The Chinese Have Our Number

zhyangi

What you hear on CNBC may be completely biased and the chatter on the other side of the world (in China) may be in a completely different tone. Want proof? Just take a look at the analysis completed by one of The Dean’s top students. It’s called  ‘Bulls, not Bears, May End in Tears‘ and is a chinese editorial that discusses the false hope built on government stimulus measures. While it may feel good today… it will only delay necessary reforms.

The key take-aways that students should understand:

1. The debt crisis is far from over. Just look at the U.S. financial sector debt – the source of all problems in this crisis. It has not come down, despite all the talk about deleveraging. It stood at $17.2 trillion at the end of 2008, higher than $15.8 trillion in September 2007, when the crisis began. Even though it can’t borrow from the market like before, it is borrowing from the Fed and the government. How could we say that the crisis is over when the U.S> financial sector’s leverage hasn’t declined?

2. The economic fallout of the debt bubble bursting is just beginning.By the end of 2008, households’ net wealth in the U.S. had declined by $13 trillion or 20 percent from its peak in 2007.U.S. property prices are still declining.The odds are that the value of all residential properties in the U.S. would decline by another $5 trillion or more before stabilizing. On the other hand, U.S. household debt has not fallen. It stood at $13.8 trillion at the end of 2008.For the first time since the 1930s, aggregate household debt would exceed the value of the property that households own in the U.S.Obviously, borrowing against property to fund consumption is no longer possible.

3. Income prospects look very poor.Unemployment is rising rapidly in the U.S., Europe and Japan. As the credit-funded portion of global demand vanishes, the labor force behind it loses their jobs. As the unemployed curtail their consumption, the multiplier effect pushes unemployment even higher.his vicious cycle is yet to reach its natural peak. The impact of rising unemployment on demand may last through 2010.

http://collegestock.com/blog/the-chinese-have-our-number/

colderdown

huaxue09

China can keep high speed growth by government control which spends huge money but chinese people consume very little. right now the us government is making unprecedented intervention and pumping huge money on the market (unprecedented),  the effect should last a period of time.

dividend_growth

如果能用1-2个T把股市总市值推高一倍（30T)，那点破债算个啥？

小亥

改成The Chinese have our mojos