China's Influence On The Global Economy

[Mulboyne]

[floatr][/floatr]Telegraph: Global stocks tumble as Chinese market falls
Global stocks tumbled after a plunge in Chinese stocks shook investors' confidence in one of the world's fastest-growing major economies. The benchmark FTSE 100 was down 148.6, or 2.3pc, at 6286.1, while the FTSE 250 also slid 431.5 or 3.7pc to 11180.9. Markets in continental Europe, Russia, South Africa and Turkey all declined. The FTSE and the Dow Jones Stoxx 600 Index, which tracks Europe's 600 largest companies, suffered from the opening after a 9.2pc drop in China's Shanghai and Shenzhen Index, the steepest since 1997. China's stock market, which has doubled in value since the start of 2006, was unsettled by concerns the government may make more efforts to restrict illegal investments and that economic growth may slow...more...

[Captain Japan]

Is the party over for the yen carry trade ?
Reuters

NEW YORK (Reuters) - The party for yen "carry trades" may be ending sooner than expected, after a 9.0 percent slump in Chinese stocks on Tuesday prompted investors to reduce some risk in their leveraged portfolios.

The Japanese yen jumped more than 1.5 percent against the U.S. dollar, and was up about 1.0 percent against the euro on Tuesday, as investors unwound trades in which they had borrowed yen at low interest rates and used the proceeds to invest in higher-yielding assets in other currencies.

The yen had slid to a four-year low against the dollar in January, as low Japanese interest rates and low volatility in global financial markets, resulted in the "carry trade" value soar to an estimated $1 trillion.

The Bank of Japan's decision last week to raise its benchmark interest rate to a decade-high of 0.5 percent did little to restrain investors from selling the yen and buying instruments with higher yields, until now.

Tim Lee, founder and president of Pi Economics, an investment advisory firm in Stamford, Connecticut, said the end of the carry trade regime could be a "devastating financial collapse."...more...

Certainly the Nikkei will open down this morning. But I'm curious where it'll head after that. This could be the big chance for the Japanese market to show that its companies really have turned it around.

[canman]

But from the looks of things early, they will follow the US and drop like a stone. I too was hoping that they could shrug off the fall in the US and after an initial shock, start to move up, but I don't have hope. On a personal note I was about to invest in a BRICS fund on Monday, but put it off as I just didn't have the time to go into the brokers and do the paperwork. Man am I glad I didn't.

[Buraku]

I warned ya all this would happen


A good day for me, my stocks easily weathered this storm

[Captain Japan]

A good day for me, my stocks easily weathered this storm

Come on, Buraku, let's have a few stock tips.

[Buraku]

I've nothing solid just feelings and vague tips, Boeing & the European Airbus may make a strong return, I think America's Superconductors could make a comeback in 08 as Bush leaves the whitehouse, watch out for well respected energy companies trying to sell their 'Green' initiative in California, General Motors needs a serious make-over and having a hold of Daewoo, Vauxhall, or Suzuki ain't gonna put this company back on its feet. There are a number of pharmaceutical companies that look ok, also the Palm guys going to takeover Nokia looks interesting, Vietnam's own Tech sector is growing thanks to the Chinese starting to ousource to Nam, Asian Tobacco will be hit hard, watch out for upcoming American political figures that may have ties to investment banks like Lehman Brothers. The 08 may be all about firms that are going to revenue from China's Olympics and the big American political run for the whitehouseand get ready for a second 'oil-shock' as the Saudis and Iranains help fuel the fires of Baghdad......commodities and foreign bonds may become more important. End 07 run on into 08 will be all about politics The market is a jungle even at the best of days, so its wise to learn your own way to weather the storm.

[Buraku]

bump

(Reuters) – U.S. Treasury Secretary Henry Paulson on Tuesday praised China's cooperation in taming global financial turmoil and urged the next U.S. president to continue an active economic dialogue with Beijing.

In his first major speech on China in two months, Paulson said he has held useful and constructive discussions with Chinese Vice Premier Wang Qishan on the turmoil rocking global markets.

"It is clear that China accepts its responsibility as a major world economy that will work with the United States and other partners to ensure global economic stability," Paulson said in prepared remarks to the National Committee on U.S.-China Relations in New York.

A advance copy of his remarks were released in Washington.

Paulson said the United States has demonstrated that it will "do what is necessary" to strengthen financial institutions, unlock credit markets and minimize the impact of financial instability on the broader U.S. economy. He urged other governments to do the same.

China is feeling strains from the global turmoil as well, but was expected to continue to be an important engine for global growth, Paulson said.

The next U.S. president should recognize this and engage China as a growth opportunity for U.S. companies, consumers, exporters and investors, he said. "A stable prosperous and peaceful China is in the best interest of the Chinese people, the American people and the rest of the world," he said.

Paulson said he hopes whomever wins the November 4 election will build upon progress that Washington and Beijing have made during the past two years by holding high-level talks called the Strategic Economic Dialogue (SED).

"Perhaps most importantly, the SED has established a new model for communication, enabling us to address urgent issues such as turmoil in our financial markets, energy security and climate change," he said. "I hope that the next U.S. president will expand on the SED to take U.S.-Chinese relations to the next level."

Before the credit crisis forced him to prop up faltering U.S. financial institutions, Paulson had made U.S.-China economic relations the centerpiece of his two-and-a-half-year term.



The former Goldman Sachs chief has made more than 75 trips to China during his career and launched the dialogue talks to try to tackle thorny issues such as America's ballooning trade deficit with China and what many U.S. firms and lawmakers viewed as an undervalued yuan.

While the talks mainly have produced agreements on air services, product safety and energy and environmental cooperation, they have coincided with a gradual rise in the value of the yuan against the dollar.

Paulson said the talks have been an "excellent forum" for discussing the yuan's value, but he refrained from urging that Beijing allow faster appreciation. "I am pleased that China has appreciated the RMB by over 20 percent since July of 2005," he said.

Paulson also urged China to continue with financial sector and capital markets reform despite the global turmoil that has shaken U.S. financial institutions to their foundations.

"Some in China look at the recent failures in our financial markets and conclude that they should slow down their reforms," Paulson said. "But their is a great opportunity for China to learn from our significant mistakes and move forward with reforms that have the potential to produce important gains for China and its people."

He said these include helping to rebalance China's growth to improve living standards for Chinese households, helping to allow monetary policy to tame inflation and encourage market-driven innovation.

[Buraku]

The BRICS bloc may soon get 6 new members and more jumbled opinions on de-dollarization
https://uk.finance.yahoo.com/news/brics ... 26637.html
Brazil, Russia, India, China, and South Africa have invited Saudi Arabia, Argentina, Egypt, Ethiopia, Iran, and the UAE