China DreamPreamble A few years ago there was a craze for ‘do-it-with’ jokes. Only the very naive would have failed to recognize do-it as a none too subtle euphemism for, well, doing it. This produced some quite amusing one liners. Organization theorists do it loosely coupled, for example; and some really sad ones. Monte Carloists do […]
The reality of events in China in the first quarter was that not much happened. The results season was a ‘meh’, underlying trends in the broad economy remained mixed and the anti-corruption campaign continued to affect decision making contributing to the new normal pace (slower) of economic development. So what’s with these fizzy stock markets? […]
One belt, one road. Who wouldn’t want that? Er, right, but what is it? Exactly? This weeks paper is more a long snippet but distills elegantly the big thinking behind four words that may end up changing China’s place in the world order more profoundly than since Deng opened the door in 1978. Ms. Nadege […]
http://www.brookings.edu/research/articles/2015/03/16-xi-jinping-inner-circle-mishu-cluster-li The link above will take you to a summary of the paper I want to highlight this week and also links to the first three papers in this series from Mr. Cheng Li of the Brookings Institute (roll back in my Sunday Papers section and you’ll find my earlier summaries). In this paper the […]
A break from China this week and a detailed look at how ISIL funds itself from the Financial Action Task Force in a report from February. I thought I’d just skim this document and cherry-pick points on how to avoid being involved with terrorist financing. I discovered it instead to be a page-turner. Extensive details of […]
[I found a full length version, with English subtitles, of Chai Jing’s (柴静) ‘Under The Dome'(穹顶之下) here at http://www.smh.com.au/digital-life/digital-life-news/under-the-dome-watch-the-viral-video-documentary-about-pollution-that-is-scaring-the-chinese-government-20150308-13yag6.html. Released on February 28th it got 150m hits on Tencent in the first three days before being pulled on March 2nd; strong stuff. Now read on.] Life expectancy increases with economic growth; and this has been reliably […]
Preamble A few years ago in China’s stock markets the retail/consumer sector was the hottest. Rising incomes, a huge population, what could go wrong? For investors in the space the bet has proved a poor or disastrous one depending on where it was placed. That such a sure-thing should have turned out so badly should […]
Largely due to it’s communist DNA the Chinese government has never ‘sold’ land to anyone. Concerns about a backlash against disposing of communal property to individuals led them in the 1980’s down the fudge-tastic path of granting limited use leases. For residential property these were/are for 70-years, for industrial property they’re for 50-years and for […]
The last two Sunday papers jabbed obliquely at the perils of ETF investing with one highlighting the dangers of following an index and the other on why ETFs lead smart people to dumb decisions. This one though goes straight for the gut. The authors, Mr. Si Cheng, Mr. Massimo Massa and Mr. Hong Zhang of […]
Feeling good about the market? Wanna get some money to work on Monday because the German data last week suggests the Eurozone might be in better shape than previously thought? Whatever you ‘feel’ about markets and, more importantly, the feeling you can somehow time your purchases and sales for optimum effect is almost certainly wrong. […]
The next financial crisis (only the dead have seen the end of these) will have something to do with Exchange Traded Funds (ETFs) with leverage, as it always is, no doubt the accelerant. I say this because crises in the past have usually come from something that starts out as a good idea but then […]
Me? I believe Quantitative Easing (QE) is at worst a placebo; and the record on the efficacy of placebos is impressive enough to make even their prescription worthwhile in many cases. What I’m highlighting this week is not an academic paper but a telling report from the European Central Bank (ECB) that may go some […]
Does China have a corruption problem? In the paper I’m highlighting this week, from Mr. Carlos D. Ramirez of the Department of Economics at the George Mason University, the conclusion is; er, not really. What’s especially interesting about this work is that was published in December 2012 some time before Mr. Xi went in determined […]
https://www.fas.org/sgp/crs/row/RL33536.pdf The link will take you to this Sunday’s paper, issued last December 5th, from the Congressional Research Service (Informing the legislative debate since 1914) by Mr. Wayne M. Morrison, Specialist in Asian Trade and Finance. In it Mr. Morrison does a thorough job of reminding readers of the history of America and China’s trading […]
Preamble The last time (and I’ve sworn to never do it again) I was foolish enough to call the market was October 2010. At that time I confidently wrote we were most definitely and without a doubt entering a grand bull market. What a putz! That call was followed by the annus horribilis of 2011. […]
Stock markets have been shown to be reliable predictors of future changes in underlying economic activity and there’s no mystery as to why this should be. If you know your company is starting to lose business and job losses, perhaps yours included, lie ahead you might chose to lighten up your equity portfolio. You do […]
Today, a paper plus a rant on some pet peeves. [It’s my blog after all. Ho-ho-ho] The human brain was designed to get us safely around the Serengeti, not stock markets. Some of the wisest and most enduring advice for investors then urges us to overcome amygdalas and let prefrontal cortexs do the driving. In recent […]
Preamble Nobody knows what determines the overall level of stock markets in the short term; and the short term can sometimes end up being several years. We know though that in the long term underlying earnings trends of the companies that compose an index must, ultimately, be reflected. It should come as no surprise then […]
I wrote in an earlier post that China’s debt blowout in recent years was a Pig-in-the-Python (in May in fact https://www.chinadream.asia/chinas-credit-growth-the-pig-in-the-python-and-whats-coming-out/) and the situation would resolve itself in time. In this comprehensive and most recent survey of China’s debt landscape Mr. Yukon Huang, of the Carnegie Endowment for International Peace and the World Bank’s country director for […]
Xi Jinping’s Inner Circle – Part III The author, Mr. Cheng Li, is a director of the John L. Thornton China Center and a senior fellow in the Foreign Policy program at Brookings (he’s also a director of the National Committee on U.S.-China Relations and focuses on the transformation of political leaders, generational change and technological […]