On Tuesday in the global market, mainly for its freaked, the following events:US Treasury Secretary Geithner Monday speech, pledging "in the United States and is not in any country around the world can devalue trip wealth."
Geithner's statement after hours after China's commitments on the basis of a rate hike the surprise — the first since 2007--raised fears that China's growth slows with global impact.
"Closing the used" unraveling the banking crisis could mean 2.0
Geithner's comments, the uncertainty over the economy of the people's Republic of China and the US mortgage market data has led to the flight investors regard murheet vis-à-vis the US Treasuries, which sends the surging 1,7% of the basket of six against major currencies on Tuesday, when shifting away from the capital shares of gold and other commodities, including crude oil and the dollar.
Currency, in terms of the accord?
Some analysts believe that the interest of the people's Republic of China and Geithner comment Exchange-G20-meeting in the context of off-the-day may propose a currency agreement.-all information of the people's Republic of China and Geithner will look, however, is, however, "as compared with UCITS coordinated within the" completely separate agendas may Show, in accordance with them.
The growth of the primary directive – the people's Republic of China
Chinese year of the creditor Central Bank announced on Tuesday, 25-point increase on the basis of State-of-the-art seeks to rein inflation and asset prices. Obstacles to the growth of the people's Republic of China, however, the slow taivesaumaamalla Global economic recovery in the fear of the transfer of the to propose, Beijing's trust to economic recovery, when the scale indicates the primary directive is to maintain growth.
In fact, there is a huge population of the people's Republic of China is likely to be due, shall be considered to be the growth of 8% of jobs in the region or the Communist Party could risk a second "civil revolution" similar to Mao a spectacle around 60 years ago.
8.5%-has the slowest growth in the Decade, as the case may be, of the people's Republic of China
In its October 2010, the East Asia and Pacific Economic Update, World-Bank stated that the
"China's growth prospects in the upcoming Decade will continue to look for the bright, but a rebalancing of the economy of growth and investment pattern by changing is becoming increasingly important for sustainability."
The Bank's projections, THE RANGES PROJECTED FOR REAL GDP increase of 9,5% of the people's Republic of China in 2010 and to slow down the rate of 8,5% in 2011.
Currency war still in use
On the preservation of growth, propping up Yuan is a half-effect, which occurred just as quell criticism of China's currency policy in General. But Beijing does not intend to give the Yuan appreciate as much as you like Geithner (and the rest of the world).So, who is also in other countries--THE U.S. — either or currency war will continue to be, even after the G20.
A strong dollar Talk-n: O Substance
On the other hand, Geithner's strong dollar talk is more symbolic than substance, the Fed's future QE2 QE1, does not mention the steadily growing national debt, in principle, is closed after the fate of the US dollar.
Quick real estate restitution obligations where the dollar hit a 10-month low against the majors last Friday, the total number of posts to the various risks including hyperinflation, and even the Bank operates. This is likely to break his 8-month calls for the silence of the dollar Geithner.
Foreclosure-port
In the meantime, the foreclosure mess could cost the banks used huge amounts of losses and lawsuits pending, that is to say, the second banking crisis spiraled into The scandal. [1] [2] a major crisis in recent weeks, after the entry into force of the evidence whether that some of the need to apply to a review procedure, based on the size of their paperwork, that is to say, "Robo!-sign."
American Bank, Ally of the GMAC Mortgage unit to JPMorgan Chase and Goldman Sachs to suspend the need to examine the General for all the paperwork. Chambers of 50 States and the FBI are investigating whether the mortgage lenders broke the laws of the State. [3] [4] Bloomberg announced that New York-the Fed had joined PIMCO and BlackRock tries to force the BofA to buy back 47 billion dollars of debt.
Up to a maximum of $ 120 billion, loss
Although most analysts agree that the biggest threat is likely to be associated with the law suits, but estimates vary. Banking analyst Dick Bove reflecting best-case scenario, it is estimated that the banks losses top $ 80 billion over the course of the next 3-5 years of Stifel Nicolaus, even on the $ 47 billion in the previous chapter's total loss, with 9,5 billion u.s. dollars, in particular, the Bank of America and JPMorgan Securities said in the region, 55 billion dollars (most likely scenario) 120 billion (in the worst case scenario).
So far, the majority appear to See this crisis remain closed banks now better is activated and less effort than before the financial crisis. 47 billion dollars or 120 billion dollar's total loss, regardless of whether one thing is certain--this Drag several years is a mass of law suits involved, which tends to sap, as well as the stock prices in the near future earnings.
Although a few analysts, including Bove think bank stocks are oversold and presents a good investment opportunity, therefore, (I) the error message that is similar to the warning to be paid to the uncertainty involved in the outgoing side, such as Jim Rogers said,
"Anyone know what the book value is BofA is, including the BofA."
Dian l. Chu, October 0, 2010
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