A MATTER OF JUSTIFICATION!!!!!!!!!!!!!!!!!

TO UPWARD MOVE NEGATIVE NEWS IS ALSO USEFULL

BECAUSE...... A MATTER OF JUSTIFICATION!!!!!!!!!!!!!!!!!

China’s Slowest GDP Growth in 2 1/2-Years Boosts Scope for Easing: Economy


By Bloomberg News - Jan 17, 2012 1:47 PM GMT+0530
China’s economy expanded at the slowest pace in 10 quarters as Europe’s debt crisis curbed export demand and the property market weakened, sustaining pressure on Premier Wen Jiabao to ease monetary policy.
Gross domestic product rose 8.9 percent in the fourth quarter from a year earlier, the statistics bureau said in Beijing today. Growth exceeded the 8.7 percent median of 26 estimates in a Bloomberg survey, staying above the 8 percent that signals a “soft landing” for China, according to SinoPac Financial Holdings Co., which correctly predicted the GDP number.
Asian stocks rose on speculation policy makers will ease lending curbs and increase fiscal spending to bolster the world’s second-biggest economy. Liang Wengen, China’s richest man and chairman of Sany Heavy Industry Co., told Wen this month that construction-machinery demand is weak and called for more infrastructure investment.
“Decelerating GDP growth will provide more room for policy makers to shift towards a pro-growth bias after an extended tightening cycle,” Jing Ulrich, chairman of global markets for China at JPMorgan Chase & Co., said in a note after the data. “At this juncture, the challenge for policy makers is to implement measures that boost domestic demand without setting back progress made in curbing inflation.”
The Shanghai Composite Index (SHCOMP) climbed 4.2 percent today, the most since October 2009, on expectations for more monetary easing and on speculation the government will support equities. The MSCI Asia Pacific Index gained 2 percent at 5:14 p.m. in Tokyo.
Property Meltdown Risk
Full-year economic growth slowed to 9.2 percent from 10.4 percent in 2010, today’s report showed. Industrial production increased 12.8 percent in December from a year earlier, more than the median estimate of 12.3 percent in a Bloomberg survey and a 12.4 percent increase in November. The economy grew 2 percent last quarter from the previous three months, when it expanded 2.3 percent.
China is prepared for a slowdown in economic growth and a mild moderation is “desirable,” Ma Jiantang, head of the statistics bureau, said at a briefing today. The government has set a target of 7 percent annual expansion for the current five- year plan that runs through 2015 and will focus more on the quality of growth, he said.
“The data confirmed no hard landing is likely, more so given the loosening stance already adopted by the policy makers,” said Shen Jianguang, Hong Kong-based chief greater China economist for Mizuho Securities Asia Ltd. Still, there is “no room for complacency, given the risks of a property sector meltdown and global crises,” said Shen, who expects further relaxation in credit, an expansionary fiscal policy and loosening in the property sector in the second quarter. ......contd.........

Pls visit for further reading......

http://www.bloomberg.com/news/2012-01-17/china-gdp-expands-at-slowest-pace-in-10-quarters-may-prompt-policy-easing.html
 
FOR NOW ENJOY THE BULL RUN ACCROSS THE GLOBE.......DESPITE THE RATE CUTS,
GLOOM IN THE EUROPE GROWTH....BUT....

 Slash your expectations: RBI to investors

AGENCIES

Posted: Monday, Jan 16, 2012 at 1924 hrs IST

Hyderabad: Indian bourses have started to display positive signs, but investors need to scale down expectations of returns on their capital to avoid creating imbalances in the system that will result in financial instability, RBI Deputy Governor K C Chakrabarty said today.

"People who are trying to invest in India, who are investors, they have to scale back their expected return on capital otherwise there will be imbalance and it will create more problems," Chakrabarty told reporters on the sidelines of a function at the Jawaharlal Nehru Institute of Banking and Finance here.

"... Every day the Sensex cannot give a 30 per cent return on equity. There has to be a relationship between debt and equity. But when the overall debt comes down, return on equity has to also come down," he said.

Replying to a query on the liquidity position in the country, the RBI deputy chief said the central bank is happy with the situation.

The apex bank has increased key policy rates 13 times since March, 2010, to tame high inflation.

However, it took a pause on the hawkish monetary stance at its policy review last month as inflation started cooling down.

Chakrabarty refused to answer requires related to inflation and rupee depreciation against the US dollar, saying these will be answered at the RBI's forthcoming monetary policy review on January 24.

The Reserve Bank of India official said there are two fundamental imbalances all over the world that need to be resolved to avoid financial instability.

Explaining the imbalances in the financial system, he said one is the cost of capital and the second is that in any economy, the rich must save and the poor must borrow.

"The second issue is that in any society which has to develop, which has to prosper, it is the rich (that) must save and the poor must borrow. Today, the world-over, economies are such that the rich borrow and poor save. If the rich borrow, it becomes inefficiency. If the poor borrow, it becomes efficient and more productive," he said.

According to him, India does not contribute to any such imbalance.

Earlier, in his speech titled, 'Crisis Management in Interconnected Markets', Chakrabarty said the best crisis management framework is one that prevents crisis and no financial system can be completely immune from episodes of financial instability from time-to-time and there will be a need to manage crises.

"There are important lesson to be learnt from each crisis. Yet, we can count on each crisis to be sufficiently different from every other crisis so as to make their identification a challenge. We can but be alert and flexible to evolving risks," the banking regulator said.

In India, an early intervention system in the form of prompt corrective action based on three indicators – capital to risk weighted assets, non-performing advances and return on assets -- has existed for a long time, he added.

Thanks to Financial Express...

S&P RATE CUT- AXE ON FRANCE????

THE INDIAN MARKETS RELENTLESS FALL DESPITE OF 7-8% GROWTH!!!!!!!!!

BECAUSE THE GROWTH HAS EXTERNAL DEPENDENCIES....LIKE...OR DON'T LIKE....

THANKS TO BUSINESS LINE....

For now the rise of hopes has been spooked by the rate cuts of EURO zone nations. The France and Astria and other nations credit ratings were stripped down. There are 19 nations on the negative watch list.

The borrowing cost of the Sovereigns and the Companies will increase, leads to a vicious cycle of pressure and failure impacting the performance of the companies, the workers and the nation as whole.

The fear factor of DOWN grade, in the spines of our FM and Japan PM, calling for fiscal prudence.

So our markets may take longer period to cope up with the external pressure, may cap the rise and the speed of recovery. For now the the bottoms are in place but sustained pressure can make the fissure wide-open for a free fall.....