Temasek and GIC gonna lose more money

[winnipegjets]

The latest data on the Chinese economy released on Saturday show exports down 8% year-on-year. By any measure, China's expansion is losing steam.

But working out how much it's slowing by is extremely hard to do.

Based on a series of different indicators, the economy is currently growing between about 4% and 7% a year. That's not exactly a small gap, and the truth matters enormously for China, Asia and the rest of the world. The country has a ballooning debt issue that'll be much harder to deal with if growth is slow.

Bank of America Merrill Lynch global economist Gustavo Reis and his team sent out a note over the weekend discussing just how much Chinese growth is slowing by a series of different measures.

One of the measures they've looked at is an analyst favourite: The Li Keqiang Index (LKI). Back in 2007, Li reportedly told a US ambassador that he personally looked at the economy with an index made up of three parts: Electricity production, rail traffic, and lending.

Here's how those three look:

Li Keqiang Index
BAML

Loans are rising, but electricity production is up by less than 5% year-on-year, and rail traffic is shrinking at rates last seen during the depths of the 2008-09 financial crisis.

So it's fair to say that it's not a pretty picture as far as China's Premier's favourite economic index is concerned. Here's how it looks in comparison to GDP:

LKI and Chinese GDP
BAML

The BAI (broad activity index) brought together by BAML economists tracks GDP much more closely — it's a composite of 20 different indicators.

But yet another indicator, the LEAP index, which brings together "power output, crude steel output, cement output, auto sales, housing starts, railway cargo traffic and medium- to long-term loans," suggests Chinese GDP is even more overblown than the Li Keqiang Index does.

LEAP CHina gdp growth chinese
BAML

So it's something of a mystery.

There seem to be at least three possibilities:

The government is lying. This doesn't seem difficult to imagine. The credibility of the Chinese government is attached to both its ability to provide growth and its ability to exert a high level of control over the economy. Slower growth isn't something it would like to admit.
China's GDP is transitioning away from industry. The BAI index that is closest to GDP finds all of the weakness is in manufacturing, while those that pay more attention to industry, like the LKI and LEAP index are lower. If the Chinese economy is shifting more towards services, things like power production will be less accurate as proxies for GDP.
It's too complicated to capture like this. GDP as a way of calculating the economy is rough at best, and it's possible that none of these indices capture what's really happening in the world's biggest developing economy.
The truth of the figures matter more to the rest of the world than they ever have before. The Chinese economy is still locked out of global financial channels in some ways, but the International Monetary Fund (IMF) said back in 2011 that it's now the main source of real economic spillovers to the rest of the world.

In short, China can't sneeze without the rest of the world catching a cold.



Read more: http://uk.businessinsider.com/why-n...ruth-could-be-much-worse-2015-8#ixzz3iPO3wi4Z

 

[winnipegjets]

PAP released data on sinkapore also cannot be trusted.

 

[dancingshoes]

Abe's upcoming war statement has global markets on edge

TOKYO -- Investors are bracing for Japanese Prime Minister Shinzo Abe's statement marking the 70th anniversary of the end of World War II, due out Friday. Depending on what is said -- and how -- the statement could damage the country's relationships with China and other countries, sending a jolt through financial markets.

According to Tina Fordham, chief global political analyst at Citigroup, tensions between Japan and China are a geopolitical risk whose potential impact is nearly on par with Russia's annexation of Crimea and the actions of the Islamic State militant group. Her assessment, she said, is based on discussions with investors around the world. Fordham herself, however, said she does not expect Abe's upcoming statement to disturb the situation with China. She also stressed that global markets have no interest in nationalism or rivalries between countries.

Many Japanese equity strategists have reported that overseas investors seem more nervous about Sino-Japanese relations than their Japanese counterparts would have expected. Abe caused a stir at last year's meeting of the World Economic Forum in Davos, Switzerland, when he compared the relationship between Japan and China to that of Britain and Germany on the eve of World War I. His remark still looms large in many market players' minds.

Bad for business

Growing tensions between the two countries would hurt the Japanese economy, as China accounts for about 20% of Japan's exports and imports. Abe's upcoming remarks could also cause a drop in the number of foreign tourists, whose spending has been supporting the earnings of Japanese retailers. Moreover, the mere existence of strife between the world's second- and third-largest economies is enough to dampen investor sentiment across the globe.

China's stock market turmoil and the Greek debt crisis have already dented investors' risk tolerance. Given this gloomy sentiment, a worst-case scenario between Japan and China is likely the last thing investors want to think about.

U.S.-based financial services provider State Street's global investor confidence index logged the largest month-on-month fall in four years in July. Last week, UBS of Switzerland advised its customers to build risk-averse portfolios by reducing their holdings of stocks in the Philippines, as the country is at greater risk of slower-than-expected growth than other countries, and instead buying "highly stable" Singaporean stocks.

http://asia.nikkei.com/Markets/Equities/Abe-s-upcoming-war-statement-has-global-markets-on-edge

 

[Leckmichamarsch]

today big loss already..........but Ho Ching still get big bonuses as well as all the fat hogs there n GIC
how to lose with golden rice bowl super glued to the palms???