China is attempting to slow its economy to minimize inflation and the risks
of a property bubble, and to improve the underwriting practices and solvency
of its banks.
The debate about China involves questions of a soft landing or a hard landing
as the result of government efforts, and the impact on China of signs of moderating
world economic growth.
New credit rating agency actions with respect to Greece and Portugal today,
following the statements by Standard and Poor's yesterday, escalate concerns
about a credit event that could trigger credit default swap contracts and impair
the banking system in Europe, with consequential follow-on impacts to banking
globally.
European sovereign credit risks have a time frame of days or weeks for a market
event (as well as long-term lingering risks of subsequent market impact). China's
banking issues have a longer time horizon, probably on the order of quarters
and possibly years for a market event.
Disclaimer: Opinions expressed in this material and our disclosed positions
are as of July 5, 2010. Our opinions and positions may change as subsequent
conditions vary. We are a fee-only investment advisor, and are compensated
only by our clients. We do not sell securities, and do not receive any form
of revenue or incentive from any source other than directly from clients. We
are not affiliated with any securities dealer, any fund, any fund sponsor or
any company issuer of any security. All of our published material is for informational
purposes only, and is not personal investment advice to any specific person
for any particular purpose. We utilize information sources that we believe
to be reliable, but do not warrant the accuracy of those sources or our analysis.
Past performance is no guarantee of future performance, and there is no guarantee
that any forecast will come to pass. Do not rely solely on this material when
making an investment decision. Other factors may be important too. Investment
involves risks of loss of capital. Consider seeking professional advice before
implementing your portfolio ideas.
IMPORTANT NOTE: We are a Registered Investment Advisor. We do not sell
investments or control client assets. We are professional advisors compensated
on an hourly basis or flat fee basis for portfolio management or for our coaching
advice. Clients for personal investment advice receive recommendations and
guidance tailored to their specific needs. Newsletters and research publications,
are not personal investment advice, are generic in nature and should not be
interpreted as specific advice for any specific person or situation. In our
research, we utilize information sources that we believe are reliable, but
do not warrant the accuracy of those sources or our analysis. Research, data
and opinions expressed on this site are for information purposes only, are
general in character and are not advice specific to any individual investor.
Copyright 2008-2012 by QVM Group LLC All rights reserved.
Sovereign
Credit Risks: Focus On China Banks and More on Greece
Circle Us