市场的不定因素：欧洲的债务和中国抑制经济过热的举措

Bailout whispers in Europe are circulating once again. EU finance ministers and IMF officials are met in Brussels this week to discuss containing and solving Ireland’s bank crisis before the problem spreads beyond Ireland. Although Ireland had said that it is fully funded through the middle of next year and does not need outside help (Ireland’s Prime Minister Cowen was reported to deny that the application for a multibillion euro bailout from the EU was made), the skyrocketing Irish bond yield last week pretty much forced EU officials’ hands. EU officials want to reach a quick resolution to shore up confidence and avoid having a drawn out period of uncertainty similar to the Greece scenario earlier this year. A bailout package will likely aim to both help Ireland’s state finances, as well as injecting additional capital into the cash-strapped Irish banks.

Judging from bond market action, investors were betting on the bailout. The yield spread between Irish bonds and their counterpart benchmark German bunds retreated from record high levels last week, indicating that demand for Irish bonds improved as investors look to take advantage of the attractive yield. This week, the action in the bonds was more negative.

It still looks like Ireland’s woes aren’t as deep as Greece’s; a failure to reach an agreement, however, could send Irish bond yields soaring past previous highs and make it very difficult for Ireland to raise capital on the debt market.

China’s loan restriction is the other big piece of economic puzzle right now. After a higher than expected retail prices reading in October (the highest in two years), China’s four largest banks will freeze lending to property developers for the rest of 2010 to curb real estate prices, blamed to be the main culprit of inflation in the country. Real estate prices growth was at the slowest pace in almost a year in October, but the amount of lending activity was still well higher than expected. A large $27 billion trade surplus during the month and a 19 percent year-on-year jump in money supply also promote worries that the extra money would exacerbate bubble concerns.

The concern, yet again, is that the latest tightening move will derail China’s economy, which some people still believe to be a house of cards despite its display of strength over and over again. More actions could be on the way, however, including higher property taxes in the most overheated real estate markets. Accelerating inflation in China also causes concerns of further steps to curb accelerating consumer prices. Commodities fell further on the news. And this week came reports that the Chinese government is considering a plan to control food prices. We doubt, though, that China will slow itself down so much the commodities will fall significantly – rather, the country’s attempt to prevent overheating is laudable.

We expect the Chinese economy to remain strong going forward; the likelihood of China going overboard in restricting growth is low because it could lead to rising unemployment and have potential sociopolitical disruptions. Once the panic over slowdown in China ebbs and there’s more clarity to the Europe situation, the markets should rebound.

（From Dr. Leeb’s e-mail）