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Moody's: Chinese Banks Over-Geared

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http://uk.finance.yahoo.com/news/china-s-rising-bank-debt-could-leave-nation-exposed-tele-97514e5a5644.html?x=0

China's rising bank debt could leave nation exposed
Ambrose Evans-Pritchard, 20:28, Monday 30 August 2010
Moody's rating agency is concerned that China is powering its economic growth by raising the gearing of the banking system, leaving the country exposed if the outlook darkens.
The banks are expanding their balance sheets rapidly through higher leverage a policy that relies entirely on the continuance of torrid growth. "Pain lies ahead if China's economic growth slows and the banking business model cannot adjust accordingly in time," said Yvonne Zhang, the agency's senior China analyst.

Time to dump Chinese investments if you have any? This is shaping up to be a global collapse-could never see how the East was going to escape the mess in the West. Decoupling? Myth IMO.

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http://uk.finance.yahoo.com/news/china-s-rising-bank-debt-could-leave-nation-exposed-tele-97514e5a5644.html?x=0

China's rising bank debt could leave nation exposed
Ambrose Evans-Pritchard, 20:28, Monday 30 August 2010
Moody's rating agency is concerned that China is powering its economic growth by raising the gearing of the banking system, leaving the country exposed if the outlook darkens.
The banks are expanding their balance sheets rapidly through higher leverage a policy that relies entirely on the continuance of torrid growth. "Pain lies ahead if China's economic growth slows and the banking business model cannot adjust accordingly in time," said Yvonne Zhang, the agency's senior China analyst.

Time to dump Chinese investments if you have any? This is shaping up to be a global collapse-could never see how the East was going to escape the mess in the West. Decoupling? Myth IMO.

There is a serious difference though, while in Western economies if the bankers mess up we give them loads of money to fix it so they mess up again...

If they fail in China they are put into death camps called Lao Gai where they are subjected to brutally hard labour and are executed shortly afterwards. A frauster in 2004-5 stole about 5mil and was sentenced to Lao Gai. He was shot in 2009....

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Let me see, Moodys that spot on rateing company that (Didn't) spoted the CDO for the sham they where "Suddenly" gets wind of trouble in China. The Telegraph's Mi6 mouthpiece then gives it both barrels......he tried this V the Euro, who China resuced.

Where the salt?

Mike

Edited by Mega

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Actually, I think the Rating Agencies are probably rather good at credit ratings for corporations (apart from estimating fraud risk).

They are not even THAT bad at rating sovereigns.

But for rating banks and structured finance products their rating methodologies seem to be flawed.

The problems they have had with bank ratings, CDO ratings etc. do not necessarily 'infect' the methodologies for corporations or of sovereigns. The approaches are different, the teams are different, and the history of their methodologies are different.

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http://uk.finance.yahoo.com/news/china-s-rising-bank-debt-could-leave-nation-exposed-tele-97514e5a5644.html?x=0

China's rising bank debt could leave nation exposed
Ambrose Evans-Pritchard, 20:28, Monday 30 August 2010
Moody's rating agency is concerned that China is powering its economic growth by raising the gearing of the banking system, leaving the country exposed if the outlook darkens.
The banks are expanding their balance sheets rapidly through higher leverage a policy that relies entirely on the continuance of torrid growth. "Pain lies ahead if China's economic growth slows and the banking business model cannot adjust accordingly in time," said Yvonne Zhang, the agency's senior China analyst.

Time to dump Chinese investments if you have any? This is shaping up to be a global collapse-could never see how the East was going to escape the mess in the West. Decoupling? Myth IMO.

Another thread I started here: http://www.housepricecrash.co.uk/forum/index.php?showtopic=150236

about Weimar republic which says mass expansion of money supply (china included) could stay benign for years, create apparent of great wealth and then all the hell

break loose. Seemed to be some similarities with China there as well...

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  • 140 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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