And the market is prone to temporary fits of shared enthusiasm for emerging market debt, for Internet stocks, for residential mortgage backed securities, for Greek government debt. Traders need not wait to see when or whether the profits materialize.

A reporting mechanism about securities firms relating status between securities regulatory agency under the State Council and local people's government should be established.

Mortgage banks kept some claims on their books, but sold most of them to investment banks as mortgage backed securities. The investment banks blended these securities into asset backed securities and collateralized debt obligations (CDOs) and sold them on to financial institutions throughout the world.

Because rapid fiscal deterioration now has investors worrying about capital losses on US government securities, devaluation would make foreigners more hesitant to finance America s budget deficit. If foreign financing is not forthcoming, yields on US government debt will rise and the US economy will fall back into recession.

(33) As regards investment yield, it is required to make disclosure of investment yield in current year and that in last year by securities category (like government securities and funds, etc.).

This is factually incorrect US government securities remain one of the safest investments in the world but the claim serves the purpose of dramatizing the federal budget and creating a great deal of hysteria around America s current debt levels. This then produces the fervent belief that government spending must be cut radically, and now.

With no current account surplus, China would no longer be a net purchaser of US government bonds and other foreign securities. Moreover, if the Chinese government and Chinese firms want to continue investing in overseas oil resources and in foreign businesses, China will have to sell dollar bonds or other sovereign debt from its portfolio.

In addition, given that local government debt comprises 27 of China s 2010 GDP, while central government debt and policy loans stand at 20 and 6 of GDP, respectively, the total public debt to GDP ratio is approximately 53 lower than Germany s. So, while China should not be complacent about local government debt, panic is unwarranted.

The securities firm should sign entrustment contracts with securities brokers who accept such entrustment, issue securities broker certificate, define authorized scope of securities broker and supervise working behavior of securities broker.

The expenditure cuts mandated by the outcome of the debt ceiling debate will reduce economic activity, thereby undermining growth and making debt reduction even more difficult. Providing further fiscal stimulus to boost economic growth would carry its own risks, owing to the debt ceiling and another, more ominous factor America is already overly indebted, and there are signs that major holders of US government securities are finally tired of being repaid in depreciated currency.

Canada has been restructuring government spending to reduce its debt.

Without securities business license, the securities firm and its domestic branch shall not run securities business.

The securities broker should have securities working qualification.

Of the roughly 200 trillion in global financial assets today, almost three quarters are in some kind of debt instrument, including bank loans, corporate bonds, and government securities. The derivatives market certainly helps spread risk more widely than this superficial calculation implies, but the basic point stands.

Investment guarantees will lead, via issuance of Eurobonds, to socialization of the risks inherent in public debt. Because all the member states provide one another with free credit guarantees, interest rates for government securities can no longer differ in accordance with creditworthiness or likelihood of repayment.

In Lebanon, persisting high levels of public debt forced the Government to direct much of its expenditure towards debt service.

The demand for debt repayment confronts the philosophy of debt forgiveness. In the lender s view, the 17 interest rate that Greece s government now has to pay for its 10 year bonds accurately reflects the lender s risk in buying Greek government debt.

Securities brokers should work within authorized scope of the securities firm and show securities broker certificates to customer.

In December 2001, the Government declared default on its external debt.

Article 56 Where a securities firm carries out securities lending and borrowing but does not have sufficient funds or securities, it can borrow from the securities financial companies.

3 Trade securities or maneuver securities market with insider information

(5) Securities service agencies provided services for a securities firm.

The combination of all these factors contributed to an acceleration of government debt accumulation and made debt service difficult or impossible.

Article 41 A securities firm engaged in securities business for its own account is limited to trading of legally issued stocks, bonds, warrants, securities investment funds or other securities recognized by the securities regulatory agency under the State Council.

Securities brokers shall not handle securities subscription or trading for customers.

Article 20 If a securities firm has two or more kinds of securities brokerage business, securities assets management business, financing with capital and securities, securities underwriting, securities sponsors, its board should set up remuneration and nomination committee, auditing committee and risk control committee to perform rights prescribed in company regulation.

But, by lowering long term interest rates, central bank purchases of government debt can help contain government debt service. In this way, QE can keep solvent a government that otherwise would be insolvent a nightmare scenario for a central bank.

Whereas the average return on FDI in China was 33 for American firms in 2008, the average return on China s investment in US government securities was a mere 3 4 . So, why does China invest its savings so heavily in low return US government securities, rather than in high return domestic projects?

While China has attracted a large amount of foreign direct investment, it has bought an even larger amount of US government securities. Whereas the average return on FDI in China was 33 for American firms in 2008, the average return on China s investment in US government securities was a mere 3 4 .

1 Illegally buying securities issued by shareholder of the securities firm or other issuer with major relationship to securities firm against regulation

1 Customers purchase of securities, settlement of securities trading or customers withdrawal

Attempting to cure an overhang of private debt by issuing mountains of safe government debt is too dangerous. After all, when the private debt was issued, it, too, was considered safe.

As a result, mortgage brokers maximize their income by generating larger volumes of mortgages, as do the banks that package these loans into mortgage backed securities (MBS s). Investment banks then earn fees for re packaging these securities in tranches of collateralized debt obligations, or CDO s (and sometimes into CDO s of CDO s).

Article 32 A securities firm should establish information inquiring system to ensure customers inquiring entrustment record, trading record, securities and balance during business hours of the securities firm, as well as other information such as name, practice license of the business operator and securities broker of the securities firm, certificate number of securities broker, etc.

Interest payments on the debt eventually become so burdensome that bondholders demand higher interest payments (Greek debt recently yielded over 30 ). Interest rates on US government debt remain low, so this threat is prospective, but future deficits will be far higher than government projections when rates normalize.

In addition to estimating financing gaps and identifying the sources of financing (including different scenarios of debt rescheduling), DSA includes an analysis of debt dynamics to determine the stability of debt to GDP or debt to government revenue ratios.

Article 26 If a securities firm and its domestic branch are engaged in securities business prescribed in Article 125 of the Securities Law, they should follow the Securities Law and provisions of this Regulation.

Article 38 If a securities firm is engaged in securities brokerage business, it can entrust staff outside of the securities firm as securities broker, engaging in attracting and providing service for customers as agent.

Article 48 Securities lending and borrowing referred to in this article means that in the securities trading at the stock exchange or other securities trading places that have been approved by the State Council, securities firms lend capital or securities to customers for them to buy or sell securities based on the corresponding collaterals provided by the customers.

Securities account opened by the securities firm for securities assets management customer should be submitted to stock exchange for filing within 3 trading days.

Meanwhile, China s outward FDI will continue to encounter challenges, as various short and long term factors from weak international demand to an aging population cause its trade surplus to decline, diminishing its ability to export capital. China s investment in US government securities and other sovereign debt will continue to yield extremely low returns.

Article 44 If a securities firm is engaged in self run securities business, its risk controlling indicators such as ratio of total securities value and company net capital, ratio of value of one type of securities and net corporate capital, and ratio of quantity of one type of securities and total issuing quantity of this type of securities should comply with prescription of the securities regulatory agency under the State Council.

Article 50 A securities firm that carries out securities lending and borrowing business shall sign a securities lending and borrowing contract with the customer, and shall open a customer securities guarantee account with the securities registration and settlement organs, and a customer funds guarantee account with the designated commercial bank in the name of the securities firm in accordance with the provisions of the securities regulatory agency under the State Council.

Article 28 When the securities firm is entrusted by securities registration settlement agency to open securities account for customers, it should audit name and identity authenticity declared by customers according to management rule of securities account.

Financial bubbles emerge wherever liquid asset markets exist. Indeed, the objects of such speculation astound the imagination tulip bulbs, gold and silver mines, real estate, the debt of new nations, corporate securities.