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Happy Thanksgiving Y'All.
China slashes interest rates as panic spreads
The People's Bank of China cut interest rates by more than 1pc point as the economy crumbles and millions of jobs are predicted to go ahead of Christmas.
By Malcolm Moore in Shanghai
Last Updated: 12:48PM GMT 26 Nov 2008
The move came just one day after the World Bank predicted that China would grow by 7.5pc next year. The level of growth may appear robust by Western standards, but it would represent the slowest economic expansion in China for the last two decades.
It is also perilously close to the 7pc minimum level of growth that Chinese economists believe is necessary in order to create enough jobs for the 6m university graduates who will enter the jobs market next year.
It is the fourth interest rate cut from the Chinese central bank in the last ten weeks as the government desperately battles an evident economic collapse. "China is out to save itself here," said Patrick Bennett, an analyst with Societe Generale in Hong Kong.
The PBOC reduced its main borrowing rate by 1.08pc points to 5.58pc, the biggest one-off cut since the Asian Financial Crisis in 1997.
In recent weeks, a series of riots across central and southern China have flowered as disgruntled employees aired their grievances at the downturn.
Today, around 500 protesters rioted at the Kai Da toy factory in Dongguan in the Pearl River delta, flipping over a police car and trashing computers in a dispute over payoffs to 80 fired workers. Tens of thousands of factories across the region have already shut their gates.
Yin Weimin, China's Social Security minister, has revealed that employment is the Communist Party's number one concern in the downturn and said the "situation is critical". Unemployment is expected to rise from 4pc to 4.5pc by the end of the year and anecdotal reports have suggested that 3m people have already been fired in the industrial province of Zhejiang alone.
Two major provinces, Shandong and Hubei, have already responded by banning companies from firing staff without permission from the government.
The Chinese government has also announced a £373bn bailout to stimulate domestic growth by investing in infrastructure. However, only a fifth of the money is likely to come from central government coffers, with the rest coming from a mix of private enterprise and local government funds.
"We're seeing a government that steps in, that is trying to do everything it can to keep growth at a decent rate, and has the financial means and the administrative capacity to make that happen," said Louis Kuijs, the head of the World Bank's China economics analysis.
"All my colleagues were shocked by such a big easing. It signals the government may believe the economic situation is really serious for it to call for such a drastic move," said Liu Dongliang, a currency analyst at China Merchants Bank in Shenzhen.
The reserve requirements of Chinese banks were also cut by 1pc point, and 2pc points for smaller banks, freeing up around 360 billion rmb (£34bn) for lending.
CHINA'S FACTORY OWNERS VANISH
China's manufacturing boom has come to a shockingly abrupt end, and stories abound of factory bosses simply closing shop and running away, presumably to Hong Kong. Workers––many of them migrants––are abandoned and jobless in an unfriendly land. Shaoxing, China.
First, Tao Shoulong burned his company's financial books. Then he sold his golf memberships and disposed of his Mercedes S-600 sedan. Then he was gone.
Just like that, China's biggest textile dye operation––with four factories, a campus the size of 31 football fields, 4,000 workers and debts amounting to at least $200 million––was history. "We're pretty much dead now," said Mao Youming, one of 300 suppliers stiffed in October by Tao's company, Jianglong Group.
Lighting a cigarette in a coffee shop here, the 38-year-old spoke calmly about the bleak future for his industrial gas business.
Tao owed him $850,000, Mao said, about 60 percent of his annual revenue. "We cannot pay our workers' salaries. We are about to be bankrupt, too." Government statistics show that 67,000 factories were shuttered in China in the first half of the year, said Cao Jianhai, an industrial economics researcher at the Chinese Academy of Social Sciences.
By year's end, he said, more than 100,000 plants will have closed.
As more factories in China shut down, stories of bosses running away have become familiar, multiplying the damage of China's worst manufacturing decline in at least a decade. Even before the global financial crisis, factory owners in China were straining under soaring labor and raw-materials costs, an appreciating Chinese currency and tougher legal, tax and environmental requirements.
When the credit crunch took hold––prompting Western businesses to slash orders for Chinese goods and bankers to curtail loans to factories––
many operations were pushed over the edge. China's industrial decline is a main factor in the sharp economic slowdown. The nation's gross domestic product grew at an annual rate of 9 percent in the third quarter, the lowest in five years and worse than what analysts had forecast.
China's GDP expanded 11.9 percent last year. Now economists worry that the one big remaining engine of global growth is losing steam rapidly.
Last month, Beijing increased tax rebates for many exported goods and pledged to take other steps to spur development, including producing banks to boost lending to small companies. But many businesses and analysts are not optimistic. "Honestly, I think whatever measures government would take at the current stage would not turn around this trend," said Ye Hang, an economics professor at Zhejiang University.
"The government can only try its best to put out a fire here and there."
In Zhejiang province, south of Shanghai, Ye counted at least six major bankruptcies. These included Jianglong; Feiyue Group, China's biggest sewing-machine maker; and Zhejiang Yixin Pharmaceutical Co., among the largest in its industry. Of the six owners, he said, "one committed suicide, one was detained by police, and the remaining four all escaped.
"I can imagine that, in the future, there would be more such cases as a result of the chain reaction."
Migrant workers generally do not qualify for unemployment benefits, and although China's bankruptcy laws give unpaid workers priority, that is of little value if owners run away and there are few corporate assets. Yang Shenggang, 33, had been at a Shenzhen shoe factory for seven years.
He worked his way up from the assembly line, making $50 a month, to become a supervisor earning six times that amount.
This spring, he said, the Hong Kong owner fell behind in paying wages. One morning in September, the plant closed. "The boss was just gone," Yang said. "I have to get my five months' salary back. My family needs money to eat and live."
Stanley Lau, deputy chairman of the Federation of Hong Kong Industries, a trade group with 3,000 members, said he did not know how many owners in Hong Kong had run away.
"I think it’s wrong," Lau said. But he added: If a factory operator went by the book, it could take two years to close a shop because of regulations and red tape. Lau's trade group has estimated that 15 percent of the 70,000 factories run by Hong Kong businesspeople in the mainland will close this year.
He says many more are likely to shut after Chinese New Year in February, when millions of migrant laborers will return home for several days.
"Once workers go home, they can close down the factory quietly," he said in an interview in Hong Kong. The Taiwanese operate about 20,000 plants in Guangdong, and some of them also have walked away from their factories, workers and labor groups say. In northern China's Shandong province, dozens of South Korean export-company managers have fled, according to state-run media reports.
"If these laid-off migrant workers stay in the city, it might cause social problems in the urban areas," said Cao, the Chinese academy economist.
"But if they go back to their hometown, they won’t have enough to do to make money." Thousands of workers face that dilemma in Shaoxing, about 140 miles south of Shanghai. Companies with names such as Rich-tex and Sun-tex dot the city, the capital of China's textile industry.
Few were bigger than Jianglong, which is Chinese for "River Dragon."
The owner, Tao, boasted of the company's sophisticated research-and-development capabilities and a base of global customers that included Wal-Mart. Government officials said last week that Tao had been caught, but they refused to comment further.
On the day Jianglong was shut down, 2,000 workers jammed the streets outside the factory, blocking traffic and demanding answers.
Several hundred police officers scuffled with workers. Later that day, government officials agrEed to pay employees. "I'll go home and farm," said Yang Chaoxian, 43, who had earned about $260 a month working 12 hours a day, seven days a week. "Labor here is too hard," said the Chongqing native, a cigarette tucked behind his ear.
"After I leave, I don't ever want to come back."
Source: Don Lee, Los Angeles Times, November 3, 2008, www.latimes.com
Up 42% so far today. Amazing what a little communication will do.
Is that some light I see at the end of this dark tunnel?
One institutional buyer is a start. Might help to put us on the radar.
bar, with the new acquisitions I feel that Hartcourt is back on track. Once we start to show profitable quarters I believe the price will take off. I did get filled today at 0.015. If it moves to 0.15 I'll have a 10 banger, and it's more fun that playing the lottery.
Had a limit order in today for 60,000 shares at 0.015 but no takers.
Let's get this snowball rollin!
Found this article on Fidelity under the HRCT news section.
Accounting & Governance Risk Overview: The Hartcourt Companies Inc. (PDF)
01:34 a.m. 10/07/2008 Provided By Research
The Hartcourt Companies Inc. (HRCT)is currently rated as having Conservative Accounting & Governance Risk (AGR®), receiving an AGR Score of 81 out of a possible 100.This places them in the 80th percentile among the approximately 8,000 companies rated by Audit Integrity,indicating higher accounting and governance risk than 20% of the other companies.
At least Hartcourt doesn't own any banks in Iceland
That article was from November 2007.
I'm trying to buy back some shares with a limit order of .048. Bid has moved up on me to .050 with the ask at .055. Doesn't look like anyone is willing to part with their shares today. Only 45k traded so far.
Price rise to .05 with no news. Someone knows something!
For those of you that did not have the time to read through the rather long and in-depth PR which laid out in great detail what was accomplished at the shareholder meeting, I have summarized:
Meeting over. No more IT, Edgycation Now. Better times ahead as directors get rich.
Management (To be determined)
From the upper left to the lower right, not the direction we want to move.
I have to admit I actually paid $17.00 per share back in 1999. That was before the 2 for 1 split. Now if the price can just get back to $8.50 I'll break even.
See now you don't feel so bad!
In Alan's defense at least he kept us informed of what was going on with the company. Maby he imbellished a little, OK a lot, but we knew what was going on. Hu needs a lesson on shareholder communication. I would rather hear bad news than no news at all.
Bottoms up! Have a great New Year everyone. Here's to Hartcourt's success in 2008!
Maby the black hatters should be called the Mad Hatters.
Good move up on volume today. Mabe something is cooking.
Bar, Thanks for the 10K link.
Looks like we just hit a new 52 week low at.047. Sure would like to hear some guidance from Hartcourt.
Is it proper to order a bernaise sauce with the rat, or would that insult the chef?
Sorry Mr. EC. I guess I should have fully disclosed that I was in the $250 club but got kicked out for public drunknedness and lewd behavior.
Good Article about Hartcourt
Jul 11, 2007 (M2 PRESSWIRE via COMTEX) -- Streetinvesting.com is the leading online financial newsletter community with thousands of investors from around the world. Our goal is to bring our theories and techniques to investors seeking a different and unique approach to investment ideas. We have a research team that has been built upon the premise of finding companies that we feel may interest investors looking for that unique and tactical edge.
The Hartcourt Companies Inc. (HRCT) (FRANKFURT: 900009) closed at $ 0.072 with a trading volume of 1,077,358 on the Over-The-Counter Bulletin Board this Tuesday.
Our equity research team has been walking the mile, delving into the pool of potential companies trading in the Over-The-Counter Bulletin Board. As the market stirs up more opportunities and challenges everyday, pulling investors on an ever-ending game of nerves and wits, we have brought forward the following contender, The Hartcourt Companies Inc.
On Tuesday July 10th 2007, The Hartcourt Companies Inc. reported the news below to the public providing our researchers with the unique occasion to warrant an investigation into the company and its future throughout the endless bid-and-ask war. The Hartcourt Companies Inc. announced that it has entered into a Memorandum of Understanding ("MOU") with Chongqing Zhengda Software Group Co. Ltd ("ZDSG") to acquire a 100% equity interests in its two subsidiaries: Chongqing Zhengda Education Group ("ZDEG") and Chongqing Zhengda Hengling Co. Ltd ("ZDHL").
The proposed consideration to be paid by the Company for the acquisition is about 415 million restricted shares of our common stock. ZDSG has agreed to guarantee the total profit after tax of ZDEG and ZDHL of not less than RMB 25 million (US$ 3.29 million), RMB 35 million (US$ 4.6 million) and RMB 50 million (US$ 6.58 million) each year for the three years following closing (2007-2009). The Company and ZDSG agreed that the above-mentioned restricted shares shall be released to the vendors in three equal installments in three years on the condition of the above mentioned profits realized accordingly.
As a part of the deal, the Company also agreed to raise US$4 million cash to finance the expansion plan of ZDEG and ZDHL as well as the equity buyout from their minority shareholders. Several Asia based institutional investors have signed term sheets, with a view to providing such funds as equity investors of the Company, subject to the final completion of the acquisition deal.
ZDEG is the sponsor of Chongqing Zhengda Software Polytechnic College (CZSPC), which has over 7,000 students in campus and ZDHL is a software outsourcing service company which uses the talents (faculties and students) of CZSPC to provide software outsourcing services to multinationals in China and internationally. After the completion of the acquisition, ZDSG will become the controlling shareholder of the Company with at least 50% equity interests in the Company.
Victor Zhou, CEO of the Company, commented, "The acquisition is part of ongoing strategy to build up the operating assets of the Company in vocational education business. I believe the merger and acquisition will considerably change the Company both in business and its earnings in coming years. Given the size and substantiality of the deal, we have sent a big due diligence team to Chongqing and started to prepare a proxy statement, which will be sent out to fellow shareholders."
"With the solid and substantial cash profits to be generated by ZDEG and ZDHL, we believe Hartcourt can provide huge value to current shareholders, but also make it easier to raise more funds to do further acquisitions," added Dr. Yungeng Hu, President and CFO of the Company.
Hartcourt Companies Inc. is a holding company for China's providers of vocational education and technical training services. Hartcourt structures itself so that its portfolio of companies and affiliates can operate well-recognized institutions with dominant positions within their regions and sectors. Founded in 1983 and a US corporation with subsidiaries internationally, particularly in Asia, Hartcourt Companies moved its operation headquarter to Shanghai, China in 2002. Hartcourt used to be one of the largest IT product distributors in China.
I'm still holding out for $250.00 being in the club and all.
Finally we get some news after the drought. Sounds like a good deal to me. We're buying a solid asset with stock only if they perform.
I am very concerned about the lack of communication lately from our company. I have just gone on the Hartcourt web site and clicked on the Contact Investor Relation tab. I have sent Hartcourt an email requesting information on the office move and our acquisition progress. If everyone sends an email maby we can get a response from management.
Cheers,
Bob
Hartcourt was the only green in my portfolio today among a sea of red.
From $17.00 (pre split) to .04. Still keepin the faith. Very happy with the news and current direction.
I think we have until the 15th to make the filing and remove the dreaded "E".
New information on the Hartcourt Web site. Victor Zhou is our new CEO.
It's great to finally get some positive news, and communication. I feel like we have a direction and purpose now. I'm still concerned about all of those unearned options out there and the comments about a possible reverse split.
144 RESTRICTED SHARES-NONAFFILIATES
Please note the following is mandated by the Securities and Exchange
Commission under the Securities Act of 1933 as amended.
Please note for securities which bear a 144 Restrictive Legend held less
than 1 year, please note that the shares must be held for at least one year
prior to applying for legend removal absent a registration statement or
another filing by the issuer.
Please note for Restrictive Securities held between 1 year and two years
(held between twelve to twenty four months) and/or held by a insider or
majority shareholder please submit your stock certificate to your stock
broker along with the 144 paperwork (roughly 5 pages which will be supplied
by your stock broker). Your brokerage house will handle the legend removal
from this point.
Thank you
Jason M. Bogutski - President
Signature Stock Transfer, Inc.
2301 Ohio Drive - Suite 100
Plano, Texas 75093
Telephone Number 972 612 4120
Facsimile Number 972 612 4122
Email Address signaturestocktransfer@msn.com
Thanks for the help. I found the stock transfer agents phone number and address on Hartcourts Web page. I'll give them a call on Monday to see how to proceed.
Bob
G'Day everyone. I'm looking at my 144-Restricted shares of Hartcourt that I recieved from Dr. Phan in September 2004. Does anyone know if the restricted period is over and how do I remove the restriction from this stock certificate. Any help would be appreciated.
Bob
Wow, volume up and the price up too. Nice to see both of those going hand in hand.
Bob
Thanks Lugan. I appreciate you giving us your thoughts on the shareholder meeting. Do you have any more details on the Jump merger? How does Hartcourt plan to proceed on the vote for the additional shares? Will a second meeting be necessary?
Any feedback from the meeting today?