Democorruptcy Posted April 4, 2012 Share Posted April 4, 2012 M Pettis on China and Japan (it's a couple of weeks old) http://www.economonitor.com/blog/2012/03/the-japan-debt-disaster-and-chinas-nonrebalancing/ Which isn't really what many market commentators are suggesting will happen is it. Why you would want to be loading up with oil, gold, silver etc ahead of this is quite puzzling to me. Nadeem was having a pop at Niall Ferguson about China http://www.marketoracle.co.uk/Article33906.html Quote Link to comment Share on other sites More sharing options...
scepticus Posted April 4, 2012 Share Posted April 4, 2012 Niall's version and nadeems alternative are both just caricatures I think. No-one really knows what changes ageing populations will bring as a result of upsets to traditional inter generational relations and economic assumptions. In terms of economics - returns to capital, wages etc the outcome seems obvious. But of course that may well all play second fiddle to the parallel cultural and technological changes that result. Both nadeem and niall analyse the future of china in terms of the west's past. Pretty pointless exercise... Quote Link to comment Share on other sites More sharing options...
Crash Buyer Posted April 6, 2012 Share Posted April 6, 2012 Citigroup Economic Surprise Index seems about to decline into negative territory. Presumably the NFP data will be enough. Doesn't bode well for equities. http://www.bloomberg.com/quote/CESIUSD:IND/chart Note of caution - this article notes the poor predictive power of the index (against SPX) before the 2008 crash. http://articles.businessinsider.com/2012-04-05/markets/31292553_1_stock-market-s-p-business-insider Quote Link to comment Share on other sites More sharing options...
Guest_FaFa!_* Posted April 7, 2012 Share Posted April 7, 2012 Interesting things going on in China. http://www.ft.com/cm...l#axzz1q52wAs00 I am on the smartphone so will keep this short. Basically the CCP is naturally riven by cliques but occasionally it comes into the open (ie Tiananmen and now the Bo thing). After Tiananmen the Shanghai clique led by Jiang Zemin took control, but Hu and Wen (Wen is the protege of Zhao Ziyang who got ousted for saying the students might have had a point, his book is worth a read) have had the last 8 years in power. However they have needed to operate by getting consensus across the party, the Mao and Deng godlike powers are over. Getting rid of Bo has apparently taking a year of getting the necessary support before moving against him. This is part of the reason why I am bearish on China. The CCP, contrary to mainstream opinion, is not like the Borg and you don't need much exposure to China to know this. I believe if things get bad, fault lines could appear rapidly (like Tiananmen) and the party paralyzed by indecision. Quote Link to comment Share on other sites More sharing options...
R K Posted April 8, 2012 Share Posted April 8, 2012 An interesting speech by Ben Broadbent (15/3/12) (which I appear to have missed at the time) questioning some commonly held views on 'deleveraging' especially relating to UK housing market, MEW, and 'normalisation' of rates. http://www.bankofengland.co.uk/publications/Documents/speeches/2012/speech553.pdf Essentially arguing (evidentially) that it was not easy credit but rather the longer term falls in real rates pushing down on rental yields which caused the rise in house prices. An interesting chart on MEW as 'transfers' as opposed to 'consumption' and on the causal effect of rising house prices driving increased mortgage debts rather than vice-versa. What must be true is that larger aggregate balance sheets are more exposed to interest-rate risk. If the property-related explanation for the expansion in household balance sheets is correct, then one important corollary is that the debt and the financial assets are held by different people – the debt by the young (roughly speaking), the assets by the old. In time, this intergenerational transfer may get unwound, via bequests. But it may not (the old could yet consume their capital gain) and, in any case, the gross debt has to be serviced in the meantime4. Much of the expansion in balance sheets (I have argued) was due a secular decline in the long-run, risk-free rate of interest, and they are now more vulnerable to a reversal of that trend. I will discuss the risks and implications of a rise in long-term interest rates later on This won't be a 'popular' view with many on here but nontheless makes sense. In some ways it accords with what I understand to be Scepticus' argument. Perhaps the 'imbalances' resulting between young and old will not be significantly rebalanced until the old 'die off' or are in some other way fiscally 'nudged' into deleveraging their b/sheets. Quote Link to comment Share on other sites More sharing options...
scepticus Posted April 8, 2012 Share Posted April 8, 2012 This won't be a 'popular' view with many on here but nontheless makes sense. In some ways it accords with what I understand to be Scepticus' argument. Yes it does. However I don't think broadbent actually made any suggestion what might have caused the secular decline in risk-free rates apart from pointing out they were much higher than normal in the 1980s/1990s. Quote Link to comment Share on other sites More sharing options...
R K Posted April 8, 2012 Share Posted April 8, 2012 Yes it does. However I don't think broadbent actually made any suggestion what might have caused the secular decline in risk-free rates apart from pointing out they were much higher than normal in the 1980s/1990s. Well he doesn't it that speech, no. I don't know if he has elsewhere (?). Perhaps you ought to drop him a line............. Quote Link to comment Share on other sites More sharing options...
R K Posted April 9, 2012 Share Posted April 9, 2012 South Koreans recylcing into London CRE http://blogs.ft.com/beyond-brics/2012/04/09/koreans-move-into-london-property/?utm_source=ft.com/beyondbrics&utm_medium=twitter £ as a 'real-estate' currency? Quote Link to comment Share on other sites More sharing options...
R K Posted April 9, 2012 Share Posted April 9, 2012 Over valued or even more overvalued? Take your pick........... http://advisorperspectives.com/dshort/guest/Forecasting-the-Market-Chris-Turner.php Quote Link to comment Share on other sites More sharing options...
R K Posted April 9, 2012 Share Posted April 9, 2012 [/url] DJ FX Trader @djfxtrader President Complains To US President Obama Mon That Loose Monetary Policy In Big Countries Is Harming EM Economies [DJ] The penny drops........... https://twitter.com/#%21/djfxtrader' rel="external nofollow"> Quote Link to comment Share on other sites More sharing options...
R K Posted April 9, 2012 Share Posted April 9, 2012 Michael Pettis - The ways China can rebalance http://www.economonitor.com/blog/2012/04/the-ways-china-can-rebalance/ And this is my point. If you believe my assumptions are correct, then you should agree that China has no choice but to follow one or more of these paths. If privatization is not an option, then a collapse in the economy caused by a rapid adjustment in interest rates and the currency (the second option) might be. If that is ruled out, then perhaps the outcome will be a surge in government debt (the fourth option again), and so on. This what I mean by the economic constraints that limit the choices Beijing can make. It doesn’t matter what anyone thinks or wants Beijing to do, if the plan violates the economic constraints, it cannot be done. To be really complete we should outline the political constraints, the environmental constraints, the demographic constraints, the external trade constraints, and so on, although of course this is way beyond my ability, but each of these exercises allows us to escape from the confusion of stated intentions and to focus on the possible. Quote Link to comment Share on other sites More sharing options...
scepticus Posted April 9, 2012 Share Posted April 9, 2012 Michael Pettis - The ways China can rebalance http://www.economonitor.com/blog/2012/04/the-ways-china-can-rebalance/ good link! ofc, rising real interest rates in china would require falling real interest rates in the west. That is what the vast majority of commentators looking for rising real rates in the west (any day now!) fail to realise. Quote Link to comment Share on other sites More sharing options...
R K Posted April 10, 2012 Share Posted April 10, 2012 In lieu of a Lindor choccy egg Sceppy..... [/url] DJ FX Trader @djfxtrade Swiss 182-Day Treasury Bill Yield -0.251% Quote Link to comment Share on other sites More sharing options...
Georgia O'Keeffe Posted April 10, 2012 Share Posted April 10, 2012 (edited) In lieu of a Lindor choccy egg Sceppy..... ahhh inflation Edited April 10, 2012 by Georgia O'Keeffe Quote Link to comment Share on other sites More sharing options...
scepticus Posted April 10, 2012 Share Posted April 10, 2012 In lieu of a Lindor choccy egg Sceppy..... Ta muchly. Quote Link to comment Share on other sites More sharing options...
R K Posted April 10, 2012 Share Posted April 10, 2012 http://blog.econbrot...ent-forum.aspx? Why bother raising rates eh? Asset prices are the new black. Quote Link to comment Share on other sites More sharing options...
R K Posted April 10, 2012 Share Posted April 10, 2012 This is weeks overdue. Unless we get a repeat of the Nov '10 'correction' which was blasted out of the water by Benjamin. Am waiting to see what happens as we retrace to 5600-5700 (basis FTSE) #Patienceisavirtue apparently Quote Link to comment Share on other sites More sharing options...
R K Posted April 10, 2012 Share Posted April 10, 2012 h/t @paulmasonnews A more detailed look at the Bo Xilai 'purge' from the left. Some interesting general detail http://www.socialistworld.net/doc/5648 Quote Link to comment Share on other sites More sharing options...
R K Posted April 11, 2012 Share Posted April 11, 2012 She looks so sweet too. (arrested re murder of Heywood according to FT) Have you ever read 'Wild Swans' by Jung Chang? I read it when I went skiing one year along with 'One Day In the Life of Ivan Denisovic' and 'All Quiet on the Western Front'. Good holiday. If you manage parallel turns whilst reading you're a more accomplished skier than I am! The princelings have acquired enormous power in China’s ‘state capitalist’ economy, both in private business and as heads of powerful state monopoly enterprises, which are often run as clan fiefdoms. As a Wikileaks report revealed, based on a 2009 cable from the US embassy in Beijing, it was “well known” that former Chinese premier Li Peng and his family controlled China’s electric power interests, while the country’s police chief Zhou Yongkang controlled the state monopoly of the oil sector. The wife of China’s premier Wen Jiabao is said to control China’s precious gems sector, the cable stated. The recent NPC meeting was “a house of representatives of officials and businesspeople” according to Wang Guixi, a professor at the Central Party School in Beijing. As reported on chinaworker.info last week, the richest 70 NPC members – with an astonishing combined wealth of 565.8 billion yuan (US$85 billion) – are more than ten times wealthier than the 535 members of the US government, Congress, and Supreme Court In essence China is run like Las Vegas in the 50s/60s. It's not really a functioning 'state', more a real life version of 'Casino'. These are the people Dave is mad keen to hand all our kids jobs over to so his £250k a pop kitchen buddies can keep the money flowing. They're infecting the entire global system. Quote Link to comment Share on other sites More sharing options...
R K Posted April 11, 2012 Share Posted April 11, 2012 Moving averages are a wondrous thing...... Spot gold is going to see a 'Death Cross' shortly unless we see closes above $1725 and then c.$1800 during April. http://stockcharts.com/h-sc/ui?s=$GOLD&p=D&b=5&g=0&id=p14414478673 It narrowly avoided it in Feb with that last ditch buying into the end of Feb which was rapidly reversed. Perhaps they'll try the same move again? Then it will have to swallow that massive surge in Aug/Sept last year to avoid the 200 turning down too. Which means either we're going to see new highs over the summer or a technical bear market and renewed selling pressure. It's going bi-polar. Quote Link to comment Share on other sites More sharing options...
scepticus Posted April 11, 2012 Share Posted April 11, 2012 In essence China is run like Las Vegas in the 50s/60s. It's not really a functioning 'state', Its looked like a functioning state when I have been there! Quote Link to comment Share on other sites More sharing options...
R K Posted April 11, 2012 Share Posted April 11, 2012 Its looked like a functioning state when I have been there! Just don't drink the tea! http://blogs.ft.com/beyond-brics/2012/04/11/chinas-latest-scare-poisonous-teas/?utm_source=ft.com/beyondbrics&utm_medium=twitter Quote Link to comment Share on other sites More sharing options...
Killer Bunny Posted April 11, 2012 Author Share Posted April 11, 2012 Which means either we're going to see new highs over the summer or a technical bear market and renewed selling pressure. It's going bi-polar. $ in major rally. Thus... Quote Link to comment Share on other sites More sharing options...
R K Posted April 11, 2012 Share Posted April 11, 2012 Been a while but recall epic sadness. Maybe you should have taken the Gulag Archipelago along as well to complete a happy quartet. Quite different but pearl buck novels also made for an interesting read esp the female perspective. stratfor.com All seems to rest on that same same but different economic growth vs societal health dynamic encountered here and everywhere, but with wider starting differentials and a more recent painful intra and international history. Perhaps the Bo Xilai 'purge' will be but one of many. Is it wise to start purging those at the top of China's military industrial complex? Ramefications? US election beginning to look a bit of a sideshow by comparison Quote Link to comment Share on other sites More sharing options...
scepticus Posted April 11, 2012 Share Posted April 11, 2012 US election beginning to look a bit of a sideshow by comparison Well, no-one has been poisoned in the US race yet... Quote Link to comment Share on other sites More sharing options...
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