77 Billion USD: Amount Poured By Foreign Banks Into China

We have written about how the Chinese central bank is trying to cool down the economy by rising reserve ratios for Chinese domestic banks – but today we spotted a stat that surprised us:

“During 2010, banks that report their holdings to the Bank for International Settlements plowed an exchange-rate-adjusted $77 billion into China, increasing their exposure by 86% from the end of 2009 and bringing the country’s share of global cross-border lending — while still small at 1.1 % — to its highest level on records going back to 1977.

The shift represents a vote of confidence in China, as banks pulling out of financially troubled European countries such as Greece, Portugal and Ireland send more money east. But it also underscores the pitfalls of China’s efforts to find its own solution to a fundamental problem of international finance, the so-called “trilemma”: While countries may want to maintain stable currencies, run an independent monetary policy and keep their borders open to foreign capital, they can do only two of the three.”

Statistics Source: WSJ

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Gold Investment: Returns Over 31 Years

Here is some interesting stat we spotted today:

” In 1978-79, the price of gold (London) was USD 208 per troy ounce. In 2009-10, it rose to USD 1023. The average annualized return (or CAGR) works out to 5.27% per annum. We don’t have the official average for 2010-2011 but assuming it is USD 1400 the CAGR works out to 6.14%.”

That number, to us was a surprise – just 6.14 percent CAGR?

Of course we have written about Gold Statistics before.

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Recent Oil Price Drop: Blame Algorithmic Trading

We have seen this before – when there is a sudden fall in the markets, algorithmic traders can easily be blamed. They were blamed for the October 1987 Crash. They were blamed for the Flash Crash in 2007. And now, they are blamed for the recent oil price drop.

The issue is fairly simple: if everyone has systems based on the same rules, the trigger would definitely lead to disaster. It has been widely quoted as a perfect example of a “Domino Effect”. For the recent price drop, stop-loss trading takes the blame.

“The automated sell orders were generated as oil crashed through price points that traders had programed in advance into their supercomputers. In many cases, computer algorithms sold for technical reasons, as oil dropped through levels that, once breached, could trigger ever larger waves of selling yet to come.”

Statistics Source: Reuters

Just have a look at the NYSE trading composition – what percentage of trading is done by institutions, what percentage is automated, what percentage is done by retail users – the picture is scary.

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George Soros Gets Out Of Gold: Market Top?

We spotted a neat question today:

“George Soros may have picked the top. His liquidation of gold below $1600 an ounce has been followed by a whole series of volatile actions in commodity markets that look to be massive trouble for the real asset players, who may be pulling their bets.

Soros seems to have correctly figured inflation risk greater than deflation; higher interest rates coming, and he got out before speculators put to rout by the regulators installing higher margin requirements. Take that Warren Buffett, John Paulson and all you gold fanatics. Not to speak of the silver freaks.”

Statistics Source: Forbes

Has the Gold Market topped? Maybe. We will not bet against Soros.

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21 Percent: Reserve Requirement Ratio For Chinese Banks

Well one thing is sure – the Chinese central bank definitely wants to cool down an overheated economy, and they want to cool down the economy on steroids. Imagine this: the reserve requirement ratio for chinese banks just went up by another half a percent, to 21 percent!!

“The increase, the eighth since October, will raise the reserve requirement ratio to a record 21 percent for China’s biggest banks.

The increase will take effect from May 18, the central bank said in a terse statement on its website.

By forcing banks to lock up deposits they would otherwise have lent, China hopes to drain its economy of excess money, one of the main drivers of high inflation”

How do we digest this statistic? compare this number with the liquidity requirements in the US:

“For institutions with up to $10.7 million, there is no minimum reserve requirement. Institutions with over $10.7 million and up to $55.2 million in net transaction accounts must have a liquidity ratio of three percent. Institutions with more than $55.2 million in net transactions must have a liquidity ratio of 10%.”

Source: Wikipedia

Statistics Source: Reuters

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Which Stock Went Up 50 Percent In Less Than A Month?

The answer will surprise many – it is Bookseller Barnes & Noble (NYSE: BKS) – a stock that had fallen 80% in the past five years, has shot up by 50 percent in the last one month.

“Back in March, I suggested “the odds are increasing for a convincing turnaround.” My logic rested on two pillars: First, a massive shrinkage in the store base of rival Border’s would help drop-in traffic in those neighborhoods affected. Second, the company’s Nook electronic reading device was starting to emerge as a real contender among the small group of e-readers. As it turns out, it’s the Nook that explains why shares of Barnes & Noble have taken off like a rocket, rising 50% in less than a month.”

Statistics Source: Seeking Alpha

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Akshaya Tritiya Statistics: 20 Tonnes Of Gold Sold In India

Akshaya Tritiya is an auspicious day for buying gold in India. The World Gold Council has a heavy marketing focus for selling gold on this day.

We spotted this today:

“Gold sales in India were about 15 metric tons to 20 metric tons on Akshaya Tritiya, according to the Bombay Bullion Association.”

Statistics Source: India Infoline

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What A Bubble Looks Like

Source: SeekingAlpha

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What Is The World’s Total Gold Stock?

“165000 – This is the total number of tonnes of gold mined since the beginning of civilisation.”

And, did you know this – Over 90 percent of the world’s gold has been mined since the California Gold Rush (1849)

Statistics Source: World Gold Council

We have written about Gold Statistics and India’s Gold Demand, and Gold and Silver Statistics before. Precious Metal, for sure!

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Why Is Mexico Buying So Much Gold?

Well, here is something that doesn’t quite add up – Mexico’s central bank has bought some 93.3 tonnes of Gold in the months of Feb and March.

“Mexico’s buying of gold in February and March amounted to 93.3 tonnes of gold, and is one of the most rapid programs of accumulation on record. With reserves now just over 100 tonnes in total, the market is holding its breath to see if it is an ongoing buyer.

Mexico’s vigorous purchase of gold over the last two months surprised the market by its speed and size. For any central bank to buy 93 tonnes in this market is a clear statement that faith in the U.S. dollar is falling fast. We do expect other emerging South American nations to follow suit over time, alongside many of the world’s emerging economies. ”

Statistics Source: Gold News

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