Victor Shih has done some serious analytical work to try to get a handle on the magnitude of China’s local debt. His post, which included extracts from his op-ed in the Asian Wall Street Journal, shows that some of the narratives about China are woefully incomplete. The whole post is very much worth reading, but […]
Read more...After the months of buoyant markets, a return to crisis-type headlines seems troublingly familiar, even though the perturbations of the last day or so are a pale shadow of the worst months of the crisis. And some are making the bull case. For instance, a headline at Clusterstock trumpetss, “Yesterday’s Bloodshed Sent The VIX Soaring […]
Read more...Patrick Chovanek, who writes from China, features an South China Morning Post story on his blog that helps give a better sense of the scale of overinvestment in real estate projects in China than isolated pictures of large, empty buildings. Data, of course, would be nice, but the Chinese officialdom specializes in misleading statistics. From […]
Read more...I must say, it’s quite amusing to watch Simon Johnson. He has an unabashedly bearish message…for 2010! And he delivers it in a sunny, enthusiastic tone. His hosts are not too keen about it, but the fact that he is so bloody upbeat about his gloomsterism leaves them a bit flummoxed.
Read more...We put up a post in late December which keyed off a discussion by Patrick Chovanec . Chovanec argued that real estate was increasingly serving as a vehicle for speculation, with many units kept vacant by investors: In China, however, “flipping” is not the problem. Some people may be engaged in short-term ”flipping,” but as […]
Read more...Ambrose Evans-Pritchard is nothing if not decisive in his views, and has a undisguised fondness for the bearish perspective. But he was correct on the 2008 inflation/commodities headfake, saying repeatedly that deflationary forces would prevail when that was decidedly a minority view. He is also a Euro-skeptic, and I’m less comfortable with that position. The […]
Read more...By Robert Johnson, former chief economist of the Senate Banking Committee and Senior Economist of the Senate Budget Committee who writes at New Deal 2.0. Since the early 1980s, rises in the living standard of middle class United States citizens have not kept up with the gains in labor productivity. Wages in the middle class […]
Read more...If the sky-high prices relative to income aren’t enough to convince you, consider this discussion from Patrick Chovanec (hat tip reader Michael) who contends that China’s latest effort to contain housing prices, the reinstitution of a property sales tax, is likely to be counterproductive: In China, however, “flipping” is not the problem. Some people may […]
Read more...What is truly remarkable about two comments in the last two days in the august Financial Times, is that they both say protectionism against China is likely. One actually urges it, the other pretty much says it’s a-comin’ unless China mends its ways. And both pieces were written by reputable economists, the last people you’d […]
Read more...By Richard Alford, a former economist at the New York Fed. Since then, he has worked in the financial industry as a trading floor economist and strategist on both the sell side and the buy side. It has been almost a week since the Bernanke testimony and since the dust has settled, two exchanges stand […]
Read more...Reader Andrew sent a research report by Pivot Capital Management, which makes a compelling case that the capital spending bubble in China has reached its limits. This is important in a narrow sense, since capital investment is now the largest component of Chinese growth, and in its broader ramifications, since China is seen as a […]
Read more...One of the motherhood and apple pie items in econ-land is that the world needs global rebalancing, which is code for China has to stop being a mercantilist and currency manipulator, and the US has to quit borrowing a ton and overconsuming (or underproducing, which is another way to frame the same problem). But once […]
Read more...Normally I relegate items that I deem important, but to which I have comparatively little to add, to Links and label as “Today’s Must Read.” Even thought this offering falls into that general category, it is far and away the most important “Must Read” I can recall coming across, and so I am highlighting it […]
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Another Presidential junket to Asia and another one of the usual lectures from China, decrying our “profligate ways”. Today’s Wall Street Journal reports:, “China’s top banking regulator issued a sharp critique of U.S. financial management only hours before President Barack […]
Read more...What a difference seven years makes. No one had a problem with Japan having super low interest rates and stoking a global carry trade, nor with the US running overly loose monetary policy that led to a real estate bubble that spread its impact beyond our borders via the creation of toxic mortgage product sold […]
Read more...