Church & chips

Wall Street “does a lot of good things and then it has this casino. It’s like a church that’s running raffles on the weekend”. So said Warren Buffett to Fortune magazine. Fair enough, I guess, but the World’s third Richest man has benefited both on week days and at the weekend, such is his skill as an investor. As noted here on Friday, too, Warren (he said I could call him ‘Warren’) is bullish on China saying that it’s transformation is “unlike anything that’s ever taken place in history”.

A number of his country men (in the House of Representatives) are not so kind and have passed incipient legislation to try and pressure China to appreciate the Yuan (and this despite US business of $150 billion per annum at risk). And, as Premier Wen continues his European tour, a number of EU officials have jumped on the up-hill Yuan charabanc, including Europe’s central banker Jean-Claude Trichet who said that China’s moves to boost the Yuan are “not exactly what we would have hoped ourselves”. This has also led to the spectre of further EU tariffs on Chinese imports.

For their part Wen and PBOC Governor Zhou Xiaochuan (who is traveling with the Premier) have been robust in defence, pointing out that Europe (and the US) is barking up the wrong tree. A view agreed with today by the renowned Jim O’Neill, Chief Economist at Goldman Sachs.

Whilst on his travels, too, Wen managed to make up (although there was no kissing) with the Japanese Prime Minister Naoto Kan. Subsequently, two Chinese gun boats from the disputed waters in the South China Sea have been withdrawn. That said, there is now a new dispute with Vietnam about the latter fishing with explosives, also in the South China Sea. Nine crew and a boat have been detained.

“I like the silent church before the service begins, better than any preaching” - Ralph Waldo Emerson

Shanghai Composite:
Today: closed
Thursday: +1.72% at 2,655.66 at close
Last week: +2.5%
YTD: -18.9%

Hang Seng:
Today: +1.07% at 22,880.41 at close (new 11 month high)
This week: +2.3%
YTD: +4.6%

Oil futures: $82.62
Gold futures: $1346.90
(new immediate delivery ‘high’ of $1349.80)
Euro/$ spot: 1.3844

Headlines

• EU pleads with China on the Yuan
• China may be target of more subsidy complaints in Europe
• Chinese banks agree to extend $267.8 million of loans to three Greek shippers
• China’s market is worth $150 billion to US companies
• Wen and Kan move to resolve China-Japan dispute; as gun boats withdrawn
• Vietnam asks China to release fishing boat
• Malaysia will joins Trans-Pacific Partnership with US – to counter China
• MSCI China Index may fall by 10 to 15% in Q4 on stimulus exit, says RBS
• Electricity blackouts ‘used’ to meet China’s energy targets
• Central China Real Estate plans sale of US dollar bonds
• Hong Kong home sales decline 41% in September