From my former Tsinghua student and investment banker Henry Zhang I got the following phone message today:
I am in the bank now and I am shocked by how many crazy people there are buying funds, stocks, etc. Most of them are old people, and how they decide on what to buy is based on their discussions with each other, which is totally clueless.
Coincidentally Kobain Wang, another one of my former Tsinghua students, who trades for a foreign investment bank, wrote me an email today under the heading "This is going NUTS":
A study by the Shanghai Securities News and Shenyin & Wanguo Securities found that investor deposits for trading local currency A shares reached RMB 1.3 trillion by the end of August, up by RMB220 billion from the end of July.
I haven't heard the rumor, Victor, but I know that they aren't happy. I guess part of the response would have to do with timing, right? We probably wouldn't want a bad market to coincide with the October meetings.
By Michael Pettis - 9/6/2007 1:25 PM
Talk a little bit about the Oct. Meeting. It seems that everyone now is taking the Meeting more and more seriously and making it become “special”. For example, when Hu became the chairman of China Communist Party, he shut down the Beidaihe Meeting, which used to be held before the Communist Party Meeting every year. (That was considered one of the action that the government was willing to get rid of Special Rights.) The Beidaihe Meeting was widely accepted that it was the real meeting making deals done. After 5 years, Hu (the China Government) re-opened this meeting this year. It is no doubt that there will be some big promotions and changes. But, from my own prospective, we should focus more on what would the government do after the meeting. Change or Harmony? And I agree everyone wants a better market to meet the "Most Important Meeting" of the year.
Michael Pettis is a professor at Peking University's Guanghua School of Management, where he specializes in Chinese financial markets. He has also taught, from 2002 to 2004, at Tsinghua University’s School of Economics and Management and, from 1992 to 2001, at Columbia University’s Graduate School of Business. He is a member of the board of directors of ABC-CA Fund Management Co., a Sino-French joint venture based in Shanghai.
Pettis has worked on Wall Street in trading, capital markets, and corporate finance since 1987, when he joined the Sovereign Debt trading team at Manufacturers Hanover (now JP Morgan). Most recently, from 1996 to 2001, Pettis worked at Bear Stearns, where he was Managing Director-Principal heading the Latin American Capital Markets and the Liability Management groups. He has also worked as a partner in a merchant banking boutique that specialized in securitizing Latin American assets and at Credit Suisse First Boston, where he headed the emerging markets trading team. Besides trading and capital markets, Pettis has been involved in sovereign advisory work, including for the Mexican government on the privatization of its banking system, the Republic of Macedonia on the restructuring of its international bank debt, and the South Korean Ministry of Finance on the restructuring of the country’s commercial bank debt.
Pettis is a member of the Institute of Latin American Studies Advisory Board at Columbia University as well as the Dean’s Advisory Board at the School of Public and International Affairs. He is the author of several books, including The Volatility Machine: Emerging Economies and the Threat of Financial Collapse (Oxford University Press, 2001). He received an MBA in Finance in 1984 and an MIA in Development Economics in 1981, both from Columbia University.
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Comments (4) for "Hot hot hot"
- 9/6/2007 1:25 AM
October, 2007