By Callum Newman
The Daily Reckoning (Australia)
Well, this is kind of confusing. In a week when commodities and mining stocks get a general lift, the Wall Street Journal puts the spotlight on Chinese banks and finds a lot to reckon with on the downside.
Normally any hint of trouble in the Middle Kingdom gives mining stocks the shudders. But gold stocks especially are enjoying a nice bounce. But are they factoring in the ineptitude of Indian politicians? More on that shortly.
Let’s start with China. The four largest state-owned Chinese banks have a hefty challenge ahead, according to the WSJ. The banks are facing a future of rising bad loans and lower earnings growth. Or, as our colleague Greg Canavan predicted, what looks like the end game of a credit binge.