[Marxism] Might explain Wen's Worries
sartesian at earthlink.net
Mon Mar 16 09:20:27 MDT 2009
Financial Times, March 16
China Loses Billions on Equities Bets Ahead of Markets' Collapse
China has lost tens of billions of dollars of its foreign exchange reserves
through poorly timed diversification into global equities just before the
world markets collapsed last year.
The State Administration of Foreign Exchange.... started making huge bets on
global stocks early in 2007 and continued this strategy at least until the
collapse of the US mortgage finance providers Freddie Mace and Fannie Mae in
July 2008, according to analysts and people familiar with SAFE's operations.
By that point SAFE had moved well over 15 percent of the country's $1800bn
reserves into riskier assets, including equities and corporate bonds,
according to people familiar with its strategy,
SAFE never discloses its holdings except to the top Chinese leadership, so
it is impossible to know exactly how much it has lost from diversifying
before markets crashed....
Total holdings of US equities by all Chinese entities reached $100bn by the
end of June last year, more than triple the total Chinese holding in June
2007, according to an annual survey published by the US Treasury...
The bulk of SAFE's holding remain in US Treasury bills....
Ahh... the bigger fool theory at work.
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