tag:blogger.com,1999:blog-34598853.post7047980827628801414..comments2023-12-30T01:47:45.604-08:00Comments on servethepeople: Derivatives and the Overproduction of CapitalUnknownnoreply@blogger.comBlogger4125tag:blogger.com,1999:blog-34598853.post-65339371803846437402009-04-13T21:28:00.000-07:002009-04-13T21:28:00.000-07:00Chinese trillion dollar derivative bets problems t...Chinese trillion dollar derivative bets problems too.<br />Tip of the iceberg visible ? Bet positions unknown.. <br /><br />“According to a company manager who refused to be named, almost all SOEs tied to <br />import-export business are engaged in derivatives trading. And the number of <br />companies is far higher than the 31 formally licensed for overseas futures <br />exchanges. As much as 1 trillion yuan in combined capital could be involved in <br />derivatives trading.<br /> <br /> <br />Among those that openly reported losses is CITIC Pacific, a state-owned <br />securities firm that bought leveraged foreign exchange forward contracts worth <br />AU$ 9.7 billion, far exceeding what was needed to hedge its investments in <br />Australian mining businesses. <br />“Companies in the minority have insufficient knowledge about the leverage, <br />complexity and risks involved in financial derivatives,” SASAC declared in <br />February. “They opened investment positions illegally, and their risk management <br />was uncontrolled, leading to a negative impact for state assets and security.”<br /> <br />SASAC based its conclusions on data gathered after it asked SOEs in September to <br />investigate their derivatives trading, and report positions and losses. The <br />survey found derivatives trading losses totaled between 10 billion and 20 <br />billion yuan, although one official who participated in the survey said the <br />losses were likely much higher. A follow-up probe of 20 SOEs in January by the <br />National Audit Office confirmed that red ink spilled far and wide…<br /><br />…CNAF”s US$ 550 million loss stemming from derivatives trading set a record when <br />it was uncovered in 2004. Since then, new records have been set by other Chinese <br />SOEs, but Chen is the only executive so far punished for derivatives errors.<br /> <br />China’s regulators have yet to issue clear statements about last year’s <br />derivative losses…<br /> 1 yuan = 14 U.S. cents<br />Full Article in Chinese: <br />http://magazine.caijing.com.cn/2009-03-15/110121002.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34598853.post-22283612679691141642009-04-01T19:28:00.000-07:002009-04-01T19:28:00.000-07:00An interesting story on important another audit ...An interesting story on important another audit in China ,despite its original sources sneering attitude -<BR/><BR/>China Orders Giant Grains Stock-Take, Cat, Pigeons Etc<BR/><BR/>Do China's Wheat Reserves Really Exist?<BR/><BR/>Remember that one from this very blog a month or two back? [I do: Does China's 60 million tons of wheat reserves actually exists?]<BR/><BR/>It would seem that even the government themselves have begun to smell a rodent or two. And it's not even Year of the Rat<BR/><BR/>If they don't mind slipping the odd bit of melamine in some baby formula, then the average Chinese storekeeper isn't going to be above half-inching a few million tonnes of grain here & there now are they?<BR/><BR/>Rumours are rife of such skulduggery not to mention falsifying records to claim storage on grain that doesn't exist, Chinese Vice Premier Li Keqiang has ordered a complete stock-take of the country's entire grain inventory. [This will be interesting]<BR/><BR/>http://www.marketskeptics.com/2009/03/china-orders-giant-grains-stock-take.htmlAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-34598853.post-123823179360391202009-04-01T19:13:00.000-07:002009-04-01T19:13:00.000-07:00House of falling cards .Derivatives accounted for ...House of falling cards .Derivatives accounted for 40% of big bank profits in casino/ponzi capitalist US . Financial companies were 40% of value of all US stocks in the US. <BR/>Bloomberg Reported:<BR/>“As much as 40 percent of profit at Goldman Sachs Group Inc. and Morgan Stanley comes from OTC derivatives trading, according to CreditSights Inc.<BR/> Estimating the new income that exchanges such as CME Group Inc. could earn from processing the OTC trades is difficult because clearing fees and volumes aren’t known yet, said Bruce Weber, a finance professor at the London Business School. JPMorgan Chase & Co. held $87.7 trillion of derivatives as of Sept. 30, more than twice as much as the next largest holder, Bank of America Corp., which had $38.7 trillion, according to data from the Office of the Comptroller of the Currency. Of the holdings at New York-based JPMorgan, 96 percent were in the OTC market, compared with 94 percent for Bank of America. <BR/>Interest-Rate Swaps <BR/>The largest positions at JPMorgan and Bank of America, based in Charlotte, North Carolina, were in interest-rate swaps. Banks enter into interest-rate swaps with clients such as cities or hospitals that sold bonds and seek protection against adverse moves in interest rates. They also hedge their exposure to rates in the inter-dealer market. <BR/><BR/>http://www.bloomberg.com/apps/news?pid=20601087&sid=alJeSkFOeGXk&refer=home<BR/><BR/>Stunned mullet.<BR/>In an hour-long interview with Jay Leno on NBC's "The Tonight Show," President Barack Obama called for the establishment of "financial regulatory mechanisms to prevent companies like an AIG holding the rest of us hostage."<BR/>He said he was "stunned" by the latest scandal of bonuses being paid to AIG traders, and explained that an entire speculative bubble of hedge funds and derivatives has grown out of control.<BR/>"Some smart person decided, let's put a hedge fund on top of the insurance company and let's sell these derivative products to banks all around the world--which are basically guarantees or insurance policies on all these sub-prime mortgages."<BR/>Before long, Obama explained, "you had $30 worth of debt on every dollar worth of mortgage--and the whole house of cards just started falling down... So much money was made in finance that about 40%, I think, of our overall growth, our overall economic growth was in the financial sector. Well, now what we're finding out is a lot of that growth wasn't real. It was paper money, paper profits on the books, but it could be easily wiped out."Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-34598853.post-33628484533273994302009-03-26T15:19:00.000-07:002009-03-26T15:19:00.000-07:00The link below is to an article in the Chinese fin...The link below is to an article in the Chinese financial magazine Caijing. It shows just how deeply intertwined with imperialist finance capital the Chinese have become - and through their state-owned enterprises that are meant to be the last vestiges of socialism in their economy:<BR/>http://english.caijing.com.cn/2009-03-25/110127786.htmlMikehttps://www.blogger.com/profile/01878524757860159914noreply@blogger.com