Home   Top down   Proactive Structural US, Asian, Europe  Debt Bubbles Burst Crisis  2007- 2010, Causes, Consequences Operations Simulation Analysis : Causes , onset , recovery, exit strategy of   and  its Impact  on Economy, Asset Prices Bubbles, Liquidity  , Monetary Policy  OSA      by   OSA pioneer  Dr. Warren Huang
 

Book your June- Aug Taipei, Hong Kong, Shanghai Proactive Structural Simulation of European, Debt crisis , global liquidity, exit strategy impact on , Global, Asian equities, housing , Gold, Metals, Currency, Commodities , derivatives prices 2010  recession recovery double dip forecast workshops ( Dr. Huang will provide strategy for your selected   country and asset of your own  wh3928@yahoo.com / osawhh@sina.com

US, Asian, European Debt crisis have been caused and created by global central banks, government monetary, economic stimulus, fiscal bailout, excessive liquidity  policy to stimulate consumer business and government spending resulted government fiscal, current  account, business, consumer debt bubble built up and burst. With US budget deficit at 1.8 trillion about 11 % of GDP, total debt 375 % of GDP,( http://www.ibtimes.com/articles/20100125/total-debt-relative-gdp-trumps-everything-else.htm  )current account deficit of 4 % of GDP, UK at 12.8 % of budget deficit, and Greece budget  and current account deficit 10.4%, Italy, Spain , Portugal, current account at 6 % GDP, budget deficit at 11 % of GDP, Hungary budget deficit at 4.5 % of GDP all due to fast GDP expansion, over spending , excess liquidity resulted huge bubbles built up in wealth.before the 2007 financial crisis, suffered by strong EURO and global recession resulted mounting trade, current account, and budget deficit facing bubbles burst, default risks following Dubai debt default last year, leading to panic selling of EURO to 1.36, pound to 1.56 against the dollar, while US dollar benefited by 4 Q GDP up 5.7 %speculating economic recovery and inflation expectation resulted future rate hike.
Greece and PIGS country debt crisis getting worse in May 2010 resulted Euro/IMF trillion dollar program still can not stop Euro plunge to 1.22
In current  financial crisis, US government spending 1.3 trillion in stimulus package deficit amount to 13 % of GDP and spend trillion dollar injecting into banking, monetary system to save the financial  and housing market bubble burst since 2008, created excess liquidity bubble, encourage consumer, business spending, created equities, housing bubble and debt bubbles  with accumulate 14 trillion in deficit spending, China, and Asian countries spend trillion dollar in economic stimulus and low interest loan further built up personal debt and government debt bubbles and housing , commodities ( oil, commodities, metal, gold) prices bubble and housing price up 30- 100 %, stock price up 100 %, furthers built housing, equities bubble . while UK has 12.8  % GDP of deficit Germany 5.6 %, France 8.4%Spain 11.5 %,Singapore 2.7 %, Malaysia, Taiwan, Korea all have debt  4-  5 % GDP . this will continue built up as housing, auto,  credit card debt  grow due to current excessive liquidity bubbles in current stimulus encourage more debt spending in housing, auto loan  ( US consumer debt already  125 % of personal income )before recession recovery and burst there after this years rate hikes to support the currency and fighting inflation, leading to double dip inflationary recession
http://www.dailyreckoning.com.au/global-bubble-2/2007/02/26/

 government debt : http://www.alternet.org/workplace/136835/geithner_and_summers_want_more_debt_bubbles:_the_result_could_be_catastrophic_/

http://www.forbes.com/2008/12/05/bubble-dubai-carlyle-pf-ii-in_rl_1205croesus_inl.html?feed=rss_popstories

Government debt bubble:  http://www.heritage.org/Research/Economy/wm2257.cfm  http://www.politico.com/news/stories/0709/25232_Page2.html

   Nobel idea and 30 years implementation of Combined Top Down and Bottom up analysis  proactive structural decision analysis modeling innovation breakthrough in Global Monetary, Economic, Fiscal Policy      in  Macro Economic Growth, Prices Stability and Assets, debt Price, Liquidity Bubble Control and Financial Market Asset Prices  mechanism   predicting the causes, impact onset, recovery, early warning Global Financial Crisis, Recession Operations Simulations Analysis (OSA)
OSA Capitalized  last 30 years Trillions Dollar Asset Prices Bubbles Burst  Investment Opportunities, Risks Early Warning and achieve billions dollar supply chain cost reduction by proactive structural  Monetary, Economic, Stimulus , Fiscal Bailout, Global credit, financial crisis, recession  Impact on US/China/Global housing , equities, bond, commodities, oil, energy , metal, derivatives markets assets prices bubbles burst simulation ( covering full range level 1 to 3 asset pricing for mark-to-model and mark- to market toxic asset valuation , replacing current probability scenario based unreliable asset pricing betting on the wrong side of investment)  ,         Workshops
 

Comment by  Dr. Warren Huang on Yahoo finance.com Blog May 10, 2010
I predicted on Sept 2007 Wall Street Journal Real Time Economics, Market Beat blog and this blog that the burst of  US and global super housing prices bubble will repeat 1980 style last through 2010 with double dip recession and stock market rebound and correction due to excessive
stimulus , zero interest and trillions liquidity into the financial and economic system.
We are in the second stage of recession recovery , the global debt bubble burst crisis with public debt over 6- 12 % of GDP, starting with Greece, US, Spain, Portuguese were caused
by easy credits, excessive liquidity resulted debt  and asset ( equities, commodities, housing )bubbles burst.
Global stock markets rally over Euro trillion bail out fades in one day due to US and global stocks investors and economist are overoptimistic about US 1 Q GDP growth at 3.2 %, April PMI at 60, and rebound in housing and retail sales 2010  all due to housing stimulus credit soon to expire in April, and tax rebate resulted consumer spending rebound at 6 % will peaking out after May, Greece, euro area debt crisis drag GDP growth to 1 % , dollar appreciation from 1.5 to 1.26 euro will further slowdown US export growth in the second half  , China credit tightening slow GDP to 8 % by yearend , India, Austria, Korea interest rate hikes will slow down GDP growth , leading to US export decline related  while any further exit strategy, credit tightening, inflationary control, rate hikes will lead to economic growth  double dip to below  2.5 % by yearend . US stocks are extremely overpriced , subject to 20- 30 % correction
Dow Jones, Nasdaq, S&P stock index forecasts
Dow Junes will be return to consolidate in 9000- 9900 soon , NASDAQ test 2000- 2200, S&P test 1000- 1100 and may test in second financial crisis dip triggered by Greek and PIGS countries debt crisis, China/Asian slowdown
Details on www.osawh.com/centmaf.htm www.osawh.com/dowwp.htm www.osawh.com/debtbub.htm  

Proactive structural dynamic asset pricing Operations Simulation analysis, tracking last 30 years global monetary, economic , fiscal policy impact on interest rate, currency, commodity, housing, equities, bond, derivatives ( MBS, CDO,,CDS), ) pricing  for normal, market to market,  and distressed, toxic  assets mark to market ,mark  to market ,(covering full range level 1 to 3 asset pricing for mark-to-model and mark- to market)  toxic asset valuation , replacing current probability scenario based unreliable asset pricing betting on the wrong side of investment) 
 The What, Why, How and Timing  in Identify, Tracking by two master hands controlling the causes, onset, burst, recovery, early warning of US/China/ Global Assets Prices, Bubbles burst Simulation,  OSA and  strategic investment/ Basel II risk management lecture/workshops tours 

 Dr. Warren Huang predicted since 2007 that Global Assets Prices bubbles burst, heading for recession, prices plunge 50 -70 %  2008- 2009 and bear market rebound and more debt, liquidity assets bubbles in summer 2009 in recession recovery heading for double dip inflationary recession 2010

 (covered thousands lectures, 46 countries capital cities 30 million , banking,  finance corporate CEO, CFO, fund managers, senior executives  investors and 100 million copies copyright since 1983,                          by  your expert   Speaker, Dr. Warren Huang, Pioneer, Global Macro, financial, industrial  economist and  Global Strategic Investment, supply chain Management Consultant

Strategic Economic, Banking, Finance , Capital Market Reform for Sustainable Global Macro and  Financial Market Growth and Price Stability : two master hands controlling Global  Capital Market Asset Prices, Bubbles, Early Warning Simulation 

    Warren Huang,   OSA  Intl   Operations Analysis  San Francisco, Ca., USA  website www.osawh.com  wh3928@yahoo.com /    osawhh@sina.com
This is part of Dr. Warren Huang pioneering work of  two master hands controlling global economy and capital market asset prices,  has copy rights over 2000 articles, 100 million  English  and Chinese copies to 78 countries.
No part of this paper models, contents can be printed, used without Dr. Huang’s prior approval.

  Prof.  at  Taiwan ,Tsinghwa and Tunghai University in Industrial Economics, Global Strategic Management and Chemical Engineering , lecturing China Peking, Tsinghwa, Fudan , Zechiang, Jiaotung, Dalian Univ. EMBA, Economic Management, Business /Financial Research Center Financial engineering .                                                      
                                                                                                                                                                                            Abstract

Develop global macro , monetary, financial economics, industrials market economy information knowledge base 
Mathematical  quantitative  Methodology: Thousands structural dynamic Operations Simulation Analysis (OSA) of demand side monetary economic integrating global macro, financial , industrial l trade economics information knowledge base  tracking monetary, economic stimulus, fiscal bailout policy, WTO impact  on  economic cycles, daily financial market  interest rate, currency, commodities, properties, commodity, natural resources,  assets demand, prices market forces mechanism, housing, credit, financial crisis, recession  simulation with average error below 1.5 %, correlation above 0.9.
supporting government and business strategic  investment and supply chain cost reduction maximize China, US, Taiwan economic , banking, finance, enterprises reform  for sustainable profit growth and price stability control.:
Spend  full time in China,(1994-98) Taiwan ( 1984-95 ) offered thousands lectures/workshops to  hundreds  banking, securities companies CEO,  and security commission, stock exchanges  executives, 15 cities TV, radio 30 million investors  CEO,, executives, traders tracking   causes, onset, recovery , early warning of  Asian financial crisis, high tech venture capital  investment  risks and supply chain  strategy, risk management.
He has been invited by  China, Taiwan, Asian, US  24 central bank governors ,financial risk management conferences to speak on  the subject , millions global government, banking, finance, SOE, executives visited  his website www.osawh.com  since 1998.
applied to maximize US, China, Taiwan  board members, management , investors  corporate governance performance  training, avoided banking reform in trillion dollar NPL  market loss, saved billion dollar supply chain costs and supporting  300,000 Taiwan importer/exporters, global currency, WTO  competitive pricing  strategy
He Trained 1000 senor industrial economics, global strategic management  students tracking 100 countries macro/financial economics, wrote thousands articles for Taiwan , China government economic, finance newspapers, investment, trade journals.
 

Keyword:  Banking, finance, enterprises reform, macro, financial , industrial , market economy, demand, asset prices,
market forces  simulation, monetary, economic policy, corporate governance, stock, currency prices mechanism
Strategic Economic, Banking, Finance Reform for Sustainable China Macro Financial Growth, Price Stability                                  

Dr. Warren Huang CV   Dr. Warren Huang English publications, speeches
He will be speaking to International Symposium of Financial Engineering and Risk Management Conference ,
June 12, 2007 Peking University, Beijing and
2007 Proactive global strategic mutual fund and wealth management investment strategy and risks early warning
He  will be the full day master class workshop  leader  on Emerging Opportunities and Risks in Strategic China Fund and
Wealth Management for Terrapinns 2007 China Fund and Wealth Management Conference, Oct 2007 at Pudong
 Shangri-La Hotel,
presented to Global finance corporate governance conference, Peking University, Business, Finance Center, Peking, May, 2002, 
Asian/China Finance, Capital Markets Conferences Singapore, Nov. 5, 2003, Shanghai, Nov. 25, Beijing, Nov 27, 2003,
China Economic Research Center, Peking University, China 3rd Economists Conference, Fudan University, Dec. 21, 2003   
Asian Business Forum, China Oil, Gas Market investment conferences Feb, Nov., 2005, Beijin
Shanghai University of Finance and Economics, China finance sustainable growth, Oct. 2003, China capital market, financial engineering  innovation conference, May 20, 2005
Dr. Warren Huang predicted  to Asian Business Forum's Beijin workshop to  ExxonMobil, ARAMCO , Merril Lynch, HSBC, VP, Phillips Petroleum CEO, 100 multinational oil, banking CEO, executives in Beijin Feb and  Nov. 2005, that oil prices will soar to 69 in summer 2005, metal prices to new high in January 2006 and oil prices will hit 80 in summer 2006, soaring US, China  inflation  will raise  rates throughout  summer 2006.,  Fed fund rate will go to 5.5 %  , China raised lending rate Apr. 28 to 5.85 %   gasoline futures will  to 265,  metals , commodity continue making new high , drive  CPI to 4.3 % in March and  higher in the month ahead. US  Fed fund rate 10 yr. bond yield will go to 5.5 %, stocks, bond facing correction  give up all 2006 gain ahead. 

Introduction :Economic Reform : Demand side monetary economic simulation tracking global macro/financial, industrial/ trade market economy
China economy is facing structural changes after joining WTO,  from closed planning economy to open world market economy as China  opening its domestic banking, financial and consumer products markets and cut or eliminate import tariff duty protection, joining the global market economy.  Over 55 billion dollar annual  foreign capital inflow  into these markets and associated technical and management know-how,  boosted China export and foreign to 345 billion and RMB appreciation pressure
 As China and global central banks follow US 13 rate cuts and tax cuts  to stimulate consumer demand and fighting deflation resulted uneven  economic development and China   coastal area (  Yantze , Pearl river, and Bohai delta) excessive auto and housing , steel  credit demand  over 24 % and money supply exceed 21 %  with  housing prices soared 60 % and some area housing prices doubled, rural area still facing recession and high unemployment and  the most of the manufacturing facing global overcapacity, price cutting, deflation  and stock prices plunge.
In order to  facing the fast changing global market economy  competition, China banking, finance, enterprises must speed up its reform, and change management
Privatization, ownerships and corporate governance reform alone will not be able to boost efficiency and performance  for
sustainable profit growth.  What the management needed is setup goal , mission, performance, risk oriented strategic, execution  cross functional teams  and modern management concept, management procedures, supported by rational reliable strategic policy, investment, supply chain decision analysis tools to avoid following global economy and financial crisis, asset  bubble burst, financial crisis resulted trillion dollar market loss, nonperformance loan every two to three years since 1987 due to the government, banking, financial markets decisions makers rely on speculation on  supply side economy and statistical models based  on  3 month old economic, business data or the instant  internet news , following the crowd, chasing the market resulted overheated asset bubbles built up and bursts  every 3 years. They failed to address to the real causes, onset of the bubble burst through structural dynamic modeling tracking the causes and responses of the market forces demand and  capital market asset prices movement Operations Simulation Analysis (OSA)
This author spend 30 years tracking the real causes of   new economy bubble bursts, old conventional  economy fade due to misled by supply side over-optimistic economists,  excessive business investment, inventory to improve productivity,  product, and market innovation, ignoring peaking off consumer, business  demand  resulted overcapacity, price  and profit  and stocks prices slump, piled up trillion dollar market loss and bad loan.  With the advancement of  internet based e-finance, e-investing, e-credit, and highly risky  trillion dollar structural finance derivatives markets providing instant  online information for deposit, transfer, credit and stocks trading  without reliable demand side decision simulators forecast the future trend,  leaving the investors follow financial markets analysts optimistic over 2000, pushed  all time high  in high tech stock prices bubble, ignoring interest  rate hikes  resulted cool off in consumer, business demand leading to earning decline and bubble burst, stock prices plunge 90 % in upstream/downstream Information Technology  (from venture capitals investment , IPO, M/A ,  dotcom to software, chips, PC, telecommunications, fiber optics ) all simulated,  warned by  this authors’ lectures on 24 global (US, ECB, Asian China, Taiwan) central banks governors and macro,  financial  economic conferences since 1998. ( Huang, 1-24) Trillion dollars loses in US and Asian stocks market loss could have avoided and billion dollar supply chain costs could have saved by these demand side monetary economic simulation of market forces

prices movement in global market economy,   to be presented and in the conferences.
 
This   author  has spend most  of his time in Taiwan, ASEAN, Asia( 1980- 1996) and China, Hong Kong(1994-1998  with Ji in China), and US, in developing, implementing thousands dynamics  Operations Simulation Analysis(OSA)  of global central banks monetary, economic, fiscal  policy, oil prices WTO impact on daily China,  Asian, US, European and  global macro economy  boom and bust cycle, wealth effect, industrial assets  prices,  bubble burst and daily financial markets interest rate, currency, stock, commodities, listed stocks industrial sectors demand, prices, profit margin stock prices normal, crisis dynamics during 1980 and 2003  for supporting daily global government, banking, securities, insurance, state enterprises reform, multinational, SOE and medium, small enterprises privatization, IPO, merger/acquisition, QFII, QDII strategic investment risk , financial crisis, corporate cost, financial accounting  tracking, board members, management teams, investors training for corporate scandal early warning and supply chain cost reduction strategic management, avoided trillion dollar debt, equities, properties asset  investment loss and  nonperformance loan and  and saved billion dollar supply chain costs in each crisis, bubble burst since 1980.
(The root causes, onset, recovery, early warning of global debt, equities, properties banks  NPL  assets)

 Dr. Warren Huang CV  accurately predicted  Nov. 5, 2003 in Singapore ,Shanghai Euro-events conferencesSingapore http://www.euro-events.com/conf/afcm2003/ photos 1, 2, 3 lecture ppt  , Shanghai, Beijin Nov. 2003  Asian/China finance, capital Markets conferences,  www.euro-events.com/conf/cfcm   picture  2  and to China economists meeting Fudan University, Shanghai , Dec. over 2000 QFII/QDII executives, May 8, 15, 2004 to US Silicon Valley investors, radio station , and  www.osawh.com website that excessive rate and tax cuts resulted manufacturing and consumer demand pushing US Oil prices  soared above 50, metals  prices reaching 23 year high, will follow economic recovery and not transitory .  weak dollar due  to soaring trade deficit, ( 55.3 billion  for June, 50 for July ) will drive  inflation up 5 %, bond market slump in May 2004  job creation, productivity, profit growth peaking out  in the second quarter 2004 Fed June, Aug  , Sept 0.25 % rate hikes China credit tightening, will follow US rate hike in summer 2004, global economy facing inflationary slowdown and followed by stagflation next year with  stocks entering bear market consolidation, with 30- 50 % correction Global IPO  will facing 30-50 % correction  as Google will  plunged from 135 to 60-80, any attempt using IPO to speculate market rebound will be followed by sell off bear trap , avoided trillion dollar bond, equities, derivative market loss made trillion dollar oil, commodity derivatives market profit.
China Macroeconomic control tracking, forecasts: Despite  China Peoples Bank raised deposit ratio by 1.5 % and cutting capital investment in steel, cement, aluminum, auto loan lead to  some progress macroeconomic control with Aug money supply growth at 14.2 % (below 17 % target), auto sales down 10 %, asset prices, inflation retreat from May ( benefited by  commodities prices down 15 % ). However Aug. producer, consumer price still up 5.3 % ( coastal cities Beijin, Shanghai GDP up 14 %) from year ago, wealth effect, FDI drive Aug national  housing prices up 14.8 % ( 2750 ) and 28 %for coastal cities Shanghai, Ninbo, Aug retail sale up 13.2, China  first half GDP up 9. 7 % far above 7 % target, medium, long term loan up 30.4  % repeat 1994, call the need for interest rate hike in Oct. to cool off the consumer and housing demand.  soaring China steel, cement, aluminum investment (over 120 %), coal, energy shortage,  stocks prices recent rebound from 1250  to 1470 speculating over Premier's statement over stock market stability is overheated ( accurately predicted by Dr. Huang on this website) market is over, continue bear market technical rebound ( within 20 %  and consolidation, with Shanghai A testing 1250- 1500, IPO and newly listed small cap shares plunge 30-50 % with most testing its IPO price, low prices blue chips shares like Sinopec, Unicom will lead future rebound 20- 40 %. , This supply side tightening are insufficient to cool  the uneven economic overheating, must  follow US rate hike in Sept.  implement  structural  rate hikes to cut off excessive consumer demand in housing, construction materials, auto and retails  demand . any postpone of rate rate hike will further delay  soft landing into second half . 2005,   He also predicted  Oct. 1994 to China Wuhan securities news, Wangguo,  Kuotai  securities investors, Beijin  China Financial Times, China macroeconomic control will be soft-landing 1996, Shanghai A will be traded  between 600- 800 during 1994- 1996 He recommended that China stocks will be very attractive to QFII in the new Millennium
Global central banks, economist, financial market , industrial sectors analysts ignoring ,Dr. Huang photo  warning to ECB, JP Morgan in Rome, China Peoples Bank governor Dai central bank governors conference in Macao, Taiwan central bank governor Asian Pacific conference Taipei, APEC finance Thailand prime minister, ASEAN central bank governors conferences in Bangkok, US Fed  governors , Washington Area, NASD finance conferences 1998-2000 on  IT asset bubble bursts
US macroeconomic, inflation control  tracking, forecasts: Dr. Huang spoke to Euro-events Singapore , Shanghai, Beijin Nov.  2003  Asian/China Finance, Capital Markets conferences lecture to 2000 QFII, QDII mutual fund managers and  China Economist annual meeting Dec. 20 and www.osawh.com  website and thousands workshops  warning  US, global analysts over optimistic  over the business and consumer spending twin growth engine will drive second half 2004 economic recovery, profit growth, bull market rally, job creation, underestimated on the impact of US dollar depreciation, excessive rate, tax cuts , 45 trillion dollar  housing, equities wealth effect resulted excessive consumer, business demand, NAPM peaking out at 66 ( already plunged to 58 as predicted ) driving soaring oil, commodities, metals asset prices bubble reaching 23 year high in March, May  and extending into the rest of  2004.  US trade deficit soared to 50- 55 billion and inflation, facing credit tightening, rate hikes after May, Aug. Sept 2004, profit , productivity growth , consumer confidence( already plunged to 98 from 106 as predicted) , business spending,  peaking out, facing  squeeze in  second half  2004, Job creation peaking out at March 370,000,  May 230,000, June 80,000, July only 32,000 , despite Aug 112,000, stock prices peaking out in the second quarter, China and US, Global stocks bull markets are over, entering bear market consolidation.   US High tech, finance, housing, retails, auto share will give up  all its 2004 gain plunge  30-50 % and  trillion dollar loss in bond and stock markets repeating 1995 and 2000  and trillion dollar profits in oil, commodity futures investments
US inflation rate at  3.2 % in Aug., with business  spending up 10 %, consumer confidence above 100 ISM at 66 are inflationary, facing excessive inventory built up,  oil, soared to 50 and metals to  new high, will drive up 20 sectors 5000 products costs and prices, more rate hikes are on its way to cool off the economy. (
Global Capital Markets Asset prices tracking, forecasts:
Dr. Huang lectured to 50 European, Asian, Malaysian central banks, banking, finance executives Kuala Lumpur, Sept. 30, 2002 predicted that oil prices soared to 43, Dow Jones retest 7500 Nasdaq 1250, March 2003 on Asian Business Forum.   He lectured Nov. 2003 lectured to Euro-events Singapore http://www.euro-events.com/conf/afcm2003/ photos 1, 2, 3 lecture ppt  , Shanghai, Beijin Nov. Asian/China finance, capital Markets conferences,  www.euro-events.com/conf/cfcm2003   picture  2  and to China economists meeting Fudan University, Shanghai , Dec. over 2000 QFII/QDII executives, identify housing, equities wealth effect bubbles   month ahead, investment opportunities in China petrochemical upstream/downstream, steel, aluminum, telecommunications ADR , Shanghai A and Hong Kong H shares, mutual fund up 80 %  IPO shares up 150 % and early warning for asset bubbles in oil, commodities prices reaching 23  year peak( recommended invested in future, derivatives gained 5000 %) in March 2004, will drive China CPI to 5 %, with steel, cement over-invested 170 % and energy shortage will lead to further credit tightening, accurately predicted China Peoples bank raise bank reserve ratio 0.5 % to 7.5 % open market inter-bank rate (Chibor)must stay above 3.% to remove 110 billion from the capital markets,  US CPI to 5.1 %, core inflation to 2.7 % in the summer , overoptimistic over US economic recovery and job creation,( despite March strong 300,000  new jobs can not sustainable after June quarter tax rebate is over ( June job creation already down to 32,000) and  inflation outlook may lead to rate hike after May and summer lead to serious bond market plunge (US lose  380 billion dollar, China lose 270 billion) housing bubble repeat 1995 bond market crash and 2000 election bubble and global IT and blue chips banking shares will peaking out in July  facing and correction 2004, Market speculators using Dell 29 % profit gain to push Dell and High tech, and blue chips is premature, Dell will facing pricing cutting from HP in back to school sales and general economic slowdown, Dell stock will plunge below 30, IBM test 80. Global IPO  will facing 30-50 % correction  as Google plunged from 135 to 60-80, any attempt using IPO to speculate market rebound will be followed by sell off bear trap  Dow will be traded 9550- 10300, Nasdaq  1750- 2000 , Taiwan index post election bubble burst from 7200 to  5000- 5500, Henseng 10500- 12500, Nikkei 10000- 11500, China credit tightening continue. Shanghai A 1250- 1500, Shenzhen 3000- 3450, Euro : 1.18- 1.26 , Yen 105- 110, US, Asian and European stocks  follow US stocks  rebound  in the third quarter 2004 will gave up all this year gain  China and US economic slowdown will drag global economic growth, stocks  ( including IPO )facing  30-50 % bear market  correction consolidation 

Monetary Policy Impact on Global Economics , Banking, Financial Crisis, Systems Risks OSA Simulation:

These banking and finance information knowledge  based expert systems provide the global central bankers reliable decision tool in daily what, when , why and how of monetary policy  impact on macro economic  national and regional
to be presented to  China  Finance Sustainable Development , Shanghai finance, economic university, Oct 25, 2003, Shanghai  
inflation, GNP, and financial money, currency, stocks, bond, financial derivatives,  industrial demand, prices markets normal and crisis discontinuous risks behavior and derivatives markets risk management to avoid uneven development.

This paper will discuss the development and implementation of improved Neoclassical Economic Synthesis monetary economics approach of Paul Samuelson, Milton Friedman . Thousands of simulators tracking, simulating central bankers monetary policy and various external shocks (oil, commodities prices, government fiscal, co-integration of bilateral, multilateral currency crisis) impact on GNP, inflation, major economics performance indicators, financial markets interest rates, currency rate, commodities, corporate profit margins, bond, stocks, derivative prices. These deterministic state form simulators tracking the financial markets risks down to the simulation of portfolio, products market demand and prices level without any prior knowledge of probabilistic distribution. Which is further improvement of current VAR and US Fed FRB/US and FRB/Global models applications to US inflation, GNP, Dow Jones Index, Fed fund rate and 30 yr. T-bond yield, financial future prices simulation will be demonstrated for US fed monetary policy impact simulation. 

 Simulation of  Global Monetary, Economic, Fiscal  Policy, oil prices Impact on  Recovery of Asian and Global Financial Markets asset bubble burst Crisis:

These systems tracking, simulate the causes, onset and  IMF rescue plan progress results and  recovery of ASEAN, Asian, Russia, Brazil and LTCM betting on the wrong of interest rates(US T-Bond and Fed fund rates) and bond yield spreads. And predicted US Fed three interest rate cuts lead to fast US and Asian stock market  rebound  and economic recovery:, reduce the interest rate spread ,took the pressure off Asian currency , dollar tumbled from 147 to 111 While most ASEAN and Asian troubled country benefited by high interest rate, falling commodities prices, reduced domestic demand, imports, cheap currency lead to soaring export and trade surplus(S. Korea has 40 billion ) and soaring export growth, are able to cut interest rates to the pre crisis level., and maintain stable currency, lead to stock markets more than tripled S. Korea already lead the recovery enjoy 11 % GNP Japan has  9 % GNP growth, Thailand, Hong Kong, Singapore return to 10 % growth., China made soft landing  announcing rate cuts as inflation return to 6 % and increasing money supply  in early 1996 ( predicted by the author 1994 in China newspaper) , Shanghai soared from 530 to 1600, GDP  back to 8.1 %. Taiwan back to 7 % growth getting out of recession and deflation ..
These systems predicted on  May 1999 Macao's central banks policy conference the  first  US interest rate hike to fight domestic inflation due to soaring  oils prices  and  5 other interest rate hikes in the author's 16 int'l conferences later

These systems accurately predicted  high tech bubble burst 2000 and  current US and Asian recovery

Currently US and global stocks are overheated again by economists, market analyst over-optimistic over  2003 second half recovery, will facing correction.
Strategic reform Teaching and Executives MBA Training economic thought and OSA Simulation Methodology

This author directed hundreds Goal Mission, Performance, Risks  oriented  multidisciplinary strategic and execution OSA teams develop, implement  strategic government, banking, finance, enterprises  reform, change management CEO, CFO, executives on the job decision analysis training and university teaching, research on  industrial economic, process simulation, control, global strategic management, EMBA/ CFA, financial engineering teaching, research  for 100 countries  currencies , prices mechanism forecasts and  comment on Wall Street Journal  articles analysis  for final examination. ( recommended by Tokyo World Congress and Washington DC,  Dallas Chemical Engineering annual meeting as the most creative teaching, training methodology  for the new millennium.

Business Economics :Global banking, finance CEO, government executives, EMBA on the job reform, strategic banking, enterprises reform change management  decision analysis workshops
Thousands OSA strategic investment, supply chain logistics decision simulators have been used as on the job  CEO, executives training simulators  for thousands CEO executives  problem solving on the job decision analysis workshops for  millions China, Taiwan, Asian, US, European CEO, VP, executives reform, change management implementation since 1984.  The author have offered thousands lectures on  pioneering work of  two master hands controlling global  economy  cycles and financial market prices, investment  strategy and risk management  on banking, enterprises reform, SOE privatization, IPO, merger/acquisition performance improvement and daily Shanghai, Shenzhen, Hong Kong, Taiwan listed stocks performance tracking, investment strategy, risk management  commentary to  China 15 cities (Shanghai, Beijing, Shenzhen, Taipei) 30 million TV, radio investors, financial executives since 1994.   

 Monetary Policy Impact on Global Macro Economy and Financial Markets Dynamics OSA

What is OSA and what OSA has accomplished in crisis and risks simulation and management

OSA ( Operations Simulations Analysis),  pioneered by the   author   is an extension of Operations Research, a powerful systematic approach for the development and implementation of problem solving and decision analysis tools, applied extensively by the US defensive and aerospace industries using artificial intelligence pattern recognition, nonlinear stochastic process filtering and control for the Apollo moon landing  guidance and control in the 1960's. As the  author extended  his PhD dissertation 1971, on “ Nonlinear Adaptive Kalman Filtering and Stochastic Control with application to chemical reactor control and econometrics: to knowledge based processing plant design and operations optimization and control, safety, explosion risk management , global investment risk, marketing and sales management in his association  with corporate finance strategic management for  Mobil, AMOCO, Phillips Petroleum, Rhone-Poulenc, Bechtel's , Bailey Network Control  US headquarters and  Taiwan, China government, banking, finance, State Enterprises, medium , small  enterprises reform, strategic investment, supply chain cost  reduction..

Development and implementation OSA/Global and OSA/US simulation systems

He started the daily US Wall Street activities and global financial markets dynamics simulation (including normal stable continuous and crisis discontinuous data ) in 1972.  Starting  1984 he develop, implemented  thousands of knowledge based  China, US, EURO, European, Asian Pacific, Russia, South America central bankers monetary policy and financial markets simulators  through applying Artificial Intelligence neural net, fuzzy logic, chaos algorithms out of last 20 years IMF statistics and daily US, Asian, European Wall Street Journals and Taiwan, China, Hong Kong's daily financial markets news papers, trading and corporate earning data(including normal stable continuous and discontinuous crisis data) combined with training and feedback from workshops and daily lectures to 30 millions China, Taiwan 15 cities TV, radio investors, banking, finance CEO, CFO, managers, traders, investors market psychology  and his lectures to 24 global central bank governors  and financial risk management conference (including China Peoples Banks governor Dai in Macao May 1999 and  Taiwan, Japan ,  ASEAN, US, Europeans  integrated into the  Neoclassic Synthesis  and   Milton Friedman demand side monetary economic theory. It pinpoints each financial market crisis one to three months ahead beforehand by simulating the global central bankers daily money market operations and it's impact on macro economic GNP, inflation and trade economics, commodities, industrial raw materials, products demand and prices, financial economics interest rates, currency exchange rates and corporate operating margins, US, European, Russia, South America stocks and bonds, commodities, financial futures and derivatives (call/put option, warrants) prices. Which have been tracking, simulating last 20 years daily US, Global and Euro countries financial markets operations and crisis, risks in central bankers, government policy risks, trillions dollars global financial institutions credit risks due to poor credit rating simulation in Asian crisis investment, resulted bad debt, trillions dollars equity markets trading loses and NPL, corporate scandals due to betting on the wrong side of financial markets investments ( currency, stock, bond, financial future, derivative and corporate merger/acquisitions and investment, procurement, market shares risks.. These systems extended US FRB/US and FRB/Global models to the monetary policy impact  on  portfolio prices, interest rate, bond spread, currency and derivatives prices level, provide direct tracking of global monetary policy, oil prices impact on interest, currency, commodities, stocks, bond, and its derivatives prices)

Monetary Policy impact on Structural Financial Derivatives for Global Strategic Cost Reduction and Risk Management:

Almost 100 trillion dollars have been traded for commodities, and financial derivatives extensively by the global financial industries for oil, gasoline, heating oil,  raw material costs, interest rate, currency, asset securitization  and markets risk reduction management, while hedging fund have exposed to seven trillions dollars on the leverage fund management, which all relied on the current unreliable risk and options models, which required probability input and betting on the wrong side of the interest rates, currency and stock, bond prices. This paper will present our options/warrants prices models are much simpler and more reliable than Black-Schole formula. Since it provide direct tracking, simulation of central bankers monetary policy impact on interest rate, currency, financial, commodity futures prices , corporate profit margin and stock prices simulation forecasts one to three month ahead and integrate into the financial derivatives call/put options, warrant calculation( striking price, date to expiration, and the simulation of current prices).

Global Central Banks Monetary Policy, Oil prices shocks Impact on Macro economics Risks Simulations

Monetary Policy for Sustainable Growth and price stability control : OSA-Global   Asset Price Bubble Burst Simulation

 
 Dynamic tracking simulation of last 20 years US, Japan, China, Taiwan, Hong Kong, Korea, ASEAN, Russia, South America, European stocks, properties prices impact on consumer and business spending, macro economics GDP performances, to predict, forecast overpriced asset prices resulted consumers spending imbalance and business profit slump, leading to bubble burst and abrupt change in consumer and business confidence caused stock prices plunges with average error below 1.5 %, correlation constant above 0.95.
These deterministic, dynamic simulation of last 20 years global asset prices, and economy boom and bust of the asset bubble vicious cycle of excessive  monetary policy, low interest rate induced sustained long term bull markets stocks prices gain caused consumer and business spending in real estate properties pushed soaring housing prices and rent. And deficit spending (negative saving) in stock markets, pushed the stock s even higher, until abrupt reverse of consumer and investor confidence --the bubble burst- plunge of stocks   and  properties prices as it happened in US, Japan, Taiwan in 1980, 1987, 1990, energy crisis, EURO 1992 currency crisis, 1994 China runaway inflation, 1995 Mexico crisis, 1997-98 ASEAN, Japan, Korea, Russia, Brazil currency crisis,  2000 ( IT  and biotech bubble burst ) all  caused by overpriced stock prices due to excess monetary policy and high  consumer, business  demand and GDP growth 

William FRB/US and FRB/Global models  provide  only  Monetary policy impact on US and global macro economy and financial markets However, the following OSA approach   rigorous simulators ( nonlinear multivariate ) have been tracking successfully 100 IMF members countries central banks monetary policy impact on  global economic boom and bust cycles.
Inflation rate = F (Money supply growth rate %, Commodity index, oil, commodity prices, consumer spending, Dollar exchange rate)

GNP = F (Consumer spending growth rate %, Interest Rate, Export Growth Rate, FDI)

Property prices  and wealth = F  ( consumer spending, Interest Rate, stock index)
Wealth Effect = F( Money Supply, Property prices, Stock Index)
Consumer spending = F( money supply growth, interest rate, unemployment rate )
These structural, dynamic, nonlinear multivariate regression models warned global central banks misguided by conventional consumer inflation model , ignored energy, food and housing, commodities prices impact resulted
excessive money supply, rate cuts, lead to Japan 1990 and US 2000 bubble and current US /global and China current overheated housing, auto bubbles.

OSA/China Macro economy and  Financial Markets Application:
 How China avoided 1994 Financial Crisis and made soft-landing and  1998 Asian Financial Crisis Simulation:

This author  with Dai  and Ji , spending half time in China during 1988 - 1998 implementing these relationships tracking Taiwan, Hong Kong and China peoples banks monetary policy impact on inflation and GNP and interest rate, Taiwan and RMB currency and stock markets prices. It accurately tracking and predicted daily China economy and financial markets activities, how the  former  Prime minister Zhu Rongji successfully managed China's monetary policy led China avoided possible financial crisis by successfully controlled the inflation, to bring it down from 35 % inflation  and 100 % currency depreciation  in 1994  to  15 % money supply, 6 % inflation, stable currency , soft landing in 1996 which lead to Shanghai stock index plunge from 1994 peak of 1550 to 333 and stabilized traded between 600 and 800 during 1994 and 1996 through three stages credit tightening to cut the domestic demand and reduced the import duty by 30 % to reduce the importing inflation and implemented stock markets and financial institution regulation and full transparency, ban short term foreign capital speculation in the housing and stock markets achieved perfect soft-landing in 1996. And also predicted 1996 interest rate cuts leading to bull markets, with Shanghai A index tripled from 520 to 1650 . ( all predicted by the author on and national newspapers, lectures to 20 million  15 cities TV, radio programs  investors and training nationwide hundred banking, securities companies CEO during 1994- 98 .The state enterprise reform and Asian crisis resulted high unemployment and export slowdown, pulling the money supply down from 1996  28 % to  11 % in 1999, drag  into deflation and  GNP from 9.5 % to 7.1 % . But recovered strongly by domestic stimulus package in pay raise and public construction and strong export growth (40 %)  in 2001, money supply growth back to 22 % . with GDP 8.2 % and Shanghai index soared to 2200 new high in July 2001 while global stocks under correction due to US interest rate hike resulted recession
The declining export, 50 billion domestic public construction deficit budget and 150 billion short term debt  and falling corporate profit and falling prices as entering WTO in late 2001., as stock prices  plunged 40 % with US and global stocks from 2200 to 1350 correction  and rebound to 1800 in 2002 due to soaring foreign capital inflow and direct capital investment  and retreat to 1450 in early 2003 reflecting to soaring oil prices due to Iraq war and fear of global  deflation.
China  housing prices  bubble Simulation /Forecasts:
This equation predicted   China coastal area  housing prices soared 10 times during  1986- 1994 as money supply growth soared form -5 % to 35 %, Beijin, Shanghai house prices soared  10 times, ranking top 5 in global prices, as  Shanghai stock index  soared  from 150 to 1500 . Housing  prices plunge 70 % as money supply growth plunge from 35 to 12 %, during 1994- 1998, It rebound 30 % as money  supply growth from 12 % to 15 % in Asian crisis recovery in 1999 –2001 and government economic stimulus package, Shanghai index  rebound from 520  to 2100 since  1999,.
However, following US interest rate cuts to 5.5 % and excessive money supply ( over 20 %) and 52 billion annual foreign capital inflow, potential hot money by QFII in the financial market  boosting business and  consumer spending led  housing prices up 20 % and auto industry enjoyed 30 % growth since 2002 lead to banking property stock prices up 30-50 % due to low interest  rate and excessive money supply( despite the rest of manufacturing still facing  global deflation pressure ), lead to China People Bank  governor Zhou Xiao Chuan concern on potential inflation by tightening the money supply to cool the housing  bubble ( coastal area housing prices soared from 60 % to 100 %)lead to banking, properties stocks give up most of its gain due to China Peoples Bank credit tightening predicted by the author tracking of China  macro, financial trade economic impact on 700 listed corporate industries trends, profit margins and stock prices

OSA/ASEAN and OSA/Asian, OSA/Russia, OSA/South America Financial Crisis Root Causes Simulation:

These formulas indicated the rest of Asian emerging countries, Russia, Mexico, Brazil failed to do so, maintaining excessive money supply and growth, by encourage short term hot money speculating in housing and stock markets resulted soaring stocks and properties prices and labor costs caused export decline and huge trade and current account deficit, led to runaway currency depreciation and inflation, followed by rising interest rate and tight money supply resulted economic contraction between 5 % and 10 % started July of 1997 , the burst of the asset bubble and widening of bond yield spread

 Monetary Policy Impact on Global Financial Economics and  Financial Markets Dynamics Simulations:

Monetary Policy and Shocks, Speculative attack impact on Global Financial Markets Prices dynamics under stress:

Global interest rates , bond prices and spread, Debt Markets Dynamics , Credit, Market Risk Simulations

Global central banks use the commodity prices and consumer   inflation rate as the leading indicators for setting the monetary policy and short term interest rates (inter-bank rate or Fed fund rate), while the long term interest rate bond yield are related to the dollar exchange rate which influence the capital flow

Short term Interbank or Fed fund rate =F (Money supply growth rate %, commodity index, oil price, inflation )

While the long term bond yield = F( money supply growth rate %, dollar exchange rate, inflation rate)

This author spending half time in China with Ji  applying this formula tracking, simulate China  macro economic control in 1994-1996.  China had inflati0on of 30 % in early 1994 . Peoples Bank cut money supply growth from 33 % to 15  %, interest rate up from 8 % to 25 %, cut import duty to reduce importing inflation, facing trade deficit and currency depreciation pressure resulted inflation plunged from 30 % to 6 % in 1996 and cut interest rate to 9 %  achieved soft landing and export growth,  back to expansionary money, fiscal policy in 10 th economic plan to stimulate the consumer spending follow US 13 .rate cuts to 5.5
This formula also predicted  global interest rate, bond prices dynamics accurately. It indicate that reduced demand due to Asian turmoil, tightening money supply , raise the interest rate  have  drag down the global oils and , commodities prices and inflation.  US excessive money supply ( over 10 %) in 2000 led  to 3.6 % inflation rate and soaring oil, commodities prices results Greenspan  cut money supply growth to 5 % and 6 interest rate hikes to 7 % in 2000, bond yield follows short term Fed fund rate. US  plunging business, consumer spending  resulted recession in 2001 and inflation dropped  to 1.5 %, led to Greenspan 13 rate cuts to 1. %  Bush 3 tax cuts to stimulate the spending in 2003 against deflationary threat. 

 Global Currency Market Forces Prices Mechanism OSA 

 Monetary Policy, Interest rate ,Trade  Impact on Global Currency Exchange Rates Dynamics, Risks Simulation-
The Onset of global currency crisis:.

Based on this authors  20 years daily 100 countries currency  OSA  indicated that global currency are only responding to its market forces formula below.  Global central banks, government, G-7 intervention have no significant effect on currency prices movement.   
Dollar exchange rate = F (US trade deficit, the other country's trade surplus (deficit), interest rate spread)

China RMB market force price mechanism:
This equation explain how China raise interest rate in 1994 to fight inflation, cut import demand, expand export and trade surplus to maintain stable RMB at 8.27 during 1994-1998 and  fighting global deflation threat due to WTO. maintaining  export growth and foreign currency reserve of 346 billion dollars, cut interest rate maintaining  stable RMB exchange rate at 8.27 in 1999 to current situation. And cut export tax rebate, boost import to cut export and trade surplus  and double China resident carried USD from 2500 to 5000 to reduce the appreciation pressure due soaring export, and hot foreign capital inflow 
 US dollar  only responding to real interest rate, trade/current account balance indicated US soaring trade and current account deficit lead to its plunge against EURO and Japan (both  have 7 billion trade surplus against US 42 billion deficit and falling interest rate early this year.
Exchange rates are related to US ,other countries trade deficit (or surplus) and the two countries interest rates spread 

100  countries dollar currency exchange rates simulations have been used for 1000 chemical engineering and economics seniors course assignment by the  author  Tracking  Yen from 250 to 80 and back to 150, Taiwan NT dollar from 40 to 25 and back to 40. results have been published in the weekly trade journal for 300,000 Taiwan's Taipei importer/exporters members daily trading decisions for 100 countries currency and  export/import competitive pricing strategy since 1984.

Monetary Policy Impact on global market economic forces, industrial sectors demand, corporate earning,  Asset Prices Simulation and e- investing   Strategy
(Two master hands controlling global  asset prices, bubble stock prices)
Monetary Policy on China / Taiwan/US  natural resources, commodity, 20 old and new economy industrial sectors 5000 products demand, prices, corporate earning and Asset prices simulation
 

This author accurately  warned  on China peoples banks governors sponsored central  banks governors conferences  May 15, 1999 in Macao, that the US 3 rate cuts resulted excessive US and Asian demand pushed oil prices doubled will lead to US Fed a series interest rate hike (Fed raised rate in June) to cool off the economy and  soaring stocks, housing markets prices resulted wealth effect. pushed inflation over 3.6 %,  He warned on www.sina.com  and www.osawh.com  in  Jan 2000 that China and US high IPO and ADR shares are overheated, due to excessive Y2K money supply and  financial markets analysts overoptimistic over second half earning , ignoring more rate hike to cool off the overheated manufacturing (NAPM soared to 58) Nasdaq IPO, bubble will burst plunge 50-90 % . The Market did start correction in Apr 2000  half  soaring oil prices .
He warned again  in Aug. 2000 on the website, that US  economy will facing recession risk with NAPM plunge to 41, consumer confidence plunge below 90 in the first quarter 2001, with earning decline drag IT and biotech high flier stocks above 100  for 50- 90 % correction compressed to  20-50  and Nasdaq test  1200- 1400, Dow will test  7500  with finance, retail stocks subject to 30 %-50 % correction and  entering 6 month bear market , Fed will cut rates,  but will take  12 months for any economic and stock market recovering.

 Monetary policy, oil prices impact on old  economy  industrial demand, supply, prices,:

Dow blue chips old economy stocks are overpriced, ignoring 6 rates hikes and soaring oil prices pushed raw material and energy costs for most petrochemical, fibers, plastics, mining, transportation while plunging products prices due to sluggish  demand ( NAPM plunged from 58 to recession low of 41.3) and shrinking profits and widening loss, plunging stock prices.
While retail sales facing sluggish sales, and deep discount , shrinking profit margin, stocks prices overpriced, subject to 30 % correction in the first quarter 2001.-2003

Monetary Policy Impact on Global Commodities, Financial Futures Derivatives prices trading loses Risks OSA:
The Global Commodities, Industrial raw materials, consumers products and Futures Prices and Risks Simulations, Forecasts

Metal, commodities cash, future prices = (current, future oil price, inflation rate, dollar exchange rate)

This equation predicted gold and platinum futures price soared to new high and commodity prices rebound 30 %  due to soaring oil prices and falling US dollar. The risks in uncertainties in corporate profits due to global deflation, resulted product demand and prices slump in global commodities, industrial raw material and consumers products contract and spot and futures prices and credit crunch can be simulated to it's current and future raw material cost, downstream demand, and the dollar exchange rates in the trading countries or spot, futures markets. Thousands of such proprietary prices simulation forecasts models have been developed, implemented for 20 millions US, EUROS, Taiwan and China's corporate procurement, marketing, sales managers and 300,000 importer/exporter members weekly global currency tracking and import/export pricing strategy and gold and metals, feedgrains, oils, petrochemical, fibers, plastics, paper and computers companies daily global corporate procurement, marketing strategic decisions during the last 14 years   and Asian crisis  drag down oil, commodities prices and inflation rate  .

OSA/Oil , Natural Resources,  Raw materials,  export/import product prices   refinery profit margin
 
Gas, Heating oil, gasoline prices =  F (consumer demand, crude oil prices, inflation, refinery operating capacity)
raw material, IC chips and product prices = F( Business demand, raw material costs, exchange rate, life cycle )
Crude oil price = F  ( gasoline price, heating oil prices, exchange rate, consumer demand)
Export /Import Product Prices = F ( consumer demand, raw material costs, currency )

 US tight refinery and gas capacity ( operated at 97 %) and  dollar plunge from 125 to 108, Yen, 1.0 to 1.18 EURO, excessive consumer demand ( built up inventory) are responsible for heating, oil, gasoline prices to 100  pushed crude oil prices to  39 and gas to 10.5  in pre Iraq war,  Refinery margin dropped from 8 % to 4 % as shown in the simulation, is benefited by high gasoline demand and prices support in US, EURO, Asian oil consuming countries are hurt by fuel oil and crude oil prices 

OSA/Global  Asset Prices Simulation :Monetary Policy Impact on Global  Capital Markets Asset  Prices, Investment Strategy

Monetary policy impact on global stock market indices cash and futures trading loses and trading volume  risks simulation:

Stock Index/Bond cash and future price  and trading volume = F ( money supply growth, consumer, business spending, interest rate, dollar exchange rate)

US economic, stock market impact on Asian stock index and trading volume
The following structural co-integration of US stocks into Asian stock prices and trading volume due to its export market dependence. Have been implemented accurately since 1984

China/ Hong Kong/ Japan stocks index and trading volume  = F ( China money supply, consumer spending growth, inflation, US Dow Jones index)

Singapore/Taiwan stock index  and trading = F ( Taiwan money supply, consumer spending growth, NT exchange rate, interest rate, Nasdaq index)
due to US account for 40 % of China export, while Taiwan electronic stocks amounts to 50- 90 % of market value and mostly export to US

This relationship simulated last  20 years 40 daily international stock market stock indices, including normal and major crisis (under stress discontinuous data) with average error below 1.5 %
Applied by this author in China tracking China shares accurately during 1994-98 for 15 cities daily TV, radio 30 million investors,  predicted inflation, money supply growth, RMB  impact on Shanghai A, B listed stocks 1994-2000 and Dow jones impact since 2001 China joining WTO and tracking Taiwan markets since 1984 till now, shown Taiwan stock index following Nasdaq plunge 70 % since 2000.
 It  also predicted 1987 crash as FED raise fund rate 0.75 %: Nasdaq plunge form 5100 to 1100 during   2000 to 2003 as Fed 6 interest rate hikes  lead to 2001 recession, business spending plunged fro 18 % to –5 %, consumer spending from 10  % -2 %and 1995 Baring betting on the wrong side of Nikkei Index. And 1990 Nikkei crash from 38000 as Bank of Japan tightening the money supply growth from 13 % to 5 %
Global listed stocks corporate earning, profit margin simulation (Left master hands)
Corporate Sales = ( customer demand, unit price ) = F ( consumer demand, unit prices, currency )
Profit  margin/earning = F( Sales, Costs) = F (raw material, financial, labor costs,  consumer demand, sale prices, currency)

                                        
Global Stock Prices  Simulation :
The left master hand simulate last 20 years  monetary policy impact on daily  raw material, financial, labor costs, sales and unit prices, corporate earning, profit margin

global stock prices = F (Global stock index, corporate profit margin/earning)

The left master hand will tell you how monetary policy impact on the industrial sectors supply demand, prices corporate earning, profit margin stock prices  decline is over, when everybody is selling ready for  turnaround
Therefore combing right master hands( investors sentiment) and the left master(corporate performance) will accurately predicted last 20 years global stock prices (hot stocks,  ADR, IPO)

SOE  Reform, privatization, and Hi-tech  venture capital  performance and  IPO stock prices simulation
China SOE will be facing reform through privatization and corporate governance
Various co-integration models accurately predicted China stocks listed in US, Hong Kong H, red chips, London and foreign stocks listed in China stock market prices  IPO prices are linked to market investors sentiment and corporate earning
China IPO linked to Shanghai A index and IPO earning  

ADR/IPO prices  = F( Nasdaq index, corporate or industry group earning, profit margin)

 These two master hand controlling old and new economy  IPO prices as well

For China high tech stock IPO are related to US Fed money supply growth, interest rate and China investor sentiment ( US Nasdaq , China Shanghai A index, profit margin), 
For US Internet stock index are related to US Fed money supply growth, interest rate and investor sentiment (Nasdaq index), as for individual internet IPO stock prices, they are related to the internet stock and Nasdaq index (investor sentiment in internet) and corporate revenue and earning outlook(depend on industry trend and regional economy. As Yahoo soared to 350 when Nasdaq soared to 5100, and follow Nasdaq plunged to 1100,  Yahoo plunged to  11

Global ADR shares prices are linked to home country  and listed  (US)country investor sentiment and share company earning)
Global ADR shares prices = F( Home country investor sentiment, listed country investor sentiment, stock earning, margin)                  
=  F ( home country stock index, US Nasdaq index, corporate earning)

 The right master hand pinpoint the risks of overheated investor sentiments in the listed( US )and home country(monetary policy tell you do not chase hot ADR  stocks when they  are too hot, when every analyst recommending, investors chasing ( the author warned  Nov. 1999. on sina.com that China ADR  are too hot, speculating on merger acquisition, ( China telecom ADR in US will following US nasdaq plunge 50-90  %.  soared to 150 as Nasdaq soared to 5100, Shanghai soared to 2000 it plunged to  13 as Nasdaq plunged to  1100  , Shanghai A plunged to 1200, telecom industry facing rate cuts, falling prices. All these relationships indicating internet, IT and biotech IPO  stocks are extremely volatile and overpriced,  

Global Asset bubble simulation, early warning and Basel II  risks management

Simulation of US, China , Singapore, Hong Kong, Taiwan, global central bank monetary, economic, fiscal policy impact on global asset prices, bubbles, and early warning, risk management
OSA- Asset Bubble Burst-  Stock and properties, industrial assets (old and new economy assets ) markets asset bubble burst in Global Stock prices impact on house, business spending, housing properties prices, GDP and central banks Monetary Policy
A. OSA-Country Risks: Country inflation/Deflation economic and business cycle, capital flow, currency, systemic credit, nonperformance loan, banking crisis and default risks simulation and control
B. OSA-Credit Risk: Macro-economic imbalance, currency, commodity, interest rate, stocks bond,
derivatives market , trading, policy, operation , liquidity and corporate credit default  risks simulation, control,
C. OSA-Commodity: Policy, currency, oil prices, supply/demand impact on Energy, Feed grain, food,
metals, fibers futures and derivative prices resulted trading loss simulation.
D. OSA-Currency: Interest rate spread, trade impact on daily global currency , and it's derivatives prices dynamics the onset of currency crisis risks simulation and control
E. OSA-Interest Rate: Policy, currency, inflation, commodity price shocks impact on short , long term interest
rate, treasury and corporate bond spread and it's derivatives prices risks simulation , control
F. OSA- Market Risk; Policy, external shocks impact on global money, currency, stocks, derivatives markets
price ill-liquidity  risks simulation, control
G. OSA-Reform /Merger Risk: Policy, external shocks, technology innovation impact on pre/post merger/acquisition
cost/benefit, profit margin, stock prices performance risks simulation, control.:
Global enterprises expanded their market share by merger and  job cuts all fail to improve their profit margin in post merger integration resulted stock prices up 50 % on merger news speculation and give up all their gain to new low in post merger integration.  Big is not beautiful for banking and all other  merger, it is risky: presented by  the author on JP Morgan 

Global Corporate Governance Scandals Early Warning OSA

US Sabarne-Oxley act to maximize corporate governance  by set up independence board member  and supervision requirement and audit committee financial expert perform auditing and supported by independent equities research will not

Able to tracking the complicated daily fast changing   structural financial derivatives  and asset prices. ( which currently are based on speculation on the business, financial news)
Only the  decision  tools tracking global capital market asset prices simulation displayed here can applied to global corporate daily cost and financial accounting on and off balance sheet performance supporting compensation, internal  and external auditing committee.  As our simulators tracking simulate, forecast 3 month ahead the oil, gas prices  and high tech bubble burst impact on Enron  and WorldCom stocks China Guanxia bubble burst and scandals. Simulation results will be demonstrated in the conference  and Training board members, management team and investors maximize corporate governance performance and transparency

 Conclusions and Recommendation:

  The expert simulations systems presented here have been applied to supporting millions China, Taiwan, global banking, securities, enterprises CEO/CFO  senior executives daily strategic investment decisions, risk management during the last 15 years, it will  provide daily reliable  decision tools for  China and global economic , banking, finance, SOE , medium enterprises reform; central banks, government  economic, fiscal policy  planners,  securities, banking, insurance  supervision, regulations, WTO trade, procurement official and  banking, finance, enterprises CEO, executives rational, independent, policy impact simulation forecasts to achieve sustainable profit growth and prices stability, investment and supply chain strategy to avoid wealth, assets bubble bursts, excessive investment and inventory built up in  financial crisis.  It will also support  daily  banking, finance, insurance reform, supervision, regulation, nonperformance loan and corporate accounting scandals early warning decisions analysis  to avoid trillion dollar financial market loss financial markets  for on line banking, investing, e-learning to predict and prevent future  financial market  prices instability  in internet age due to excessive monetary policy and financial and real estate properties markets decisions based on the current  risks  models betting on the wrong side, and joining the crowd. resulted trillions dollar loses

Acknowledgement  

The author is grateful to feedbacks and valuable suggestions from  millions China, Taiwan and global  government economic, finance, trade executives, and  banking, finance, corporate  CEO, CFO, fund manager, supply chain, marketing export managers, trader, investors, attended the authors’ thousands workshops and visited www.osawh.com  website contributed to the development, feedback , implementation of two master hands controlling global economy and financial market  prices, and especially to X. M. Ji  help in China banking finance application lectures  to 14 cities 30 million TV, radio investors and hundreds nationwide banking, securities companies CEO, CFO, executives workshops  during 1994-  98
The author is grateful to Taiwan hundreds state owned, medium enterprise CEO, CFO, senior executives financial support

for  implementing OSA  in enterprises strategic investment, supply chain program maximize board members, management, investors performance and banking, finance, TV,  daily  newspapers, economic,  finance, investment , trade journal supporting authors lectures and articles to 6 millions investors, executives, readers enterprises in authors thousands lectures and articles since 1980  and also to  300,000 Taiwan import/exporter members for feedback and support for authors weekly 100 countries currency, import/export pricing strategy.

References:
 

Global Macro Economics, Monetary  Economics , Financial Markets Simulation Reference

IMF report on Global Economic Outlook and Capital Markets Implications Dec. 15, 1998-2002
EURO convergence report, Dec 18, 1998 by European Central Bank
Federal Reserve Board Systems working papers, speeches:
Michael Gordy: A Comparative Anatomy of Credit Risk Models: Dec. 1998
Greenspan: Speech on Financial Derivative, Mar, 19,1999 and Asset Bubble Aug. 27, 1999  and monetary policy , state of the economy review to congress 2000-2003
John Rogers: Aggregate Disturbance, Monetary and the Macro economy The FRB/Global Model, 1998
John Williams: Aggregate Disturbance, Monetary and the Macro economy The FRB/ US Model, 1998
Marvin Goodfriend: The Neoclassical Synthesis and the Role of Monetary Policy, June 1997

Warren Huang References : Banking and Finance :

“Asian capital markets asset prices  simulation  strategic supply chain logistics”  to be presented to Global Supply Chain Logistics Conference, by Northern Jiaotung University, School of Management, May 29-30, 2004 , Beijing 

China macro-economy and capital market prices, bubble early warning”  to be presented to the third China economic annual meeting, Fudan University, Dec. 19-20, 2003 ,Shanghai 

Global/Asian  capital markets asset prices, bubble , financial crisis, simulation, corporate governance early warning, risk management ”  presented to  Pan Pacific Business  Conference, sponsored  School of Management, Shanghai Jiaotung University, May 29-30, 2003 

”Asian capital markets asset prices, bubbles, securitization simulation, risk management” presented to Asian Business Forum sponsored  ABS securitization conference, Kuala Lumpur Sept 30-Oct. 1 2002, for global central banks, banking, securities, stock exchange investment  banking asset a

” Asian Financial, banking crisis, Asset securitization  early warning, risk management and hedging” presented to Asian Business Forum sponsored  ABS securitization conference, Kuala Lumpur Sept 30-Oct1 2002 for global central banks, banking, insurance, securities commissions risk supervision..

” Strategic European and Asian hedging fund risk management” presented to Intl Business Conference, London on, July 11-13, 2002 

” Global/China capital markets asset prices, corporate scandals bubble,  simulation, risk management” presented to Global corporate governnance conference, Peking Guanhua School of Management, Peking University, Beijing, May 28, 2002 

and speaking to Guanhwa school of Management EMBA/CFA , financial engineering faculty, graduate students, May 29.

2002  www.osawh.com/GCaptbj.html 

Strategic China oils upstream/downstream ERP/SCM/CRM maximize WTO profits and ” Cross strait China strategic investment, merger/acquisition return and risks in post WTO ” 2- full day workshop offered  to Chinese Petroleum investment, planning managers at Taipei Howard Plaza Hotel, Jan 21-22, 2002 www.osawh.com/Chinaerp.html 

” Strategic China oils upstream/downstream ERP/SCM/CRM maximize WTO profits” full day workshop offered to IBC (Intl Business Conference) Asia to Exxon, China, Asian oil, gas, Singapore Development bank VP, executives at Beijing Kerry Center Hotel, Nov. 29-30, 2001 

” Cross strait China strategic investment return and risks in post WTO ” lectured to IBC (Intl Business Conference) Asia to Exxon, China, Asian oil, gas, Singapore Development bank VP, executives at Beijin Kerry Center Hotel, Nov. 29-30, 2001 

” Strategic integrated supply demand chain for oil/chemical industry ”, offered keynote speech to IBC (Int抣 Business Conference) Asia to Exxon, BP, Shell, Thailand Petroleum, petrochemicals, Chevron, Texaco, VP, trade managers, IT software VP, Apr 26-27, 2001, Singapore trader House 

” Strategic integrated supply demand chain TQM saves billion dollar SCM cost for oil/chemical industry ”, offered full day workshop to IBC Asia to Exxon, BP, Shell, Thailand Petroleum, Chevron, Texaco, VP, trade managers, Apr 26-27, 2001, 

Hydrocarbon Processing Advanced Control, information systems  handbook 1991-2003  www.osawh.com/hp2001h.html   

”. Monetary policy impact on Financial , Banking crisis, risk management “ presented to Academic of Finance , US FED Chicago governors, Mar. 7, 2001 Chicago,  50 anniversary  meeting of Midwest Finance meeting , US Fed Cleveland governor,  Mar. 30,2001 Cleveland, Ohio   

Monetary policy impact on capital market prices ,e-global currency, e-Investing Strategy and e-Risk management”, presented to Global  Finance conference Apr 4-7, 2001,  Los Angeles

13.. " Monetary Policy impact on Asian  financial crisis, recovery and risk management" presented to 9 th  Asian Pacific finance conference, Bangkok, Thailand, July24, 2001 presented to Asian central bank governors, banking, finance CEO, CFO, academics.

" Monetary, Economic., Fiscal Policy, WTO impact on China and US bubble burst recovery, stock prices and risk management" spoke to China Peoples Bank Beijin Banking, finance executives, July 2001 predicted China stocks bubble burst, Shanghai A plunged from 2200 to 1500 and US recession resulted global stock crash ( details on www.osawh.com  visited by millions global government, banking, finance, corporate executives

. " Monetary Policy impact global financial crisis, recovery" speak to Thai prime minister, ASEAN, Taiwan central banks governors 7 th  Pacific economic and finance conference , Bangkok, Thailand,  June 1, 2000, banking, finance CEO, CFO, academics

 Monetary Policy Impact on  Asian, US  Financial Banking Crisis and Risk management’, Invited by NASD, American Futures Association, George Mason , George Washington Univ sponsored Washington Area Finance research Conference, Apr. 30, 1999 

 Asian Financial , Banking Crisis Recovery, early -warning and Risk management  China Peoples Bank, Monetary Authority of Macau sponsored Int'l Central Bank Governors Conference on Policy for Sustainable Growth in Macau, on May ,1999 to global central bank governors.

Global, Financial Crisis impact on pacific stock and financial derivatives prices and risk hedging” to Pacific Basin Finance and Economic Conference in Taipei( speak to  Taiwan Futures Association, Minister of Finance, Taiwan Central bank governors, NTU May 28-29, 1999,

 Global financial crisis impact on EURO capital markets and session chairman for risks in int'l context , invited by Prof. David Walker, Global Capital Markets Research Center Director of Georgetown Univ. to a panel on emerging markets economy and crisis on June in European finance conference in Barcelona, Spain June,1999 .

 “ Global financial crisis impact on global government and business risk management strategy” presented to .USDA, dept.   Business & Government Strategy, Capital Hilton in Washington DC June 30,1999,  

Financial Crisis Impact on US financial markets prices, risk management,”, Midwest Finance conference Mar. 28 1999, chairman on investment 

 Global Financial Crisis Impact on Global Currency Multinational Performance Risk Management "Multinational Finance Toronto, July 7, 1999  

 Global Financial Crisis Impact on  financial markets prices, risk management “ Royal Statistical Society, UK, Warwick, UK, July, 14, 1999

 " Monetary Policy impact global financial crisis, recovery"  and " How China avoided Asian Crisis, achieving growth and stability" speak to ICCG Global financial crisis conference, Bangkok, Thailand, Oct. 22, 1999 

 Goal, Mission performance oriented OSA teams education and training”  to American Inst. Chemical Eng. Dallas, TX, Nov  1999

 Monetary Policy impact global financial crisis, recovery, risk management ” to  Japan APEC  Studies conference Tokyo , Japan, Dec. 15, 1999

Asian Financial and LTC Crisis Impact on Post EURO financial and banking integration performance, strategy” speak to J P Morgan, European Central Bank  and University of Rome  on Post EURO  finance and banking integration strategy  conference in Rome Italy, Nov. 24-25, 1998

:Simulation of Asian Financial and LTC Crisis Impact on Global Financial Markets prices performance” Speak to EC2 econometrics Forecast conference in Stockholm Dec19,1998 Swedish school of economics, 

Asian Financial crisis impact on financial derivatives prices simulation and hedging risk management”, speak to QFM 98, Computational Methods in Financial Derivatives conference, in Sydney, Australia, Dec. 16 , 1998  Global Banking, Finance, Enterprises Reform, Strategic Change Management”  to World Economic Forum, Fudan  University, July , 1997, Shanghai 

 Integrated global refinery, petrochemical strategic management and enterprises reform, change management ” to INTERPEC  CHINA 91, by SINOPEC president, Oct. 1, 1991, Beijing

Large Chemical plant conference Antwerp, Belgium, Sept, 1991, 1995 and  ASEAN Petroleum Minister meeting, Singapore, 1989 Economic Impact on global petrochemicals demand, trades, prices” presented to World Cong. Of Chemical Engineering, Tokyo, Oct. 1, 1986

OSA applications in Chemical Eng. Education and Training”, to Third Chemical Eng. Congress, Tokyo, Sept. 1986

 OSA for global petrochemical marketing, sales strategy” to American Inst. Of  Chemical Eng Diamond Jubilee Meeting, Washington DC, Oct. 1983 

 Improve Process by OSA ,” published on Hydrocarbon Processing, May , 1980( one million copies in 78 countries)

1000 articles in  Chinese on Taiwan government economic, finance,  economic, global economic Journal, and investment, trade journal  , commercial times daily news and China Shanghai Securities, Shenzhen, securities news  1984- current and  lectures, Workshops program for Singapore supply chain, Beijing post WTO China profit management and Kuala Lumpur,

Prof. Warren Huang,  Short Resume

Contact Information :

Warren Huang,  OSA  Int'l  Operations Analysis  San Francisco, Ca., USA  website www.osawh.com
Box 130,  706, Sacramento, San Francisco, Ca. , USA,    wh3928@yahoo.com     /  osawhh@citiz.net
Tel:  1-510-524-4484   Fax:  1-510-524-0283

Experiences summary:
Prof. Huang received his Ph.D in Chemical Eng./Operations Research, competitive economic games simulation from Polytechnic Institute of New York, extended his Ph.D thesis on APPLO moon landing guidance and control approach to “Nonlinear Adaptive Kalman Filtering and Stochastic Control with Applications to Chemical Reactors Control and Econometrics” to  over 30 years simulation of monetary, economic, fiscal policy, WTO impact on  international macro, financial, industrial, trade economic  applied for  US major oils /petrochemicals, engineering, network controls companies and Taiwan, China, Asian government, banking, finance, state owned, medium small companies strategic reform, investment and supply chain change management achieve sustainable profit growth.
The author was associate professor at Taiwan University Full Professor at Tsinghwa and Tunghai University in Industrial Economics, Global Strategic Management and Chemical Engineering, lecturing China Peking, Tsinghwa, Fudan , Zechiang, Jiaotung, Dalian Univ. EMBA, Economic Management, Financial Research Center.
Research Fields: Pioneer of Operations Simulation Analysis (OSA) of
1. Monetary, Economic, Fiscal Policy, WTO trade impact on global macro economic indicators, bubble burst, the causes, onset, recovery and early warning, control of global economic, financial, energy crisis achieve sustainable growth with prices stability control.
2. Monetary, Economic, Fiscal Policy, WTO trade impact on global financial economics, daily financial markets interest, currency, stocks and assets(  commodities, properties, industrial products, derivatives) prices, wealth effect bubbles burst, recovery, risk hedging management, for banking finance reform corporate governance financial accounting scandals , trillion dollar banking nonperformance loan early warning.
3 .Monetary, Economic, Fiscal Policy, WTO trade impact on global industrial, bilateral, multilateral trade economics, 20 industrial sectors 5000 upstream/downstream products demand, import/export competitive pricing, supply chain and global market shares strategy

Supporting multinational, SOE, medium enterprises reform, privatization, IPO, merger/acquisition performance improvement.

4. Teaching, Research: was associate professor at Taiwans’ Taiwan University Full Professor at Tsinghwa and Tunghai University in Industrial Economics, Global Strategic Management and Chemical  Engineering , lecturing China Peking, Tsinghwa, Fudan , Zechiang, Jiaotung, Dalian Univ. EMBA/CFA, Economic Management, Financial Research Center.
5. Lectures/workshops: invited to speak to 24 global (  China, Taiwan, Asian, US, ECB) central bank governors and econometrics, financial economics, financial risk management) conferences and  OPEC Petroleum Ministers and China state department, SINOPEC sponsored INTERPEC CHINA in Beijin, World Economic Forum in Shanghai Fudan University, Global corporate governance conference , Peking University. Business , finance research center.  Offered thousands CEO, executives workshops for economic, banking, finance, SOE reform, strategic change management, lectures to China 15 cities( Beijing, Shanghai, Shenzhen, Taipei) TV, radio 30 million investors,  and hundreds global banking, securities, state owned, multinationals enterprises properties companies CEO, CFO, executives tracking, forecast China/Asian/US macro, financial, industrial, trade economics and daily financial market prices, risks management, supply chain cost reduction strategy since 1994 and 100 countries currency, export pricing strategy for 300,000 Taiwan importer/exporters. Millions global government, banking, finance, enterprises, academics executives visited his website

www.osawh.com  tracking the results since 1998.

6. Publications: wrote thousands articles for US Gulf Publishing Hydrocarbon Processing since 1979 and recommended by advanced control and information systems handbook 1991-2003 ( www.osawh.com/hp2001h.html ) and for Taiwan抯 government economic, finance , stock exchange journals, economic, commercial times, industrial economics daily news papers, weekly investment, trade journal, China抯 economic, Financial Times, China, Shanghai, Shenzhen, Wuhan securities daily newspapers.