Years of Poems and Spirits

I bought a Motorola KRZR K1 on eBay a year ago. The default network and timezone was set to Hong Kong. Since I got the phone, I had endless troubles getting it sync-ed up with Outlook on Windows: the Motorola Phone Tool worked for a while, then an update later it stopped sync-ing (charging is fine).

Motorola’s website was least helpful. Although K1 has been on sale in the States, it is not listed on their U.S. website. Finally I tried the HK/CN website and found a firmware update here.

Once the firmware was updated, all is well.

I have been reading Paul Blustein’s “And the Money Kept Rolling in (And Out)”. The book tells the story of the 2001 Argentina default and subsequent IMF intervention.

From the journalistic point of view, the book is not quite as good as his first one on Asian crisis in 97 (The Chastening), which is full of anecdotal accounts of key players during the crisis (for example, Taiwan’s central banker decided to devalue TW dollar while playing golf with his Korean counterpart, who sensed something was about to happen but didn’t know what when the Taiwan guy whispering Chinese into his cell phone). It was as if Ken Burns shot a documentary on Watergate.

This book is somewhat duller but has more insight in international economics. It tells a much more coherent story on how domestic policies (i.e. fiscal policy) drives trade and currency valuation.

I had this discussion with Migdal (I admire the man but he needs a econ upgrade) and most recently in class with a fellow student: who is to blame for currency crisis? My arguemnt is: it is the fiscal policy that is at fault. In other words, currency devaluation is just the consequence of inflation. Currency speculation is a byproduct, NOT the culprit.

Blustein certainly started out hoping to make a case against the moneymen on the Street. But as he progresses, he finds the Argentinian government the most to blame. The whole country is addicted to deficit spending and the political system is configured to keep it that way.

For example, its federal system means the provinces can borrow money without federal consent. Its Peronist tradition (i.e. Latin American populism) gives labor unions a disproportionally large role in policy decisions. Also, a powerful government means temptation of corruption and personal ego: often a President does not want to leave office and finds ways to buy his votes/time through government spending.

Since 2001, the Argentinian economy is on a fast recovery. However, I just came across this article on WSJ, “Economic Reckoning Looms In Argentina’s Election“, which says that the recovery is riddled with high inflationary risk:
“(Its current President) has ramped up spending, helping to fuel inflation. The government’s fiscal surplus is rapidly shrinking due to subsidies for energy, as well as goodies for pensioners, some public-sector workers and other key constituencies. There are also inflationary pressures from the higher international prices for Argentine agricultural commodities, which are blowing back to cash registers at home.”

The article did not mention the capital account or currency reserve level. One of the problem in 2001 was that the governments borrowed too much foreign debt to finance its spending. The focus of the article is the government’s price control practice.

I am interested to see how such an anti-investment policy will work. It is not a contractionary policy but almost like selective punishment. It has been working in China (I think so until I am proven wrong), will it work for Argentina?

http://english.peopledaily.com.cn/90001/90778/6282823.html
Household savings in the country grew by 762.1 billion yuan (101.6 billion U.S. dollars) in the first nine months, compared with an increase of 1.73 trillion yuan in the same period a year ago, according to latest statistics from the central bank.

A survey by the central bank showed a record high of 35.6 percent of the 20,000 respondents in the third quarter rated investment funds and stocks as their most important assets, while 50.4 percent thought so about bank deposits, down from 70.4 percent at the beginning of last year.

http://www.imf.org/external/np/speeches/2004/051904.htm
Second, banks need to be run on a fully commercial basis.
ceilings on lending rates need to be removed. This would enhance the ability of banks to intermediate funds;
maintaining China’s steady and gradual approach to capital account liberalization is appropriate.

About PetroChina IPO
http://www.livemint.com/2007/11/05104938/PetroChina-becomes-world8217.html
http://www.businessweek.com/globalbiz/content/nov2007/gb2007115_272997.htm

http://money.163.com/special/0025274H/2007zhengce.html
贸易摩擦引出的政策影响
A、B股合并
超级大盘股持续引进
股指期货的推出
交易规则更改：T+0推出:”T+0：所谓的T＋0的T，是指股票成交的当天日期。凡在股票成交当天办理好股票和价款清算交割手续的交易制度，就称为T＋0交易。通俗地说，就是当天买入的股票在当天就可以卖出。T＋0交易曾在我国实行过，但因为它的投机性太大，所以，自1995年1月1日起，为了保证股票市场的稳定，防止过度投机，股市改为实行“T＋1”交易制度，当日买进的股票，要到下一个交易日才能卖出。同时，对资金仍然实行“T＋0”，即当日回笼的资金马上可以使用。”
今年7.1日即将在中国股市实行的新政策

针对股市过热的现象政府今年总共出台了什么措施
加息和增加准备金率, 提高印花税,

IPO新政策有哪些重要改进？
由股票市值配售恢复为现金申购, 取消了IPO的融资上限, 取消IPO的一年辅导期

http://www.reuters.com/article/governmentFilingsNews/idUSSHA10876520070927
“Securities, stock exchanges — are these things good or not? Are they dangerous? Are they something owned only by capitalism? Can socialism have these things?” he asked in 1992.

“A wait-and-see attitude is allowed, but we must resolutely experiment. If it is okay after a trial, let’s open it. Otherwise, we can close it — fully or partially, depending on circumstances,” Deng said at an internal meeting of officials.

May 2006 – Regulators say the state share reform is proving successful and they will now encourage large, high-quality companies to list domestically. Share prices surge.

May 2007 – The Finance Ministry triples the stock stamp duty to cool the market, which plunges as much as 21 percent by June 5.

September 2007 – The market fully recovers from the May stamp duty shock and hits repeated record highs amid signs that the government has not changed its policy for a steady, long-term rise in the stock market.

http://bbs.soufun.com/1010185823~-1~8389/52139735_52139735.htm
受国家税务总局即将对房地产企业土地增值税进行清算的消息影响，沪深股指房地产板块17日全线下跌，并拖累大盘双双大幅下挫。

http://www.scol.com.cn/focus/zlk/20050303/200533134528.htm
２０日由中国人民银行、中国银监会和中国证监会联合出台并施行的《商业银行设立基金管理公司试点管理办法》，因为标志着“银行系”基金公司进入实质性操作阶段而受到市场的高度关注。

http://www.samlong.cn/article/10/1615/2007/20070306163080.html
按照传统的热钱计算方式，剩余的3.62亿美元为去年流入中国的全部热钱数。
剩余的3.62亿美元为去年流入中国的全部热钱数。
复旦大学中国反洗钱研究中心秘书长严立新称，“这种计算方式并不符合中国实际。实际的数量应该在四五百亿美元，这部分资金才真正成为目前中国股市‘泡沫化生存’并巨幅震荡的重要幕后推手之一.
在李看来，欧美的对冲基金其实相当规范，相当注重资金的安全性，因此通过非法的秘密渠道进入中国股市的可能性非常小。即使有，也可能来自港台(地区)和日本，但量不会很大。“因此，目前国内股市中的所谓热钱更多的可能是通过外籍华人或明或暗的非法跨境汇兑流入的。”
李振宁提到的非法跨境汇兑活动在南方某沿海口岸长期存在
非法跨境汇兑主要以两种组织形式存在。首先是依托小商品店铺进行的非法跨境汇兑.流密集的口岸处一般都聚集着不少明为出售台湾地区槟榔、烟酒糖茶，实则从事非法跨境汇兑活动的小商品店铺。它们“批零”兼营，一边直接从事小额汇兑活动，一边伺机招揽“大生意”，交易金额从几百元到几百万元不等。
其次是隐匿于居民小区进行的非法跨境汇兑。隐蔽在一些居民小区里的从事大宗非法跨境汇兑活动者多以住宅为掩体，只做熟人生意，而陌生人根本无法接近，交易金额则从几万元到几百万元不等。
非法跨境汇兑还远不止上述方式，热钱还通过其他如地下钱庄、外资赠款、虚假贸易以及个人利润或股利账户等方式曲线进入国内.
2005年10月，央行总行北京营管部反洗钱处人士就发现有某账户突然新增境外汇入款80万美元，国际收支申报为利润股利。但经核查，司法机关发现此人之前从未有大额资金收付纪录，而通过对这个人的间接了解，得知其在某能源公司任职，月收入在2万人民币左右，80万美元的股利明显与其身份、收入水平不相匹配。
上述反洗钱处人士也发现境内十余名居民集中借捐赠款或遗产名义调大额资金入境，资金来源的真实性同样无法确认。
因为几百万外籍华人在国内股市走好的情况下，通过这种小额跨境汇兑进来，并积少成多，

http://www.bilinchina.com/china-blog-secret-foreign-capital-do-china-stock-market-maker.html
“Though the government’s monitor is strict,we have all kinds of ways to let foreign funds to enter into China stock market.”
At the end of 2005, with the oversea capital speeding up to enter into China stock market
Previously,oversea capital borrowed Hongkong as path to enter China,but now the rate of taking Taiwan as path is increasing. theoretically, Zhang is introducing Taiwan’s capital into mainland China. A great number of Taiwanese-owned enterprises in Jiangsu become Zhang’s floodwater storing pool for oversea capital entering China.
Oversea funds also register company abroad,and then setup WFOE (Wholly Foreign Owned Enterprise).Thus it’s convenient for capital entering China.
More than one billion us dollars distributed in more than 3000 companies and individual shareholder accounts. It’s a big project only to assign accounts for this several billion us dollars. There are too many stock brokerage firms which are close to “death”. To alive,they would like to provide any services for their customers.

http://www.iht.com/articles/2007/08/20/business/yuan.php
The Chinese government announced Monday that it would allow mainland Chinese citizens to invest in the Hong Kong stock market,

By making it easier for Chinese investment to leave the mainland, the government hopes to offset some of the money pouring into the mainland through corporate investments and China’s soaring trade surplus.

The agency released the text of a new regulatory proposal that it described as having been approved. The proposal allows Chinese citizens to open accounts at the Tianjin branch of the Bank of China, and then sell yuan and buy Hong Kong dollars without limit for the purpose of buying shares in Hong Kong.

Chinese citizens will also be allowed to use their foreign currency savings to buy shares in Hong Kong, using the Tianjin branch.

http://www.ce.cn/cysc/tech/07ityj/guonei/200711/16/t20071116_13612887.shtml
数据显示，前三季度百强企业盈利水平较好。1-9月份百强企业实现利润总额312亿元，增幅为125%。
http://www.p5w.net/newfortune/qianyan/200612/t667518.htm
这使我们对2007年企业盈利增长的预测显得过于保守（我们预期130家中国上市公司的每股盈利增长
8%）

http://www.amoney.com.cn/cms.php?prog=show&tid=127832
但这些企业的盈利增长很可能会在2007年继续放缓。 根据报告显示，2005年这些大企业的总体盈利增长了20.8%，

http://www1.cei.gov.cn/ce/doc/cen2/200601231486.htm
B-shares, were initially set up as a separate market to attract foreign investors without letting foreigners have too much influence over trading.
More importantly, foreign institutions have been allowed to invest in A shares through the qualified foreign institutional investor (QFII) program, making B shares even less relevant.
The B-share daily turnover in Shanghai is usually below the paltry sum of US$10 million and less than HK$100 million (US$12.8 million) in Shenzhen.
The total market capitalization of Shanghai B shares equals US$12.25 billion, compared with US$336 billion for Shanghai’s A shares.
QFII is a transitional program begun in 2004 and aimed at pulling institutional investors into the market under a quota system prior to a full opening.

http://ng2.mofcom.gov.cn/aarticle/chinanews/200701/20070104288180.html
The SAFE will likely replenish the total quota this year, industry observers said on Thursday.
China ushered in a QFII system in 2003. With the approval of the State Council, China’s cabinet, the total investment quota for QFII operations increased from four billion to ten billion U.S. dollars in September 2005.

Chinese ADR companies:
http://www.site-by-site.com/adr/asia/adr_chn.htm