In a sign of relative strength, Chinese banks are able to grow their loan portfolios de novo, i.e., without artificial capital infusions:
The excerpt above hints at my next point. U.S. banks are unable to make capital available for asset growth without severely diluting their owners:
Now do you guys see why I'm staying long China and short the U.S.? We're going to see this story play out in many different ways over the next few years.
Nota bene: Anthony J. Alfidi is long FXI (with covered calls) and short uncovered calls on SPY and IWM.
President Hu Jintao said April 1 that China’s 4 trillion yuan stimulus plan was taking effect, after urban fixed-asset investment surged 26.5 percent in the first two months. China’s lending boom contrasts with the struggle in the U.S. to rid banks of illiquid assets and efforts by central banks from Switzerland to Japan to unfreeze credit.
The excerpt above hints at my next point. U.S. banks are unable to make capital available for asset growth without severely diluting their owners:
Goldman Sachs Group Inc., by selling stock to help it repay $10 billion to the U.S. Treasury, may pressure competitors to follow suit or appear dependent on government support, analysts said.
Now do you guys see why I'm staying long China and short the U.S.? We're going to see this story play out in many different ways over the next few years.
Nota bene: Anthony J. Alfidi is long FXI (with covered calls) and short uncovered calls on SPY and IWM.