The ailing US$, a problem?

[xssve]

Uh, gee, I dunno where i got that impression - maybe it was the planeloads of pallets of shrinkwrapped bundles of 100 dolar bills - around 9 billion dollars wasn't it?

1.00 US DOLLAR (USD) = 1233 IRAQI DINAR (IQD)

Ah, I stand corrected - so stabilizing the Dinar was an important part of stabilzing the country, silly me.

 

[xssve]

Just for historical contrast:

The dinar was introduced into circulation in 1931, replacing the Indian rupee, which had been the official currency since the British occupation of the country in World War I, at a rate of 1 dinar = 13⅓ rupees. The dinar was pegged at par with the British pound until 1959 when, without changing its value, the peg was switched to the U.S. dollar at the rate of 1 dinar = 2.8 dollars. By not following the devaluations of the U.S. currency in 1971 and 1973, the dinar rose to a value of US$3.3778, before a 5% devaluation reduced the value of the dinar to US$3.2169, a rate which remained until the Gulf War, although in late 1989, the black market rate was reported as being five to six times (1.86 dinars for US$1) higher than the official rate.[1]

http://en.wikipedia.org/wiki/Iraqi_dinar

Your more recent figures seem to indicate modest rate of inflation, no?

 

[trysail]

It occured to me that part of the neo-con strategy for the invasio of Iraq apparently consisted of lflooding the country with American currency - a move which cannot have had any other efect than undermining Iraqi currency, and expandingthe Black market in American currency - is there even an Iraqi currency anymore?

You appear to have answered your own question.

In 1950, $1.00 bought roughly 4.70 Swiss francs; today $1.00 buys roughly 1.17 Swiss francs. In 2000, $1.00 bought approximately 36 rubles; today it will get you less than 25 rubles. Since 1971, the Japanese yen has appreciated from 360 against the U.S. dollar to 116. Is it any wonder that OPEC is apparently considering pricing petroleum in a basket of currencies?

 

[Handprints]

That's Vietnam and Qatar you hear right now, saying their emotional goodbyes to the dollar. Neither one is terribly important for short-term pricing: between them they had about USD200bn in USD (barely enough for a years Iraq expenses, for scale's sake.) However, both of them have cut their dollar holdings back to about 40% of total reserves - about the level most treasuries would suggest is about "right" for a global basket - and both are early adopters of any economic idea - good, bad or indifferent in their regions.

In other words, these two may occasionally be fashion victims but they're also often trendsetters in their respective regions.

What I find interesting is that these are two countries where a large proportion not only of treasury officials but also of the voices in their ears are US-educated.

Hope it's of interest,
H

 

[Trinique_Fire]

What do I think? I think it doesn't do much good to worry about it a whole lot. Read Revelation...the extremists will tell you it was bound to happen someday and it just means we're one step closer to being totally annihilated.

 

[trysail]

"The Balance Sheet of A Bankrupt:"
_______________________________________________


Balance Sheet
The United States of America

Assets.....................................Liabilities

..............................................Social Security......$11,000,000,000,000
..............................................Medicare................ 66,000,000,000,000
..............................................Treasury Debt..........9,000,000,000,000

..............................................Total Liabilities...$86,000,000,000,000


Against these known liabilities, the government has the ability to tax:

The whole stock market.........................~$17,000,000,000,000
All of the privately owned real estate.....~35,000,000,000,000
(basically, that's the net worth of everybody in the whole country).

There are two (and only two) ways out of this mess; neither one is very pretty.

Even now, creditors are voting with their feet. Others are sharpening their knives.

 

[trysail]

http://farm2.static.flickr.com/1206/1491299422_9b5a76eaea.jpg

 

[Le Jacquelope]

Great numbers, Trysail.

Except that once again you forget that
a) Social Security has been borrowed against -an external factor that was not a part of the social security concept. Your argument is like throwing axel grease on the road around a blind corner and watching a Cadillac CTS-V slide across it and crash and then saying the Cadillac CTS-V is a shitty design.

b) Without SS and Medicare, this country would have gone down a long time ago. Consider what effect all our current and past retirees would have had if they'd invested in stocks instead of Social Security and had sold their stocks to fund their retirement. We'd be dead already.

 

[trysail]

Great numbers, Trysail.

Except that once again you forget that
a) Social Security has been borrowed against...

Huh? Wha? How can you "borrow against" something that never existed?

Perhaps you've noticed- there's a difference between "cash accounting" and "financial accounting."

 

[trysail]

Great numbers, Trysail.
Consider what effect all our current and past retirees would have had if they'd invested in stocks instead of Social Security.

They'd have been a hell of a lot better off (especially if they'd invested in Vanguard's S&P500 Index fund)!!

http://farm3.static.flickr.com/2134/1524006423_2f7d98ea96_o.jpg​

 

[Handprints]

Consider what effect all our current and past retirees would have had if they'd invested in stocks instead of Social Security and had sold their stocks to fund their retirement. We'd be dead already.

You have to be 65 to collect SS in the US, right? And I'm willing to assume that there are few enough people aged 90+ to be worth counting for the sake of this argument. So, if we assume that everyone starts investing at age 20, that gives us 35 cohorts who started buying stocks between 1927 (a great time for it!) and 1961. (EDIT: I have no idea when SS started in the US but for the sake of argument, let's assume it was present for the whole history.)

So we turn to our trusty Bloomberg machine and call up the T-Bill and S&P500 returns from those dates forward, we do this for all 35 cohorts, and then we set the bar absurdly high: how many cohorts would have made less than three times as much money for their retirements (300% as much), had they bought stocks instead of SS?

Answer: none.

Every single person in every single birth year between 1907 and 1941 would have more than tripled their retirement money had they been able to opt out of SS and put the money into the S&P 500. In fact, the worst performing years (1907 and 1908, respectively) would have made 321% and 335% of the SS return over their working lives. Add in what they'd get if they just took 5% of their millions out each year to live on and they do so much better it's comical.

They'd be dead already? They'd be the guys crunching fenders trying to park their Corniches in front of the early-bird-special diners in Florida.

Hope that's of interest,
H

 

[rgraham666]

But what happens when the value of stocks is pretty much wiped out? As it was in 1929, or when the dot bomb went off.

People with lots of assets can survive this. People that don't will be hurt badly. Their worth disappears and they pretty much have to start over again.

You're also assuming that everyone has money to invest in the stock market. That's not true. Many people, such as myself, live hand to mouth. Stocks are not something we can afford. Sometimes even food is an iffy proposition.

SS was started by people who believed that America should look after Americans. They didn't consider it a good thing that anyone in America would suffer in their old age.

The people who want to privatize SS have a very elitist perception of what constitutes an American. To whit, only those with lots of money count. And their writings make it quite clear they are not going to give up any of their money to people who aren't Americans.

Shrugs. As the Romanovs and the Bourbons discovered a society has to include as many people as possible. If it doesn't those on the outside find a way to remake society, a way that doesn't include the people that shunned the outsiders in the previous one.

 

[Handprints]

But what happens when the value of stocks is pretty much wiped out? As it was in 1929, or when the dot bomb went off.

People with lots of assets can survive this. People that don't will be hurt badly. Their worth disappears and they pretty much have to start over again.

Since 1941, there have been exactly three ten-year periods when you would have lost money by being in stocks: the ten years ending 1941, 1942 and 1943, respectively. You'd have made money every other time, including the dotcom crash. The most you could have lost (in 1941) was 16% of your initial investment. (NOTE: that assumes lump-sum in/lump-sum out. If you're making monthly contributions, there weren't any ten-year periods in US history in which you'd have lost money. Dollar-cost averaging, folks: it's a winner.)

Clearly, if you're over 55, you shouldn't have all of your money in stocks. Just as clearly, if you're 30, you shouldn't have all of your money in bonds. In fact, you can make a good case for holding an utterly minimal amount of your retirement savings there and a sensible one for holding less than 10%.

You're also assuming that everyone has money to invest in the stock market. That's not true. Many people, such as myself, live hand to mouth. Stocks are not something we can afford. Sometimes even food is an iffy proposition.

Everyone who works in the US has 6.2% of their earned income withheld for Social Security. That's the money to invest in the stock market that I'm talking about. I'm not suggesting that people should be trading food for retirement income; I'm answering LT's question about what the effect would have been had retirees put their money into stocks instead of SS.

I heartily applaud laws which force people to save for their retirements. I'm wholly in favour of their pitiless application. I am amazed that a citizenry as (relatively) financially sophisticated as the US will stomach their mandatory retirement savings being invested in such a shitty and brainless way.

Hope that's of use,
H

 

[R. Richard]

SS was started by people who believed that America should look after Americans. They didn't consider it a good thing that anyone in America would suffer in their old age.

The people who want to privatize SS have a very elitist perception of what constitutes an American. To whit, only those with lots of money count. And their writings make it quite clear they are not going to give up any of their money to people who aren't Americans.

Social Security is a ponzi scheme. If it were not run by the US government, it would be shut down and the people running it put in jail. Social Security money is 'invested' in special US government bonds that have no financial backing whatsoever, except taxes.

In the 1980s, the US Congress allowed certain state government agencies to opt out of social security. A few such government agencies in Texas chose to do so. The participants, most of whom fought against the idea, are now beginning to retire. They get some 2.5 to 3 times what Social Security pays, they get a $50,000 life insurance policy [SS gives a $255 'death benefit'] and they own the money in their trust account. The Texas retirement accounts are insured by giant insurance companies and no one is in any danger of losing their retirement money.

If the Social Security money were invested in US stocks and bonds, in a conservative fashion, the SS retirees would get the same kind of return as the Texas retireees, plus the amount the insurance company charges to run the scheme. In addition, it would not matter if the contributor to SS was an American, the money in a SS account would belong to the contributor. The only ones who would be cut off would be the retirees who are past 72 [IIRC,] who get a minimum SS payment, even if they never contributed to SS.

 

[xssve]

Begs the question: if we had a republican administration serious about individual private accounts, they'd have invested the projected total revenue surplus to jump start those private accounts - somebody already in their forties isn't going to see much return on a 6.2% investment over the next Twenty years, and for people already at retirement age, it's pretty much a joke - without fully funding them from the getgo.

Instead, they pretended it was a surplus in general revenues and made deep supply side cuts, funded by those payroll taxes, while running up a huge debt, to resolve which, of course they recommend cutting the services payroll taxes are specifically collected for, while increasing the tax itself.

In short, it operates much like a de facto flat tax on the middle class, and this is exactly how republicans treat it.

Historically, they appear to hate pension funds almost as much as they hate inflation the thought of all that capital laying around where they can't get their hands on it to fund their various schemes really gets their teeth to grinding, they have a twenty year history of expediting pension fund raids.

And this, essentially, is the problem with the entire theory of private accounts, this administration has proven beyond a shadow of a doubt that no principle in any form is immune to or protected from political expediency.

Private accounts would be, first and formost, a big pool of other peoples money to dole out to cronies to game the market with, any benefits to retirees would come in a distant second, which is pretty much the way it is now, with the exception that the current system does work, however poorly, and in spite of every republican attempt tank it so far.

I'm all for hearing about way it might be done, clearly, there probobly is something better in theory, and there will come a time when it will be necessary to do something, its' definitely on the table, but I seriously doubt that the political will to do it on the up and up exists in Washington, and that's as good as saying it won't happen.

The opportunity has come and gone, one does not need to invent any future scenarios, they heard the word money and their fucking eyes glazed right over.

 

[trysail]

No shit, Sherlock.


Greenspan Says Demand for U.S. Debt May Be at `Limit' (Update1)
By Kevin Carmichael and Simon Kennedy

Oct. 21 (Bloomberg) -- Former Federal Reserve Chairman Alan Greenspan said the dollar's depreciation may reflect growing unwillingness among foreigners to buy U.S. debt.

``Obviously there is a limit to the extent that obligations to foreigners can reach,'' Greenspan said in a speech in Washington today. The dollar's decline to its lowest since 1997 may be ``an indication America is approaching this limit.''

Greenspan's warning came after the U.S. Treasury reported last week that international investors sold a record amount of U.S. financial assets in August. Total holdings of equities, notes and bonds fell a net $69.3 billion after an increase of $19.2 billion in July.

The dollar has declined about 8 percent against the euro this year and 4 percent against the yen.

The former Fed chief, who published a 531-page memoir last month, spoke for about 35 minutes before taking questions for another half hour on the sidelines of the meetings this weekend of the International Monetary Fund and World Bank. The lecture was hosted by the Per Jacobsson Foundation.

Greenspan also said that the August surge in the cost of credit after a jump in U.S. mortgage defaults was an ``accident waiting to happen,'' given that investors were pricing risk too low.

``Something had to give,'' he said. ``Had the crisis not been trigged by subprime mortgages it would have erupted in another sector or market.''

SuperSiv Fund

Greenspan, 81, was critical last week of a plan by some of the U.S.'s biggest banks to help revive the asset-backed commercial paper market, which seized up because of investor concern that too much of the paper was backed by securities containing subprime loans.

Citigroup Inc., Bank of America Corp. and JPMorgan Chase & Co. announced a plan last week to raise money for a so-called SuperSiv that would buy assets from distressed structured investment vehicles.

Investor uncertainty about the value of complex assets held by the vehicles has damped willingness to lend to the funds in the commercial paper market, stoking concern they'll have to dump holdings at fire-sale prices.

U.S. Treasury Secretary Henry Paulson, the former head of Goldman Sachs Group Inc., helped broker the agreement.

In an interview with Emerging Markets magazine published on Oct. 19, Greenspan was quoted as saying that he was unsure ``the benefits'' of the plan ``exceed the risks.''

`Best Assets'

Paulson assembled a group of reporters later that day to discuss the SIV rescue, emphasizing that the initiative was led by banks, that he had consulted the Fed and other regulators as the deal was put together, and that he was confident the initiative would work.

``The concept is not to buy bad assets or assets that have credit problems,'' Paulson said after hosting a meeting of Group of Seven finance ministers and central bank governors.

Investors will buy ``assets that aren't credit-impaired and don't have credit issues -- the very best assets,'' Paulson said. ``That will accelerate the return of liquidity to parts of this market.''

Today, Greenspan questioned whether there was any longer a market for such ``peculiar'' assets.

While he praised ``innovation'' in securitized markets as ``positive,'' he noted that demand for sales of debt backed by subprime mortgages has dried up.

`Peculiar Financial Structures'

``These peculiar financial structures that have become very prominent in the past four or five years are about to disappear from the scene,'' Greenspan said, citing ``various variations'' of collateralized debt obligations and ``special'' investment vehicles as examples.

``They have been tried and they have failed,'' Greenspan said. ``The failure is the basic way that investors have been misled as to what the value of these products is.''

The former Fed chief said central banks also increasingly appeared to have ``lost control'' of market interest rates beyond three to five years of maturity.

Much of the speech was dedicated to explaining why he doesn't view the U.S. current-account deficit with ``undue concern.''

The current-account gap, a measure of trade that includes investment flows, is now about 5.5 percent of U.S. gross domestic product, compared with 6.75 percent in 2005.

A reduction in ``home bias'' by international investors has channeled more money to the U.S., helping the country to finance its current-account deficit, Greenspan said.

He said he may become more concerned about the trade gap if ``the pernicious drift toward'' U.S. government budget deficits ``isn't arrested and compounded by protectionist reversal of globalization.''

Such a reversal would deal a ``major blow to world economic prosperity,'' he said.

 

[trysail]

The U.S. keeps exporting little pieces of green paper with George Washington's picture in exchange for tangible goods (i.e., petroleum, manufactured items). Lord help us if the day ever comes when OPEC or China wants to be paid with something other than those little pieces of paper that we so easily run off on a printing press.

http://farm3.static.flickr.com/2264/1768771050_66eafc9db0_o.jpg

http://farm2.static.flickr.com/1169/1490443623_b0ac251821.jpg

http://farm3.static.flickr.com/2396/1768030761_decee48a2f.jpg​

 

[trysail]

China's Yuan Rises Past 7.4 Per Dollar; First Time Since Peg
By Belinda Cao and Aaron Pan

Nov. 23 (Bloomberg) -- China's yuan rose beyond 7.4 to the dollar for the first time since a link to the U.S. currency was scrapped in 2005 before a European delegation arrives in Beijing next week to press for faster appreciation.

The People's Bank of China signaled it wanted the yuan to gain as it set the reference rate for the day's trading at 7.399 from the close of 7.4145 yesterday. Xie Fuzhan, a member of the central bank's monetary policy committee, said yesterday that China's currency is undervalued and increased flexibility is ``essential'' to make economic growth more stable.

``China's government may use a higher reference rate to guide the market to let the yuan gain faster,'' said Wang Tao, head of economics and strategy for Greater China at Bank of America Corp. in Beijing. ``It's easier to do so when the dollar weakens versus major currencies.''

The currency advanced 0.22 percent, the biggest gain in two weeks, to 7.3983 against the dollar as of 10:45 a.m. in Shanghai, from 7.4257 a week ago, according to the China Foreign Exchange Trade System. Forwards contracts in the currency show the yuan will reach an implied rate of 6.8050 versus the dollar in 12 months, a gain of 8.7 percent from the current spot rate.

European Central Bank President Jean-Claude Trichet, Luxembourg Prime Minister Jean-Claude Juncker and European Union Commissioner Joaquin Almunia arrive in Beijing on Nov. 27 for two days of talks with central bank officials.

French President Nicolas Sarkozy will make his first state visit to China on Nov. 25. where he'll also discuss the yuan's weakness with his Chinese counterparts, according to an aide. U.S. Treasury Secretary Henry Paulson will travel to China next month.

China Visits
European and U.S. officials have urged China to allow faster appreciation in the yuan to reduce global imbalances in trade that are threatening manufacturing jobs. They say the Asian nation keeps the currency undervalued to boost exports, a policy that has flooded the economy with cash, making it difficult for the government to cool economic growth and decade-high inflation.

Central bank Governor Zhou Xiaochuan this week said the nation will consider expanding the yuan's 0.5 percent daily trading limit and gradually allow the currency to move more freely.

The U.S. dollar dropped against 12 or the 16 most-actively traded currencies, reaching a record low versus the euro today.

 

[WRJames]

The Chinese have been playing games with the US currency -- propping it up to keep a gigantic trade imabalance. The reason -- to encourage economic development in China. The Indian rupee is also undervalued. A correction will be good for the balance of trade. If the Chinese get stuck with a lot of worthless dollars -- well, that's a risk they took.

 

[colddiesel]

The Chinese have been playing games with the US currency -- propping it up to keep a gigantic trade imabalance. The reason -- to encourage economic development in China. The Indian rupee is also undervalued. A correction will be good for the balance of trade. If the Chinese get stuck with a lot of worthless dollars -- well, that's a risk they took.

The problem with this sort of comment is that it only sees the issue from a rather one eyed American point of view. America has gorged itself through soft credit on cheap Chinese goods and yes, China has protected a low exchange rate by buying US Government Bonds but it ain't only going to be the Chinese that take the pain of readjustment.

I suspect that the Chinese will revalue but slowly and the main driver in their decision making will be local inflation and its effect on internal security within China. There are already rumblings about food prices in Beijing. It is worth remembering that the riots in Beijing twenty years ago had their birth in protests about food prices. We in the west like to see them as protests about freedom and democracy. Locally the view of the ordinary Chinese was rather different.

When the Chinese do increase the value of their currency their main export to the US will be price inflation. Then the Fed will have to tighten interest rates and that is pain for US citizens.

But always, always in China the most important factor in this debate will not be whether Washington can influence or bully Beijing but what effect any change has on Chinese internal stability and security.

Cheers.

 

[JAMESBJOHNSON]

In the long term the Arabs will destabilize Europe politically, and the Euro will become Monopoly Money. The Arabs have almost taken over the Netherlands.

 

[ishtat]

In the long term the Arabs will destabilize Europe politically, and the Euro will become Monopoly Money. The Arabs have almost taken over the Netherlands.

I was just reading this thread which contains some diverse and interesting politico/economic views expressed without any rancour or abuse and then I noticed the absence of Roxanne, Amicus, Pure etc, ???

Then I noticed this quotation, which as an example of catatonic idiocy will take some beating.

 

[oggbashan]

A weak dollar means that American goods and services are cheaper for other countries to buy.

If the US border controls would act sensibly, tourists visiting the US could help balance the books.

The Euro is strong but the national banks of the Eurozone fudge the requirements to keep the Euro. The European Community Commission hasn't been able to have its books approved by the auditors for years. That should bother bankers but doesn't seem to.

The US dollar and the UK's pound operate with much stricter and visible controls than other currencies. The value of a currency is what people, particularly currency traders, think it is worth. At the moment they think the dollar is weak. Next week they might change their mind.

Og

 

[JAMESBJOHNSON]

OG is correct. A weak dollar means a Ford or Chevy costs less than a Toyota or Nissan to buy. Boeing aircrat are cheaper than French aircraft. American lumber is cheaper than Canadian lumber. And American vacations are cheaper than Spanish vacations.

 

[trysail]

China to Let Foreign Companies Sell Yuan Stock, Bonds
By Allen Cheng and John Brinsley


Dec. 13 (Bloomberg) -- China will let overseas companies sell stock and bonds in the nation for the first time, responding to U.S. calls to open its financial markets and increasing supply in an equity market that's more than doubled this year.

The announcement, made at the end of the third Sino-U.S. Strategic Economic Dialogue talks in Beijing today, will allow ``qualified'' companies to sell yuan-denominated shares, while locally incorporated foreign banks may sell bonds in the currency.

The decision paves the way for companies such as HSBC Holdings Plc to tap China's $4.2 trillion stock market, the world's best- performing in 2007. It will also broaden investor choice in a nation that bars its citizens from buying stocks abroad, a restriction that's contributed to the 139 percent advance in the benchmark CSI 300 Index this year.

``This is one of the measures by the government to maintain a stable market,'' said Jeff Coggshall, a London-based hedge fund manager at Tiburon Partners LLP, which invests in the Greater China region. ``They're meeting demand with supply.''

London-based HSBC, Europe's largest bank, has said it and Hong Kong unit Hang Seng Bank Ltd. are both considering stock market listings in Shanghai when rules allow. The Shanghai Stock Exchange is studying a plan to let companies including Coca-Cola Co. and Siemens AG trade, the official Xinhua News Agency reported last month, citing Que Bo, the bourse's assistant general manager.

Currency Gains
HSBC has invested more than $5 billion in China. Coca-Cola, the world's largest soft-drink maker, has put in $1.25 billion since entering the country in 1979, while Siemens, Germany's biggest engineering company, has invested the equivalent of $2 billion, according to their Web sites.

U.S. Treasury Secretary Henry Paulson, in Beijing for the SED meetings, said there's ``clearly'' demand from companies doing business in China to be able to finance investments there in local currency.

The move may run counter to Paulson's goal of persuading China to let its currency appreciate faster. Allowing foreign companies to sell shares and bonds in China reduces the need for them to bring in funds from overseas, potentially alleviating pressure on the yuan to strengthen.

``If a foreign company doesn't need to bring a billion dollars through foreign direct investment, but can raise that money onshore, then you don't have to bring in that capital,'' said Stephen Green, senior economist at Standard Chartered Bank Plc in Shanghai.

The yuan rose to the highest since a fixed exchange rate ended in July 2005, climbing 0.11 percent to 7.3692 per U.S. dollar as of the 5:30 p.m. close in Shanghai. The currency has gained about 12 percent since the link was scrapped.

`Modest Progress'
Paulson has pushed China to give more access to its financial services industry than it offered in order to join the World Trade Organization in 2001. He acknowledged today that progress in opening the world's fourth-largest economy to foreign financial- services companies had been ``modest.''

China doesn't allow overseas investment banks to arrange share sales or trade stocks in the world's fourth-largest economy. The securities regulator said yesterday that China will ``soon'' end a ban on foreign investment banks setting up joint ventures.

``Opening China's financial markets to foreign competition strengthens the financial backbone of the Chinese economy,'' Paulson said in today's closing speech.

Brokerage Ventures
Foreign companies have lobbied for greater access to China's stock market, where investors opened more than 47.5 million investment accounts this year for trading stocks and mutual funds. China overtook Hong Kong as the second-largest equity market in Asia this year, partly driven by a surge in stock sales.

China will also study foreign investment in domestic brokerages before June next year, according to today's statement. The government halted investment in securities companies by international firms last year, saying domestic brokerages needed time to restructure.

The securities regulator yesterday said it will announce rules on relaxing requirements for foreign investors seeking stakes in Chinese securities firms ``in a few days,'' and will gradually extend the scope of activities brokerage ventures can engage in.

Chinese firms have raised 439.1 billion yuan ($60 billion) from domestic share sales this year, more than in the previous six years combined, according to data compiled by Bloomberg.

The CSI 300's rally has made it the world's most expensive primary index tracked by Bloomberg, valued at 37 times estimated earnings this year, compared with 16 times for the Standard & Poor's 500 Index, 18 times for Japan's Nikkei-225 Stock Average and 19 times for Hong Kong's Hang Seng Index.

The government is considering a plan to let Chinese individuals invest directly in Hong Kong stocks for the first time. Hong Kong submitted a proposal to China's cabinet on the so-called through train initiative, Hong Kong Monetary Authority Chief Executive Joseph Yam said in Beijing today.