Beneath the widely reported headline of a cut to their 2021 China-GDP growth projection from 8.2%, made last October, to now 7.9% there was a lot of more useful data in this release from the IMF on January 8th. Below are some other observations and my selection of some of the more informative charts from […]
Author: Nial Gooding
The paper highlighted today is a useful run through of what China just did to Australia in terms of upending trade in certain vulnerable products. Vulnerable because in all cases they’re homogeneous and substitute-able. In the past Australia sold mostly iron ore and coal to China and in those cases the products were/are of high […]
China’s stock markets, where institutional investors don’t dominate shareholder registers, make a good place to study how their participation changes the behavior of listed companies. In the U.S. studies have had a harder time pinning down the effect as so much of the market is already dominated by institutions. In China though their presence is […]
Today’s paper is a mood-booster. Well, it boosted mine at least. We all know corruption is bad. The reason there’ve been so many studies into it and the behavior so well documented is there’s, sadly, so much of it. Researchers from the Huazhong University of Science and Technology and the Zhongnan University of Economics and […]
Still wondering why Ant was so abruptly pulled? The paper highlighted today provides essential-reading on what may have been a major component of the regulatory authorities’ thinking. Zhengyang Bao and Difang Huang, both from Australia’s Monash University have produced the first paper, probably anywhere in the world*, that looks at how the exogenous shock of […]
If you’re not a stock analyst, or a manager of such, there’s not much here for you today. If you’re either of the above though the paper highlighted adds usefully to the debate about whether or not company visits are worth the effort. To recap; there are two schools of thought on this. Some argue […]
Cryptocurrencies get all the headlines but the real interest of late, which COVID-19 appears to have intensified, is with Central Bank Digital Currencies or CBDCs. In the ‘Working Paper’ highlighted today Raphael Auer (Et al.) of the Bank for International Settlements surveys the current development landscape and (sort-of, seems-to) concludes nobody is ready, yet, to […]
From other studies we know that rising and high home prices lead to related social problems, in China and elsewhere. Here’s a brief list: higher savings ratios, lower household consumption, reduced female labor force participation, higher marriage ages, increased inter-generational cohabitation, reduced innovation at the firm level and a crowding-out of fixed capital investment. So […]
To find the world’s cheapest market relative to it’s long-term average look below for the biggest distance between the green dot (the September valuation) and the red square (the long-term average). The cheapest market, according to this analysis, is therefore Japan. In terms of absolute cheapness the UK (at the time of this analysis) held […]
That Chinese parents want ‘Dragon’ babies i.e. children to be born if possible in the zodiacal year associated with the Dragon, is an observable fact. Marriages rise in the two years prior to a Dragon year and births increase in these years (this effect is also in evidence elsewhere in Asia). Writing in a Discussion […]
Let’s get straight to it. The effects of COVID-19 on the world’s major economies will be significant and long lasting. That’s according to Alexander Chudik of the Federal Reserve Bank of Dallas (et. al.) writing in a CESifo (a Munich based organization) Working Paper. Below is the key figure from their work and the straight […]
In 1993 Morgan Stanley’s then Chief Strategist Mr. Barton Biggs returned from a trip to China and declared himself “tuned in, overfed and maximum bullish.” At the time I’d recently given up on Japan and was working in Hong Kong. An old friend called from Tokyo; “Hey, you heard of some guy called Biggs? Says […]
Value investors understand better than many that differences between ‘should-be’ and ‘are’ stock prices can be large and persist for very long periods, Keynes noting famously in the 1930s ‘The market can stay irrational longer than you can stay solvent”. The solve-for-y of these discrepancies is flows. With this in mind researchers Xavier Gabaix and […]
Previous studies have highlighted negative effects of the growth of passive investment, especially index tracking ETFs, in recent years. In addition to increasing market volatility ETFs have been shown to lead to lower price efficiency, higher return synchronicity and less analyst coverage of securities in underlying baskets. Researchers from the University of Utah wanted to […]
[A quick tutorial for lay readers. ‘Smart-beta’ is the idea there are recurring patterns in markets, or factors, that professionals use to gain advantage. By automating the application of these factors passive investors, perhaps via an ETF, can obtain some of the same advantage when investing. For example: growth, value or momentum. Just let machines […]
We all know the story. America allowed China Permanent Normal Trade Relations (PNTR) status in 2000 which in turn led to China’s accession to the WTO. This in turn led to a ‘China Shock’ to American manufacturing destroying millions of blue-collar jobs whilst the Washington elites and their friends reaped the benefits. This then led […]
The housing market in the U.S. is in rude good health as figures released last week show U.S. housing market. This may have something to do with government transfers in recent months? This is almost certainly not an outcome planners were aiming for. The paper highlighted today reminds policymakers there’s a more effective way to […]
Pity regulators. Well, not so much perhaps. When markets are volatile, especially when they’re going down, a notion develops that ‘authorities should ‘do’ something’ and governments are often persuaded to step in. In many cases this has meant to either halt trading or slow it down. The academic literature is divided on whether this is […]
Dan Ciuriak writing in a Policy Brief for the Asia Pacific Foundation of Canada makes three important points about the early onset of the COVID-19 pandemic: There was no global information asymmetry as early as December 31st 2019. The world knew as much as China did at that point Information available on that date was […]
Mr. Jack Ma has form in terms of rearranging parts of his empire on terms not wholly to the liking of other interested parties Yahoo 2011 Spat; but investors seem not to care about past events, especially if they believe they’re still on a profitability-rocket-ship-to-God. The paper highlighted today is a detailed study that every […]