CICC said global banks too optimistic on the Stocks of China

4: 22 Am EDT by Bloomberg News, April 15, 2011

(Updates with prices closing of the second paragraph).

April 15 (Bloomberg)--more great China Investment Bank turns "prudent" on stocks of the country, as six of its Overseas rivals and the largest mutual fund manager say that it is the time to buy.China International Capital Corp. predicts the economic slowdown and growth of earnings limit equity gains after the Hang Seng China enterprises index increased by 6.6% this year, the best advance among key Asian indices. "The provider of the head of research in China in the Asiamoney survey recommends"defensive"businesses including cash and consumer staples producers".We will turn cautious, "Hong Hao, CICC global equity strategist, said in an interview to 13 April in Shanghai." "Economic growth will slow in the coming months."CICC reduced outlook follows recommendations to stimulate the Chinese holdings stocks in the month of Goldman Sachs Group Inc., JPMorgan Chase & Co., Macquarie Group Ltd., and HSBC Holdings Plc, with forecasts for more gains of at least 14% by Credit Switzerland Group AG and Deutsche Bank AG. This week, has declared Pacific Investment Management Co., who oversees the $ 1.2 billion, it occupies a position of "great overweight" in China.While the actions of the country are rallied for three consecutive weeks on speculation that the Bank of China is near the end of its campaign to tighten policy monétaireHong said investors bullish can be disappointed.Rate BetsThe Hang Seng gauge Chinese shares listed in Hong Kong, or H-shares, fell 23 percent in the six months after that the Central Bank ceased to increase in 2007, underperforming index of emerging markets of the MSCI by 14 percentage points. In 2004, the tonnage of H-share rose about 3 percent after rate increases at the end, the MSCI index of end of 8 percentage points.The index of H-share added 0.4% to 13,533.58 today. "Consensus sees the start of the end of the interest rate hike cycle and so is distributed upward,"Hong said in a report sent to clients April 10. "The end of the cycle is not necessarily optimistic judging by the experiences of 2004 and 2007."In January 2010, Hong, a former analyst at Morgan Stanley and strategist of Citigroup Inc., predicted that stocks would be retirement as the Government reined in property speculation. The tonnage of China Hang Seng dropped 10 percent in the first half while index Composite of Shanghai of so-called shares exchanged on the continent declined by 27 percent. The tonnage of Shanghai gained 0.3% at 3,050.53 today.In November 2010, Hong advised investors to avoid buying Chinese stocks after the largest gathering of 15 months. The tonnage of China Hang Seng decreased for four straight months.Inflation JumpChina economy grew a further estimated 9.7% in the first quarter and inflation in March has accelerated the fastest rate since 2008, the National Bureau of statistics said at a Conference in Beijing today.Consumer prices increased by 5.4% a year earlier, the bureau of statistics said. The median forecast in surveys of Bloomberg News, economists have been for the growth of 9.4% and the inflation of 5.2%.China has increased its lending rate of benchmark of 1 percent to 6.31% since October and thrown the requirements of the reserve banks three times this year to combat inflation and curbing property speculation.The policy makers will raise the rate of loan key to 6.56% year-end, according to the median of forecasts in a survey of 20 economists Bloomberg March 22. In addition to monetary tools, the Government has deployed grants, State food reserves and the threat of the price control to counter inflation, including Prime Minister Wen Jiabao has described as a threat to social stability of the nation of 1.3 billion people. "The biggest second sustainable Rally Bank ' Credit Switzerland, Switzerland, boosted its forecast for 12 months on the Hang Seng index the day after its central bank rate increase on 5 April. HSBC, Europe largest lender, has increased its rating on the greater China "overweight" Investment Bank while the Australia, Macquarie, said investors expected lift holdings because the Central Bank is near the end of raising borrowing costs.Chinese stocks have been upgraded to "overweight" from "market weight" the previous week by analysts Helen Zhu and Timothy Moe at Goldman Sachs, the largest fifth U.S. Bank by assets. They recommended banking and property sharing and their target of 16 500 for 12-month Hang Seng index. In a report distributed on 21 March, Ma Jun, a strategist based in Hong Kong to Deutsche Bank, largest of Germany, lender said that Chinese actions can achieve approximately 25 per cent.Maria Gordon, a Fund Manager of emerging stock in London in the Pimco, said in an interview with Bloomberg Television on 13 April as financial and property stocks are attractive. The 236 billion PIMCO Total Return Fund, managed by Bill Gross, is the largest mutual fund in the history of the industry.Cup CyclicalsFrank Li, JPMorgan China strategist, said stocks may "swing" before a "sustainable rally" towards the end of the third quarter, according to the comments sent by e-mail yesterday. MOE of Goldman Sachs, Garry Evans of HSBC and Peggy Chan of Switzerland Credit did not respond to telephone and E-mail requests for comment. Michael Kurtz, a strategist at Macquarie, declined to comment. "Growth will be stronger than market expectations,"Ma of Deutsche Bank said in a telephone interview yesterday." "We expect a small re-rating of the market as the macro fears rise." ' Cheap' StocksThe MSCI China Index primarily listed in Hong Kong China stocks "is cheap," said Ma. Trades of gauge for 12 times estimated, compared to its historical average of 14.8, according to data compiled by Bloomberg. The measure on the part of h is assessed both the 11.1, compared to 11.6 for the emerging market MSCI Index.CICC Hong advised investors to cut holdings of the companies that rely on the acceleration of economic growth to increase revenuesincluding producers of raw materials. Benefits to companies listed on China spent about 19% in 2011, at the bottom 40 percent last year, according to IPCC estimates. "It is time to turn defensive,"said Hong.

-Michael Patterson, Zhang Shidong and Allen Wan. With the help of Irene Shen and Kristine Aquino. Publisher: Allen Wan

To communicate with the staff of Bloomberg News for this story: Michael Patterson in London, mpatterson10@bloomberg.net. Allen Wan in Shanghai at the awan3@bloomberg.net

To contact the editor responsible for this story: Reinie Booysen at rbooysen@bloomberg.net

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Help banks afloat, was, until it is not fed

The loan by the so-called discount window turns a little used program for banks, which some long-term financing for troubled institutions, of which one the fed for more than a year regularly borrowed to cash low run.

The Central Bank has a low risk loans even to make the protection of the demanding large amounts of collateral. But propping keeping banks afloat, so that they even deeper get fight in debt cleanup costs for the Federal Deposit Insurance Corporation, as it can increase up to banks. It can also clog the arteries of the financial system, bind money in banks that no longer make new loans.

County Bank, which was the largest bank in Merced County, California, from the window in March 2008 the announcement of the first annual loss in its 30-year history, news, the depositors, $52 million back to discount loans prompted a 4.8 million dollars.

In the fall of 2008, the Bank was regularly bonds the fed, the more than two dozen loan amounts, which reached over $ 60 million. Borrowing up to the day it in error the taking of a final loan for US$ 55 million on Friday, February 6, 2009, the continued.

Thomas hawker, the former Chief Executive, said that the loans keep helped the Bank in the business, which required cash deposits dwindled. But he said that it was clear in hindsight, the County Bank dead was financing the construction of new houses in the California Central Valley on the legs all the time, thanks to the once lucrative focus.

"I think in most cases, it is a lifeline, offering to survive the kind of a bridge," said Mr hawker, who left the Bank in 2008. "In the case here, Merced County ground was zero for everything that possibly could have wrong with the economy."

The discount window design, original is a fundamental characteristic of the Central Bank to Bank to mitigate runs and other cash squeezes. But access is limited to historically on healthy banks with short-term problems.

This limits moved from user-defined Law 1991 when Congress formally the Fed help banks limited. A Congress investigation showed that more than 300 banks, between 1985 and 1991 owed money to the fed at the time of its failure is failed. Critics said lending the Fed increases the costs for these errors had.

The Central Bank has been castigated for a generation, but in 2007, with a view to a new banking crisis, the Fed once again started to expand access to the discount window. It reduces the cost of borrowing and began with loans for the extension of the duration of up to 30 days.

More than a thousand banks have taken advantage. A review of the Federal Republic of data, including the records shows published last week, the Fed then is at least 111 of those banks failed. The Fed money owed eight on the day, as the not including Washington Mutual, the largest failed bank in American history.

The Fed said that it the law in all of their emergency loans fully respected and his actions, including loans through the discount window to limit the impact of the crisis were determined.

Charles Calomiris, finance Professor at Columbia University, the discount window has studied loans during the previous crises, said that the Fed not enough information for the public to determine whether some of the recipients were erected in inappropriate and should have more quickly fail approved had released.

"We know that the Fed has?" No, we do not, "he said." "But the Fed politicized more than at any point in its history became, and do very much, I fear that many of the Fed discount window loans may be only part of a political calculation."

Had the Fed lending significant advantages in some cases, if the loan goes the mandate meant.

The F.D.I.C. is the banks almost always on Friday night, so that the new owners two days before reopening. In some cases maintain the Fed banks up to the next Friday. The Bank of Clark County, Vancouver, Washington, was his first discount window loans on Monday, Jan. 12, 2009. It borrowed $8 million Monday, Tuesday and Wednesday, then US$ 14 million on Thursday and Friday. Then the F.D.I.C. be closed its doors.

In other cases, it became clear the Fed lending to banks such as the extent of their financial problems stopped. Alton Gilbert, a former official at the Federal Reserve Bank of St. Louis, one oft-cited study of the Fed discount window wrote the financing in the 1980s, said that some banks with fed loans on their books during the recent crisis has failed. The Central Bank suspended often several months before they failed the lending.

Some experts said still, additional control was installed for a subset of the banks, receive the strong support even though she faced clear problems.

The most common visitors to the window were three subsidiaries of the FBOP, a bank holding company based in Oak Park, Illinois

Park National Bank in Chicago regularly borrowed from April 2008 until the day of their failure in October 2009, amounts, the 129 loans at $345 million achieved the longest period of sustained support for each bank, which is during the crisis failed. Park to the some of the money financing of the acquisition of the assets of other banks, extended his own record and potentially increase the cost for the errors or inaccuracies. Bloomberg news reports first the details of the Fed discount window lending to the company.

Discount, California National Bank of Los Angeles and Pacific took more than 100 loans from the window two more failed banks owned by FBOP National Bank of San Francisco, although both bond some months before failing.

Marvin Goodfriend, Professor of Economics at Carnegie Mellon University, said that such loans, which the fed in the inappropriate position of deciding on the fate of the individual banks, decisions, he said should be made by elected representatives.

"What I think is the lesson is, that the Congress to clarify the limits of an independent fed and credit policy," said Professor Goodfriend. "There should be a mechanism so that the Fed not, these decisions for taxpayers to make."

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April 1 is coming... Give life a little entertainment spirit... ...

April 1 is coming... Give life a little entertainment spirit... ...

A, office applicable

1. Modulation smell coke

Buy a bottle of coke, drank half later, adding vinegar, soy sauce, salt, mustard seasoning and so on, and carefully modulated a colour and lustre is normal smell coke. Meet acquaintances act like it is drinking, then naturally "coke" give up, the other side, the side of unsuspecting thanks big mouthful down, and then, to open the mouth will vomit. Eyebrows You can also make by old formula, such as to mineral water into wine, and to the spirit erguotou beer soap water etc. Against PM

2, toothpaste GaXinBing 

The GaXinBing unpacking and carefully through two cracker, remove the original sandwich, take out toothpaste (best is black teeth 

Cream, tastes good! ) Squeeze appropriate amount to bread, component follow individual "diet" habit, finally to Bob close, try to do too lifelike presentable. You generally no specially use, just put it to obvious place, best to prepare for the GaXinBing patches of the original watching TV and eating, would automatically someone patronage taste. This is called JiangTaiGong fishing, let person the bait. You can also the initiative, everywhere please people, although the risk bigger taste, but there must be many people trap. 

3, the song 

Prepare for a water or enamel washbasin (other can send out loud after by the blow of high decibels objects all but) and telephone. Try to use a very formal tone phone call for the other party, after connect according to below words: here is the music station, a X (can say don't say real surname), sir/miss for Y sir/miss point one song, if you wanted to hear, please dial "#" key listen to (average person can click). Thank you, the song is engine 

"When", please listen carefully. Then tap the prepared blow things out, knock only once, 1 of "when" in each other, not the reaction come over, say: thank you for listening before, happy April fool's day, goodbye! 

This method is applicable to between quarters, or available telephone contact friends, who is a close final. In addition on the phone process must not laugh, lest affect effect and atmosphere. 

 4, double postage 

Estimation good time, ahead of time to send a letter of your friends, but don't put stamps, also don't make your mail address write (or it will give you back). This April fool's day one day, your friend will receive a notification issued by the post office, was told that wins he have a postage due mail, please to so-and-so post office and pay for place on get double postage. When he arrived in so-and-so post office, dusty, humbly after sending the postage on double, opened the envelope, but found savoir inside a small note, top write "happy April fool's day." But the joke may time could achieve error, the effect that there may not be an imagination of so good. 

5, gifts 

If someone's birthday on April fool's day, they gave him a write "happy birthday" big box, the box, and filled with scraps of this fluffed up. When he picked up the box, this fall, scraps of fly all over the house, is going to be up for the was a fool. Half an hour 

6, measuring 

With a cut the rope pranksters, stopped a pedestrian, to him for help measure size. Then take the other side of the rope, turned the corner, and stopped another pedestrian, likewise. Then you can hide in the side to complainers. Two people may wait ten minutes, seeing no action to put down the rope head, to find each other ask clear, then just can discover fooled. This is the good way to fool strangers. 

Second, network application: 

1 the most primary methods: simple, suitable for all use computers 

The toilet while others in their computer screen saver, set on and adding * * * *; Fake website administrator speech: "system will restart, please keep hands quit after the work"; E-mail to a friend, first Winzip, packaging, packaging... again Finally make self-extracting files, so circulates several times, finally open letter other only six Word: today is April fool's day! 

2. Easy to let art: appropriate use MSN instant messaging software friends 

Use emergency will are using instant messaging software was a fool ZhiKai, open the instant messaging software revision personal data options, use a keyboard, mouse, will be a fool looks to a comprehensive network of modifications. As for how to change, then take your interest and ability. Finally, don't forget the destruction of all the evidence may expose evidences. This method will not be discovered, not only let be a fool 1:30 was friends don't know who he was, even be a fool myself also 1:30 was confused. 

3, another method is seeking to be fools MSN number 

Himself to apply for a MSN number, according to the details of fools provide your personal information. Will be a fool to join you apply new number contact list, and then began to grab the weakness of "big bombing". This method is mainly to don't let them know of who you are, so in use must note hidden, try not to let the other side to you have suspicion. 

Remind be fools: whenever and wherever there are ten million should remember will leave the computer system lock, again. Once the suspect in Plan, can only be careful, carefully to observe cracked. 

4, bait-and-switch: change is a fool some of computer Settings 

Using the microphone and Windows bringing "recorder" program to record some terrorist or extraordinary voice, and then the Settings for Windows open (closed) machine voice. So when be fools open (closed) machine, suddenly must be jump. Will be a fool in the computer "my documents" of the corresponding target folder change and let its mistake written document all disappear hard. Will be a fool commonly used some application shortcuts target change and let its click shortcut open procedure, but found start-up not and shortcut corresponding program. Note must will shortcut icon to maintain and original procedures. 

These methods a fool's effect is the first-class, enough to be a fool a racing heartbeat, increased blood pressure, emit cold sweat. But when use must careful, because but they made a great mistake. 

Remind: don't give anyone is April fool's day can be as close as your computer's chance. 

5, move hardware 

Computer broke down, average person can see program or whether Internet wrong, seldom consider that slight little hardware you can be a fool also did not go to work, and it will display before the power plug or mouse plug fluffed up so that when be fools work opened his computer will find display screen or hints the mouse can't find, as he did not know what to do, you will easily appears, brace again, then each other not only questions resolved never think be fooled, but also greatly appreciate you? 

Of course there are also "vicious" one court, that is will display contrast to adjust the minimum to screen for dark principle. So, unless the other very talk, or extremely difficult to find the real cause. If he feels is hardware that right, and likely will own computer "big discharging, in order to check eight" reasons. 

Remind: should pay attention to observe carefully monitor power indicator. Whether you can find the problem, see you Not deep spiritual deep. 

Tests Show Irish Banks Still Ailing

Just months after a banking collapse forced an 85 billion euro ($120 billion) rescue package for the country, the Irish central bank is expected to announce on Thursday that the latest round of stress testing shows that the nation’s banks may need 13 billion euros to cover bad real estate debt. On top of the 10 billion euros already granted by Europe and the International Monetary Fund for the banks, that would bring the total bill for Ireland’s banking bust to about 70 billion euros, or more than $98 billion.

Some specialists say the final tally could be closer to $140 billion, an extraordinary amount for a country whose annual output is $241 billion. Trading in shares of Irish Life and Permanent, the only domestic bank to have avoided a state bailout, was suspended Wednesday after reports that it might have to seek government aid as well.

Dermot O’Leary, chief economist for Goodbody Stockbrokers in Dublin, says that Ireland can no longer afford to shoulder the still-growing burden of its banks. The nation’s interest payments are set to rise to 13 percent of government revenue by 2012 — a figure that trails only Greece’s 18 percent, Mr. O’Leary wrote in perhaps the most definitive report to date on Ireland’s financial ills.

“The Irish stress tests will be an important call to arms that shows that it cannot keep putting up the cost for recapitalizing its banks,” he said. “You need burden-sharing with the bondholders. Without that, the debt becomes unsustainable.”

Many proposals have been put forward to deal with the issue, including requiring bondholders to share in losses, as Mr. O’Leary and the new Irish government suggest, and a United States-style stress test with teeth, which would name and shame front-line banks and require them to raise capital.

But European governments have stuck to their position that such measures would further fuel investor fears, rather than calm them.

The second stress test of European banks now under way is beginning to be regarded as too weak, much as the first one was. In the meantime, the condition of the banks is worsening.

In Spain, which is having a brutal housing bust like Ireland’s, fresh data shows that problem loans are growing at their fastest level in a year.

And Portuguese and Greek banks, with their Irish counterparts, have become dependent on short-term financing from the European Central Bank for their survival as their economies deteriorate and doubts increase about their ability to repay their debts.

“Europe hesitates to deal with the banking problem for two reasons,” said Daniel Gros, the director for the Center for European Policy Studies in Brussels.

“Our policy makers saw Lehman and want to avoid a repeat of the experience at any cost,” he said, referring to the collapse of Lehman Brothers in September 2008. “And the weak banks in Germany and elsewhere are too politically connected to fail.”

Irish taxpayers have been left responsible since the government guaranteed all the liabilities of its banks two years ago.

The European Central Bank and the International Monetary Fund have refused to accept the notion that investors who bought the bonds of Irish banks, in effect financing their reckless lending, should share the pain with some loss on their holdings.

But a newly elected government has become more vocal in arguing that $29 billion in unsecured senior debt — which is not tied to an asset and as a result is deemed riskier from the start — is ripe for restructuring because the banks that issued it, like Anglo Irish, have essentially failed and been taken over by the government.

So the government should not be obligated to keep paying interest.

It is not clear who owns the senior Irish debt; analysts guess it is a mix of European banks and bargain-hunting hedge funds.

What is clear is Europe’s opposition to imposing reductions in the value of these bonds, often called haircuts. That view was reaffirmed this week when a central bank board member, Jürgen Stark of Germany, described such a move as populist and one that could feed a wider investor panic.

Should investors respond by driving down the value of government bonds from the weaker euro zone economies, the pain would most likely be felt by all. The Continent’s big banks in particular would suffer because many have large piles of sovereign debt, which has yet to be marked down to its market value.

According to Goldman Sachs, European banks hold $270 billion in Greek, Irish and Portuguese bonds.

Greek banks are the most exposed, with $87 billion, mostly in Greek debt, but German banks hold $62 billion in total and French banks $26 billion. Hypo Real Estate, a commercial lender now wholly owned by the German government, is the largest holder of Irish sovereign debt, with $14.5 billion.

With bank lending growth negligible and capital levels thin, especially in the weaker euro zone economies, a fresh round of write-offs is the last thing governments want.

The problem is compounded because banks account for a much larger share of national economies in Europe than they do in the United States.

In Ireland, bank assets are 2.5 times the size of its economy. A recent review of the European banking sector by Morgan Stanley shows that the rest of Europe is also heavily reliant on the health of its banks.

The five largest banks in Britain are 3.5 times the size of the country’s economy, 4.4 times in the Netherlands, 3.25 times in France and two times in Spain. In Germany, the figure is 1.5 times gross domestic product, but that excludes the biggest, Deutsche Bank, which is mainly an investment bank. (The comparable figure for the United States is 60 percent of economic output.)

Spain has managed to separate itself from the malaise surrounding Portugal and others this year by undertaking some aggressive deficit cuts.

But, according to a report this week by Marcello Zanardo, an analyst in London for Sanford C. Bernstein & Company, Spain’s problem loans rose 3.3 percent in January from December, the biggest increase in a year. That brought its bad loans to a 17-year high of 6.06 percent of its portfolio. Nonperforming loans jumped 48 percent in 2009 and 15 percent last year, Mr. Zanardo’s data show, driven by the continuing weakness in Spanish home prices.

While Spanish banks are not in as bad shape as their Irish peers, the government has not yet convinced investors that it has addressed the problem despite steps to force local savings banks to raise capital.

Veterans of the three-and-a-half-year bank crisis in Ireland say that the hardest part is accepting how bad things really are, then taking definitive action.

“We need to accept once and for all that Ireland has 100 billion euros in irrecoverable bank loans,” said Peter Matthews, a financial consultant and recently elected member of Parliament who has long argued that Ireland and Europe are underestimating the scope of the country’s debt problem. “People do not relish a write-down but it is the right way to deal with this.”

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