China DreamSummary conclusion Eight weeks ago I wrote the Umbrella Movement would fold with only timing moot. I was wrong footed on how long it’s taken but at last, and inevitably, it’s happening. In this note I want to look at the reasons for the failure and then, perhaps more usefully, try and think over some […]
Value Relevance of Environmental, Social and Government Disclosure The paper highlighted this week is a tour de force in terms of both a review of pretty much all (as far as I can tell?) the academic literature to date on how governance affects stock prices and a unique new study on the specifics of ESG […]
Me? I’m feeling OK about life. China continues its relentless ascent. The US, in spite of its chaotic political system, seems to be making progress. Europe (really only two and half sensible economies to begin with and now it seems finally acknowledging this fact) seems to be stable at least and wasn’t that G20 show […]
Should we build more large dams The actual costs of hydropower megaproject development For a short paper (click the link above) this one packs a mighty wallop. The authors, Mr. Atif Asar, Mr. Bent Flyvbjerg, Mr. Alexander Budzier and Mr. Daniel Lunn all from Oxford University, demonstrate empirically what most of us had long suspected. […]
Preamble From, what we recognized then, an unsustainably high valuation level of over 30x earnings in October 2007 China stocks have been in a multi-year valuation bear-market. Following the recovery from immediate post GFC lows valuations made a lower high in July 2009 of around 20x before heading down again. In August 2011 they dropped […]
Institutional investors, for the most part, own too many stocks and individuals own too few. So what’s the right number of stocks for a manager to own and legitimately claim to be truly ‘active’? The authors of this paper put their conclusion right up there in the title when it comes to China. To be […]
Why is it taking so long for a fresh capex cycle to re-engage in the US? In the last couple of years a new database on US private companies has become available from Sageworks Inc. It takes in data from all the major US accounting firms (and many of the smaller regional ones) on their […]
Summary conclusion The outlook for the US economy is the outlook for the global economy. It’s therefore, in large part, the outlook for China’s. Given the recent sturm und drang commentary from the US I thought a quick look at underlying reality was in order. What I found was not only reassuring but suggests, to […]
With such a short history I’m suspicious of ‘proofs’ about anything extracted from China stock market data. I’m also reluctant to allow China’s stock markets any degree of Chinese-ness in terms of explaining their long run valuations. Local factors can matter from time to time but ultimately, just as people are people, stocks are stocks […]
When and How to Exit Quantitave Easing This is a very math intensive paper (click the link above for the full text) but the plumbing for the argument is less important than the main conclusions. QE works best when it’s applied in size and swiftly. The model developed in this paper by Professor Yi Wen, assistant […]
Summary Conclusion At the beginning of this week I wrote to friends I was scared. Irresistible forces seemed headed for immovable objects and it wasn’t clear how the mob, then reeling from clashes with tear-gas firing riot-squad-gear clad police, would proceed. My biggest worry was our Wednesday holiday would turn into a July 1st 2003-style […]
What the heck’s going on in China? Since the Third Plenum last November it’s been clear something big is underway; but what? In the paper I’m highlighting this week Professor Barry Naughton, the So Kwanlok Chair of Chinese International Affairs at the Graduate School of International Relations and Pacific Studies at the University of California, San […]
With the kind permission of Professor Dr. Gerald Chan 陳智宏 Professor and former Head of Department of Political Studies at the University of Auckland, New Zealand I’m posting this paper (click the link below for the paper in full) that discusses the new world order. This is the one where China is a reluctant perhaps but nonetheless […]
Summary conclusion To be clear; not will/may hard land but is hard landing. For several years I swatted away the notion that this was going to happen; because it didn’t. Indicators are now though pointing unequivocally in this direction and only the trajectory and speed of descent are moot. This will rattle some but for value […]
Last week a friend highlighted an article that appeared originally in ‘The Hindu’ on August 25th beneath the headline ‘Dalai Lama in talks to return, Chinese official’ (http://www.thehindu.com/todays-paper/dalai-lama-in-talks-to-return-says-chinese-official/article6348150.ece). It seems a group of Indian journalists were recently invited for a tour of Tibet and one at least received the impression that the Dalai Lama (in […]
This went out last month and in it George speculates on some of the fallout from what he concludes is ‘..the most important political campaign in China for 25 years.’ He candidly admits there are ‘Trenchant questions which I can’t answer, and which most people can only speculate about.’ but has a go anyway. He […]
The authors of this paper don’t mince words. China can’t escape a hard landing. Why? One of their most compelling arguments is that few before have managed it. The historical precedent of economies that come off a rapid-growth-plateau is for a similiarly rapid adjustment to lower norms; why should China be any different? Assesing the […]
China’s Economic Rise – Congressional Research Service The full title of this piece, published a little over a week ago by the Congressional Research Service (“Informing the legislative debate since 1914”), is ‘China’s Economic Rise: History, Trends, Challenges, and Implications for the United States’. It’s an excellent high-level summary of where China stands today, and […]
[I’m not going to present a detailed analysis here just my impression of releases to date from companies I care about (and quite a lot I don’t)] Summary conclusion A dull H114 earnings’ season is drawing to a close and prospects for H2 seem no more thrilling. The market in aggregate remains ‘cheap’ but without […]
This report, from July this year, is from the Pew Research Center and “..examines global public opinion about the United States, China and the international balance of power.” Pew Attitudes Report July 2014 The full report can be accessed by clicking the link above or if you’re short on time there’s a five page summary […]