We’re starting the holiday week – October 1 is the anniversary of the 1949 revolution – so markets were closed today and will be closed for the rest of the week, and there’s a pretty good chance not a whole lot will happen on the policy front until the end of the holiday schedule. Much [...]
Bank run in Hong Kong
Sep 25th, 2008
What was supposed to be largely a US financial crisis seems to be spreading even further. This might come as both a surprise and an annoyance to those who believe that the cause of the crisis was specific mistakes made by US bankers and regulators, but much less of a surprise to those who assume [...]
Worrying about the banking system
Sep 23rd, 2008
While Monday’s stock market, led by the banks, continued Friday’s big bounce back, rising 7.8% to add to Friday’s 9.5% surge, leaving us at a 2-week high (largely on buyback talk, I think), worries about the banking sector actually seemed to be deepening. Today, perhaps in response, the stock market was a lot more confused, [...]
Markets surge, but little has improved
Sep 21st, 2008
As everyone by now knows, a massive intervention Thursday by the Fed and the US Treasury, which the Financial Times calls “the most extensive peacetime expansion of the role of government in the financial system since the Great Depression,” and seemingly coordinated world-wide, caused a huge rally in global stock markets. Chinese markets were no [...]
Is China safe?
Sep 18th, 2008
I finally got back to Beijing on Monday, but after an interesting lunch with a group of pessimistic Brazilian hedge fund managers who were concerned about financial fragility in China and its impact on Brazilian markets, I had to fly that afternoon to Hong Kong for two days of meetings. It is not a lot [...]
China and the savings glut
Sep 15th, 2008
On September 11 Ben Bernanke, Chairman of the Federal Reserve, gave a very useful presentation at the Bundesbank Lecture in Berlin. It can be read at http://www.federalreserve.gov, and I strongly recommend that my Peking University students all read it. Bernanke argues, as he has many time before, that the world is experiencing a savings glut. According to [...]
Fire and Ice
Sep 13th, 2008
There is still no respite for the Chinese stock market (or, for that matter, of any of the other global stock markets). On Thursday the SSE composite fell more or less in a straight line, losing 72 points, or 3.3%, rising a single point on Friday to close at 2079. We are now less than [...]
Is the PBoC running out of capital?
Sep 10th, 2008
Another terrible day on the stock market saw the SSE Composite, led kicking and screaming by energy and financial companies, trade more or less straight down by 3.2% to close the day at 2203. The brilliant autumn weather in Beijing (and the best week for air quality I have seen in seven years of living [...]
US slowdown = Chinese slowdown
Sep 4th, 2008
Earlier this week I was talking to my grad student Shang Ning about the awful markets around the world, and he suggested that maybe it was a good thing that Chinese stock markets were closed this week for National Day since this would act as an extended circuit breaker that might protect them from collapsing [...]
Market temporarily breaks below 2500
Sep 3rd, 2008
The Chinese stock markets declined further today, with the SSE Composite punching its way through the psychologically important 2300 in the first hour of the day, to trade as low as 2248 in the later afternoon (with 2500 often cited as another important “barrier”, below which the government was presumed to intervene) for a total [...]
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