Comments on: Putting the BRICs cash to work …. http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/ Wed, 07 Jan 2009 21:40:34 +0000 http://wordpress.org/?v=2.6.1 By: Anonymous http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97329 Anonymous Mon, 25 Jun 2007 12:37:30 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97329 Well, at least 2007-06-25 15:04:37 posted the stuff, although can't see why he'd expect anyone to respond. Well, at least 2007-06-25 15:04:37 posted the stuff, although can’t see why he’d expect anyone to respond.

]]> By: Guest http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97328 Guest Mon, 25 Jun 2007 12:24:23 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97328 July 5 is Independence Day, that's around $225bn that could make its way overseas according to the CSRC: "Welcome, Chinese investors, to a brave new world. Thanks to another relaxation of capital controls last week, Chinese investors can now put their money into a wider range of assets, from foreign stocks to real-estate investment trusts. It's an idea whose time has come, even if there are some big devils lurking in the details." http://online.wsj.com/article/SB118272151385146377.html "...the initiative, set to kick off on July 5, will help mainland securities firms work to... allow fund managers and brokerages to pool citizens' yuan or foreign-currency capital to invest in securities abroad..." http://news.xinhuanet.com/english/2007-06/25/content_6286354.htm "...allowing Chinese companies to sell bonds maturing in more than a year without issue-by-issue approval. That is expected to lead to a surge in bond offerings by cash-strapped companies, which until now have raised most of their financing through domestic bank loans..." http://www.financialexpress.com/fe_full_story.php?content_id=168186 July 5 is Independence Day, that’s around $225bn that could make its way overseas according to the CSRC: “Welcome, Chinese investors, to a brave new world. Thanks to another relaxation of capital controls last week, Chinese investors can now put their money into a wider range of assets, from foreign stocks to real-estate investment trusts. It’s an idea whose time has come, even if there are some big devils lurking in the details.” http://online.wsj.com/article/SB118272151385146377.html

“…the initiative, set to kick off on July 5, will help mainland securities firms work to… allow fund managers and brokerages to pool citizens’ yuan or foreign-currency capital to invest in securities abroad…” http://news.xinhuanet.com/english/2007-06/25/content_6286354.htm

“…allowing Chinese companies to sell bonds maturing in more than a year without issue-by-issue approval. That is expected to lead to a surge in bond offerings by cash-strapped companies, which until now have raised most of their financing through domestic bank loans…” http://www.financialexpress.com/fe_full_story.php?content_id=168186

]]> By: bsetser http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97327 bsetser Mon, 25 Jun 2007 12:21:31 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97327 Sunlight -- rumors that make economic sense (UAE dropping its peg) are more credible than ones that don't but i don't know more than that. appreciate the nit-picking, on this one tho your basic argument (FCBs stopped buying rather than sold) was one that I have been trying to make, so i was rather worried that i haven't been communicating effectively (perhaps b/c I was sloppy with my language) Sunlight — rumors that make economic sense (UAE dropping its peg) are more credible than ones that don’t but i don’t know more than that. appreciate the nit-picking, on this one tho your basic argument (FCBs stopped buying rather than sold) was one that I have been trying to make, so i was rather worried that i haven’t been communicating effectively (perhaps b/c I was sloppy with my language)

]]> By: Guest http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97326 Guest Mon, 25 Jun 2007 11:50:36 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97326 Berlin seeks to vet foreign fund deals http://www.ft.com/cms/s/d25a3618-2342-11dc-9e7e-000b5df10621.html http://www.bloomberg.com/apps/news?pid=20601103&sid=aGgLCqUS9XCI Amaranth Distorted Natural-Gas Market, Senate Finds Berlin seeks to vet foreign fund deals
http://www.ft.com/cms/s/d25a3618-2342-11dc-9e7e-000b5df10621.html

http://www.bloomberg.com/apps/news?pid=20601103&sid=aGgLCqUS9XCI
Amaranth Distorted Natural-Gas Market, Senate Finds

]]> By: Guest http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97325 Guest Mon, 25 Jun 2007 11:44:05 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97325 "...there was a moderate tightening of monetary policies in many countries, although overall monetary and financial conditions remained highly accommodative. In part this was due to real policy rates remaining rather low, with associated effects on long-term interest rates. But it was also due to an increased willingness of lenders to advance credit to high-risk borrowers with less onerous conditionality than in the past. While the credit cycle has peaked in the subprime mortgage market in the United States, the expansion has continued in most other areas. As a result, global asset prices either continued to rise or were maintained at unusually high levels. Moreover, financing for the US current account deficit, as well as private capital outflows from the United States, continued to be available at terms that seemed to factor in expectations of only a very moderate further depreciation of the dollar... http://www.bis.org/publ/arpdf/ar2007e1.htm http://www.bloomberg.com/apps/news?pid=20601087&sid=aHlb_k7gVajg Dollar `Vulnerable' to Drop in Investment, BIS Says Yen Gains From Record Low Versus Euro as Carry Trades Are Pared http://www.bloomberg.com/apps/news?pid=20601101&sid=auh1NEiWSnnw “…there was a moderate tightening of monetary policies in many countries, although overall monetary and financial conditions remained highly accommodative. In part this was due to real policy rates remaining rather low, with associated effects on long-term interest rates. But it was also due to an increased willingness of lenders to advance credit to high-risk borrowers with less onerous conditionality than in the past. While the credit cycle has peaked in the subprime mortgage market in the United States, the expansion has continued in most other areas. As a result, global asset prices either continued to rise or were maintained at unusually high levels. Moreover, financing for the US current account deficit, as well as private capital outflows from the United States, continued to be available at terms that seemed to factor in expectations of only a very moderate further depreciation of the dollar… http://www.bis.org/publ/arpdf/ar2007e1.htm

http://www.bloomberg.com/apps/news?pid=20601087&sid=aHlb_k7gVajg
Dollar `Vulnerable’ to Drop in Investment, BIS Says

Yen Gains From Record Low Versus Euro as Carry Trades Are Pared
http://www.bloomberg.com/apps/news?pid=20601101&sid=auh1NEiWSnnw

]]> By: Ford Fairlane http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97324 Ford Fairlane Mon, 25 Jun 2007 11:04:37 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97324 Guest, Hey, blowhard. The Toyota data is up on the previous thread. Setser, are you going to acknowledge it? Guest,

Hey, blowhard. The Toyota data is up on the previous thread.

Setser, are you going to acknowledge it?

]]> By: Sunlight http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97323 Sunlight Mon, 25 Jun 2007 10:47:27 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97323 Brad, I didn't mean to nitpick, and I like the combination of accurate and colorful prose. I also passed your conversation with global portfolio manager on to some colleagues, and they really liked it. Maybe you have already answered this one somewhere but one of my trading buddies, who happens to be based in Doha, says there is "heavy rumor" about the UAE dropping the dollar peg. According to him many people there think of this as a done deal. Any substance to this one? Brad,
I didn’t mean to nitpick, and I like the combination of accurate and colorful prose. I also passed your conversation with global portfolio manager on to some colleagues, and they really liked it.

Maybe you have already answered this one somewhere but one of my trading buddies, who happens to be based in Doha, says there is “heavy rumor” about the UAE dropping the dollar peg. According to him many people there think of this as a done deal. Any substance to this one?

]]> By: Guest http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97322 Guest Mon, 25 Jun 2007 09:35:35 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97322 "...Jin Renqing, China's minister of finance, will lead a delegation of senior Chinese regulators and financial sector executives to a high-level meeting at Niagara-on-the-Lake in mid-October... China remains a difficult place to do business, as analysts have warned. Regulations can be stifling. Its stock markets are still weak and respond more to rumours and speculation than business fundamentals. Partnering with, or buying, a local company is risky given substandard financial reporting practices and weak corporate transparency... Organizers hope to schedule the forum so that it occurs just prior to the Oct. 21 meeting of the World Bank Group and the International Monetary Fund in Washington." http://www.globeinvestor.com/servlet/story/GAM.20070625.RCHINA25/GIStory/ “…Jin Renqing, China’s minister of finance, will lead a delegation of senior Chinese regulators and financial sector executives to a high-level meeting at Niagara-on-the-Lake in mid-October… China remains a difficult place to do business, as analysts have warned. Regulations can be stifling. Its stock markets are still weak and respond more to rumours and speculation than business fundamentals. Partnering with, or buying, a local company is risky given substandard financial reporting practices and weak corporate transparency… Organizers hope to schedule the forum so that it occurs just prior to the Oct. 21 meeting of the World Bank Group and the International Monetary Fund in Washington.” http://www.globeinvestor.com/servlet/story/GAM.20070625.RCHINA25/GIStory/

]]> By: Guest http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97321 Guest Mon, 25 Jun 2007 08:43:20 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97321 "...China may have repeated the disastrous errors made by Japan in the 1980s when Tokyo let rip with excess liquidity. "The Chinese economy seems to be demonstrating very similar, disquieting symptoms," it said, citing ballooning credit, an asset boom and "massive investments" in heavy industry. Some 40 per cent of China's state-owned enterprises are losing money, exposing the banking system to likely stress in a downturn. It said China's growth was "unstable, unbalanced, unco-ordinated and unsustainable" - borrowing a line from Chinese premier Wen Jiabao..." http://www.smh.com.au/news/business/great-depression-fall-looms/2007/06/25/1182623823367.html “…China may have repeated the disastrous errors made by Japan in the 1980s when Tokyo let rip with excess liquidity. “The Chinese economy seems to be demonstrating very similar, disquieting symptoms,” it said, citing ballooning credit, an asset boom and “massive investments” in heavy industry. Some 40 per cent of China’s state-owned enterprises are losing money, exposing the banking system to likely stress in a downturn. It said China’s growth was “unstable, unbalanced, unco-ordinated and unsustainable” - borrowing a line from Chinese premier Wen Jiabao…” http://www.smh.com.au/news/business/great-depression-fall-looms/2007/06/25/1182623823367.html

]]> By: Dave Chiang http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97320 Dave Chiang Mon, 25 Jun 2007 04:41:02 +0000 http://blogs.cfr.org/setser/2007/06/23/putting-the-brics-cash-to-work/#comment-97320 LOL: New IMF mandate promoted by Washington Consensus inflames U.S.- China economic relations http://www.chinaknowledge.com/news/news-detail.aspx?id=8742 Jun. 25, 2007 (China Knowledge) - The International Monetary Fund (IMF) could be snared in a tussle between two of the world's largest economies over exchange rates and the party responsible for massive trade surpluses, said a senior official from IMF. The situation may be imminent given the board's adoption of a new mandate for international surveillance- a move widely seen as a hardening of rhetoric towards China's economy. The new mandate has since inflamed U.S.- China relations and contentions between both parties seem to be showing no sign of abating. On the other hand, China has taken up the defense and retaliated by pointing out that IMF's surveillance would exert unequal influences on the emerging and developed economies. Ge Huayong, China's representative at the IMF, attributed China's overruling to the lack of support for developed nations having the bigger voting powers in the fund. The U.S. was also said to have exacted significant amount of influence on the panel's decision. Bystanders have expressed uneasiness towards the fix which the IMF could land up in. Former offcials of the fund had maintained that it is not within the capacity of the global financial regulator to decide on such issues. Others are apprehensive over China's possible backlash- such as spurning the fund and devising Asian monetary tactics to supersede it. LOL:

New IMF mandate promoted by Washington Consensus inflames U.S.- China economic relations
http://www.chinaknowledge.com/news/news-detail.aspx?id=8742

Jun. 25, 2007 (China Knowledge) - The International Monetary Fund (IMF) could be snared in a tussle between two of the world’s largest economies over exchange rates and the party responsible for massive trade surpluses, said a senior official from IMF.

The situation may be imminent given the board’s adoption of a new mandate for international surveillance- a move widely seen as a hardening of rhetoric towards China’s economy. The new mandate has since inflamed U.S.- China relations and contentions between both parties seem to be showing no sign of abating.

On the other hand, China has taken up the defense and retaliated by pointing out that IMF’s surveillance would exert unequal influences on the emerging and developed economies.

Ge Huayong, China’s representative at the IMF, attributed China’s overruling to the lack of support for developed nations having the bigger voting powers in the fund. The U.S. was also said to have exacted significant amount of influence on the panel’s decision.

Bystanders have expressed uneasiness towards the fix which the IMF could land up in. Former offcials of the fund had maintained that it is not within the capacity of the global financial regulator to decide on such issues. Others are apprehensive over China’s possible backlash- such as spurning the fund and devising Asian monetary tactics to supersede it.

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