超过400亿美元热钱流入境内 天量热钱到底藏在哪
“来的都是客，留下的都是祸。”曾有人这样形容来去自由、神秘兮兮的热钱。中国人民银行11月26日公布的数据显示，中国10月新增外汇占款高达5190.47亿元，刷新30个月以来的最高纪录。按照主流的残差法计算(外汇储备－实际利用外资－贸易顺差)，10月“热钱”规模是9月的2.4倍。
而按照前三季度的统计数据来看，中国外汇储备较去年底增加2491亿美元，扣除同期的贸易顺差1206亿美元和外国直接投资743亿美元后，粗略计算有超过400亿美元热钱流入境内。
那么，目前市场中到底有多少热钱？是否真如预想中这么严重？又进入了哪些领域？
楼市股市无热钱？
中央电视台近期在中国香港做的一项调查引发众多关注。按照该节目的说法，目前已经有6500亿热钱囤积香港，并对内地“虎视眈眈”。
一位在香港读书的朋友告诉《国际金融报》记者，“不像内地，香港对于外汇基本没有管制。我从很多渠道了解到，其实有些店面天天都有人在用港元兑换人民币，而且基本上没人管。”央视援引研究香港金融分析师温天纳的话称，在香港，类似地下钱庄的兑换点大概有1000多家，“这种兑换方式在香港有20多年的历史，然而在近几年国际热钱泛滥的变化下，这些兑换点已经成为热钱进入内地的一条重要途径”。
而在上海及周边地区，记者却得到了与香港截然不同的答案。
在江苏省常州市，一位黑市的外汇交易黄牛对记者坦言，近几个月，其从事的外汇交易额度总体相差不大，“在我们这里换汇的香港人和外国人很少，主要还是以出国旅游的‘刚性需求’为主。据我所知，很多热钱还是披着贸易的‘合法外衣’进入，通过黑市进入的不多”。
对于追逐利润的热钱来说，楼市是另一个重要去处。但记者以购房者的身份在上海市内环以内中山公园、中环的崂山路和外环的金沙江西路等地的中介门店交流后得知，他们最近交易的客户中并无外籍人士的身影，且在中介看来，目前成交多数属于“刚性需求”，仅在外环临近地铁线附近，才有少数投资客投资，继续与楼市调控政策对赌。不过，也有报道称，目前已有不少国外房地产企业曲线进入中国楼市抄底，且很看好中国目前的楼市走向。
除楼市外，股市也是热钱另一处藏身所。目前，中国股市已被不少分析师和机构所看好，甚至有人大胆预言，牛市才刚刚开始。对此，华泰证券分析师尤亦韬对《国际金融报》记者说，“就近期行情来看，股市中并无大量热钱的身影，但国庆节后，有色板块和煤炭板块的那波疯涨，背后绝对有热钱在拉动。同时就现状来说，热钱似未离场，似乎在等待合适的时机再次进入中国股市，赚取快钱。”
而中国价值指数首席研究员崔新生在《国际金融报》记者采访时则“干脆”认为，“股市和楼市中几无热钱的身影，一方面源于楼市打压政策，另一方面中国流动性早已足够拉动股市乃至楼市了。”
瑞银财富管理研究部亚太区主管兼亚太区首席投资策略师浦永灏日前也对媒体指出，流入亚洲其他国家的热钱比流入中国的多，热钱并非中国主流。
严控披合法外衣的热钱
值得注意的是，央行公布的数据显示，截至10月末，中国外汇占款达２１.８４５４万亿元，较上月增加５１９０亿元，创30个月来新高。事实上，10月新增外汇占款出现跳增并不是个开始，从第三季度开始，中国外汇占款已经呈现出快速增加态势，７、８、９月份分别新增外汇占款１７０９．５１亿元、２４３０亿元、２８９５．６５亿元，业内普遍认为，这串数字背后隐现热钱涌入的身影。
对此，新华社援引首都经贸大学金融学院院长谢太峰的话称，“尽管管理部门不断打击‘热钱’，但是事实上我们很多热钱还是可以从贸易渠道或者通过其他渠道进入的，甚至现在中国在国外的一些侨民汇过来的款都带有热钱的性质。”
对此，有关专家不断强调，面对热钱的凶猛之势，最主要的还是要加强监管。曾有专家对《国际金融报》记者指出，“对于我国监管部门来说，需加强对国际资本进入途径、投资规模和投向的监测，在加强监测的基础上，通过严格监管贸易结算、提高利息税等方法阻止热钱流入。”
复旦大学经济学院副院长孙立坚撰文指出，在“堵”热钱方面，可以考虑使用政策组合拳，“首先加强外汇管理和资本管理。其次，发现问题要及时采取惩罚制度，甚至在问题多发的市场中可以率先增加起到‘托宾税’作用的交易费用；再次，有的放矢地采取一些交易数量上的限制。第四，继续严厉打击商品市场中的投机行为，以此降低市场通胀的预期。第五，对产业资本也要立法和制定规章制度，打击那些违规使用资金的行为”。
在疏导热钱方面，孙立坚认为，可以通过诸如增加遗产税、降低企业所得税等税收杠杆，让很多金融投机资本转变为扶持产业的慈善资本。同时，引导游资或热钱集中在一个金融投资场所，这样便于监管，也便于用它来为实体经济服务。此外，还要继续鼓励外资企业进行中长期的实业投资，通过中国经济发展给大家带来双赢的效果。
流动性压力考验央行
热钱流入量速齐增也将考验央行调控市场流动性的能力。
专家认为，流动性持续流入状况短期内不会改变，需时刻预防我国资产价格泡沫化风险。兴业银行资深经济学家鲁政委认为，由于人民币汇率受制于种种因素不能自由调整，因而，在美元进入升值通道和美联储加息之前，国内都将面临巨大的资产泡沫化压力。
鲁政委指出，当前采取紧缩的货币政策相当必要。国际经验显示，与通胀相比，资产泡沫更难确认、更难甄别、也更难防范，一旦破裂，对经济的危害也更大。
为应对外汇占款带来的流动性加剧状况，11月央行已连续两次上调存款准备金率，以大幅收缩流动性。鲁政委预期，在11月宏观数据公布前也就是12月7日至18日之间，央行再度加息1次已无悬疑。值得关注的是，公开市场操作已几近丧失流动性管理能力，这在年内外汇占款跳增、流动性压力巨大的背景下是无法容忍的。管理层要想恢复流动性管理功能，必须加息。鲁政委还指出，在再度加息之后，年内仍有上调0.5％至1%准备金率的可能性，这将根据公开市场操作是否放量而定。(国际金融报 黄烨 张竞怡)
Monday, November 29, 2010
Tuesday, November 23, 2010
储蓄大搬家
储蓄大搬家
储蓄搬家的现象再度出现，这是对后市看法依然乐观的投资者的"理由"之一。11月11日央行公布：10月份人民币存款增加1769亿元，同比减少1128亿元，其中居民存款减少高达7003亿元，创下了2009年以来的新低。这一幅度在历史上都较为少见，说明有不少资金在物价上涨的压力下，出于保值增值的需要，开始从银行"搬家"到股市中。
业内人士指出，在通胀预期和现实通胀压力居高不下情形下，持续负利率状态使得居民储蓄意愿大幅下降，投资意愿不断增强，引发"储蓄大搬家"。
统计显示，近年来，中国股市共经历过两拨比较明显的储蓄搬家。第一波储蓄搬家潮出现在2006年至2007年。当时央行发布的数据显示，2006年10月储蓄存款月度减少76亿元。2007年4月储蓄存款减少1674亿元，5月储蓄存款减少2784亿元，连续创历史月度最大降幅。同时，存款活期化趋势明显。而与之相伴的，是中国股市在此期间走出了惊人的超级牛市行情。
第二波储蓄搬家潮则出现在2009年。2008年末，为应对国际金融危机的冲击，国家出台了包括4万亿元投资在内的一揽子经济刺激计划，这给国内资本市场以极大信心，A股市场迅速回暖。在这一背景下， 储蓄搬家潮于2009年中出现，当年8月份的居民户存款减少800亿元，而2009年10月居民存款更是大幅减少2507亿元， 搬家现象明显。
分析人士认为，持续的负利率局面以及１０月以来Ａ股市场赚钱效应是造成居民新增存款大幅减少的最重要原因。近期居民证券开户和基金开户数大幅增加，表明，居民的资金或大部分都流入到了股市中，居民储蓄搬家将成为后市股指上涨的一个重要推动力。
储蓄搬家的现象再度出现，这是对后市看法依然乐观的投资者的"理由"之一。11月11日央行公布：10月份人民币存款增加1769亿元，同比减少1128亿元，其中居民存款减少高达7003亿元，创下了2009年以来的新低。这一幅度在历史上都较为少见，说明有不少资金在物价上涨的压力下，出于保值增值的需要，开始从银行"搬家"到股市中。
业内人士指出，在通胀预期和现实通胀压力居高不下情形下，持续负利率状态使得居民储蓄意愿大幅下降，投资意愿不断增强，引发"储蓄大搬家"。
统计显示，近年来，中国股市共经历过两拨比较明显的储蓄搬家。第一波储蓄搬家潮出现在2006年至2007年。当时央行发布的数据显示，2006年10月储蓄存款月度减少76亿元。2007年4月储蓄存款减少1674亿元，5月储蓄存款减少2784亿元，连续创历史月度最大降幅。同时，存款活期化趋势明显。而与之相伴的，是中国股市在此期间走出了惊人的超级牛市行情。
第二波储蓄搬家潮则出现在2009年。2008年末，为应对国际金融危机的冲击，国家出台了包括4万亿元投资在内的一揽子经济刺激计划，这给国内资本市场以极大信心，A股市场迅速回暖。在这一背景下， 储蓄搬家潮于2009年中出现，当年8月份的居民户存款减少800亿元，而2009年10月居民存款更是大幅减少2507亿元， 搬家现象明显。
分析人士认为，持续的负利率局面以及１０月以来Ａ股市场赚钱效应是造成居民新增存款大幅减少的最重要原因。近期居民证券开户和基金开户数大幅增加，表明，居民的资金或大部分都流入到了股市中，居民储蓄搬家将成为后市股指上涨的一个重要推动力。
周小川开金口 央票地量发行或预示货币政策全面转向
周小川开金口 央票地量发行或预示货币政策全面转向
2010年11月23日 14:05 中金在线/财经编辑部 查看评论 导读：
1年期央票发行规模创年内新低 资金面或逆转收紧
中央经济工作会议预计近期召开 货币政策或微调
周小川开金口：上调存准率为控制流动性
货币政策或全面转向回收流动性成主线
政府调控再出重拳 货币政策转向影响未散
中信证券：四种可能的紧缩政策已经使用两项
本周或再加息
后两月信贷收紧成定局 投放结构或突变
银行担忧明年信贷收紧 11月反常大规模放贷
存准率还有2%上调空间 年底前央行或非对称加息
分析预计 央行本周或再加息
1年期央票发行规模创年内新低 资金面或逆转收紧
存款准备金率自11月19日再度上调后，市场资金面明显趋于紧张。央行将于周二(11月23日)在公开市场发行20亿元1年期央票，发行规模创年内新低。
业内人士表示，此次准备金缴款与商业银行月末贷存比监管几乎同时发生，对短期内流动性造成较大影响；未来央行很可能进一步出台一系列新的调控政策，届时资金面宽裕局面或将发生逆转，对债市走势会形成较大的冲击。
1年期央票地量发行
央行月内两度上调存准率后，公开市场操作力度随即减码。根据公告，央行将于周二在公开市场发行20亿元1年期央票，发行规模创年内新低。市场人士认为，11月份剩余两周公开市场到期资金量不大，央行净投放力度有限，又逢月末银行时点考核，预计回购利率仍将上行。
"央行净回笼资金的难度相对较大，所以公开市场操作各个品种的利率后续仍有上行的空间。"
随着存款准备金率的再度上调，资金面由前期的充裕逐步转向紧张。继上周单周升幅分别接近30个和40个基点后，本周一货币市场利率隔夜品种和7天品种利率进一步上升。
数据显示，周一银行间市场隔夜质押式回购加权平均利率报1.9643%，较上日的1.8237%上涨逾14个基点，7天期质押式回购加权平均利率报2.1621%，较上日的2.0925%上涨近7个基点。拆借市场上，隔夜拆借加权平均利率报1.9605%，较前交易日的1.8206%上涨近14个基点，7天期拆借加权平均利率报2.1477%，较前交易日的2.1135%涨3个基点。
业内人士对 表示，存款准备金率的再度提高，造成银行间资金面的阶段性紧张，流动性预期趋于悲观。
"央行连续上调存款准备金，紧缩效应会逐渐显现，此前相对宽松的资金面正在发生逆转。"一债市交易员称。
中信证券分析师认为，准备金率的连续上调，导致商业银行在实施新的准备金率的同时还将面临月末的贷存比考核，所以对于资金较为强烈的需求可能会一直持续至月末，货币市场短端品种利率短期内还将维持在一个相对高的位置。
东方证券分析师则表示，在跨月效应带动下，货币市场利率将继续抬高，货币市场利率或突破6月份所创下的高点。
"12月中旬大银行差别存款准备金率到期，届时央行可能会再次上调存款准备金率。"中金公司认为，未来持续上调存款准备金率，将会系统性地抬高回购利率的中枢水平。
但资金面紧张局势可能不会延续太久。"进入12月份后，财政存款的大量释放，又将对市场资金面提供支撑。"
流动性预期骤然变化
由于存款准备金率再度上调，市场对资金面及后续政策收紧的预期升温，周一银行间债市现券收益率全线上涨。
业内人士指出，短期内流动性预期发生骤然变化，流动性较好的短期品种抛压偏大，其收益率上行幅度超过10个基点，明显高于长端涨幅，收益率曲线进一步扁平化。
"现券收益率还是在涨，3年期央票涨了10个基点左右，10年期国债涨了5-6个基点；短端涨得更多，有超过10个基点甚至接近20个基点。"
"资金面发生变化，债市还将面临进一步的调整，特别是短期品种风险相对偏大，近期承受明显压力，利率曲线开始平坦化。"上海一银行交易员表示，回购利率有望继续走高，对短端利率形成推动。
"市场对于债券的需求，将随着资金面逐步转向紧张而逐渐减弱。"一固定收益分析对表示，债券市场资金面从中期来看并不乐观，市场会做出负面反应，收益率很可能回升至前期高点。
分析师并预计，受月末因素以及货币政策持续收紧的影响，预计本周债市短端收益率上行幅度将大于长端，收益率曲线将继续平坦化。
此外，另有分析师指出，虽然央行再次上调准备金率有助于缓解公开市场和基准利率上调压力，但接连超预期的通胀形势使得春节前加息更有可能会随时发生，因此目前债市系统性风险可能远未结束。
(每日经济新闻 贺麒麟 )
2010年11月23日 14:05 中金在线/财经编辑部 查看评论 导读：
1年期央票发行规模创年内新低 资金面或逆转收紧
中央经济工作会议预计近期召开 货币政策或微调
周小川开金口：上调存准率为控制流动性
货币政策或全面转向回收流动性成主线
政府调控再出重拳 货币政策转向影响未散
中信证券：四种可能的紧缩政策已经使用两项
本周或再加息
后两月信贷收紧成定局 投放结构或突变
银行担忧明年信贷收紧 11月反常大规模放贷
存准率还有2%上调空间 年底前央行或非对称加息
分析预计 央行本周或再加息
1年期央票发行规模创年内新低 资金面或逆转收紧
存款准备金率自11月19日再度上调后，市场资金面明显趋于紧张。央行将于周二(11月23日)在公开市场发行20亿元1年期央票，发行规模创年内新低。
业内人士表示，此次准备金缴款与商业银行月末贷存比监管几乎同时发生，对短期内流动性造成较大影响；未来央行很可能进一步出台一系列新的调控政策，届时资金面宽裕局面或将发生逆转，对债市走势会形成较大的冲击。
1年期央票地量发行
央行月内两度上调存准率后，公开市场操作力度随即减码。根据公告，央行将于周二在公开市场发行20亿元1年期央票，发行规模创年内新低。市场人士认为，11月份剩余两周公开市场到期资金量不大，央行净投放力度有限，又逢月末银行时点考核，预计回购利率仍将上行。
"央行净回笼资金的难度相对较大，所以公开市场操作各个品种的利率后续仍有上行的空间。"
随着存款准备金率的再度上调，资金面由前期的充裕逐步转向紧张。继上周单周升幅分别接近30个和40个基点后，本周一货币市场利率隔夜品种和7天品种利率进一步上升。
数据显示，周一银行间市场隔夜质押式回购加权平均利率报1.9643%，较上日的1.8237%上涨逾14个基点，7天期质押式回购加权平均利率报2.1621%，较上日的2.0925%上涨近7个基点。拆借市场上，隔夜拆借加权平均利率报1.9605%，较前交易日的1.8206%上涨近14个基点，7天期拆借加权平均利率报2.1477%，较前交易日的2.1135%涨3个基点。
业内人士对 表示，存款准备金率的再度提高，造成银行间资金面的阶段性紧张，流动性预期趋于悲观。
"央行连续上调存款准备金，紧缩效应会逐渐显现，此前相对宽松的资金面正在发生逆转。"一债市交易员称。
中信证券分析师认为，准备金率的连续上调，导致商业银行在实施新的准备金率的同时还将面临月末的贷存比考核，所以对于资金较为强烈的需求可能会一直持续至月末，货币市场短端品种利率短期内还将维持在一个相对高的位置。
东方证券分析师则表示，在跨月效应带动下，货币市场利率将继续抬高，货币市场利率或突破6月份所创下的高点。
"12月中旬大银行差别存款准备金率到期，届时央行可能会再次上调存款准备金率。"中金公司认为，未来持续上调存款准备金率，将会系统性地抬高回购利率的中枢水平。
但资金面紧张局势可能不会延续太久。"进入12月份后，财政存款的大量释放，又将对市场资金面提供支撑。"
流动性预期骤然变化
由于存款准备金率再度上调，市场对资金面及后续政策收紧的预期升温，周一银行间债市现券收益率全线上涨。
业内人士指出，短期内流动性预期发生骤然变化，流动性较好的短期品种抛压偏大，其收益率上行幅度超过10个基点，明显高于长端涨幅，收益率曲线进一步扁平化。
"现券收益率还是在涨，3年期央票涨了10个基点左右，10年期国债涨了5-6个基点；短端涨得更多，有超过10个基点甚至接近20个基点。"
"资金面发生变化，债市还将面临进一步的调整，特别是短期品种风险相对偏大，近期承受明显压力，利率曲线开始平坦化。"上海一银行交易员表示，回购利率有望继续走高，对短端利率形成推动。
"市场对于债券的需求，将随着资金面逐步转向紧张而逐渐减弱。"一固定收益分析对表示，债券市场资金面从中期来看并不乐观，市场会做出负面反应，收益率很可能回升至前期高点。
分析师并预计，受月末因素以及货币政策持续收紧的影响，预计本周债市短端收益率上行幅度将大于长端，收益率曲线将继续平坦化。
此外，另有分析师指出，虽然央行再次上调准备金率有助于缓解公开市场和基准利率上调压力，但接连超预期的通胀形势使得春节前加息更有可能会随时发生，因此目前债市系统性风险可能远未结束。
(每日经济新闻 贺麒麟 )
Sunday, November 21, 2010
避免一二级市场价格倒挂
避免一二级市场价格倒挂
http://www.sina.com.cn 2010年04月16日 01:53 第一财经日报
债务融资工具长期定价机制出台在即
李彬
信用债一级市场和二级市场的价格倒挂情况有望解决。据银行间市场交易商协会(下称“交易商协会”)透露，将建立债务融资工具长期定价机制，帮助市场形成稳定和相对集中的预期，理顺一级发行和二级交投秩序。
定期提供估值
4月14日召开的债券融资工具市场研讨会提出了建立周期性债务融资工具估值中枢体系的建议。基本构想是：市场有代表性的机构定期提供对各评级和各关键期限品种债务融资工具的中间价格估值，由交易商协会进行汇总统计，取算术平均后形成各品种估值中枢。
此外，交易商协会将对价格预测行为加以约束，不能违反“一二级市场不能倒挂”的惯例，而预测差别也不能太大。
交易商协会一位人士透露，该价格体系将会在交易商协会网站发布，暂定周期为一周。近期已经开始估值中枢体系建立和统计工作，观察其与二级市场联动表现，待运行成熟后对外发布。
一二级市场价格倒挂
事实上，一二级市场价格倒挂的现象由来已久。“信用债一级市场和二级市场价格倒挂，导致市场流动性很差，债券卖不出去，这是非常不正常、不健康的。这对中国债券市场的发展非常不利。”交易商协会一位人士对《第一财经日报》表示。
按市场惯例，为保障二级市场流动性，一级市场的发行利率应该略高于二级市场。但因为发行人太强势，迫使主承销商以偏低的价格向市场发行，因此很多信用债一级市场定价较低。如此一来，债务融资工具发行利率背离市场真实价值，导致了主承销商出现亏损，部分投资者撤离市场。
针对这种情况，承销商和投资机构此前采取了“定价联席会”的方式，通过对不同信用级别企业的发行利率设定参考下限，令发行利率向市场价值理性回归。
交易商协会上述人士指出，周期性债务融资工具估值中枢体系下，价格生成方式事实上并未改变，但与之前相对刚性的要求不同，不再设定参考下限。“这样一方面对一级市场和二级市场都有一个价格发现的功能，同时也会使大家的预期相对集中，定价上不再产生那么大的分歧。”
一家参会的市场成员表示，如果估值中枢体系建立起来并正常运作，将大大提高信用产品定价的透明度。
http://www.sina.com.cn 2010年04月16日 01:53 第一财经日报
债务融资工具长期定价机制出台在即
李彬
信用债一级市场和二级市场的价格倒挂情况有望解决。据银行间市场交易商协会(下称“交易商协会”)透露，将建立债务融资工具长期定价机制，帮助市场形成稳定和相对集中的预期，理顺一级发行和二级交投秩序。
定期提供估值
4月14日召开的债券融资工具市场研讨会提出了建立周期性债务融资工具估值中枢体系的建议。基本构想是：市场有代表性的机构定期提供对各评级和各关键期限品种债务融资工具的中间价格估值，由交易商协会进行汇总统计，取算术平均后形成各品种估值中枢。
据介绍，这种机制相对于其他基准的优势有：机构囊括买卖双方机构的意见，更加真实反映市场供求关系；机构估值与发行交易行为交互检验，准确性高；对市场反应敏感，特别是一级市场。
此外，交易商协会将对价格预测行为加以约束，不能违反“一二级市场不能倒挂”的惯例，而预测差别也不能太大。
交易商协会一位人士透露，该价格体系将会在交易商协会网站发布，暂定周期为一周。近期已经开始估值中枢体系建立和统计工作，观察其与二级市场联动表现，待运行成熟后对外发布。
一二级市场价格倒挂
事实上，一二级市场价格倒挂的现象由来已久。“信用债一级市场和二级市场价格倒挂，导致市场流动性很差，债券卖不出去，这是非常不正常、不健康的。这对中国债券市场的发展非常不利。”交易商协会一位人士对《第一财经日报》表示。
按市场惯例，为保障二级市场流动性，一级市场的发行利率应该略高于二级市场。但因为发行人太强势，迫使主承销商以偏低的价格向市场发行，因此很多信用债一级市场定价较低。如此一来，债务融资工具发行利率背离市场真实价值，导致了主承销商出现亏损，部分投资者撤离市场。
而多家机构在上述会议上指出，目前债务融资工具作为信用产品定价存在困难，发行人个体差异明显，投资者分歧大；市场尚未形成完整的信用利差曲线，定价无参照。
针对这种情况，承销商和投资机构此前采取了“定价联席会”的方式，通过对不同信用级别企业的发行利率设定参考下限，令发行利率向市场价值理性回归。
交易商协会上述人士指出，周期性债务融资工具估值中枢体系下，价格生成方式事实上并未改变，但与之前相对刚性的要求不同，不再设定参考下限。“这样一方面对一级市场和二级市场都有一个价格发现的功能，同时也会使大家的预期相对集中，定价上不再产生那么大的分歧。”
一家参会的市场成员表示，如果估值中枢体系建立起来并正常运作，将大大提高信用产品定价的透明度。
什么叫一二级市场利率倒挂现象
什么叫一二级市场利率倒挂现象
http://blog.sina.com.cn/s/blog_5ce26c760100aytd.html
央票发行利率较低，二级市场往往折价买卖，所以利率较高，称之为一二级市场利率倒挂。
根据我自己的观察，很多长期国债的发行利率往往才百分之二点几，比目前一年期定存的3.87%还低得多。长久以来，倒挂的时间也是比不倒挂的时间多。可能把倒挂称之为正常，把不倒挂称之为倒挂更为恰当。
倒挂严重了之后，由于二级市场利率较高，大家都愿意到二级市场上去购买，一级市场的央票卖不出去也很正常。哦，不是这个原因。
市场对一年期央票需求很大（因为股市不好么？），利率再低，市场也会去抢的（怎么不
到二级市场去抢呢？），为防止利率大幅下行，央行设定了招标利率下限，限制了发行量。不
过挡是挡不住的，降息的声音如潮水般涌来，快降吧，哈哈。
根据上面的理解，作一结论：
债券市场还会走强，没买股票的就买债券吧。不过股票市场更有诱惑力，投资有些公司已
经有10%以上的收益，有胆识的，不怕死的就冲进股市吧！
http://blog.sina.com.cn/s/blog_5ce26c760100aytd.html
央票发行利率较低，二级市场往往折价买卖，所以利率较高，称之为一二级市场利率倒挂。
根据我自己的观察，很多长期国债的发行利率往往才百分之二点几，比目前一年期定存的3.87%还低得多。长久以来，倒挂的时间也是比不倒挂的时间多。可能把倒挂称之为正常，把不倒挂称之为倒挂更为恰当。
倒挂严重了之后，由于二级市场利率较高，大家都愿意到二级市场上去购买，一级市场的央票卖不出去也很正常。哦，不是这个原因。
市场对一年期央票需求很大（因为股市不好么？），利率再低，市场也会去抢的（怎么不
到二级市场去抢呢？），为防止利率大幅下行，央行设定了招标利率下限，限制了发行量。不
过挡是挡不住的，降息的声音如潮水般涌来，快降吧，哈哈。
根据上面的理解，作一结论：
债券市场还会走强，没买股票的就买债券吧。不过股票市场更有诱惑力，投资有些公司已
经有10%以上的收益，有胆识的，不怕死的就冲进股市吧！
Friday, November 19, 2010
Asset-Backed Bonds Come Back
Asset-Backed Bonds Come Back
By ANUSHA SHRIVASTAVA
A rush of new bonds is flooding the asset-backed securities market, including several types of deals that haven't been seen since the financial crisis.
.Adams Outdoor is bringing a bond backed by advertising revenue from billboards, the first such issue since markets collapsed in 2008. Banco Santander SA is offering the biggest post-crash bond backed by subprime auto loans, a $900 million deal. It raised the size from $675 million amid robust investor demand. South Carolina Student Loan Corp. also increased the size of its education-loan backed bonds.
The sales are a marked change from the trend so far this year, which has been dominated by prime auto-loan bond sales. The deals are finding demand from investors, many of whom are seeking a relatively safe investment that pays more than Treasury bonds. Other investments, like corporate bonds, have also staged rallies, making asset-backed securities more attractive.
Issuers are coming to market now in large part to finish their sales ahead of Thanksgiving week.
"Whatever deals are out there will be wrapped up today and tomorrow," said Jim Harrington, an asset-backed investor and former portfolio manager. "Next week will consist of maybe one or two days of trading."
Increased supply hasn't damped prices. Triple-A-rated three-year auto-sector bonds traded Thursday at yields of 25 basis points, or one-quarter percentage point over comparable Treasurys. A year ago, the difference was 55 basis point, Citigroup data show. Since prices move inversely to yields, the bonds rose in relative value.
Also, the Federal Reserve's recent decision to renew a bond-buying program to keep interest rates low took an "element of uncertainty out of the picture and set the market on sturdier ground," said Brian Wiele, head of the Americas securitization syndicate at Barclays Capital.
More than 60% of bonds sold this year have been auto-sector bonds, but the mix has become a little more varied this week. Adams Outdoor Advertising LP issued a $355 million bond backed by billboard revenue; Harley-Davidson Inc. sold a $600 million motorcycle loan-backed deal; Delta Air Lines Inc. offered a $474.1 million aircraft equipment-backed bond; and Gracechurch Funding, which securitizes credit-card debt of Barclaycard of the U.K., sold a $500 million bond. Nelnet Student Loan Trust also sold a $347.77 million bond.
South Carolina Student Loan Corp. raised the size of its bond to $920 million from $500 million.
Still, consumer loan-backed issuance this year will lag behind the $140 billion sold last year, when the Federal Reserve was supporting the market with low-cost loans to investors. Estimates put this year's total near $100 billion.
Citigroup said $91.56 billion has been sold this year through Thursday. Last year by this time, investors bought securities valued at $124.28 billion.
Next year may see issuance decline: Uncertainty over regulations on disclosure and accounting have damped issuer's forecasts. Industry participants said this may be one more reason issuers are hurrying to make deals this year.
Write to Anusha Shrivastava at anusha.shrivastava@dowjones.com
By ANUSHA SHRIVASTAVA
A rush of new bonds is flooding the asset-backed securities market, including several types of deals that haven't been seen since the financial crisis.
.Adams Outdoor is bringing a bond backed by advertising revenue from billboards, the first such issue since markets collapsed in 2008. Banco Santander SA is offering the biggest post-crash bond backed by subprime auto loans, a $900 million deal. It raised the size from $675 million amid robust investor demand. South Carolina Student Loan Corp. also increased the size of its education-loan backed bonds.
The sales are a marked change from the trend so far this year, which has been dominated by prime auto-loan bond sales. The deals are finding demand from investors, many of whom are seeking a relatively safe investment that pays more than Treasury bonds. Other investments, like corporate bonds, have also staged rallies, making asset-backed securities more attractive.
Issuers are coming to market now in large part to finish their sales ahead of Thanksgiving week.
"Whatever deals are out there will be wrapped up today and tomorrow," said Jim Harrington, an asset-backed investor and former portfolio manager. "Next week will consist of maybe one or two days of trading."
Increased supply hasn't damped prices. Triple-A-rated three-year auto-sector bonds traded Thursday at yields of 25 basis points, or one-quarter percentage point over comparable Treasurys. A year ago, the difference was 55 basis point, Citigroup data show. Since prices move inversely to yields, the bonds rose in relative value.
Also, the Federal Reserve's recent decision to renew a bond-buying program to keep interest rates low took an "element of uncertainty out of the picture and set the market on sturdier ground," said Brian Wiele, head of the Americas securitization syndicate at Barclays Capital.
More than 60% of bonds sold this year have been auto-sector bonds, but the mix has become a little more varied this week. Adams Outdoor Advertising LP issued a $355 million bond backed by billboard revenue; Harley-Davidson Inc. sold a $600 million motorcycle loan-backed deal; Delta Air Lines Inc. offered a $474.1 million aircraft equipment-backed bond; and Gracechurch Funding, which securitizes credit-card debt of Barclaycard of the U.K., sold a $500 million bond. Nelnet Student Loan Trust also sold a $347.77 million bond.
South Carolina Student Loan Corp. raised the size of its bond to $920 million from $500 million.
Still, consumer loan-backed issuance this year will lag behind the $140 billion sold last year, when the Federal Reserve was supporting the market with low-cost loans to investors. Estimates put this year's total near $100 billion.
Citigroup said $91.56 billion has been sold this year through Thursday. Last year by this time, investors bought securities valued at $124.28 billion.
Next year may see issuance decline: Uncertainty over regulations on disclosure and accounting have damped issuer's forecasts. Industry participants said this may be one more reason issuers are hurrying to make deals this year.
Write to Anusha Shrivastava at anusha.shrivastava@dowjones.com
By DAVID ENRICH And CHARLES FORELLE
By DAVID ENRICH And CHARLES FORELLE
DUBLIN—The Irish government all but buckled to pressure to accept a historic international bailout Thursday, capitulating after a week of intense lobbying from officials across Europe and spurring questions about which other European economies will need a helping hand. Ireland's central-bank governor and finance minister acknowledged for the first time Thursday that the country needs help rescuing its banking industry, which has been crippled by losses on sour loans.
The Irish government is in talks with the International Monetary Fund and European officials about a loan package that is likely to amount to "tens of billions" of euros, the central-bank governor, Patrick Honohan, said. "It will be a large loan because the purpose...is to show Ireland has sufficient firepower to deal with any concerns of the market."
Ireland's grudging decision to accept foreign aid, after insisting it didn't need help, is a bitter moment for a country that won its independence from Britain decades ago. Already, some lawmakers and editorial writers are bemoaning what they see as the inevitable loss of sovereignty that will accompany a foreign bailout.
It is an equally pivotal point for the 16 nations that use Europe's common currency. After rescuing Greece in the spring, European leaders are now betting that if they extinguish the financial crisis engulfing Ireland, it won't spread to other euro-zone weak spots. But with bond markets continuing to punish those countries, new bailouts may be needed soon—a prospect that some believe will call into question the durability of the euro as a common currency.
The near-certain bailout helped ignite a global markets rally in which the euro rebounded against the dollar and equity markets strengthened.
As Ireland copes with the aftermath of a large property bust, it faces a new wave of emigration but also innovation, as a group of architects band together to create a micro economy. WSJ's Andy Jordan reports from Dublin.
It has become almost impossible for Ireland's banks or government to drum up funding through traditional market sources. That has prompted them to lean heavily for financing on the European Central Bank, which has grown wary of its growing exposure to Ireland.
The structure of an anticipated bailout remains unclear. Mr. Lenihan told lawmakers Thursday afternoon that the negotiations will be focused on "providing capital—or a contingency capital fund—that can stand behind the banks."
A crucial issue is the fate of Ireland's ultra-low 12.5% corporate tax rate. Some European leaders want Ireland to increase that tax as a condition of the country's receiving funds, but Mr. Lenihan and other Irish ministers have ruled that off-limits. For some time, many EU nations have chafed at Ireland's use of low corporate taxes to woo business. Excluding exemptions, the average corporate tax rate in the EU is 23%; the U.S.'s corporate rate is 35%.
The Irish capitulation underscores the hazards of placing separate countries under a single monetary regime.
The ECB's low-interest policy exacerbated Ireland's bubble during the boom decade. Today, the central bank's anti-inflation bent accelerated Ireland's demise: According to several people familiar with the matter, it was the ECB—nervous to be lending so heavily to troubled Irish banks—that led the charge to push Ireland to find liquidity elsewhere.
The €750 billion bailout fund from which Ireland likely will draw was established just this spring, and European officials hoped never to use it. It was meant to reassure financial markets that they need not fear lending to a euro-zone country, because its fellows stood behind it.
This week, a team of officials from the IMF, the ECB and the European Commission arrived in Dublin to assess the scale of the problem and gauge how much assistance Ireland is likely to require.
Until Thursday, Irish government officials had rejected any suggestion that a bailout was necessary. But that position is wilting as leaders gently prepare the public for the idea of a politically unpopular bailout.
"It's clear we will need some form of external assistance," Finance Minister Brian Lenihan said Thursday evening in a national television broadcast. "We have to find a resolution to our banking difficulties with whatever external assistance is appropriate."
Anxiety about Ireland has rubbed off on other financially shaky euro-zone countries. On Wednesday, Portugal shelled out a lofty interest rate to attract investors in a routine auction of government debt. On Thursday, a Spanish auction fared better, but the country still had to offer a yield that was about half a percentage point higher than when it last issued debt two months ago.
Jean-Claude Trichet, president of the European Central Bank, also sounded an alarm Thursday, saying he had "grave concerns" about how much was being done to toughen the EU's fiscal-discipline rules, which were widely ignored for most of the past decade.
Trying to quell public furor over how much the Irish government has already spent in vain on bank-rescue efforts, Mr. Lenihan said an international bailout "would not necessarily" create additional burdens on the taxpayer beyond fees for the borrowing.
Still, borrowing tens of billions of euros a year could add billions in extra interest payments for the Irish government.
Any loans also could come with conditions attached by the IMF, , which has dispatched a team of about a dozen economists to Ireland, and expects to start working on Friday.
A hint of possible Fund demands are contained in its review of Ireland's economy. In that report, published in June, the IMF said that the Irish needed to boost financial regulation to guard against risky loans to small and medium-size companies, which the Irish government was pushing.
The IMF also called for broad financial restructuring including the sale of bank assets—quickly. "Rather than aiming to time the market for an upturn in property prices, the goal should be to reduce the large overhang of property in state hands (which could keep investors on the sidelines and prices low), restart market transactions and, thus, help normalize the property market," the IMF report said. At the same time, the IMF called for "targeted support" for homeowners who might be forced to default on their mortgages.
The public statements by Messrs. Honohan and Lenihan represent the government's clearest acknowledgments yet that Ireland's repeated attempts to stabilize the banking system have failed. Most recently, the government in late September said it would inject billions of euros more into the banks, pushing the total investment to about €50 billion ($67.52 billion). At the time, Mr. Lenihan vowed that the banks wouldn't need more.
.."It's true that the banks need additional confidence," Mr. Honohan said Thursday. "The huge sums of money that have been put in by the government to support the banks have not generated sufficient confidence yet."
One source of market angst is Allied Irish Banks PLC, the country's second-largest bank and a major player in its property-lending binge. So far, Allied Irish has posted smaller losses than some rivals, but some industry officials worry it could be plagued by a new wave of bad loans.
Despite the pressure of financial markets, the Irish government isn't likely to take a bailout lightly. Ireland's independence from Britain, long fought and hard won, still resonates vibrantly in the public sphere.
"Was it for this?" the Irish Times editorialized Thursday, lamenting that the martyrs of the 1916 Easter Rising should have died for such a humbling: "a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side."
It went on: "There is the shame of it all. Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund." In Ireland's parliament, a deputy recited the stanza of Yeats from which the editorial takes its title, an elegy for the dead of an earlier, failed, revolution.
In Dublin, a small band of protesters demonstrated outside the Finance Department building where IMF and European officials were gathered. Nearby, at the Central Bank's nearby headquarters, a lone woman carried a home-made yellow sign that read: "Ireland's new absentee landlords—ECB and IMF. Famine next!!!"
DUBLIN—The Irish government all but buckled to pressure to accept a historic international bailout Thursday, capitulating after a week of intense lobbying from officials across Europe and spurring questions about which other European economies will need a helping hand. Ireland's central-bank governor and finance minister acknowledged for the first time Thursday that the country needs help rescuing its banking industry, which has been crippled by losses on sour loans.
The Irish government is in talks with the International Monetary Fund and European officials about a loan package that is likely to amount to "tens of billions" of euros, the central-bank governor, Patrick Honohan, said. "It will be a large loan because the purpose...is to show Ireland has sufficient firepower to deal with any concerns of the market."
Ireland's grudging decision to accept foreign aid, after insisting it didn't need help, is a bitter moment for a country that won its independence from Britain decades ago. Already, some lawmakers and editorial writers are bemoaning what they see as the inevitable loss of sovereignty that will accompany a foreign bailout.
It is an equally pivotal point for the 16 nations that use Europe's common currency. After rescuing Greece in the spring, European leaders are now betting that if they extinguish the financial crisis engulfing Ireland, it won't spread to other euro-zone weak spots. But with bond markets continuing to punish those countries, new bailouts may be needed soon—a prospect that some believe will call into question the durability of the euro as a common currency.
The near-certain bailout helped ignite a global markets rally in which the euro rebounded against the dollar and equity markets strengthened.
As Ireland copes with the aftermath of a large property bust, it faces a new wave of emigration but also innovation, as a group of architects band together to create a micro economy. WSJ's Andy Jordan reports from Dublin.
It has become almost impossible for Ireland's banks or government to drum up funding through traditional market sources. That has prompted them to lean heavily for financing on the European Central Bank, which has grown wary of its growing exposure to Ireland.
The structure of an anticipated bailout remains unclear. Mr. Lenihan told lawmakers Thursday afternoon that the negotiations will be focused on "providing capital—or a contingency capital fund—that can stand behind the banks."
A crucial issue is the fate of Ireland's ultra-low 12.5% corporate tax rate. Some European leaders want Ireland to increase that tax as a condition of the country's receiving funds, but Mr. Lenihan and other Irish ministers have ruled that off-limits. For some time, many EU nations have chafed at Ireland's use of low corporate taxes to woo business. Excluding exemptions, the average corporate tax rate in the EU is 23%; the U.S.'s corporate rate is 35%.
The Irish capitulation underscores the hazards of placing separate countries under a single monetary regime.
The ECB's low-interest policy exacerbated Ireland's bubble during the boom decade. Today, the central bank's anti-inflation bent accelerated Ireland's demise: According to several people familiar with the matter, it was the ECB—nervous to be lending so heavily to troubled Irish banks—that led the charge to push Ireland to find liquidity elsewhere.
The €750 billion bailout fund from which Ireland likely will draw was established just this spring, and European officials hoped never to use it. It was meant to reassure financial markets that they need not fear lending to a euro-zone country, because its fellows stood behind it.
This week, a team of officials from the IMF, the ECB and the European Commission arrived in Dublin to assess the scale of the problem and gauge how much assistance Ireland is likely to require.
Until Thursday, Irish government officials had rejected any suggestion that a bailout was necessary. But that position is wilting as leaders gently prepare the public for the idea of a politically unpopular bailout.
"It's clear we will need some form of external assistance," Finance Minister Brian Lenihan said Thursday evening in a national television broadcast. "We have to find a resolution to our banking difficulties with whatever external assistance is appropriate."
Anxiety about Ireland has rubbed off on other financially shaky euro-zone countries. On Wednesday, Portugal shelled out a lofty interest rate to attract investors in a routine auction of government debt. On Thursday, a Spanish auction fared better, but the country still had to offer a yield that was about half a percentage point higher than when it last issued debt two months ago.
Jean-Claude Trichet, president of the European Central Bank, also sounded an alarm Thursday, saying he had "grave concerns" about how much was being done to toughen the EU's fiscal-discipline rules, which were widely ignored for most of the past decade.
Trying to quell public furor over how much the Irish government has already spent in vain on bank-rescue efforts, Mr. Lenihan said an international bailout "would not necessarily" create additional burdens on the taxpayer beyond fees for the borrowing.
Still, borrowing tens of billions of euros a year could add billions in extra interest payments for the Irish government.
Any loans also could come with conditions attached by the IMF, , which has dispatched a team of about a dozen economists to Ireland, and expects to start working on Friday.
A hint of possible Fund demands are contained in its review of Ireland's economy. In that report, published in June, the IMF said that the Irish needed to boost financial regulation to guard against risky loans to small and medium-size companies, which the Irish government was pushing.
The IMF also called for broad financial restructuring including the sale of bank assets—quickly. "Rather than aiming to time the market for an upturn in property prices, the goal should be to reduce the large overhang of property in state hands (which could keep investors on the sidelines and prices low), restart market transactions and, thus, help normalize the property market," the IMF report said. At the same time, the IMF called for "targeted support" for homeowners who might be forced to default on their mortgages.
The public statements by Messrs. Honohan and Lenihan represent the government's clearest acknowledgments yet that Ireland's repeated attempts to stabilize the banking system have failed. Most recently, the government in late September said it would inject billions of euros more into the banks, pushing the total investment to about €50 billion ($67.52 billion). At the time, Mr. Lenihan vowed that the banks wouldn't need more.
.."It's true that the banks need additional confidence," Mr. Honohan said Thursday. "The huge sums of money that have been put in by the government to support the banks have not generated sufficient confidence yet."
One source of market angst is Allied Irish Banks PLC, the country's second-largest bank and a major player in its property-lending binge. So far, Allied Irish has posted smaller losses than some rivals, but some industry officials worry it could be plagued by a new wave of bad loans.
Despite the pressure of financial markets, the Irish government isn't likely to take a bailout lightly. Ireland's independence from Britain, long fought and hard won, still resonates vibrantly in the public sphere.
"Was it for this?" the Irish Times editorialized Thursday, lamenting that the martyrs of the 1916 Easter Rising should have died for such a humbling: "a bailout from the German chancellor with a few shillings of sympathy from the British chancellor on the side."
It went on: "There is the shame of it all. Having obtained our political independence from Britain to be the masters of our own affairs, we have now surrendered our sovereignty to the European Commission, the European Central Bank, and the International Monetary Fund." In Ireland's parliament, a deputy recited the stanza of Yeats from which the editorial takes its title, an elegy for the dead of an earlier, failed, revolution.
In Dublin, a small band of protesters demonstrated outside the Finance Department building where IMF and European officials were gathered. Nearby, at the Central Bank's nearby headquarters, a lone woman carried a home-made yellow sign that read: "Ireland's new absentee landlords—ECB and IMF. Famine next!!!"
央票回笼不给力 存款准备金率年内或将再次上调
央票回笼不给力 存款准备金率年内或将再次上调
央行时隔四周后再度向市场注入资金，本周通过公开市场操作向银行体系“输血”740亿元。货币市场资金价格涨幅回落，流动性紧张有所缓和，紧缩预期稍有缓解。
业内人士指出，本周央行公开市场净投放实际上是因央票需求不振，央行在回笼资金和维持货币市场利率稳定之间举步维艰，但仍不改长期回笼流动性的总体格局，年内再次上调存款准备金率的可能性较大。
央行本周“输血”740亿元
数据显示，银行间市场基准回购利率周四收盘继续上涨，但涨幅较前交易日有所下降。货币市场指标利率——7天回购加权平均利率收报2.01%，较前收盘涨8个基点；隔夜回购加权平均利率报1.81%，较前收盘涨7个基点。1年期央票收益率跌0.2个基点至2.4280%；3个月期Shibor涨0.34个基点至2.8956%。
业内人士对《每日经济新闻》表示，近期加息和上调存款准备金率后，短期市场资金流动性趋紧。
“货币市场资金价格出现连续上涨，主要是前期紧缩政策的作用显现；存款准备金率上调0.5个百分点，相当于央行回笼了3500亿元资金。”一股份制银行交易员称。
为缓和商业银行目前的资金面紧张局势，央行在时隔四周后再度向市场注入资金，本周公开市场操作净投放740亿元。此前央行连续四周净回笼资金1535亿元，其中上周净回笼300亿元。
根据公告，央行周四在公开市场发行的160亿元3月期央票，发行收益率持平于1.8131%。央行同日未进行正回购操作。“央票收益率的连续走稳，缓解了投资者对短期内再度加息的忧虑。”
周四现券收益率延续跌势，亦显示市场的通胀预期出现降温。周四银行间市场国债成交价格收盘涨跌互见，成交的49只国债22涨1平26跌，剩余期限4.64年的10附息国债20涨0.52%，至96.15元，对应收益率3.43%。金融债价格涨跌互见，追随国债走势。
央票回笼不“给力”
业内人士在接受 《每日经济新闻》记者采访时表示，本周央行公开市场净投放的表面原因是考虑存款准备金率调整；实际上则是因为目前央票收益率一二级市场倒挂严重，央票需求不振，央行在回笼资金和维持货币市场利率稳定之间举步维艰。
“实际上央行现在有点被动，一方面控制通货膨胀需要回笼货币，另一方面又担心货币市场资金利率波动大。”上海一分析师表示，净投放更重要的原因是缓解利率上行压力。
中债登央行票据到期收益率曲线显示，二级市场1年期央票收益率最新报2.5362%，较本周1年期品种发行利率2.3437%高近20个基点；3月期央票收益率最新报2.0282%，超过本周3月期品种发行利率逾20个基点。
“如果一二级市场倒挂长期存在，那么通过央票大规模回笼流动性将会很难，预计近期央行在公开市场的回笼力度仍将偏弱。”北京一券商研究员认为，由于央票一级市场需求不振，上调存款准备金率可能将成为央行控制流动性的主要举措。
“受美国二次量化宽松政策影响，国内整体流动性仍趋于宽松，年内再次上调存款准备金率的可能性较大。”
从本周公开市场操作来看，目前央行维持货币市场利率稳定的意图较明显。深圳一交易员指出，爱尔兰债务危机引发的外围紧张气氛增加了央行的谨慎情绪，现阶段央行可能处于观察期。“但是如果资金面不改宽松格局，也不排除央票收益率上行的可能性。”(每日经济新闻)
央行时隔四周后再度向市场注入资金，本周通过公开市场操作向银行体系“输血”740亿元。货币市场资金价格涨幅回落，流动性紧张有所缓和，紧缩预期稍有缓解。
业内人士指出，本周央行公开市场净投放实际上是因央票需求不振，央行在回笼资金和维持货币市场利率稳定之间举步维艰，但仍不改长期回笼流动性的总体格局，年内再次上调存款准备金率的可能性较大。
央行本周“输血”740亿元
数据显示，银行间市场基准回购利率周四收盘继续上涨，但涨幅较前交易日有所下降。货币市场指标利率——7天回购加权平均利率收报2.01%，较前收盘涨8个基点；隔夜回购加权平均利率报1.81%，较前收盘涨7个基点。1年期央票收益率跌0.2个基点至2.4280%；3个月期Shibor涨0.34个基点至2.8956%。
业内人士对《每日经济新闻》表示，近期加息和上调存款准备金率后，短期市场资金流动性趋紧。
“货币市场资金价格出现连续上涨，主要是前期紧缩政策的作用显现；存款准备金率上调0.5个百分点，相当于央行回笼了3500亿元资金。”一股份制银行交易员称。
为缓和商业银行目前的资金面紧张局势，央行在时隔四周后再度向市场注入资金，本周公开市场操作净投放740亿元。此前央行连续四周净回笼资金1535亿元，其中上周净回笼300亿元。
根据公告，央行周四在公开市场发行的160亿元3月期央票，发行收益率持平于1.8131%。央行同日未进行正回购操作。“央票收益率的连续走稳，缓解了投资者对短期内再度加息的忧虑。”
周四现券收益率延续跌势，亦显示市场的通胀预期出现降温。周四银行间市场国债成交价格收盘涨跌互见，成交的49只国债22涨1平26跌，剩余期限4.64年的10附息国债20涨0.52%，至96.15元，对应收益率3.43%。金融债价格涨跌互见，追随国债走势。
央票回笼不“给力”
业内人士在接受 《每日经济新闻》记者采访时表示，本周央行公开市场净投放的表面原因是考虑存款准备金率调整；实际上则是因为目前央票收益率一二级市场倒挂严重，央票需求不振，央行在回笼资金和维持货币市场利率稳定之间举步维艰。
“实际上央行现在有点被动，一方面控制通货膨胀需要回笼货币，另一方面又担心货币市场资金利率波动大。”上海一分析师表示，净投放更重要的原因是缓解利率上行压力。
中债登央行票据到期收益率曲线显示，二级市场1年期央票收益率最新报2.5362%，较本周1年期品种发行利率2.3437%高近20个基点；3月期央票收益率最新报2.0282%，超过本周3月期品种发行利率逾20个基点。
“如果一二级市场倒挂长期存在，那么通过央票大规模回笼流动性将会很难，预计近期央行在公开市场的回笼力度仍将偏弱。”北京一券商研究员认为，由于央票一级市场需求不振，上调存款准备金率可能将成为央行控制流动性的主要举措。
“受美国二次量化宽松政策影响，国内整体流动性仍趋于宽松，年内再次上调存款准备金率的可能性较大。”
从本周公开市场操作来看，目前央行维持货币市场利率稳定的意图较明显。深圳一交易员指出，爱尔兰债务危机引发的外围紧张气氛增加了央行的谨慎情绪，现阶段央行可能处于观察期。“但是如果资金面不改宽松格局，也不排除央票收益率上行的可能性。”(每日经济新闻)
Thursday, November 18, 2010
Fidelity’s Junk-Bond King Notkin Adds Stocks as Debt Rally Dies
Fidelity’s Junk-Bond King Notkin Adds Stocks as Debt Rally Dies
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Charles Stein
Nov. 18 (Bloomberg) -- Fidelity Investments’ Mark Notkin, whose high-yield mutual fund beat all rivals over the past five years, said the rally in junk bonds is over and stocks are a better buy.
The manager of the $12.8 billion Fidelity Capital & Income Fund is putting more money into equities and leveraged loans while cutting back on high-yield bonds, which have soared 80 percent since the start of 2009.
“I don’t see the value in the high-yield market,” Notkin said in an interview at his Boston office. “You are not being paid to take risk.”
Corporate junk bonds climbed last year after the U.S. recession ended and the default rate fell. Investors added $55.1 billion to U.S. junk-bond funds in 2009 and this year through September, according to Cambridge, Massachusetts-based research firm EPFR Global. Withdrawals from U.S. equity funds were $129.9 billion in the same period.
It’s time to shift gears because equities offer bigger gains, said Margaret Patel, who oversees about $1 billion for Wells Fargo & Co. in two mutual funds that invest in both asset classes. Notkin’s fund, which can keep as much as 20 percent of assets in stocks, had 17 percent in equities at the end of September, according to Fidelity’s website.
“The pendulum has swung from high yield to equities,” Patel said in a telephone interview from Boston.
Patel said that as earnings rise for companies tied to the global economy over the next 12 months, stocks are likely to deliver more than the 6 percent to 7 percent gains she expects from junk bonds.
Low Yields
Junk-bond yields that are low by historical standards and the prospect of increasing interest rates will limit gains, Patel said. Firms that issued high-yield securities in the past three to five years may buy back outstanding bonds because the debt can be refinanced at lower rates, she said.
Speculative grade, or junk, bonds, are rated Ba1 or below by Moody’s Investors Service and BB+ or below by Standard & Poor’s.
High-yield bonds could outperform stocks if the U.S. economy slows, said Patel, because companies would still be able to pay their debts even as profits slump.
Notkin, 46, joined Fidelity in 1994 as a high-yield analyst covering broadcasting, gaming and lodging. He earned a bachelor’s degree from the University of Massachusetts and a master’s of business administration from Boston University.
Third in Size
He took over Fidelity Capital & Income in July 2003. It’s the third-largest U.S. junk-bond fund after the $17.3 billion American High-Income Trust, run by Los Angeles-based Capital Group Cos., and the $13.1 billion Vanguard High-Yield Corporate Fund.
Notkin’s fund fell 32 percent in 2008, compared with the 26 percent drop in Bank of America Merrill Lynch’s U.S. High Yield Master II Index, as the financial crisis prompted investors to dump risky assets.
By the end of 2008, Notkin saw an “extraordinary opportunity,” when the average yield on junk bonds rose above 20 percent.
“At that point I thought it made sense to be pressing down on the gas pretty hard,” he said.
Notkin used the fund’s cash stake, which he had built to about 20 percent of the portfolio, to buy the riskiest high- yield bonds.
Not for Fainthearted
By Sept. 30, 2009, according to Chicago-based Morningstar Inc., the fund had 35 percent of its assets in bonds rated CCC and below, among the lowest credit ratings assigned by New York- based Standard & Poor’s. The typical high-yield fund had 21 percent in bonds rated that low, according to data compiled by Morningstar.
“This fund is not for the faint of heart,” Miriam Sjoblom, an analyst with Morningstar, said in a telephone interview.
Fidelity Capital & Income surged 72 percent in 2009, compared with a return of 58 percent for the Merrill Lynch index, Bloomberg data show. In the five years ended Nov. 16, Capital & Income averaged gains of 9.9 percent, the best among 422 high-yield funds tracked by Morningstar. This year the fund has risen about 14 percent.
The default rate for junk-rated corporate debt is expected to drop to 2.4 percent in the year ending September 2011 from 11 percent at the end of 2009, Standard & Poor’s said in October.
Reducing Risk
Notkin said he has been “de-risking” the fund this year by substituting higher-quality bonds for those of lesser stability. As of Sept. 30, 21 percent of the fund was in bonds rated CCC and below, compared with the 17 percent allocation among his average peer, according to Morningstar.
With prices on high-yield bonds near all-time peaks and yields near a record low, investors can expect gains over the next 12 months of about 7 percent, Notkin said.
“The market is fairly valued, if not overvalued,” he said. “Compared to high yield, equity is very cheap.”
Notkin expects interest rates to rise to historically normal levels over the next year or two, which could push up yields on U.S. Treasuries in the 5- to 10-year range more than 200 basis points, or 2 percentage points, he said. The yield on the 10-year Treasury note is about 2.88 percent. Bond prices fall when rates climb.
“We aren’t Japan,” said Notkin, referring to a nation where rates have stayed near zero for more than a decade.
Patel of Wells Fargo said gains in junk bonds will be further restricted as corporations buy back more of their high- yield debt.
Ceiling on Prices
“That creates a ceiling on how far prices can advance,” she said.
In April 2009, Notkin’s fund had 5 percent of assets in stocks, filings with the U.S. Securities and Exchange Commission show.
“If I find opportunities, don’t be surprised if it gets to 20 percent,” he said.
Notkin said stocks have underperformed high yield “dramatically” since he began running the fund. The high-yield index has gained more than twice as much as the S&P 500 over that stretch, Bloomberg data show.
Stocks also look attractive using other measures, he said. The earnings yield on the S&P 500, the index’s total earnings divided by its price, was 6.86 percent in the second quarter, the highest it has been since at least 1993, data from Standard & Poor’s show.
Money managers often compare the yield on stocks and fixed income as a way to gauge the appeal of the two asset classes.
Stocks ‘Attractive’
“Stocks are attractive relative to any kind of bonds,” said Michael Mullaney, a portfolio manager at Fiduciary Trust Co. in Boston, where he helps oversee $9.5 billion.
More U.S. executives than ever are increasing earnings forecasts compared with those lowering them, based on data Bloomberg began tracking in 1999.
Shares of Teck Resources Ltd., which Notkin acquired in the third quarter of 2009, have climbed 72 percent since Sept. 30 of that year, Bloomberg data show. Vancouver-based Teck, Canada’s largest diversified mining company, was the fund’s 10th-biggest holding as of July 31.
TRW Automotive Holdings Corp., another top 10 position for Notkin, has almost tripled in value over the same period. The Livonia, Michigan-based company is the world’s biggest supplier of vehicle-safety equipment.
“We love the auto sector,” said Notkin. The business will continue to grow globally, he said, and companies that sell safety and emissions gear will do especially well as governments around the world force carmakers to raise standards.
Tech, Materials
Notkin favors industries such as technology and materials that will benefit from expanding economies in emerging countries. Businesses that depend more on the U.S., including retailing and homebuilding, are less appealing to him.
“We don’t see the domestic economy going gangbusters anytime soon,” Notkin said.
Leveraged loans are rated below investment grade and are repaid first in a bankruptcy or liquidation, which makes them a more defensive investment than high-yield bonds. Because the interest rates on the loans float, returns may rise if rates climb.
Economists surveyed by Bloomberg expect the yield on the 10-year U.S. Treasury note to reach 3.3 percent by the fourth quarter of 2011. The S&P/LSTA U.S. Leveraged Loan 100 Index has returned 8.1 percent this year.
Notkin said he is looking to add to his loan holdings, which represented 13 percent of the portfolio as of April 30, according to a filing with the U.S. Securities and Exchange Commission.
“When rates rise, which will happen eventually, bank debt will look attractive and will outperform high yield at some point,” he said.
To contact the reporter on this story: Charles Stein in Boston at cstein4@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
Share Business ExchangeTwitterFacebook| Email | Print | A A A By Charles Stein
Nov. 18 (Bloomberg) -- Fidelity Investments’ Mark Notkin, whose high-yield mutual fund beat all rivals over the past five years, said the rally in junk bonds is over and stocks are a better buy.
The manager of the $12.8 billion Fidelity Capital & Income Fund is putting more money into equities and leveraged loans while cutting back on high-yield bonds, which have soared 80 percent since the start of 2009.
“I don’t see the value in the high-yield market,” Notkin said in an interview at his Boston office. “You are not being paid to take risk.”
Corporate junk bonds climbed last year after the U.S. recession ended and the default rate fell. Investors added $55.1 billion to U.S. junk-bond funds in 2009 and this year through September, according to Cambridge, Massachusetts-based research firm EPFR Global. Withdrawals from U.S. equity funds were $129.9 billion in the same period.
It’s time to shift gears because equities offer bigger gains, said Margaret Patel, who oversees about $1 billion for Wells Fargo & Co. in two mutual funds that invest in both asset classes. Notkin’s fund, which can keep as much as 20 percent of assets in stocks, had 17 percent in equities at the end of September, according to Fidelity’s website.
“The pendulum has swung from high yield to equities,” Patel said in a telephone interview from Boston.
Patel said that as earnings rise for companies tied to the global economy over the next 12 months, stocks are likely to deliver more than the 6 percent to 7 percent gains she expects from junk bonds.
Low Yields
Junk-bond yields that are low by historical standards and the prospect of increasing interest rates will limit gains, Patel said. Firms that issued high-yield securities in the past three to five years may buy back outstanding bonds because the debt can be refinanced at lower rates, she said.
Speculative grade, or junk, bonds, are rated Ba1 or below by Moody’s Investors Service and BB+ or below by Standard & Poor’s.
High-yield bonds could outperform stocks if the U.S. economy slows, said Patel, because companies would still be able to pay their debts even as profits slump.
Notkin, 46, joined Fidelity in 1994 as a high-yield analyst covering broadcasting, gaming and lodging. He earned a bachelor’s degree from the University of Massachusetts and a master’s of business administration from Boston University.
Third in Size
He took over Fidelity Capital & Income in July 2003. It’s the third-largest U.S. junk-bond fund after the $17.3 billion American High-Income Trust, run by Los Angeles-based Capital Group Cos., and the $13.1 billion Vanguard High-Yield Corporate Fund.
Notkin’s fund fell 32 percent in 2008, compared with the 26 percent drop in Bank of America Merrill Lynch’s U.S. High Yield Master II Index, as the financial crisis prompted investors to dump risky assets.
By the end of 2008, Notkin saw an “extraordinary opportunity,” when the average yield on junk bonds rose above 20 percent.
“At that point I thought it made sense to be pressing down on the gas pretty hard,” he said.
Notkin used the fund’s cash stake, which he had built to about 20 percent of the portfolio, to buy the riskiest high- yield bonds.
Not for Fainthearted
By Sept. 30, 2009, according to Chicago-based Morningstar Inc., the fund had 35 percent of its assets in bonds rated CCC and below, among the lowest credit ratings assigned by New York- based Standard & Poor’s. The typical high-yield fund had 21 percent in bonds rated that low, according to data compiled by Morningstar.
“This fund is not for the faint of heart,” Miriam Sjoblom, an analyst with Morningstar, said in a telephone interview.
Fidelity Capital & Income surged 72 percent in 2009, compared with a return of 58 percent for the Merrill Lynch index, Bloomberg data show. In the five years ended Nov. 16, Capital & Income averaged gains of 9.9 percent, the best among 422 high-yield funds tracked by Morningstar. This year the fund has risen about 14 percent.
The default rate for junk-rated corporate debt is expected to drop to 2.4 percent in the year ending September 2011 from 11 percent at the end of 2009, Standard & Poor’s said in October.
Reducing Risk
Notkin said he has been “de-risking” the fund this year by substituting higher-quality bonds for those of lesser stability. As of Sept. 30, 21 percent of the fund was in bonds rated CCC and below, compared with the 17 percent allocation among his average peer, according to Morningstar.
With prices on high-yield bonds near all-time peaks and yields near a record low, investors can expect gains over the next 12 months of about 7 percent, Notkin said.
“The market is fairly valued, if not overvalued,” he said. “Compared to high yield, equity is very cheap.”
Notkin expects interest rates to rise to historically normal levels over the next year or two, which could push up yields on U.S. Treasuries in the 5- to 10-year range more than 200 basis points, or 2 percentage points, he said. The yield on the 10-year Treasury note is about 2.88 percent. Bond prices fall when rates climb.
“We aren’t Japan,” said Notkin, referring to a nation where rates have stayed near zero for more than a decade.
Patel of Wells Fargo said gains in junk bonds will be further restricted as corporations buy back more of their high- yield debt.
Ceiling on Prices
“That creates a ceiling on how far prices can advance,” she said.
In April 2009, Notkin’s fund had 5 percent of assets in stocks, filings with the U.S. Securities and Exchange Commission show.
“If I find opportunities, don’t be surprised if it gets to 20 percent,” he said.
Notkin said stocks have underperformed high yield “dramatically” since he began running the fund. The high-yield index has gained more than twice as much as the S&P 500 over that stretch, Bloomberg data show.
Stocks also look attractive using other measures, he said. The earnings yield on the S&P 500, the index’s total earnings divided by its price, was 6.86 percent in the second quarter, the highest it has been since at least 1993, data from Standard & Poor’s show.
Money managers often compare the yield on stocks and fixed income as a way to gauge the appeal of the two asset classes.
Stocks ‘Attractive’
“Stocks are attractive relative to any kind of bonds,” said Michael Mullaney, a portfolio manager at Fiduciary Trust Co. in Boston, where he helps oversee $9.5 billion.
More U.S. executives than ever are increasing earnings forecasts compared with those lowering them, based on data Bloomberg began tracking in 1999.
Shares of Teck Resources Ltd., which Notkin acquired in the third quarter of 2009, have climbed 72 percent since Sept. 30 of that year, Bloomberg data show. Vancouver-based Teck, Canada’s largest diversified mining company, was the fund’s 10th-biggest holding as of July 31.
TRW Automotive Holdings Corp., another top 10 position for Notkin, has almost tripled in value over the same period. The Livonia, Michigan-based company is the world’s biggest supplier of vehicle-safety equipment.
“We love the auto sector,” said Notkin. The business will continue to grow globally, he said, and companies that sell safety and emissions gear will do especially well as governments around the world force carmakers to raise standards.
Tech, Materials
Notkin favors industries such as technology and materials that will benefit from expanding economies in emerging countries. Businesses that depend more on the U.S., including retailing and homebuilding, are less appealing to him.
“We don’t see the domestic economy going gangbusters anytime soon,” Notkin said.
Leveraged loans are rated below investment grade and are repaid first in a bankruptcy or liquidation, which makes them a more defensive investment than high-yield bonds. Because the interest rates on the loans float, returns may rise if rates climb.
Economists surveyed by Bloomberg expect the yield on the 10-year U.S. Treasury note to reach 3.3 percent by the fourth quarter of 2011. The S&P/LSTA U.S. Leveraged Loan 100 Index has returned 8.1 percent this year.
Notkin said he is looking to add to his loan holdings, which represented 13 percent of the portfolio as of April 30, according to a filing with the U.S. Securities and Exchange Commission.
“When rates rise, which will happen eventually, bank debt will look attractive and will outperform high yield at some point,” he said.
To contact the reporter on this story: Charles Stein in Boston at cstein4@bloomberg.net
To contact the editor responsible for this story: Christian Baumgaertel at cbaumgaertel@bloomberg.net
Wednesday, November 17, 2010
50-yr CGBs with yield at 4.5% are relatively
50-yr CGBs with yield at 4.5% are relatively attractive to insurers and banks China is scheduled to issue 50-yr CGBs this week, which we believe are relatively attractive to banks and insurers if yields stand at 4.5%.
For insurers, interest rate on 5-yr fixed-rate negotiated loans is around 4.5%, and 30-yr CDB bonds have higher yields than 50-yr CGBs.
For banks, only one 10-yr CGB saw yields of higher than 4.5% since 2000, and only three of China’s ultra
long-term CGBs had a yield of 4.5% or higher. In addition, compared with mortgage loans, ultra
long-term CGBs have higher rate of returns given its tax exemption and zero risk weight.
For insurers, interest rate on 5-yr fixed-rate negotiated loans is around 4.5%, and 30-yr CDB bonds have higher yields than 50-yr CGBs.
For banks, only one 10-yr CGB saw yields of higher than 4.5% since 2000, and only three of China’s ultra
long-term CGBs had a yield of 4.5% or higher. In addition, compared with mortgage loans, ultra
long-term CGBs have higher rate of returns given its tax exemption and zero risk weight.
Monday, November 15, 2010
Bain Gets a Break with Gome Truce
Bain Gets a Break with Gome Truce
By PETER STEIN
Private-equity firm Bain Capital LLC can breathe a sigh of relief at the rare truce brokered in a war for control of China's best-known electronics retailer—and, for now, enjoy the returns on its risky investment in the company.
On Thursday, Gome Electrical Appliances Ltd. said it had reached an accord with its imprisoned founder, Huang Guangyu, to bring two of his representatives—his lawyer and his sister—onto the company's board. Shares of the Hong Kong-listed company jumped as investors saw the agreement as a sign the company would now be freer to focus less on corporate infighting and more on expanding the business. On Friday, the shares closed at 3.18 Hong Kong dollars (41 U.S. cents), up 17% from their level before the announcement.
The particular circumstances surrounding Bain's dealings with Gome and Mr. Huang are unique. But like other foreign private-equity players looking to profit from China's growth, Bain faces the challenge of exercising influence without actually having control. For private equity, China offers minority stakes at best, not leveraged buyouts.
All considered, Boston-based Bain has done well with Gome. Its roughly 10% stake, at least on paper, is now worth about US$684 million, or nearly three times the US$233 million it agreed to invest in June 2009.
View Full Image
REUTERS
Huang Guangyu, shown in 2006
.Not bad, considering the guerrilla warfare Mr. Huang, 41 years old, has waged against Gome's current, Bain-backed management, all while being under arrest, and later imprisoned, for insider trading, corruption and bribery.
Bain's investment in 2009 was an unusually chancy move, given the uncertainty surrounding Mr. Huang. Gome's founder and biggest investor—he currently owns 32.47% of the company—quickly dashed any hopes Bain might have harbored that he would sit idly by while the private-equity firm set about improving Gome's operations and repairing the company's damaged brand.
In August 2009, while being detained by Chinese authorities, Mr. Huang participated in a rights offering, thwarting Bain's efforts to increase its stake. This past September, he called a shareholders' meeting in a bid to oust his former protégé, Chen Xiao, as chairman. Though shareholders blocked that move, they sided with Mr. Huang on another issue by preventing Gome from issuing new shares that would have diluted his holding.
But Bain had insurance of a sort. The convertible bonds it bought offered a 5% coupon and guaranteed it a return of at least 1.5 times its outlay. And while Mr. Huang was a wild card, Bain knew it had the support of the new chairman, Mr. Chen, as well as the board.
Gome is growing despite the management turmoil. In the first half, it said profit rose 66% from a year earlier to 962.3 million yuan ($145 million) on the back of a 22% jump in revenue amid a recovery in China's economy. Thursday's agreement prompted Nomura to raise its price target for Gome to HK$4.10, nearly 30% above Friday's close.
The truce with Mr. Huang looks fragile. The agreement noted that he had "no current intention" to nullify management contracts between Gome and hundreds of stores he owns that aren't part of the listed company. Earlier, he had threatened to cancel those deals if the management changes he sought weren't approved. That kind of language suggests he is keeping his options open should warfare resume. And Gome still has lawsuits pending against Mr. Huang in relation to actions taken against him by securities regulators.
For now, Bain will be hoping that Mr. Huang chooses to take to heart the words of Sun Tzu. In "The Art of War," China's great military philosopher advised those contemplating war to "let your object be victory, not lengthy campaigns." If Mr. Huang views victory as a rise in the value of his stake in Gome, letting Bain and Mr. Chen get back to work while Mr. Huang's new eyes and ears on the board provide constructive input is the way to go. If victory means kicking out the interlopers, Bain will have its hands full for some time.
By PETER STEIN
Private-equity firm Bain Capital LLC can breathe a sigh of relief at the rare truce brokered in a war for control of China's best-known electronics retailer—and, for now, enjoy the returns on its risky investment in the company.
On Thursday, Gome Electrical Appliances Ltd. said it had reached an accord with its imprisoned founder, Huang Guangyu, to bring two of his representatives—his lawyer and his sister—onto the company's board. Shares of the Hong Kong-listed company jumped as investors saw the agreement as a sign the company would now be freer to focus less on corporate infighting and more on expanding the business. On Friday, the shares closed at 3.18 Hong Kong dollars (41 U.S. cents), up 17% from their level before the announcement.
The particular circumstances surrounding Bain's dealings with Gome and Mr. Huang are unique. But like other foreign private-equity players looking to profit from China's growth, Bain faces the challenge of exercising influence without actually having control. For private equity, China offers minority stakes at best, not leveraged buyouts.
All considered, Boston-based Bain has done well with Gome. Its roughly 10% stake, at least on paper, is now worth about US$684 million, or nearly three times the US$233 million it agreed to invest in June 2009.
View Full Image
REUTERS
Huang Guangyu, shown in 2006
.Not bad, considering the guerrilla warfare Mr. Huang, 41 years old, has waged against Gome's current, Bain-backed management, all while being under arrest, and later imprisoned, for insider trading, corruption and bribery.
Bain's investment in 2009 was an unusually chancy move, given the uncertainty surrounding Mr. Huang. Gome's founder and biggest investor—he currently owns 32.47% of the company—quickly dashed any hopes Bain might have harbored that he would sit idly by while the private-equity firm set about improving Gome's operations and repairing the company's damaged brand.
In August 2009, while being detained by Chinese authorities, Mr. Huang participated in a rights offering, thwarting Bain's efforts to increase its stake. This past September, he called a shareholders' meeting in a bid to oust his former protégé, Chen Xiao, as chairman. Though shareholders blocked that move, they sided with Mr. Huang on another issue by preventing Gome from issuing new shares that would have diluted his holding.
But Bain had insurance of a sort. The convertible bonds it bought offered a 5% coupon and guaranteed it a return of at least 1.5 times its outlay. And while Mr. Huang was a wild card, Bain knew it had the support of the new chairman, Mr. Chen, as well as the board.
Gome is growing despite the management turmoil. In the first half, it said profit rose 66% from a year earlier to 962.3 million yuan ($145 million) on the back of a 22% jump in revenue amid a recovery in China's economy. Thursday's agreement prompted Nomura to raise its price target for Gome to HK$4.10, nearly 30% above Friday's close.
The truce with Mr. Huang looks fragile. The agreement noted that he had "no current intention" to nullify management contracts between Gome and hundreds of stores he owns that aren't part of the listed company. Earlier, he had threatened to cancel those deals if the management changes he sought weren't approved. That kind of language suggests he is keeping his options open should warfare resume. And Gome still has lawsuits pending against Mr. Huang in relation to actions taken against him by securities regulators.
For now, Bain will be hoping that Mr. Huang chooses to take to heart the words of Sun Tzu. In "The Art of War," China's great military philosopher advised those contemplating war to "let your object be victory, not lengthy campaigns." If Mr. Huang views victory as a rise in the value of his stake in Gome, letting Bain and Mr. Chen get back to work while Mr. Huang's new eyes and ears on the board provide constructive input is the way to go. If victory means kicking out the interlopers, Bain will have its hands full for some time.
Sunday, November 14, 2010
China buys up the world
China buys up the world
And the world should stay open for business
Nov 11th 2010
IN THEORY, the ownership of a business in a capitalist economy is irrelevant. In practice, it is often controversial. From Japanese firms’ wave of purchases in America in the 1980s and Vodafone’s takeover of Germany’s Mannesmann in 2000 to the more recent antics of private-equity firms, acquisitions have often prompted bouts of national angst.
Such concerns are likely to intensify over the next few years, for China’s state-owned firms are on a shopping spree. Chinese buyers—mostly opaque, often run by the Communist Party and sometimes driven by politics as well as profit—have accounted for a tenth of cross-border deals by value this year, bidding for everything from American gas and Brazilian electricity grids to a Swedish car company, Volvo.
There is, understandably, rising opposition to this trend. The notion that capitalists should allow communists to buy their companies is, some argue, taking economic liberalism to an absurd extreme. But that is just what they should do, for the spread of Chinese capital should bring benefits to its recipients, and the world as a whole.
Why China is different
Not so long ago, government-controlled companies were regarded as half-formed creatures destined for full privatisation. But a combination of factors—huge savings in the emerging world, oil wealth and a loss of confidence in the free-market model—has led to a resurgence of state capitalism. About a fifth of global stockmarket value now sits in such firms, more than twice the level ten years ago.
The rich world has tolerated the rise of mercantilist economies before: think of South Korea’s state-led development or Singapore’s state-controlled firms, which are active acquirers abroad. Yet China is different. It is already the world’s second-biggest economy, and in time is likely to overtake America. Its firms are giants that until now have been inward-looking but are starting to use their vast resources abroad.
Chinese firms own just 6% of global investment in international business. Historically, top dogs have had a far bigger share than that. Both Britain and America peaked with a share of about 50%, in 1914 and 1967 respectively. China’s natural rise could be turbocharged by its vast pool of savings. Today this is largely invested in rich countries’ government bonds; tomorrow it could be used to buy companies and protect China against rich countries’ devaluations and possible defaults.
Chinese firms are going global for the usual reasons: to acquire raw materials, get technical know-how and gain access to foreign markets. But they are under the guidance of a state that many countries consider a strategic competitor, not an ally. As our briefing explains (see article), it often appoints executives, directs deals and finances them through state banks. Once bought, natural-resource firms can become captive suppliers of the Middle Kingdom. Some believe China Inc can be more sinister than that: for example, America thinks that Chinese telecoms-equipment firms pose a threat to its national security.
Private companies have played a big part in delivering the benefits of globalisation. They span the planet, allocating resources as they see fit and competing to win customers. The idea that an opaque government might come to dominate global capitalism is unappealing. Resources would be allocated by officials, not the market. Politics, not profit, might drive decisions. Such concerns are being voiced with increasing fervour. Australia and Canada, once open markets for takeovers, are creating hurdles for China’s state-backed firms, particularly in natural resources, and it is easy to see other countries becoming less welcoming too.
That would be a mistake. China is miles away from posing this kind of threat: most of its firms are only just finding their feet abroad. Even in natural resources, where it has been most active in dealmaking, it is not close to controlling enough supply to rig the market for most commodities.
Nor is China’s system as monolithic as foreigners often assume. State companies compete at home and their decision-making is consensual rather than dictatorial. When abroad they may have mixed motives, and some sectors—defence and strategic infrastructure, for instance—are too sensitive to allow them in. But such areas are relatively few.
What if Chinese state-owned companies run their acquisitions for politics, not profit? So long as other firms could satisfy consumers’ needs, it would not matter. Chinese companies could safely be allowed to own energy firms, for instance, in a competitive market where customers could turn to other suppliers. And if Chinese firms throw subsidised capital around the world, that’s fine. America and Europe could use the money. The danger that cheap Chinese capital might undermine rivals can be better dealt with by beefing up competition law than by keeping investment out.
Not all Chinese companies are state-directed. Some are largely independent and mainly interested in profits. Often these firms are making the running abroad. Take Volvo’s new owner, Geely. Volvo should now be able to sell more cars in China; without the deal its future was bleak.
Show a little confidence
Chinese firms can bring new energy and capital to flagging companies around the world; but influence will not just flow one way. To succeed abroad, Chinese companies will have to adapt. That means hiring local managers, investing in local research and placating local concerns—for example by listing subsidiaries locally. Indian and Brazilian firms have an advantage abroad thanks to their private-sector DNA and more open cultures. That has not been lost on Chinese managers.
China’s advance may bring benefits beyond the narrowly commercial. As it invests in the global economy, so its interests will become increasingly aligned with the rest of the world’s; and as that happens its enthusiasm for international co-operation may grow. To reject China’s advances would thus be a disservice to future generations, as well as a deeply pessimistic statement about capitalism’s confidence in itself.
And the world should stay open for business
Nov 11th 2010
IN THEORY, the ownership of a business in a capitalist economy is irrelevant. In practice, it is often controversial. From Japanese firms’ wave of purchases in America in the 1980s and Vodafone’s takeover of Germany’s Mannesmann in 2000 to the more recent antics of private-equity firms, acquisitions have often prompted bouts of national angst.
Such concerns are likely to intensify over the next few years, for China’s state-owned firms are on a shopping spree. Chinese buyers—mostly opaque, often run by the Communist Party and sometimes driven by politics as well as profit—have accounted for a tenth of cross-border deals by value this year, bidding for everything from American gas and Brazilian electricity grids to a Swedish car company, Volvo.
There is, understandably, rising opposition to this trend. The notion that capitalists should allow communists to buy their companies is, some argue, taking economic liberalism to an absurd extreme. But that is just what they should do, for the spread of Chinese capital should bring benefits to its recipients, and the world as a whole.
Why China is different
Not so long ago, government-controlled companies were regarded as half-formed creatures destined for full privatisation. But a combination of factors—huge savings in the emerging world, oil wealth and a loss of confidence in the free-market model—has led to a resurgence of state capitalism. About a fifth of global stockmarket value now sits in such firms, more than twice the level ten years ago.
The rich world has tolerated the rise of mercantilist economies before: think of South Korea’s state-led development or Singapore’s state-controlled firms, which are active acquirers abroad. Yet China is different. It is already the world’s second-biggest economy, and in time is likely to overtake America. Its firms are giants that until now have been inward-looking but are starting to use their vast resources abroad.
Chinese firms own just 6% of global investment in international business. Historically, top dogs have had a far bigger share than that. Both Britain and America peaked with a share of about 50%, in 1914 and 1967 respectively. China’s natural rise could be turbocharged by its vast pool of savings. Today this is largely invested in rich countries’ government bonds; tomorrow it could be used to buy companies and protect China against rich countries’ devaluations and possible defaults.
Chinese firms are going global for the usual reasons: to acquire raw materials, get technical know-how and gain access to foreign markets. But they are under the guidance of a state that many countries consider a strategic competitor, not an ally. As our briefing explains (see article), it often appoints executives, directs deals and finances them through state banks. Once bought, natural-resource firms can become captive suppliers of the Middle Kingdom. Some believe China Inc can be more sinister than that: for example, America thinks that Chinese telecoms-equipment firms pose a threat to its national security.
Private companies have played a big part in delivering the benefits of globalisation. They span the planet, allocating resources as they see fit and competing to win customers. The idea that an opaque government might come to dominate global capitalism is unappealing. Resources would be allocated by officials, not the market. Politics, not profit, might drive decisions. Such concerns are being voiced with increasing fervour. Australia and Canada, once open markets for takeovers, are creating hurdles for China’s state-backed firms, particularly in natural resources, and it is easy to see other countries becoming less welcoming too.
That would be a mistake. China is miles away from posing this kind of threat: most of its firms are only just finding their feet abroad. Even in natural resources, where it has been most active in dealmaking, it is not close to controlling enough supply to rig the market for most commodities.
Nor is China’s system as monolithic as foreigners often assume. State companies compete at home and their decision-making is consensual rather than dictatorial. When abroad they may have mixed motives, and some sectors—defence and strategic infrastructure, for instance—are too sensitive to allow them in. But such areas are relatively few.
What if Chinese state-owned companies run their acquisitions for politics, not profit? So long as other firms could satisfy consumers’ needs, it would not matter. Chinese companies could safely be allowed to own energy firms, for instance, in a competitive market where customers could turn to other suppliers. And if Chinese firms throw subsidised capital around the world, that’s fine. America and Europe could use the money. The danger that cheap Chinese capital might undermine rivals can be better dealt with by beefing up competition law than by keeping investment out.
Not all Chinese companies are state-directed. Some are largely independent and mainly interested in profits. Often these firms are making the running abroad. Take Volvo’s new owner, Geely. Volvo should now be able to sell more cars in China; without the deal its future was bleak.
Show a little confidence
Chinese firms can bring new energy and capital to flagging companies around the world; but influence will not just flow one way. To succeed abroad, Chinese companies will have to adapt. That means hiring local managers, investing in local research and placating local concerns—for example by listing subsidiaries locally. Indian and Brazilian firms have an advantage abroad thanks to their private-sector DNA and more open cultures. That has not been lost on Chinese managers.
China’s advance may bring benefits beyond the narrowly commercial. As it invests in the global economy, so its interests will become increasingly aligned with the rest of the world’s; and as that happens its enthusiasm for international co-operation may grow. To reject China’s advances would thus be a disservice to future generations, as well as a deeply pessimistic statement about capitalism’s confidence in itself.
Full Transcript: Jeremy Grantham Interview
Full Transcript: Jeremy Grantham Interview
Published: Thursday, 11 Nov 2010 | 11:46 AM ET
Text Size
By: Lulu Chiang
Legendary investor Jeremy Grantham, Chief Investment Strategist of Grantham, Mayo, Van Otterloo sat down with Maria Bartiromo in an extremely rare interview.
Jeremy Grantham
Jeremy Grantham, Chief Investment Strategist of Grantham, Mayo, Van Otterloo
Grantham recommended institutional clients to sell into this rally. He is convinced that stocks are overpriced and cash is now the avenue for investors.
As an investment strategist for the past 30-years, Grantham has long been known for his timely calls.
In 1982, he said U.S. market was ripe for a "major rally." And in 1989, he correctly called the top of the Japanese economy. In January 2000, he warned of an impending crash in tech stocks which took place two months later. And in April 2007, Grantham said we are now seeing the first worldwide bubble in history covering all asset classes.
When we sat down with Mr. Grantham earlier this week, he expressed worries about various pockets of the global markets, including emerging markets and U.S. stocks. Grantham is betting on a strong cash position and being patient about when to get back into the market.
Check out the complete transcript of Maria Bartiromo’s interview with Jeremy Grantham, or watch the complete interview here.
MARIA BARTIROMO: Great to have you on the program. Thanks so much for joining us.
JEREMY GRANTHAM: Very nice to be here.
BARTIROMO: Time and time again, your writings and your predictions have been right on in terms of investing and where we are in this market. From the tech bubble to beyond. Can you talk to us about where we are today in the stock market and what trends you see developing?
GRANTHAM: What I worry about most is the Fed's activity and — QE2 is just the latest demonstration of this. The Fed has spent most of the last 15, 20 years— manipulating the stock market whenever they feel the economy needs a bit of a kick. I think they know very well that what they do has no direct effect on the economy.
The only weapon they have is the so-called wealth effect. If you can drive the market up 50 percent, people feel richer. They feel a little more confident, and the academics reckon they spent about three percent of that. So, the market went up 80 percent last year. They should be spending 2.4 percent extra of— of the entire value of the stock market, which is about two percent of GDP. And that's a real kicker.
You don't see it because of the enormous counterdrag from the housing market— and— and its complete bust. But, it would have been worse with— without this. The problem is, they know very well how to stimulate the market. But, for whatever reason, they step away as the market gathers steam, and— and resign any responsibility for moderating— a bull market that may get out of control as we saw in '98 and '99 with Alan Greenspan, as we saw in the housing market.
And— I fear that the market will continue to rise. It will be continuously speculative. After all, when you can borrow at a rate that is negative after adjustment for inflation, it's not surprising that you would borrow a lot.
BARTIROMO: So, what are the implications of— of this constant easing and stimulation? You know, it— it seems the numbers are so mind boggling: $600 billion here.
GRANTHAM: They— they (CHUCKLE) are mind-boggling.
BARTIROMO: You know? (CHUCKLE) But, give us the—
GRANTHAM: The consequences are you get boom and bust. You— stimulate in '91. You let it get out of control. You have this colossal tech bubble in '99. Sixty-five times earnings for the— for the growth stocks. Then you have an epic bust. Then, of course, they're panic struck. They race back into battle with immense stimulus with negative real rates for three years.
"You can drive a market higher and eventually — of its sheer overpricing, it will eventually pop. And, typically, it seems to pop at the most inconvenient time."
And you get another— rise of risk taking and everything risky— prospered in '03, '04, '05, '06, '07 until we had what I called the first truly global bubble. It was pretty well everywhere in everything. It was in real estate. Almost everywhere. It was in stocks absolutely everywhere. And— and it was in the bond market to some considerable degree.
And that, of course, broke. They all break. That's the one thing they can't control. You can drive a market higher and eventually — of its sheer overpricing, it will eventually pop. And, typically, it seems to pop at the most inconvenient time. So, we're going to drive this one up, and this time there isn't much ammunition. In 2000, the Fed had a good balance sheet. The government had a good balance sheet.
In '08, it was still semi respectable, and— and now it's not. It's not very respectable at all. So, what are they going to use as ammunition if they cause another bubble and it breaks, let's say, in a couple of years? Then we might have some real Japanese-type experiences.
BARTIROMO: Where are the solutions then, if not this? What do you think ought to be done?
Or you must go in there and hire people yourself as a government. Now, I— I believe in crowding out. So, I— I would never do it unless there was clearly quite a few million extra unemployed. I wouldn't go after too many skilled labor because there's never— enough of them to go around. And that does cause crowding out. I would go after the— what I called lightly-skilled workers.
The kind of people who were building the extra million-dollar— sorry— extra million houses in— in '05, '06 and '07. And find— and find jobs for them. We have an infrastructure that is decades behind schedule.
We could insulate every house in the Northeast. These are high-return projects, great— for society in general. And to— to allow people to sit there unemployed. Their skills are deteriorating. Their family morale goes to hell. And— it's a deadweight on society. And you have to remember when— when the government hires someone, he doesn't pay the full price like a corporation does.
He pays about half price because he pays a lot. He, the government— it, the government, pays a lot for someone sitting down unemployed. All the— all the many ways— that unemployed get— get helped plus— the government carries the atrophying of the skills. Society loses that, the longer they're unemployed.
BARTIROMO: So, what should the federal government be doing then? I mean, the housing industry, for example, missing in action. What is it going to take to get housing moving again? What is it gonna take to get businesses hiring again? If it's not the job of the Federal Reserve, what policy should we be seeing coming out of the government?
GRANTHAM: I think the Federal Reserve has— is in a very strong position to move against bubbles. Bubbles are the most dangerous thing— asset-class bubbles that come along. They're the most dangerous to investors. They're also the most dangerous to the economies of— as we have seen in Japan and in 1929 and now here. You've got to stop them.
The Fed has enormous power to move markets. And it— not necessarily immediately, but give them a year and they could bury a bull market. They could have headed off the great tech bubble. They could have headed off the housing bubble. They have other responsibilities— powers. They— they could have interfered with the quantity and quality of the sub-prime event. They chose not to.
In fact, Greenspan led the charge to deregulate this, deregulate that, deregulate everything, which was most— ill advised, and for which we have paid an enormous price. So, they can— they can stop bubbles, and— and they should. It's easy. It's a huge service. What you do now is— is— I like to say it's a bit like the Irish problem.
I wouldn't start the journey from here if I were you when you ask— the way. You— you really shouldn't allow the— situation to get into this shape. You should not have allowed the bubbles to form and to break. Digging out from a great bubble that has broken is so much harder than preventing it in the first place.
"Greenspan led the charge to deregulate this, deregulate that, deregulate everything, which was most— ill advised, and for which we have paid an enormous price."
Japan has paid 20 years for the price of the greatest land— bubble and the greatest stock bubble in history. Far worse, in my opinion, than the South Sea bubble or the tulip bubble in many ways. The land under the Emperor's Palace really was worth the whole state of California, which is quite remarkable. But, we spent quite a few hours checking it, and it seemed to be true. And the price they paid— to dig out of that has, of course, been legendary.
And we better hope that we don't pay anything like that price. But, that is a risk. It's not— it's not certain that we will escape— without several years of— sub-average growth and— and stress to the system.
BARTIROMO: So, are there policies that the administration could be implementing?
GRANTHAM: It's really Congress. If Congress is bound and determined to— interfere with any proposed stimulus, then— we’re going to have a nice experiment and that is to see how the natural, recuperative powers of the economy stand up to this stress. I think it will probably muddle through. But, it won't be pretty. I— I don't think it will necessarily go backwards. But, it will go forward at a very sub-average rate. And I think that's the course that— would have to be recommended now is— it would be much better if Congress would shape up and— and do some sensible— stimulus program from here.
And it would be sensible if the Fed recognized it doesn't have that— that power, and— and get out of the way. Cranking out the printing press irritates all the foreign countries. Why wouldn't it? It's manipulating the dollar downwards. It's causing inflationary fears.
It's causing— commodities to go through the roof. Not led by gold by the way. Gold has gone up almost exactly the same in the last year as all the other metals. Everything is up. The commodity index in a year is up 35 percent. A weighted average of everything. And that isn't oil because oil is slightly less than that.
But, it is— a very dangerous situation. And it risks currency wars. If we're seen to be pushing down the dollar, when on technical terms— and fundamental terms, I should say, the dollar looks already pretty cheap, and we're clearly driving it down by aiming to increase inflation and— and swamping the system with money, why wouldn't— emerging countries take defensive action? And all of them are.
So, we're already in— in a— in a currency war in a way. It's a mild one, and I hope it stays that way. But, a currency manipulation is exactly the same as tariffs. It's a bit easier to change, a bit easier to back off. But, it has the same effect on global economy if we get into a currency war as if we got into a tariff war, which characterized the period after 1930 when the Smoot-Hawley Tariff Bill was passed. And— and— and they're talking about that even as we speak in— in— in Congress.
"So, we're already in— in a— in a currency war in a way. It's a mild one, and I hope it stays that way."
BARTIROMO: So, while so many people are talking about the Chinese as far as manipulating their currency, you say the Fed is manipulating these markets?
GRANTHAM: They are. And— and— and China is, of course, manipulating its currency. And it would make life easier for everybody if they would allow the currency to rise a— a little faster. But, it— it certainly weakens our hand enormously to go there and— and shout at them angrily when we're clearly doing the same thing. And this is what the— the German Finance Minister— the point he made two days ago.
BARTIROMO: Yeah. Let me ask you about emerging markets. You recommended an overweight position in emerging markets back in 2000 when not many people were talking about it. And, obviously, it was dead on, the right call as we've seen a huge move in the emerging markets. Do you think there's still room to run in the emerging markets? Or is that becoming a bubble?
GRANTHAM: Incidentally, the emerging market since— 2000 is 3.3 times the S&P. So, every $100 you have in the S&P, you would have had $330 starting from the same point in emerging. And after that incredible discrepancy, which by the way says the main event in investing should be getting the big picture right. It's nice to pick stocks. But, how many good stocks do you have to pick in a whole portfolio to equal that incredible move between the biggest asset class in the world, U.S. equities, and the third or fourth biggest asset class emerging markets?
It— it's these movements between the great asset classes that make you money. And I'm happy to say that that's the group that, GMO, I work with— asset allocation where we are students of bubbles. And— and— and, basically, financial history. It's a very entertaining job, I might say, which has made me forget the question.
BARTIROMO: The question is do you think that is now becoming overvalued? Is there still room to make money in emerging markets?
GRANTHAM: I'm pleased to say two and a half years ago, I did a quarterly letter called the Emerging Emerging Bubble, and I argued that in the following five years, the case for emerging would be seen as so crystal clear— that it could not possibly help but outperform and go to a premium PE. Now, up until then, they had always sold at a discount. Sometimes a substantial discount.
But, I — the case is this, they are growing at about six percent real. Six percent plus inflation. We are growing in the developed world at about two. Before '95, there was no difference. Before 1995. And now it's three to one. My argument two and a half years ago is what a simple bull case? You want to grow? Buy emerging.
You want to be conservative? Buy utility companies or the blue chips of— of— of the developed world. If you're going to grow at six, you're— you're— it is very appealing that you would outperform a world growing at two percent. And the developed world is slowing down. I— I say it has an incurable case of middle-aged spread.
It's just been there, done that. It's a little old. It's a little pastured. Doesn't have the population profile. Emerging does. And they have the attitude, and they have good finances. And— and they're really showing— a— a clean pair of heels to the developed world.
Now, it turns out that you— it's a bit more complicated. You don't actually find a strong correlation between— top-line GDP growth and making money in the market. It— it seems like you should. The fastest-growing countries should give you the highest return. They simply don't. But, there's only four of us— that— that believe that story. Everyone else in the world believes that if you grow fast like China, you'll outperform in the stock market.
And so, I'm reasoning two and a half years ago, everybody will think this way pretty soon. And surely— emerging countries will go to a big premium on— every dollar of earnings that they make. And they're beginning to. But, I think they've got at least a few years left. The bad news for us, because we're fairly purest value managers for mainly institutional clients, is we don't like to play games with overpriced assets.
And that's the world that we're in now. The Fed is driving the S&P, which is overpriced— the Standard & Poor's 500— a broad measure of the U.S. market, is driving it from already substantially overpriced into what I would call dangerously overpriced.
This is about the boundary line. We expect on a seven-year horizon one percent only plus inflation from the U.S. market. And now, as you push it up another 20 percent perhaps in the next year, it becomes dangerously overpriced. A bubble territory and ready to inflate to considerable pain. That's what we have to worry about.
So, you're caught between, if you want to become conservative, you've got to start taking— counteraction now. If— if you want to go with the flow, don't fight the Fed as they say— you should be prepared to speculate on very nimble feet. It's not our style as a firm. But, I think it's— probably a game that you could play with a pretty good chance of winning for— for a few more quarters.
BARTIROMO: A few more quarters. But, at some point— or is it today— would you be recommending selling into the rally?
GRANTHAM: Our institutional clients— sell very gracefully into this rally. We've already started to sell. We're not even— averagely weighted. We're modestly underweighted. And you must remember bonds are even worse than stocks on a seven-year forecast. So, you get caught in this paradox. It's very tempting— and this is what the Fed wants by the way.
It wants us to go out there and buy stocks, which are overpriced because bonds they have manipulated into being even less attractive. So, we’re being forced to choose between two overpriced assets. That is not always a terrific choice to make because there is a third choice, and that is don't play the game and hold money in cash.
And cash has a— a virtue that people don't appreciate fully. And that is its— its optionality. In other words, if anything crashes and burns in value— say the U.S. stock market, if you have no resources, it doesn't help you. If the bond market crashes, and you have no resources, it doesn't help you. And what cash is is an available resource. It buys you the right to buy the U.S. market if the S&P drops from 1,220 today to 900, which is what we think is fair value.
You then have some resources if you have some cash. There's another complexity and that is that we believe that the old-fashioned, super blue-chip franchise companies like Coca-Cola [KO 62.92 0.12 (+0.19%) ] are also much cheaper than the rest of the market. So, if someone put a gun to my head and s— said, "I've got to buy stocks. What should I buy?" I'd say, "Buy two units of the Coca-Colas. They're the cheapest group in— in the equity world. Buttress it with a fairly large dose of emerging markets. They're a little overpriced. But, they've got potential. And— a lot more cash than normal for opportunities should the bubble blow up."
"I have an eccentric view on commodities not necessarily shared by my colleagues or by— almost anybody."
BARTIROMO: What about commodities? I mean, clearly, the story of China and the demand coming out of China has boosted all sorts of commodities. Is that bull run still in place?
GRANTHAM: I have an eccentric view on commodities not necessarily shared by my colleagues or by— almost anybody. And that is we're running out of everything. I think it will become devastatingly clear to everybody. I— I think we went through a great paradigm shift about five years ago and— we'd spent a 100 years with almost all commodities declining. Perhaps oil was about flat in real terms, adjusted for inflation.
But, everything else was declining: copper, corn, and so on. And, now, you look back five years later, you can't see that clearly at all. A lot of them seem like they've been going up for 50 years, a 100 years: copper— iron ore— tin. But— and— and— and oil. Oil has clearly broken out. It spent a 100 years at $16 in— in our currency until 1974. And then it doubled when OPEC started and it's been 20 years trading around 35, plus or minus a lot.
And then I think it doubled it again, and I think the trend line is probably about 75. So, the world has changed. We're entering a period where we're running out of everything. The growth rate of China and India is simply— can't be borne by declining quality of— of resources. And— and I think we're in a period that I call a chain-linked— crisis in commodities.
So, it'll be a crisis in rice. It will triple and it'll come down. But, then— then it'll be followed by one in corn and— and barley and so on. And— and copper will go up a lot, and then that will come down. But, oil will be in crisis mode. From now on, we just better get used to it. So, if you're afraid of inflation, I think— and if you can bring yourself to have a long horizon— and when I say long, I mean ten to 20 years, not the usual ten to 20 weeks— that locking up resources in the ground is a terrific idea.
Or locking up— timber, agricultural land will do just fine. A great inflation hedge. You will win, in my opinion. Very high probability over a long horizon. Now, have these things gotten ahead of themselves in the short term? Quite possibly yes. And that— that's what makes investing so tricky. If they were to break for whatever reason at all in the next year, I— I would suggest that is a great buying opportunity.
BARTIROMO: And—
GRANTHAM: To— to buy here is to trade off the long-term high prospects of winning with quite a reasonable chance of— of— of buying at a— a— a short-term peak.
BARTIROMO: So, is there value in some of the commodities producers? The equities
GRANTHAM: If they have stuff in the ground. If they're just processors, forget them. Shoot them, in fact. Because they're the people who will pay the price of constantly having to raise their prices paying more for their raw materials. But— if they've got stuff in the ground. The oil industry since 2000 has doubled against the stock market. They didn't double because they got brilliant.
They doubled because oil in the ground became worth four times what it was. And that is a wonderful thing for an oil company with good reserves. But, the same if you had mineral reserve. That— that's the play, I think, on commodities.
BARTIROMO: It's extraordinary that people are putting so much money into such low-yielding, fixed income— products. And— ignoring dividend payers, which of course in equities are— are even more competitive than— than the yields that you're seeing. You're seeing no yield in— in fixed income. Is that a bubble?
GRANTHAM: I— I don't call it a bubble because it's not— it's not driven by huge animal stir— spirits. They're not doing it to sell it at a huge profit. They're doing it because they were severely frightened— in the great crunch. It was a devastating event. And it could have c— turned out much worse than it did. It— it should have frightened people. It did frighten people and they'll still frightened for quite a while.
And what the Fed is trying to do is to make cash so ugly that it will force you to take it out and basically speculate. And in that, it's very successful, of course, with the hedge funds. They're out there speculating. Finally, the ordinary individuals are beginning to get so fed up with having no return on their cash that they're beginning to do a little bit more purchasing of equities. And that's what the Fed wants.
It wants to have the stocks go up, to make you feel a bit richer so that you'll spend a little more and give a short-term kick to the economy. But, it— it's a pretty circular argument. For every dollar of wealth effect you get here, as stocks go from overpriced to worse, you will give back in a year or two. And you'll give it back like it— like it happened in— in '08 at the very worse time.
All of the kicker that Greenspan had engineered for the '02, '03, '04 recovery and so on was all given back with interest. The market overcorrected through fair value. The housing market that was a huge driver of economic strength and a— actually masked structural unemployment with all those extra, unnecessary houses being built. All of that was given back similarly at the same time. It couldn't have been worse.
BARTIROMO: What are you expecting from the economy in 2011?
GRANTHAM: (Sigh.) I'm expecting 2011, 2012 to— and— and 20 as far as I can see to be less handsome than it used to be. I think we— we're on a trend lying growth of about two percent. And— I think we'll muddle through— quite well. The problem is in the not too distant future, stocks will be too expensive and they'll crack again. Risky, fixed-income will be too expensive and that will crack again.
And unless we're lucky, we will have yet another crisis without being able to lower the rates 'cause they'll still be low, without being able to issue too much moral hazard promises from the Fed because people will begin to find it pretty hollow. Cycle after cycle, the Fed is making basically— is flagging the same intention. Don't worry, guys. Speculate. We'll help you if something goes wrong. And each time something does go wrong and it gets more and more painful.
And, eventually, even— even— fairly unintelligent investors might get the point that this is not a good game to play indefinitely. I am impressed, however, how eager we have been to return to the game. We got a— a practically mortal blow, and, yet, everyone was back in there swinging last year. It wasn't just that the S&P went up 80, which I did call by the way. I said it would race up to 1,100. And— but, it was speculative so the— the junky part of the market went up 120 percent. This is a formidable— recognition of what the Fed can do when it wants to.
BARTIROMO: What about the dollar? Where do you see it?
GRANTHAM: The dollar is on fundamental purchasing power— it's a— a fairly cheap currency. And— as long as there's QE three, four, five and six, you'd have to bet that it's more probable that it will go down. Now, if it stirs up— a currency war, all bets are off. We haven't had one since the 1930s. We— who knows how that will play out? That's one thing that can completely change the game, and— and— very hard for me or anyone to guess what that would do.
But, if we avoid that, I think you have to count on the dollar being at least irregularly weaker until we finish the Q game, which is ma— basically just running a printing press and using it to push down artificially— the bond rate. And let me point out that the Fed's actions are taking money away from retirees.
They're the guys, and near retirees, who want to part their money on something safe as they near retirement. And they're offered minus after-inflation adjustment. There's no return at all. And where does that money go? It goes to relate the banks so that they're well capitalized again. Even though they were the people who exacerbated our problems.
And, hopefully, the redeeming feature in that infamous trade is that your corporations go out there, borrow money, build factories, hire people, which they're not doing because consumption is weak and because they were also terrified by the crunch. I— I think, therefore, under these conditions, low rates is actually hurting the economy. It's taking more money away from people who would have spent it —retirees — than are being spent by passing it on to financial enterprises and being distributed as bonuses to people who are rich and, therefore, save more.
So, I think it's a— a— bad idea at any time and a particularly bad idea now.
BARTIROMO: So, final question here. What are you recommending to institutional clients today? How— how should they be investing?
GRANTHAM: We recommend a very heavy overweight in— in the great franchise companies: the Coca-Cola’s [KO 62.92 0.12 (+0.19%) ] , Johnson and Johnson's [JNJ 63.67 -0.25 (-0.39%) ]. I'm not recommending those two names. They're just examples. We're recommending a modest overweight in emerging, an underweight— in everything else. Extra cash reserves and— patience. But, I think if you're willing to speculate, you might find that this is an interesting one more year to speculate.
"The trouble with bubbles is when they go, it's very hard to know how painful it will be."
BARTIROMO: And—
GRANTHAM: But, be aware the ice is thin. It's overpriced. It's a dangerous game. Don't believe that it's somehow justified. It is not justified by anything except the crazy behavior of the Fed.
BARTIROMO: You said, "The ice is thin." In terms of these cracks, how significant a crack would you expect when, in fact, we do see a crack?
GRANTHAM: The trouble with bubbles is when they go, it's very hard to know how painful it will be. But, typically, they go racing back to fair value. So, if this market goes to 1,500 in a couple of years, by then, fair value might be at 950— 950 is painfully below 1,500. And by the time it gets there, the mysteries of momentum in— in the market— everyone likes to go in the same direction, and they shout, "Fire."
It— it's— usually the case that it doesn't stop at fair value— 950. So, it might go to 700. And— and you're talking another market that halves. It halved in 2000, and we thought it would by the way. We predicted a 50 percent decline. It halved this time in— in '08, '09. And I think it might very well halve again if it gets back to 1500.
Published: Thursday, 11 Nov 2010 | 11:46 AM ET
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By: Lulu Chiang
Legendary investor Jeremy Grantham, Chief Investment Strategist of Grantham, Mayo, Van Otterloo sat down with Maria Bartiromo in an extremely rare interview.
Jeremy Grantham
Jeremy Grantham, Chief Investment Strategist of Grantham, Mayo, Van Otterloo
Grantham recommended institutional clients to sell into this rally. He is convinced that stocks are overpriced and cash is now the avenue for investors.
As an investment strategist for the past 30-years, Grantham has long been known for his timely calls.
In 1982, he said U.S. market was ripe for a "major rally." And in 1989, he correctly called the top of the Japanese economy. In January 2000, he warned of an impending crash in tech stocks which took place two months later. And in April 2007, Grantham said we are now seeing the first worldwide bubble in history covering all asset classes.
When we sat down with Mr. Grantham earlier this week, he expressed worries about various pockets of the global markets, including emerging markets and U.S. stocks. Grantham is betting on a strong cash position and being patient about when to get back into the market.
Check out the complete transcript of Maria Bartiromo’s interview with Jeremy Grantham, or watch the complete interview here.
MARIA BARTIROMO: Great to have you on the program. Thanks so much for joining us.
JEREMY GRANTHAM: Very nice to be here.
BARTIROMO: Time and time again, your writings and your predictions have been right on in terms of investing and where we are in this market. From the tech bubble to beyond. Can you talk to us about where we are today in the stock market and what trends you see developing?
GRANTHAM: What I worry about most is the Fed's activity and — QE2 is just the latest demonstration of this. The Fed has spent most of the last 15, 20 years— manipulating the stock market whenever they feel the economy needs a bit of a kick. I think they know very well that what they do has no direct effect on the economy.
The only weapon they have is the so-called wealth effect. If you can drive the market up 50 percent, people feel richer. They feel a little more confident, and the academics reckon they spent about three percent of that. So, the market went up 80 percent last year. They should be spending 2.4 percent extra of— of the entire value of the stock market, which is about two percent of GDP. And that's a real kicker.
You don't see it because of the enormous counterdrag from the housing market— and— and its complete bust. But, it would have been worse with— without this. The problem is, they know very well how to stimulate the market. But, for whatever reason, they step away as the market gathers steam, and— and resign any responsibility for moderating— a bull market that may get out of control as we saw in '98 and '99 with Alan Greenspan, as we saw in the housing market.
And— I fear that the market will continue to rise. It will be continuously speculative. After all, when you can borrow at a rate that is negative after adjustment for inflation, it's not surprising that you would borrow a lot.
BARTIROMO: So, what are the implications of— of this constant easing and stimulation? You know, it— it seems the numbers are so mind boggling: $600 billion here.
GRANTHAM: They— they (CHUCKLE) are mind-boggling.
BARTIROMO: You know? (CHUCKLE) But, give us the—
GRANTHAM: The consequences are you get boom and bust. You— stimulate in '91. You let it get out of control. You have this colossal tech bubble in '99. Sixty-five times earnings for the— for the growth stocks. Then you have an epic bust. Then, of course, they're panic struck. They race back into battle with immense stimulus with negative real rates for three years.
"You can drive a market higher and eventually — of its sheer overpricing, it will eventually pop. And, typically, it seems to pop at the most inconvenient time."
And you get another— rise of risk taking and everything risky— prospered in '03, '04, '05, '06, '07 until we had what I called the first truly global bubble. It was pretty well everywhere in everything. It was in real estate. Almost everywhere. It was in stocks absolutely everywhere. And— and it was in the bond market to some considerable degree.
And that, of course, broke. They all break. That's the one thing they can't control. You can drive a market higher and eventually — of its sheer overpricing, it will eventually pop. And, typically, it seems to pop at the most inconvenient time. So, we're going to drive this one up, and this time there isn't much ammunition. In 2000, the Fed had a good balance sheet. The government had a good balance sheet.
In '08, it was still semi respectable, and— and now it's not. It's not very respectable at all. So, what are they going to use as ammunition if they cause another bubble and it breaks, let's say, in a couple of years? Then we might have some real Japanese-type experiences.
BARTIROMO: Where are the solutions then, if not this? What do you think ought to be done?
GRANTHAM: I think the Fed is not designed— to have effective tools to deal with the economy. It should settle for just controlling the money supply. And— if it insists, it can worry about inflation. The way you address a weak economy, particularly very substantial excess unemployment is through fiscal policy. You must either bribe man— manufacturers, corporations to hire people who have been unemployed, which they did in Germany. A lot of economists think that's perfectly effective.
Or you must go in there and hire people yourself as a government. Now, I— I believe in crowding out. So, I— I would never do it unless there was clearly quite a few million extra unemployed. I wouldn't go after too many skilled labor because there's never— enough of them to go around. And that does cause crowding out. I would go after the— what I called lightly-skilled workers.
The kind of people who were building the extra million-dollar— sorry— extra million houses in— in '05, '06 and '07. And find— and find jobs for them. We have an infrastructure that is decades behind schedule.
We could insulate every house in the Northeast. These are high-return projects, great— for society in general. And to— to allow people to sit there unemployed. Their skills are deteriorating. Their family morale goes to hell. And— it's a deadweight on society. And you have to remember when— when the government hires someone, he doesn't pay the full price like a corporation does.
He pays about half price because he pays a lot. He, the government— it, the government, pays a lot for someone sitting down unemployed. All the— all the many ways— that unemployed get— get helped plus— the government carries the atrophying of the skills. Society loses that, the longer they're unemployed.
BARTIROMO: So, what should the federal government be doing then? I mean, the housing industry, for example, missing in action. What is it going to take to get housing moving again? What is it gonna take to get businesses hiring again? If it's not the job of the Federal Reserve, what policy should we be seeing coming out of the government?
GRANTHAM: I think the Federal Reserve has— is in a very strong position to move against bubbles. Bubbles are the most dangerous thing— asset-class bubbles that come along. They're the most dangerous to investors. They're also the most dangerous to the economies of— as we have seen in Japan and in 1929 and now here. You've got to stop them.
The Fed has enormous power to move markets. And it— not necessarily immediately, but give them a year and they could bury a bull market. They could have headed off the great tech bubble. They could have headed off the housing bubble. They have other responsibilities— powers. They— they could have interfered with the quantity and quality of the sub-prime event. They chose not to.
In fact, Greenspan led the charge to deregulate this, deregulate that, deregulate everything, which was most— ill advised, and for which we have paid an enormous price. So, they can— they can stop bubbles, and— and they should. It's easy. It's a huge service. What you do now is— is— I like to say it's a bit like the Irish problem.
I wouldn't start the journey from here if I were you when you ask— the way. You— you really shouldn't allow the— situation to get into this shape. You should not have allowed the bubbles to form and to break. Digging out from a great bubble that has broken is so much harder than preventing it in the first place.
"Greenspan led the charge to deregulate this, deregulate that, deregulate everything, which was most— ill advised, and for which we have paid an enormous price."
Japan has paid 20 years for the price of the greatest land— bubble and the greatest stock bubble in history. Far worse, in my opinion, than the South Sea bubble or the tulip bubble in many ways. The land under the Emperor's Palace really was worth the whole state of California, which is quite remarkable. But, we spent quite a few hours checking it, and it seemed to be true. And the price they paid— to dig out of that has, of course, been legendary.
And we better hope that we don't pay anything like that price. But, that is a risk. It's not— it's not certain that we will escape— without several years of— sub-average growth and— and stress to the system.
BARTIROMO: So, are there policies that the administration could be implementing?
GRANTHAM: It's really Congress. If Congress is bound and determined to— interfere with any proposed stimulus, then— we’re going to have a nice experiment and that is to see how the natural, recuperative powers of the economy stand up to this stress. I think it will probably muddle through. But, it won't be pretty. I— I don't think it will necessarily go backwards. But, it will go forward at a very sub-average rate. And I think that's the course that— would have to be recommended now is— it would be much better if Congress would shape up and— and do some sensible— stimulus program from here.
And it would be sensible if the Fed recognized it doesn't have that— that power, and— and get out of the way. Cranking out the printing press irritates all the foreign countries. Why wouldn't it? It's manipulating the dollar downwards. It's causing inflationary fears.
It's causing— commodities to go through the roof. Not led by gold by the way. Gold has gone up almost exactly the same in the last year as all the other metals. Everything is up. The commodity index in a year is up 35 percent. A weighted average of everything. And that isn't oil because oil is slightly less than that.
But, it is— a very dangerous situation. And it risks currency wars. If we're seen to be pushing down the dollar, when on technical terms— and fundamental terms, I should say, the dollar looks already pretty cheap, and we're clearly driving it down by aiming to increase inflation and— and swamping the system with money, why wouldn't— emerging countries take defensive action? And all of them are.
So, we're already in— in a— in a currency war in a way. It's a mild one, and I hope it stays that way. But, a currency manipulation is exactly the same as tariffs. It's a bit easier to change, a bit easier to back off. But, it has the same effect on global economy if we get into a currency war as if we got into a tariff war, which characterized the period after 1930 when the Smoot-Hawley Tariff Bill was passed. And— and— and they're talking about that even as we speak in— in— in Congress.
"So, we're already in— in a— in a currency war in a way. It's a mild one, and I hope it stays that way."
BARTIROMO: So, while so many people are talking about the Chinese as far as manipulating their currency, you say the Fed is manipulating these markets?
GRANTHAM: They are. And— and— and China is, of course, manipulating its currency. And it would make life easier for everybody if they would allow the currency to rise a— a little faster. But, it— it certainly weakens our hand enormously to go there and— and shout at them angrily when we're clearly doing the same thing. And this is what the— the German Finance Minister— the point he made two days ago.
BARTIROMO: Yeah. Let me ask you about emerging markets. You recommended an overweight position in emerging markets back in 2000 when not many people were talking about it. And, obviously, it was dead on, the right call as we've seen a huge move in the emerging markets. Do you think there's still room to run in the emerging markets? Or is that becoming a bubble?
GRANTHAM: Incidentally, the emerging market since— 2000 is 3.3 times the S&P. So, every $100 you have in the S&P, you would have had $330 starting from the same point in emerging. And after that incredible discrepancy, which by the way says the main event in investing should be getting the big picture right. It's nice to pick stocks. But, how many good stocks do you have to pick in a whole portfolio to equal that incredible move between the biggest asset class in the world, U.S. equities, and the third or fourth biggest asset class emerging markets?
It— it's these movements between the great asset classes that make you money. And I'm happy to say that that's the group that, GMO, I work with— asset allocation where we are students of bubbles. And— and— and, basically, financial history. It's a very entertaining job, I might say, which has made me forget the question.
BARTIROMO: The question is do you think that is now becoming overvalued? Is there still room to make money in emerging markets?
GRANTHAM: I'm pleased to say two and a half years ago, I did a quarterly letter called the Emerging Emerging Bubble, and I argued that in the following five years, the case for emerging would be seen as so crystal clear— that it could not possibly help but outperform and go to a premium PE. Now, up until then, they had always sold at a discount. Sometimes a substantial discount.
But, I — the case is this, they are growing at about six percent real. Six percent plus inflation. We are growing in the developed world at about two. Before '95, there was no difference. Before 1995. And now it's three to one. My argument two and a half years ago is what a simple bull case? You want to grow? Buy emerging.
You want to be conservative? Buy utility companies or the blue chips of— of— of the developed world. If you're going to grow at six, you're— you're— it is very appealing that you would outperform a world growing at two percent. And the developed world is slowing down. I— I say it has an incurable case of middle-aged spread.
It's just been there, done that. It's a little old. It's a little pastured. Doesn't have the population profile. Emerging does. And they have the attitude, and they have good finances. And— and they're really showing— a— a clean pair of heels to the developed world.
Now, it turns out that you— it's a bit more complicated. You don't actually find a strong correlation between— top-line GDP growth and making money in the market. It— it seems like you should. The fastest-growing countries should give you the highest return. They simply don't. But, there's only four of us— that— that believe that story. Everyone else in the world believes that if you grow fast like China, you'll outperform in the stock market.
And so, I'm reasoning two and a half years ago, everybody will think this way pretty soon. And surely— emerging countries will go to a big premium on— every dollar of earnings that they make. And they're beginning to. But, I think they've got at least a few years left. The bad news for us, because we're fairly purest value managers for mainly institutional clients, is we don't like to play games with overpriced assets.
And that's the world that we're in now. The Fed is driving the S&P, which is overpriced— the Standard & Poor's 500— a broad measure of the U.S. market, is driving it from already substantially overpriced into what I would call dangerously overpriced.
This is about the boundary line. We expect on a seven-year horizon one percent only plus inflation from the U.S. market. And now, as you push it up another 20 percent perhaps in the next year, it becomes dangerously overpriced. A bubble territory and ready to inflate to considerable pain. That's what we have to worry about.
So, you're caught between, if you want to become conservative, you've got to start taking— counteraction now. If— if you want to go with the flow, don't fight the Fed as they say— you should be prepared to speculate on very nimble feet. It's not our style as a firm. But, I think it's— probably a game that you could play with a pretty good chance of winning for— for a few more quarters.
BARTIROMO: A few more quarters. But, at some point— or is it today— would you be recommending selling into the rally?
GRANTHAM: Our institutional clients— sell very gracefully into this rally. We've already started to sell. We're not even— averagely weighted. We're modestly underweighted. And you must remember bonds are even worse than stocks on a seven-year forecast. So, you get caught in this paradox. It's very tempting— and this is what the Fed wants by the way.
It wants us to go out there and buy stocks, which are overpriced because bonds they have manipulated into being even less attractive. So, we’re being forced to choose between two overpriced assets. That is not always a terrific choice to make because there is a third choice, and that is don't play the game and hold money in cash.
And cash has a— a virtue that people don't appreciate fully. And that is its— its optionality. In other words, if anything crashes and burns in value— say the U.S. stock market, if you have no resources, it doesn't help you. If the bond market crashes, and you have no resources, it doesn't help you. And what cash is is an available resource. It buys you the right to buy the U.S. market if the S&P drops from 1,220 today to 900, which is what we think is fair value.
You then have some resources if you have some cash. There's another complexity and that is that we believe that the old-fashioned, super blue-chip franchise companies like Coca-Cola [KO 62.92 0.12 (+0.19%) ] are also much cheaper than the rest of the market. So, if someone put a gun to my head and s— said, "I've got to buy stocks. What should I buy?" I'd say, "Buy two units of the Coca-Colas. They're the cheapest group in— in the equity world. Buttress it with a fairly large dose of emerging markets. They're a little overpriced. But, they've got potential. And— a lot more cash than normal for opportunities should the bubble blow up."
"I have an eccentric view on commodities not necessarily shared by my colleagues or by— almost anybody."
BARTIROMO: What about commodities? I mean, clearly, the story of China and the demand coming out of China has boosted all sorts of commodities. Is that bull run still in place?
GRANTHAM: I have an eccentric view on commodities not necessarily shared by my colleagues or by— almost anybody. And that is we're running out of everything. I think it will become devastatingly clear to everybody. I— I think we went through a great paradigm shift about five years ago and— we'd spent a 100 years with almost all commodities declining. Perhaps oil was about flat in real terms, adjusted for inflation.
But, everything else was declining: copper, corn, and so on. And, now, you look back five years later, you can't see that clearly at all. A lot of them seem like they've been going up for 50 years, a 100 years: copper— iron ore— tin. But— and— and— and oil. Oil has clearly broken out. It spent a 100 years at $16 in— in our currency until 1974. And then it doubled when OPEC started and it's been 20 years trading around 35, plus or minus a lot.
And then I think it doubled it again, and I think the trend line is probably about 75. So, the world has changed. We're entering a period where we're running out of everything. The growth rate of China and India is simply— can't be borne by declining quality of— of resources. And— and I think we're in a period that I call a chain-linked— crisis in commodities.
So, it'll be a crisis in rice. It will triple and it'll come down. But, then— then it'll be followed by one in corn and— and barley and so on. And— and copper will go up a lot, and then that will come down. But, oil will be in crisis mode. From now on, we just better get used to it. So, if you're afraid of inflation, I think— and if you can bring yourself to have a long horizon— and when I say long, I mean ten to 20 years, not the usual ten to 20 weeks— that locking up resources in the ground is a terrific idea.
Or locking up— timber, agricultural land will do just fine. A great inflation hedge. You will win, in my opinion. Very high probability over a long horizon. Now, have these things gotten ahead of themselves in the short term? Quite possibly yes. And that— that's what makes investing so tricky. If they were to break for whatever reason at all in the next year, I— I would suggest that is a great buying opportunity.
BARTIROMO: And—
GRANTHAM: To— to buy here is to trade off the long-term high prospects of winning with quite a reasonable chance of— of— of buying at a— a— a short-term peak.
BARTIROMO: So, is there value in some of the commodities producers? The equities
GRANTHAM: If they have stuff in the ground. If they're just processors, forget them. Shoot them, in fact. Because they're the people who will pay the price of constantly having to raise their prices paying more for their raw materials. But— if they've got stuff in the ground. The oil industry since 2000 has doubled against the stock market. They didn't double because they got brilliant.
They doubled because oil in the ground became worth four times what it was. And that is a wonderful thing for an oil company with good reserves. But, the same if you had mineral reserve. That— that's the play, I think, on commodities.
BARTIROMO: It's extraordinary that people are putting so much money into such low-yielding, fixed income— products. And— ignoring dividend payers, which of course in equities are— are even more competitive than— than the yields that you're seeing. You're seeing no yield in— in fixed income. Is that a bubble?
GRANTHAM: I— I don't call it a bubble because it's not— it's not driven by huge animal stir— spirits. They're not doing it to sell it at a huge profit. They're doing it because they were severely frightened— in the great crunch. It was a devastating event. And it could have c— turned out much worse than it did. It— it should have frightened people. It did frighten people and they'll still frightened for quite a while.
And what the Fed is trying to do is to make cash so ugly that it will force you to take it out and basically speculate. And in that, it's very successful, of course, with the hedge funds. They're out there speculating. Finally, the ordinary individuals are beginning to get so fed up with having no return on their cash that they're beginning to do a little bit more purchasing of equities. And that's what the Fed wants.
It wants to have the stocks go up, to make you feel a bit richer so that you'll spend a little more and give a short-term kick to the economy. But, it— it's a pretty circular argument. For every dollar of wealth effect you get here, as stocks go from overpriced to worse, you will give back in a year or two. And you'll give it back like it— like it happened in— in '08 at the very worse time.
All of the kicker that Greenspan had engineered for the '02, '03, '04 recovery and so on was all given back with interest. The market overcorrected through fair value. The housing market that was a huge driver of economic strength and a— actually masked structural unemployment with all those extra, unnecessary houses being built. All of that was given back similarly at the same time. It couldn't have been worse.
BARTIROMO: What are you expecting from the economy in 2011?
GRANTHAM: (Sigh.) I'm expecting 2011, 2012 to— and— and 20 as far as I can see to be less handsome than it used to be. I think we— we're on a trend lying growth of about two percent. And— I think we'll muddle through— quite well. The problem is in the not too distant future, stocks will be too expensive and they'll crack again. Risky, fixed-income will be too expensive and that will crack again.
And unless we're lucky, we will have yet another crisis without being able to lower the rates 'cause they'll still be low, without being able to issue too much moral hazard promises from the Fed because people will begin to find it pretty hollow. Cycle after cycle, the Fed is making basically— is flagging the same intention. Don't worry, guys. Speculate. We'll help you if something goes wrong. And each time something does go wrong and it gets more and more painful.
And, eventually, even— even— fairly unintelligent investors might get the point that this is not a good game to play indefinitely. I am impressed, however, how eager we have been to return to the game. We got a— a practically mortal blow, and, yet, everyone was back in there swinging last year. It wasn't just that the S&P went up 80, which I did call by the way. I said it would race up to 1,100. And— but, it was speculative so the— the junky part of the market went up 120 percent. This is a formidable— recognition of what the Fed can do when it wants to.
BARTIROMO: What about the dollar? Where do you see it?
GRANTHAM: The dollar is on fundamental purchasing power— it's a— a fairly cheap currency. And— as long as there's QE three, four, five and six, you'd have to bet that it's more probable that it will go down. Now, if it stirs up— a currency war, all bets are off. We haven't had one since the 1930s. We— who knows how that will play out? That's one thing that can completely change the game, and— and— very hard for me or anyone to guess what that would do.
But, if we avoid that, I think you have to count on the dollar being at least irregularly weaker until we finish the Q game, which is ma— basically just running a printing press and using it to push down artificially— the bond rate. And let me point out that the Fed's actions are taking money away from retirees.
They're the guys, and near retirees, who want to part their money on something safe as they near retirement. And they're offered minus after-inflation adjustment. There's no return at all. And where does that money go? It goes to relate the banks so that they're well capitalized again. Even though they were the people who exacerbated our problems.
And, hopefully, the redeeming feature in that infamous trade is that your corporations go out there, borrow money, build factories, hire people, which they're not doing because consumption is weak and because they were also terrified by the crunch. I— I think, therefore, under these conditions, low rates is actually hurting the economy. It's taking more money away from people who would have spent it —retirees — than are being spent by passing it on to financial enterprises and being distributed as bonuses to people who are rich and, therefore, save more.
So, I think it's a— a— bad idea at any time and a particularly bad idea now.
BARTIROMO: So, final question here. What are you recommending to institutional clients today? How— how should they be investing?
GRANTHAM: We recommend a very heavy overweight in— in the great franchise companies: the Coca-Cola’s [KO 62.92 0.12 (+0.19%) ] , Johnson and Johnson's [JNJ 63.67 -0.25 (-0.39%) ]. I'm not recommending those two names. They're just examples. We're recommending a modest overweight in emerging, an underweight— in everything else. Extra cash reserves and— patience. But, I think if you're willing to speculate, you might find that this is an interesting one more year to speculate.
"The trouble with bubbles is when they go, it's very hard to know how painful it will be."
BARTIROMO: And—
GRANTHAM: But, be aware the ice is thin. It's overpriced. It's a dangerous game. Don't believe that it's somehow justified. It is not justified by anything except the crazy behavior of the Fed.
BARTIROMO: You said, "The ice is thin." In terms of these cracks, how significant a crack would you expect when, in fact, we do see a crack?
GRANTHAM: The trouble with bubbles is when they go, it's very hard to know how painful it will be. But, typically, they go racing back to fair value. So, if this market goes to 1,500 in a couple of years, by then, fair value might be at 950— 950 is painfully below 1,500. And by the time it gets there, the mysteries of momentum in— in the market— everyone likes to go in the same direction, and they shout, "Fire."
It— it's— usually the case that it doesn't stop at fair value— 950. So, it might go to 700. And— and you're talking another market that halves. It halved in 2000, and we thought it would by the way. We predicted a 50 percent decline. It halved this time in— in '08, '09. And I think it might very well halve again if it gets back to 1500.
Saturday, November 13, 2010
君安事件
君安事件
君安事件
君安事件，1998年，一名被国泰君安开除的职员向有关部门告状，将国泰君安董事长兼总经理张国庆等人悄悄进行的MBO捅破，由此引发了一场“君安震荡”。恰好公司财务部门 发现有10亿元人民币公款不知去向，于是，引起监管部门注意。在君安事件中，原君安领导层的一项主要罪名就是侵吞国有资产，将国有资产变相转入私人名下， 张国庆也因为“虚假注资”和“非法逃汇”等罪名入狱。2009年6月22日原君安证券总裁杨骏昨日下午因病去世，终年44岁。1992年8月，时任深圳人民银行证券管理处副处长的他下海创办君安证券，担任董事长兼总经理。君安证券设立之初，由包括军队企业在内的5家国有企业投资，注册资本5000万元。君安创办后，中国股市牛气冲天，张国庆靠他的神秘背景及强势手腕迅速崛起。
君安的辉煌时期，正是《证券法》出 台的前夜，证券商可以任意纵横，操纵股价，将游戏规则玩弄于股掌之间。在深圳股市中，张国庆一人独大，俨然是南中国最强悍的大鳄。1993年至1998年 间，君安共为100多家企业承担A股、B股上市及配股业务，筹资总额近300亿人民币。君安在国内下辖60多家证券营业部，其交易量一直在深交所居第一、 二位，在上交所也在前六名之列，其国债交易量也居全国前十名。到1997年底，君安的总资产达175亿元，利润7.1亿元，名列全国第一。
此时之君安如日中天，业界甚至将中国股市的这段时期称为“君安时代”，张国庆与万国的管金生、申银的阚治东并称股市“三大教父”。 在事业到达巅峰之际，张国庆开始考虑君安的股权改造。他设想用国际通行的MBO方式来完成君安股权的改造，也就是经营层以回购的方式获得公司股份，最终实 现对企业的控制权。张国庆此时既是公司的总经理，又是董事会的主席，身兼经理人和资本代表的两重角色，自然有制订规则、双手互套的便利。然而，此时的君安 已经陡然坐大，经营层回购所需资金非一笔小数目。于是，张国庆等君安高管便展示了令人眼花缭乱的“财技”，到1997年，君安增资扩股到7亿。经过巧妙安 排，君安职工持股会变成君安证券的实际控股股东，持股比例达77%，其余的国营股东们最大的一家股权也被降低到7%左右，君安职工持股会的两大股东分别是 “新长英”和“泰东”，为张国庆团队所控制的两个投资公司。这位“君安教父”用一年半的时间，就把中国最大的证券公司改造成了一家由私人占大股的证券公 司，国有公司仍在君安拥有股份并分得红利，但其权益早已被大大稀释。
一名被君安开除的职员向有关部门告状而引发了一场“君安震荡”，这大概也是张国庆等人所始料不及的。
1998年当时是一封举报信将张国庆等人悄悄进行的MBO捅破的，由此引发了一场“君安震荡”。恰好公司财务部门发现有10亿元人民币公款不知去向，于是，引起监管部门注意。《财经》杂 志早前着手“君安事件”的报道称，国家审计署对君安的审计在1998年9月间结束，君安事件的谜底就此揭开。原来，当初张国庆是靠调用一笔账外收入在外注 册自己控制的公司，辗转获得君安的大部分股权。审计署查明张国庆等人“账外违法经营隐瞒转移收入”的总额在12.3亿元左右，其中约2.3亿元已在查处前 夕返还公司。张先后动用5.2亿元，获得君安约77％的权益。张国庆等君安高管在处理产权方面无疑展示了令人眼花缭乱的“财技”，虽然在今天这种MBO财 技在中国企业已进行得如火如荼，甚至显得平淡无奇，但在当时却是君安首开先河的大胆创新。
君安证券在1997年进行增资扩股到7亿。张国庆等高管借机进行一系列巧妙设计。经过安排，君安职工持股会变成君安证券的实际控股股东，持股比例达 77％，原大股东合能集团持股仅7.71％，成为第二大股东。君安职工持股会的两大股东分别是“新长英”和“泰东”，分别为当时君安董事长张国庆和总经理 杨骏控制的两个投资公司。
君安在过去十八个月中其实已成为一家私人占大股的证券公司。国有公司仍在君安拥有股份并分得红利，但其权益早已被大大稀释。在君安事件中，原君安领导层的一项主要罪名就是侵吞国有资产，将国有资产变相转入私人名下，张国庆也因为“虚假注资”和“非法逃汇”等罪名入狱。
92年，君安证券创办。包括5家国有企业投资，注册资本5000万。
93-98年，为百家企业承担A股、B股上市及配股业务，筹资近300亿。
国内下辖60多家证券营业部，其交易量居深交所第1、2位。
97年，增资扩股到7亿。经安排，君安职工持股会变成实际控股股东，持股达77%，其余最大股权降到7%。
职工持股会两大股东是新长英和泰东。分别为董事长张国庆和总经理杨骏控制。一年半内，最大证券公司变成由私人占大股的证券公司。
一名被君安开除职员向有关部门告状引发一场“君安震荡”。恰好，财务部门发现10亿公款不知去向。
1998年9月审计署对君安审计，张国庆调用账外收入外注册自己控制公司，辗转获得君安大部分股权。总额12.3亿，其中2.3亿在查处前返还。
国泰君安证券股份有限公司是 由原国泰证券有限公司和原君安证券有限责任公司通过新设合并、增资扩股，于1999年8月18日组建成立的。公司所属的2家子公司、5家分公司、23家区 域营销总部及所辖的113家营业部分布于全国28个省、自治区、直辖市、特别行政区，是目前国内规模最大、经营范围最宽、机构分布最广的证券公司之一。
2001年度被权威媒体评为国内最具综合竞争力的证券公司。 2004年在《世界品牌实验室》和《世界经济论坛》联合发布的《中国500最具价值品牌》中，以49亿元的品牌价值排国内所有企业第106名，位居券商首 位。同年获中国证监会批准发行16.5亿元证券公司债券。2005年初在国内大型券商中率先获中国证监会批准取得创新试点资格。之后，国务院批准了关于中 央汇金投资有限责任公司对国泰君安注资和借款的方案。
公司管理层承诺，国泰君安证券将在市场运作中充分体现专业技能和服务水准，秉承“诚信、亲和、专业、创新”的经营理念，“以客户为中心、以市场为导向”，在有效控制风险的情况下，为客户提供全方位、一站式服务，使国泰君安与客户在中国高速增长的经济环境中共同成长。
经营范围： 证券的代理买卖；代理证券的还本付息和分红派息；证券的代保管、鉴证；代理证券登记开户；证券的自营买卖；证券的承销和上市推荐；证券投资咨询；资产管理；发起设立证券投资基金和基金管理公司；中国证监会批准的其他业务
服务宗旨： 创建世界一流投资银行，促进中国资本市场发展 。
杨骏因肝癌去世，终年44岁杨骏毕业于大连理工大学，有近20年中国及海外的金融及投资业务经历，曾任深圳经济特区证券公司投资银行部总经理、君安证券有限公司总裁。尽管杨骏看上去年龄不算大，但是在中国证券行业，已是元老级人物。因为在10年前，年仅30多岁的杨骏，已经出任当时国内最大的证券公司君安证券的总裁，管理过上百亿元的自营资金。
1998年“君安事件”东窗事发，杨骏受到牵连，他也因此放弃了将君安证券打造成国际级的投资银行的想法。“君安事件”平息后，2001年杨骏重出江湖，成立晓扬投资管理公司，主要投资于香港股市。晓扬投资2001年至2007年年均投资回报率都在30%以上。
2009年6月23日私募界元老级人物———晓扬投资董事长、原君安证券总裁杨骏22日下午因病去世，终年44岁。
张国庆
国泰与君安合并前的君安证券总裁张国庆在君安事件中，原君安领导层的一项主要罪名就是侵吞国有资产，将国有资产变相转入私人名下，张国庆也因为“虚假注资”和“非法逃汇”等罪名入狱。
张国庆被捕后长达两年多的时间里，外界鲜有其消息。张已经出狱的消息更是秘而不宣
Thursday, November 11, 2010
货币战才开打 北京就赔了两夫人还折兵
你是不是觉得所有东西都在涨价?每一天的生活成本都在上升?肯定的，通货膨胀嘛。
那我告诉你，通货膨胀的一个原因是制造业不振，10万亿的信贷投下去，投哪儿去?你发现没什么产业值得投资。再加上我们的市场监管体系有漏洞，结果就如同我在《我们的日子为什么这么难》里所说的一样，
游资所到之处，绿豆、青菜等等农产品全都一路看涨。
通货膨胀的另一个原因，那就是汇率大战的代价。美国逼人民币升值，我们挺住了。美国人怎么办呢?于是就将计就计，启动了“量化宽松”这个非常规武器。好了，美元一贬值，国际市场上所有以美元标价的大宗商品都在涨，你人民币不是盯住美元不动吗?因此以人民币标价的所有原料物资也都在猛涨。最近3个月以来，布伦特原油价格上升了5.5%，铜价上涨14.4%，黄金，涨11.75%，玉米，涨44.76%，白糖，21.5%，大豆，15.4%，美国的棉花价格上升了48%，中国的棉花期货价格更是达到了国际棉价15年来的新高。
美国人第一轮“量化宽松”余波未平，美联储就又启动了第二轮。美联储第一轮用9000亿美元3个月就让美元贬值了12.5%，换言之就是送给了中国12.5%的通货膨胀率。
各位，衡量美元资产价值，你不要看什么人民币兑美元汇率，人民币在国际市场上什么都买不到，看什么呢?看美元指数。在定量宽松之下，3个月美元指数就从88跌到了77。现在呢接着就是第二轮6000亿美元，加上其他工具甚至可能有1.5万亿。中国的外汇储备不过2.64万亿美元，其中美元资产占了 65%，这样看来，我们的储备规模和美联储比起来还是太微不足道了。各位，3个月美元贬值就让中国的外汇储备损失了8.4%。
美国人为什么这么干?你以为是拍脑瓜?我告诉你，美国人有着非常长远的谋划。不是我吹，美国人的这套，我在我的新书里早就说过了，下面的文字就来自我的新书《我们的日子为什么这么难》。
2010年5月，第二次中美战略与经济对话热热闹闹地过去了。你看看，盖特纳跑去打篮球，我们的人还不忘提醒上场的球员，赶快把球传给盖特纳。透过篮球这个小事就可以想象得出，我们在面对美国人的时候，是多么的戒慎恐惧、惶恐不安、低声下气，真是让人感到难过。更让人难过的是，中美战略与经济对话的本质和盖特纳打篮球是一模一样的，我们又把篮球恭恭敬敬地送到了美国人手中。我为什么这么说?就是因为美国从2009年9月20日就开始谋划这一系列的阴谋了。
各位记不记得，去年5月我就呼吁我们政府要警惕美国展开的汇率大战，我是全世界第一个这样呼吁的学者。当然了，我们政府还是一如既往地不听我的。 2009年9月20日，汇率大战开打了。到了2010年的3月底，美国130个国会议员联合写信给财政部长盖特纳、商务部长骆家辉，要求他们在2010年 4月15日把中国列入汇率操纵国。他们为什么要这么做?是因为如果把中国列入汇率操纵国的话，美国就可以对中国所有出口美国的产品征收27.5%的关税。
可是我实在不觉得美国人会这么傻，他们有什么理由发起贸易大战呢?请你想一想，如果美国真的在4月15日把我们列入汇率操纵国的话，虽然表面上他们可以征收27.5%的关税，可是万一中国政府报复怎么办?当然了，我们政府敢报复的几率是非常小的。不过我们如果报复，也对美国出口到中国的所有产品征收 27.5%的关税的话，这就成了一场不折不扣的贸易大战，最后的结果虽然是中国受重伤，但是对美国也同样会造成一定程度的伤害。因此我实在不觉得美国会这么傻，它们干嘛甘愿受伤害呢?连我这种水平都能想得通，奥巴马的团队比我聪明得多得多，他们不会想不通的，我认为他们一定会以贸易大战为手段，而真正的目的是汇率大战。
各位想一想，如果能够利用4月15日将中国列入汇率操纵国的天赐良机，逼迫人民币汇率升值27.5%的话，这个结果不是和关税增加27.5%一样吗?而且，汇率升值中国政府也没有什么理由报复，因为是我们自己要升值的嘛。
但是中国在2010年的二三月做过压力测试，结果显示，人民币汇率升值3%的话，中国的传统劳动力密集产业的利润率将为零，如果升值超过5%的话，中国传统劳动力密集产业将大量倒闭，就会造成严重的社会问题。因此，中国政府对于汇率升值的底线是3%到5%。而美国的底线呢?是20%到41%之间，差距这么大，双方根本就没有交集。由于双方没有交集，问题就复杂了。各位想一想，美国明明知道我们中国是不可能把汇率升值到20%到41%之间的，因为那样的话就太可怕了，那将使整个中国经济解体。连我这种水平都能看得懂的问题，美国会看不懂吗?其实美国也很清楚，我们是不可能答应的，那他们为什么还这样做呢?我告诉你，他们是“项庄舞剑，意在沛公”，玩的就是声东击西。
他们真正想要的是我们开放金融市场。正如同我在《新帝国主义在中国2》上讲的，2010年4月8日美国财政部长盖特纳访问完印度之后，直接飞到北京首都机场，在机场贵宾厅和副总理王岐山会谈了一个小时。会谈完之后，在华尔街交易的一年期远期人民币汇率就突然贬值了。也就是说在谈话之前，华尔街一直对人民币施压逼迫升值，但是谈完话之后竟然说无所谓了，不升值也没关系。你不想知道为什么吗?很简单，一定是我们同意了华尔街更可怕的要求。
那到底是什么要求?美国人其实就是把贸易大战当做一种手段，汇率大战才是真正的目的。而我们为了避免汇率大战，就必须让出金融核弹头以及庞大的新能源市场。我很理解我们政府，因为我们别无选择，美国就是个新帝国主义国家，唉，还是毛泽东理解美国，他说，帝国主义的本质是不会改变的。看看美国商务部长骆家辉访问日本的时候，怎么回答日本的媒体的，他说，“美国经过多方面的考虑，认为目前条件还不成熟，所以不考虑给予中国市场经济地位了。”正如同我所想的，他们毫不犹豫地就把这个大礼物收回去了。2010年6月10日，在美国参议院听证会上，美国财政部长盖特纳受到议员的炮轰，批评他没有对人民币施压。他怎么回答? 他说，人民币汇率是中国的内政，他们不应该怎么怎么。参议院气得要立法压迫人民币升值。美国总统奥巴马竟然暗示这个立法的提案会在众议院被否决。他们两个人怎么会那么够意思呢?道理很简单，吃人家的嘴软、拿人家的手短，他们就是脸皮再厚，也得顾及点吃相，不能太难看了吧。
不过，奥巴马绝不是省油的灯，6月18日，奥巴马写给6月26和27日召开的20国峰会的其他领导一封私人信件，敦促他们在峰会上对人民币施加压力。自己不好意思施压，所以请别的国家对人民币施加压力。我相信是中美双方唱双簧，6月19日，中国人民银行宣布采行更具弹性的汇率调整措施，自6月21 日开始，人民币缓慢升值了，所以免去了峰会上被“围剿”的场面。一个月之后的7月底，人民币由6.83升值到了6.77。
7月8日，汇率大战结束，一切正如同我所料，美国财政部宣布，7月15日的审判日，美国决定不将中国列入汇率操纵国，因为我们已经是赔了两个夫人(一个夫人是金融核弹头，另一个夫人是新能源)又折兵(汇率还要升值)啊。
那我告诉你，通货膨胀的一个原因是制造业不振，10万亿的信贷投下去，投哪儿去?你发现没什么产业值得投资。再加上我们的市场监管体系有漏洞，结果就如同我在《我们的日子为什么这么难》里所说的一样，
游资所到之处，绿豆、青菜等等农产品全都一路看涨。
通货膨胀的另一个原因，那就是汇率大战的代价。美国逼人民币升值，我们挺住了。美国人怎么办呢?于是就将计就计，启动了“量化宽松”这个非常规武器。好了，美元一贬值，国际市场上所有以美元标价的大宗商品都在涨，你人民币不是盯住美元不动吗?因此以人民币标价的所有原料物资也都在猛涨。最近3个月以来，布伦特原油价格上升了5.5%，铜价上涨14.4%，黄金，涨11.75%，玉米，涨44.76%，白糖，21.5%，大豆，15.4%，美国的棉花价格上升了48%，中国的棉花期货价格更是达到了国际棉价15年来的新高。
美国人第一轮“量化宽松”余波未平，美联储就又启动了第二轮。美联储第一轮用9000亿美元3个月就让美元贬值了12.5%，换言之就是送给了中国12.5%的通货膨胀率。
各位，衡量美元资产价值，你不要看什么人民币兑美元汇率，人民币在国际市场上什么都买不到，看什么呢?看美元指数。在定量宽松之下，3个月美元指数就从88跌到了77。现在呢接着就是第二轮6000亿美元，加上其他工具甚至可能有1.5万亿。中国的外汇储备不过2.64万亿美元，其中美元资产占了 65%，这样看来，我们的储备规模和美联储比起来还是太微不足道了。各位，3个月美元贬值就让中国的外汇储备损失了8.4%。
美国人为什么这么干?你以为是拍脑瓜?我告诉你，美国人有着非常长远的谋划。不是我吹，美国人的这套，我在我的新书里早就说过了，下面的文字就来自我的新书《我们的日子为什么这么难》。
2010年5月，第二次中美战略与经济对话热热闹闹地过去了。你看看，盖特纳跑去打篮球，我们的人还不忘提醒上场的球员，赶快把球传给盖特纳。透过篮球这个小事就可以想象得出，我们在面对美国人的时候，是多么的戒慎恐惧、惶恐不安、低声下气，真是让人感到难过。更让人难过的是，中美战略与经济对话的本质和盖特纳打篮球是一模一样的，我们又把篮球恭恭敬敬地送到了美国人手中。我为什么这么说?就是因为美国从2009年9月20日就开始谋划这一系列的阴谋了。
各位记不记得，去年5月我就呼吁我们政府要警惕美国展开的汇率大战，我是全世界第一个这样呼吁的学者。当然了，我们政府还是一如既往地不听我的。 2009年9月20日，汇率大战开打了。到了2010年的3月底，美国130个国会议员联合写信给财政部长盖特纳、商务部长骆家辉，要求他们在2010年 4月15日把中国列入汇率操纵国。他们为什么要这么做?是因为如果把中国列入汇率操纵国的话，美国就可以对中国所有出口美国的产品征收27.5%的关税。
可是我实在不觉得美国人会这么傻，他们有什么理由发起贸易大战呢?请你想一想，如果美国真的在4月15日把我们列入汇率操纵国的话，虽然表面上他们可以征收27.5%的关税，可是万一中国政府报复怎么办?当然了，我们政府敢报复的几率是非常小的。不过我们如果报复，也对美国出口到中国的所有产品征收 27.5%的关税的话，这就成了一场不折不扣的贸易大战，最后的结果虽然是中国受重伤，但是对美国也同样会造成一定程度的伤害。因此我实在不觉得美国会这么傻，它们干嘛甘愿受伤害呢?连我这种水平都能想得通，奥巴马的团队比我聪明得多得多，他们不会想不通的，我认为他们一定会以贸易大战为手段，而真正的目的是汇率大战。
各位想一想，如果能够利用4月15日将中国列入汇率操纵国的天赐良机，逼迫人民币汇率升值27.5%的话，这个结果不是和关税增加27.5%一样吗?而且，汇率升值中国政府也没有什么理由报复，因为是我们自己要升值的嘛。
但是中国在2010年的二三月做过压力测试，结果显示，人民币汇率升值3%的话，中国的传统劳动力密集产业的利润率将为零，如果升值超过5%的话，中国传统劳动力密集产业将大量倒闭，就会造成严重的社会问题。因此，中国政府对于汇率升值的底线是3%到5%。而美国的底线呢?是20%到41%之间，差距这么大，双方根本就没有交集。由于双方没有交集，问题就复杂了。各位想一想，美国明明知道我们中国是不可能把汇率升值到20%到41%之间的，因为那样的话就太可怕了，那将使整个中国经济解体。连我这种水平都能看得懂的问题，美国会看不懂吗?其实美国也很清楚，我们是不可能答应的，那他们为什么还这样做呢?我告诉你，他们是“项庄舞剑，意在沛公”，玩的就是声东击西。
他们真正想要的是我们开放金融市场。正如同我在《新帝国主义在中国2》上讲的，2010年4月8日美国财政部长盖特纳访问完印度之后，直接飞到北京首都机场，在机场贵宾厅和副总理王岐山会谈了一个小时。会谈完之后，在华尔街交易的一年期远期人民币汇率就突然贬值了。也就是说在谈话之前，华尔街一直对人民币施压逼迫升值，但是谈完话之后竟然说无所谓了，不升值也没关系。你不想知道为什么吗?很简单，一定是我们同意了华尔街更可怕的要求。
那到底是什么要求?美国人其实就是把贸易大战当做一种手段，汇率大战才是真正的目的。而我们为了避免汇率大战，就必须让出金融核弹头以及庞大的新能源市场。我很理解我们政府，因为我们别无选择，美国就是个新帝国主义国家，唉，还是毛泽东理解美国，他说，帝国主义的本质是不会改变的。看看美国商务部长骆家辉访问日本的时候，怎么回答日本的媒体的，他说，“美国经过多方面的考虑，认为目前条件还不成熟，所以不考虑给予中国市场经济地位了。”正如同我所想的，他们毫不犹豫地就把这个大礼物收回去了。2010年6月10日，在美国参议院听证会上，美国财政部长盖特纳受到议员的炮轰，批评他没有对人民币施压。他怎么回答? 他说，人民币汇率是中国的内政，他们不应该怎么怎么。参议院气得要立法压迫人民币升值。美国总统奥巴马竟然暗示这个立法的提案会在众议院被否决。他们两个人怎么会那么够意思呢?道理很简单，吃人家的嘴软、拿人家的手短，他们就是脸皮再厚，也得顾及点吃相，不能太难看了吧。
不过，奥巴马绝不是省油的灯，6月18日，奥巴马写给6月26和27日召开的20国峰会的其他领导一封私人信件，敦促他们在峰会上对人民币施加压力。自己不好意思施压，所以请别的国家对人民币施加压力。我相信是中美双方唱双簧，6月19日，中国人民银行宣布采行更具弹性的汇率调整措施，自6月21 日开始，人民币缓慢升值了，所以免去了峰会上被“围剿”的场面。一个月之后的7月底，人民币由6.83升值到了6.77。
7月8日，汇率大战结束，一切正如同我所料，美国财政部宣布，7月15日的审判日，美国决定不将中国列入汇率操纵国，因为我们已经是赔了两个夫人(一个夫人是金融核弹头，另一个夫人是新能源)又折兵(汇率还要升值)啊。
Ireland and Portugal Stir New Wave of EU Debt Worry
Ireland and Portugal Stir New Wave of EU Debt Worry
By NEIL SHAH
LONDON—Irish and Portuguese bonds came under increased pressure as the dimming fortunes of the euro zone's weaker economies stirred fears that other countries besides Greece may need a bailout.
The selloffs showed that investors increasingly doubt that crisis-hit countries in Europe can pull off big reductions in their budget deficits in the face of stagnating economies without defaulting or being rescued by the European Union or International Monetary Fund.
The difference in yield between Irish 10-year government bonds and safer German debt rose to more than six percentage points for the first time on Wednesday. Ireland's chief central banker conceded that his country's debt is now trading at "crisis levels." A clearing house said it is effectively raising the cost of trading Irish government bonds due to heightened risk of an Irish debt default.
Portugal had to pay a record-high yield of 6.85% to attract investors for an offering of 10-year bonds, adding to the challenges Lisbon faces as it tries to repair its public finances. Still, the yields in the auction were lower than on existing Portuguese bonds trading in the open market, showing that low trading volumes for some European countries' bonds may be distorting the picture somewhat.
The euro sank to its lowest level in one month against the U.S. dollar, dipping below $1.37 before recovering a little. European stocks fell 0.7%.
Investors have refocused on the euro-zone's debt troubles in the past week following news of a Franco-German initiative that could end up forcing bondholders to bear part of the pain in any future bailout of a European country.
Although such a provision wouldn't change the terms of Europe's current bailout facilities, and would affect only government debt issued after 2013, the discussion among EU leaders has unnerved investors concerned about the medium-term prospects for Europe's weakest economies.German Chancellor Angela Merkel and French President Nicolas Sarkozy are pushing for the debt-restructuring provision to be included in the EU's arrangements for dealing with future debt crises. The European Financial Stability Facility, part of a €750 billion ($1.033 trillion) EU-IMF package to support euro-zone members, is expected to expire in 2013.
The yield on Ireland's 10-year bond, which moves inversely to its price, jumped to nearly 9% from 8.16% on Tuesday, a record premium of 6.49 percentage points over the borrowing rate of Europe's safest sovereign borrower, Germany. This premium, which stood at 5.74 percentage points on Tuesday, has jumped for 12 straight days.
Even more worrying, a similar yield premium for Irish two-year bonds also soared to 6.40 percentage points, from 5.06 percentage points on Tuesday. Normally, longer-dated government bonds offer a significantly higher yield, since investors lose more control over their cash when they lend it for longer periods.
The tiny gap between Ireland's yield premiums for two-year and ten-year bonds implies that investors believe the time difference no longer matters because Ireland may quickly prove unable to repay its debt.
"We are getting to the point where people are panicking," says Huw Worthington, an analyst at Barclays Capital in London. "The market is anticipating some sort of [Irish debt] restructuring now," he says. However, he adds that the chance of an imminent Irish default is "zero."
Ireland's jumping bond yields quickly hit bond markets in Portugal, Greece and, to a lesser extent, Spain.
In Greece's latest financial setback, the country appears to be slipping further in its goal of trimming a treacherously high budget deficit. Monthly budget figures released Wednesday by Greece's finance ministry show that central-government revenue rose just 3.7% in the first 10 months of this year, compared with the same period of 2009. Greece's deficit-reduction plan, hammered out in May, calls for a 13.7% increase for the full year. Even a revised plan that offsets lower revenue with more spending cuts foresees an 8.7% gain.
Thanks to the weak revenue performance, Greece said its central-government deficit from January to October was down 30% from the same period last year, falling short of Greece's target of a 32% reduction. The slippage means Greece is unlikely to meet its deficit-reduction target for the year as a whole, unless it takes even further austerity measures.
George Zanias, the chairman of the Finance Ministry's council of economic advisors, says that Greece's efforts to collect more taxes will bear fruit and that spending cuts are offsetting revenue shortfalls. On revenue, "we are behind, however, compliance is increasing," he said in an interview, "and this has not affected deficit targets because we have cut expenditures."
Investor sentiment on Ireland took another blow on Wednesday when European securities-clearing firm LCH.Clearnet raised the amount investors must set aside to trade Irish debt on margin.
Clearing firms stand between buyers and sellers of bonds to ensure that transactions go through even if one party collapses. LCH's decision makes Irish bonds less attractive for investors and thus could make it harder for Ireland to fund itself by selling bonds. However, several analysts said the impact of LCH's move on the trading of Irish bonds won't be dramatic.
Irish bonds were also hit by rumors that the increasingly indebted country, struggling with a banking crisis whose cost to taxpayers could hit €50 billion, has already asked the IMF for aid. However, Irish Finance Minister Brian Lenihan told the country's Parliament on Wednesday that "there has been absolutely no application by Ireland to the IMF and/or the EFSF," the European Financial Stability Facility.
Investors are worried about the stability of Irish Prime Minister Brian Cowen's fragile coalition government, which must pass a crucial austerity package next month. Its majority in Parliament is razor thin.
"The only good news is that Ireland does not need to access the markets in the near term," said Cambiz Alikhani, a partner at London-based asset manager Iveagh Ltd., who doesn't own Irish bonds. Ireland's government has said that it has enough funds to cover government expenses until the middle of next year.
Portugal also faces strong political and financial headwinds, raising concerns about its ability to stick to its deficit-cutting plans.
While Portugal's minority government and its opposition have come to the table lately, Parliament must still approve the budget at the end of the month.
Some investors also now fear that aggressive austerity programs in Ireland and Portugal could actually crimp economic growth, short-circuiting any deficit-cutting by reducing tax revenue.
Still, there has been some good news in recent days. Chinese officials have offered to help Portugal, possibly by buying government bonds, repeating similar moves towards Spain and Greece. And Ireland's manufacturing sector continued to push ahead despite the economy's weakness, according to data released Wednesday.
The large moves in Ireland's bond market may partly be due to limited trading of bonds, which means that even small sell orders cause a huge ripple on prices. "There's no liquidity at all," says Barclays Capital's Mr. Worthington. "Investors are not willing to touch anything at the moment."
—Charles Forelle in Brussels contributed to this article.
Write to Neil Shah at neil.shah@dowjones.com
By NEIL SHAH
LONDON—Irish and Portuguese bonds came under increased pressure as the dimming fortunes of the euro zone's weaker economies stirred fears that other countries besides Greece may need a bailout.
The selloffs showed that investors increasingly doubt that crisis-hit countries in Europe can pull off big reductions in their budget deficits in the face of stagnating economies without defaulting or being rescued by the European Union or International Monetary Fund.
The difference in yield between Irish 10-year government bonds and safer German debt rose to more than six percentage points for the first time on Wednesday. Ireland's chief central banker conceded that his country's debt is now trading at "crisis levels." A clearing house said it is effectively raising the cost of trading Irish government bonds due to heightened risk of an Irish debt default.
Portugal had to pay a record-high yield of 6.85% to attract investors for an offering of 10-year bonds, adding to the challenges Lisbon faces as it tries to repair its public finances. Still, the yields in the auction were lower than on existing Portuguese bonds trading in the open market, showing that low trading volumes for some European countries' bonds may be distorting the picture somewhat.
The euro sank to its lowest level in one month against the U.S. dollar, dipping below $1.37 before recovering a little. European stocks fell 0.7%.
Investors have refocused on the euro-zone's debt troubles in the past week following news of a Franco-German initiative that could end up forcing bondholders to bear part of the pain in any future bailout of a European country.
Although such a provision wouldn't change the terms of Europe's current bailout facilities, and would affect only government debt issued after 2013, the discussion among EU leaders has unnerved investors concerned about the medium-term prospects for Europe's weakest economies.German Chancellor Angela Merkel and French President Nicolas Sarkozy are pushing for the debt-restructuring provision to be included in the EU's arrangements for dealing with future debt crises. The European Financial Stability Facility, part of a €750 billion ($1.033 trillion) EU-IMF package to support euro-zone members, is expected to expire in 2013.
The yield on Ireland's 10-year bond, which moves inversely to its price, jumped to nearly 9% from 8.16% on Tuesday, a record premium of 6.49 percentage points over the borrowing rate of Europe's safest sovereign borrower, Germany. This premium, which stood at 5.74 percentage points on Tuesday, has jumped for 12 straight days.
Even more worrying, a similar yield premium for Irish two-year bonds also soared to 6.40 percentage points, from 5.06 percentage points on Tuesday. Normally, longer-dated government bonds offer a significantly higher yield, since investors lose more control over their cash when they lend it for longer periods.
The tiny gap between Ireland's yield premiums for two-year and ten-year bonds implies that investors believe the time difference no longer matters because Ireland may quickly prove unable to repay its debt.
"We are getting to the point where people are panicking," says Huw Worthington, an analyst at Barclays Capital in London. "The market is anticipating some sort of [Irish debt] restructuring now," he says. However, he adds that the chance of an imminent Irish default is "zero."
Ireland's jumping bond yields quickly hit bond markets in Portugal, Greece and, to a lesser extent, Spain.
In Greece's latest financial setback, the country appears to be slipping further in its goal of trimming a treacherously high budget deficit. Monthly budget figures released Wednesday by Greece's finance ministry show that central-government revenue rose just 3.7% in the first 10 months of this year, compared with the same period of 2009. Greece's deficit-reduction plan, hammered out in May, calls for a 13.7% increase for the full year. Even a revised plan that offsets lower revenue with more spending cuts foresees an 8.7% gain.
Thanks to the weak revenue performance, Greece said its central-government deficit from January to October was down 30% from the same period last year, falling short of Greece's target of a 32% reduction. The slippage means Greece is unlikely to meet its deficit-reduction target for the year as a whole, unless it takes even further austerity measures.
George Zanias, the chairman of the Finance Ministry's council of economic advisors, says that Greece's efforts to collect more taxes will bear fruit and that spending cuts are offsetting revenue shortfalls. On revenue, "we are behind, however, compliance is increasing," he said in an interview, "and this has not affected deficit targets because we have cut expenditures."
Investor sentiment on Ireland took another blow on Wednesday when European securities-clearing firm LCH.Clearnet raised the amount investors must set aside to trade Irish debt on margin.
Clearing firms stand between buyers and sellers of bonds to ensure that transactions go through even if one party collapses. LCH's decision makes Irish bonds less attractive for investors and thus could make it harder for Ireland to fund itself by selling bonds. However, several analysts said the impact of LCH's move on the trading of Irish bonds won't be dramatic.
Irish bonds were also hit by rumors that the increasingly indebted country, struggling with a banking crisis whose cost to taxpayers could hit €50 billion, has already asked the IMF for aid. However, Irish Finance Minister Brian Lenihan told the country's Parliament on Wednesday that "there has been absolutely no application by Ireland to the IMF and/or the EFSF," the European Financial Stability Facility.
Investors are worried about the stability of Irish Prime Minister Brian Cowen's fragile coalition government, which must pass a crucial austerity package next month. Its majority in Parliament is razor thin.
"The only good news is that Ireland does not need to access the markets in the near term," said Cambiz Alikhani, a partner at London-based asset manager Iveagh Ltd., who doesn't own Irish bonds. Ireland's government has said that it has enough funds to cover government expenses until the middle of next year.
Portugal also faces strong political and financial headwinds, raising concerns about its ability to stick to its deficit-cutting plans.
While Portugal's minority government and its opposition have come to the table lately, Parliament must still approve the budget at the end of the month.
Some investors also now fear that aggressive austerity programs in Ireland and Portugal could actually crimp economic growth, short-circuiting any deficit-cutting by reducing tax revenue.
Still, there has been some good news in recent days. Chinese officials have offered to help Portugal, possibly by buying government bonds, repeating similar moves towards Spain and Greece. And Ireland's manufacturing sector continued to push ahead despite the economy's weakness, according to data released Wednesday.
The large moves in Ireland's bond market may partly be due to limited trading of bonds, which means that even small sell orders cause a huge ripple on prices. "There's no liquidity at all," says Barclays Capital's Mr. Worthington. "Investors are not willing to touch anything at the moment."
—Charles Forelle in Brussels contributed to this article.
Write to Neil Shah at neil.shah@dowjones.com
Tuesday, November 9, 2010
Euro, Yen Taking Heat from QE2
Euro, Yen Taking Heat from QE2
* With China and a number of important emerging market countries unwilling to allow their currencies to appreciate substantially, the euro has again been absorbing the pressure.
* The Bank of England faces the same problem as the Fed; that is, it is very hard to judge whether more QE will help to improve the economy's performance, other than via the impact on the price of risk assets.
* In the absence of a positive surprise from the G-20 on the ability to promote coordinated adjustment, it appears that current market trends may continue for some time.
This article was originally published on www.forbes.com on November 9, 2010.
Jean-Claude Trichet, president of the European Central Bank (ECB), was very polite at the ECB's November press conference when asked about QE2 – the Federal Reserve's second round of quantitative easing – and the implications for the euro exchange rate.
"I have no indication that would change my trust in the fact that the Federal Reserve chairman and the secretary of the Treasury, not to speak of the president of the U.S., are not playing the strategy or tactics of a weak dollar. I have no reason not to trust them," he said.
Trichet, a French national, was speaking in his second language, but the garbled syntax and double negatives hint at the strain. The U.S. central bank is starting a new round of government bond purchases aimed at lowering interest rates and boosting asset prices. But part of the mechanics and logic of QE2 is the attempt to weaken the U.S. dollar in hope of boosting U.S. exports.
The potential impacts of QE2 on the American economy and the chances of success are hard to judge. But the effects in terms of the international spillover are clear.
With China and a number of important emerging market countries unwilling to allow their currencies to appreciate substantially, the euro has again been absorbing the pressure. The Japanese yen has also appreciated even though the Bank of Japan has intervened in the currency markets and it continues with its own quantitative easing program.
In London the Bank of England this week decided that it would not start another round of government bond purchases – for now, at least. The Bank of England faces the same problem as the Fed; that is, it is very hard to judge whether more QE will help to improve the economy's performance, other than via the impact on the price of risk assets. It has an additional challenge in that inflation remains above target, owing to a number of factors, including the direct impact of the increase in indirect taxes on U.K. inflation. However, one factor that may force the Bank of England to engage in more quantitative easing is the danger of the British pound appreciating. Being a floating currency in a world of many more-or-less fixed currencies is not comfortable, particularly when the economy's fundamentals suggest that exchange rate depreciation is required.
A number of emerging market countries have been rather less polite than Trichet in terms of criticizing the Federal Reserve's QE2, as well as signaling that they will increase use of capital controls to try and prevent the liquidity the Fed is creating from seeping into their markets. Emerging market countries have been recipients of large capital flows as global investors have searched for higher yields than those available in the U.S. and other OECD countries. These are potentially destabilizing, particularly for countries that are already worried about inflation pressures.
Of course it takes two to tango. China and some other countries may import U.S. monetary policy owing to their exchange rate pegs to the dollar. But the U.S. is not asking China to manage its exchange rate versus the dollar. Quite the opposite. The U.S. faces structural as well as cyclical problems and the fact that the U.S. dollar has not been allowed to weaken versus important Asian currencies is one factor frustrating structural adjustment in the U.S.
The leaders of the G-20 group of leading industrial and emerging market nations meet in Korea this week. While the group may agree on a polite statement there is little indication that there will be any real agreement on policies to facilitate the reduction of global current account imbalances. In the absence of a positive surprise from the G-20 on the ability to promote coordinated adjustment, it appears that current market trends may continue for some time, in terms of the Fed's efforts to re-inflate its domestic economy and the efforts of other countries to counter or withstand the spillover effects. But this does not look like a sustainable equilibrium. The danger is that the cracks will widen for all to see and fear.
There could be a loss of support for the Fed's activism domestically, just as there has been for fiscal activism. International investors may decide that they do not want to finance the U.S.'s current account deficits at prevailing interest rates, a challenge to the Fed's strategy. At some point, emerging market countries may decide that the potential benefits of large scale currency interventions are outweighed by the costs, and therefore allow their currencies to appreciate rather than trying to frustrate the process of global rebalancing. If not, creeping protectionism remains a serious threat.
The ECB may not be engaging in interventions aimed at the euro exchange rate. But at some point the Europeans may be forced to stand up for themselves, owing to the strains for the eurozone that stem from the current conjunction of the Fed's QE2 and emerging market opposition to exchange rate adjustments. The ECB may not be engaging in large-scale QE, but nonetheless it is working across a number of fronts to prop up weaker European sovereigns and banking systems – as well as intervening directly in the eurozone sovereign bond markets given the growing pressures on Ireland and Portugal. This is a very difficult task given the domestic economic challenges and coordination issues within the eurozone. The eurozone economy, like the U.S., faces a growth problem. The euro's appreciation does not help.
* With China and a number of important emerging market countries unwilling to allow their currencies to appreciate substantially, the euro has again been absorbing the pressure.
* The Bank of England faces the same problem as the Fed; that is, it is very hard to judge whether more QE will help to improve the economy's performance, other than via the impact on the price of risk assets.
* In the absence of a positive surprise from the G-20 on the ability to promote coordinated adjustment, it appears that current market trends may continue for some time.
This article was originally published on www.forbes.com on November 9, 2010.
Jean-Claude Trichet, president of the European Central Bank (ECB), was very polite at the ECB's November press conference when asked about QE2 – the Federal Reserve's second round of quantitative easing – and the implications for the euro exchange rate.
"I have no indication that would change my trust in the fact that the Federal Reserve chairman and the secretary of the Treasury, not to speak of the president of the U.S., are not playing the strategy or tactics of a weak dollar. I have no reason not to trust them," he said.
Trichet, a French national, was speaking in his second language, but the garbled syntax and double negatives hint at the strain. The U.S. central bank is starting a new round of government bond purchases aimed at lowering interest rates and boosting asset prices. But part of the mechanics and logic of QE2 is the attempt to weaken the U.S. dollar in hope of boosting U.S. exports.
The potential impacts of QE2 on the American economy and the chances of success are hard to judge. But the effects in terms of the international spillover are clear.
With China and a number of important emerging market countries unwilling to allow their currencies to appreciate substantially, the euro has again been absorbing the pressure. The Japanese yen has also appreciated even though the Bank of Japan has intervened in the currency markets and it continues with its own quantitative easing program.
In London the Bank of England this week decided that it would not start another round of government bond purchases – for now, at least. The Bank of England faces the same problem as the Fed; that is, it is very hard to judge whether more QE will help to improve the economy's performance, other than via the impact on the price of risk assets. It has an additional challenge in that inflation remains above target, owing to a number of factors, including the direct impact of the increase in indirect taxes on U.K. inflation. However, one factor that may force the Bank of England to engage in more quantitative easing is the danger of the British pound appreciating. Being a floating currency in a world of many more-or-less fixed currencies is not comfortable, particularly when the economy's fundamentals suggest that exchange rate depreciation is required.
A number of emerging market countries have been rather less polite than Trichet in terms of criticizing the Federal Reserve's QE2, as well as signaling that they will increase use of capital controls to try and prevent the liquidity the Fed is creating from seeping into their markets. Emerging market countries have been recipients of large capital flows as global investors have searched for higher yields than those available in the U.S. and other OECD countries. These are potentially destabilizing, particularly for countries that are already worried about inflation pressures.
Of course it takes two to tango. China and some other countries may import U.S. monetary policy owing to their exchange rate pegs to the dollar. But the U.S. is not asking China to manage its exchange rate versus the dollar. Quite the opposite. The U.S. faces structural as well as cyclical problems and the fact that the U.S. dollar has not been allowed to weaken versus important Asian currencies is one factor frustrating structural adjustment in the U.S.
The leaders of the G-20 group of leading industrial and emerging market nations meet in Korea this week. While the group may agree on a polite statement there is little indication that there will be any real agreement on policies to facilitate the reduction of global current account imbalances. In the absence of a positive surprise from the G-20 on the ability to promote coordinated adjustment, it appears that current market trends may continue for some time, in terms of the Fed's efforts to re-inflate its domestic economy and the efforts of other countries to counter or withstand the spillover effects. But this does not look like a sustainable equilibrium. The danger is that the cracks will widen for all to see and fear.
There could be a loss of support for the Fed's activism domestically, just as there has been for fiscal activism. International investors may decide that they do not want to finance the U.S.'s current account deficits at prevailing interest rates, a challenge to the Fed's strategy. At some point, emerging market countries may decide that the potential benefits of large scale currency interventions are outweighed by the costs, and therefore allow their currencies to appreciate rather than trying to frustrate the process of global rebalancing. If not, creeping protectionism remains a serious threat.
The ECB may not be engaging in interventions aimed at the euro exchange rate. But at some point the Europeans may be forced to stand up for themselves, owing to the strains for the eurozone that stem from the current conjunction of the Fed's QE2 and emerging market opposition to exchange rate adjustments. The ECB may not be engaging in large-scale QE, but nonetheless it is working across a number of fronts to prop up weaker European sovereigns and banking systems – as well as intervening directly in the eurozone sovereign bond markets given the growing pressures on Ireland and Portugal. This is a very difficult task given the domestic economic challenges and coordination issues within the eurozone. The eurozone economy, like the U.S., faces a growth problem. The euro's appreciation does not help.
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