times.

Jim Chanos predicted this was more or less inevitable back in 2011.


Said 'Thanks' for this post: triage  
 
Barra
post Posted: May 15 2014, 02:22 PM
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In Reply To: triage's post @ May 9 2014, 08:22 AM

Some interesting insights here from Magellan's CEO about China. They have until recently been bullish on China but are suddenly quite bearish.

http://www.brrmedia.com/event/preview/1s95...fa115e-82570233









 
triage
post Posted: May 9 2014, 08:22 AM
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Here's a couple of interesting bits of info, though neither are likely actionable ones in terms of investing.

First up the amazing increase in big dams in the Communist era: on average one a day is not a tardy effort (if you accept the claim [for instance one way to increase the number of big dams is to change the claimed sizes of lots of smaller dams]).

http://marginalrevolution.com/marginalrevo...the-day-17.html

Though of course with every dam comes a silt problem. The one near Beijing that Mao famously "helped" build turned out to be totally useless other than as a silt trap. And from memory the initial reason why they thought to build the world's biggest dam, the Three Gorges, was because their previous recent effort to dam that part of the Yangtze had silted up so badly. Silt remains probably the greatest risk to the Three Gorges (that and any seismic activity).

Also the "rice theory". Certainly not an entirely novel concept: the difference in heights betwen northerners and southerners was explained to me many years ago to be due to the difference in diet and a few years ago it was shown that southern Chinese are genetically closer to south east asians than to their northern han cousins. Also in history the northerners apparently used to joke that anyone from south of the Yangtze was a monkey. Of course the northerners do eat rice, but often when they do they have a bowl of it at the end of the meal, not is the core food during the actual meal.

http://www.sciencedaily.com/releases/2014/...40508141743.htm



--------------------
"The market can stay irrational longer than you can stay solvent." John Maynard Keynes

"The crisis takes a much longer time coming than you think, and then it happens much faster than you would have thought." Rudiger Dornbush

"It is the mark of an educated mind to be able to entertain a thought without accepting it." Aristotle
 
marketwinner
post Posted: Mar 21 2014, 07:07 PM
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In Reply To: Brierley's post @ Mar 13 2014, 03:55 PM

China’s stocks went up reporting its biggest gain in four months together with Asian stocks today. Do you think investors are coming back from Russia, Ukraine and other Eastern Europe to Asia? Or is it due to other reasons?

 


Brierley
post Posted: Mar 13 2014, 03:55 PM
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In Reply To: wren's post @ Mar 13 2014, 02:49 PM

Ok thx

I heard an interview with Treacy in Feb '14

http://www.financialsense.com/financial-se...ronment-markets

Have to subscribe to hear it in full.

 
wren
post Posted: Mar 13 2014, 02:49 PM
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In Reply To: Brierley's post @ Mar 13 2014, 01:50 PM

Hi Brierley,
http://www.proactiveinvestors.co.uk/
This is was originally Fuller Money (David Fuller).Been going forever…I subscribed for 15 years or so about 30 years ago . They then supplied weekly Point and Figure Chart books which were done manually and covered many markets.I went to a couple of David's Chart seminars in London:expensive but no B/S with the focus being on Behavioural Psychology as seen through Point and figure Charts.
You can sign up for a free daily email service,which has some interesting stuff however I guess it is really a teaser for the paid up site.This latter is fantastic being full of charts (anything you can think of..I mean that..) together with stuff from smart guys and gals worldwide.
Cheers.


 
Brierley
post Posted: Mar 13 2014, 01:50 PM
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In Reply To: wren's post @ Mar 13 2014, 01:28 PM

QUOTE
A link to the full report is posted in the Subscriber's Area.


Hi Wren

Which subscriber area are you referring to ?

 
wren
post Posted: Mar 13 2014, 01:28 PM
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Eoin Treacy's view
A link to the full report is posted in the Subscriber's Area.

The above report represents a measured medium-term outlook for China’s economy and is probably in line with how the administration sees the situation. However, the short-term outlook is more focused on the fact that an increasing number of troubled trust products are missing coupon payments and investor hopes of receiving their principal are deteriorating. Here is a section from a Bloomberg article with some additional detail:

Jilin Province Trust Co., which missed five interest payments on a trust product it issued to finance mining projects, declined to comment on a sixth payment due yesterday. China had its first onshore bond default last week when Shanghai Chaori Solar Energy Science & Technology Co. failed to make an interest payment and Baoding Tianwei Baobian Electric Co.’s notes were suspended from trading yesterday after it lost money for a second year.

“China’s economic outlook has deteriorated and more bond defaults could be coming, so it’s weighing on the yuan,” said Bruce Yam, a currency strategist at Sun Hung Kai Forex in Hong Kong. “A weaker yuan could help some exporters, especially the small- to medium-sized ones. It will also facilitate meeting China’s growth target this year.”

 
 


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