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Kroeber To Faber: China Is Very Big, Marc…

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Kroeber to Faber: China is very big, Marc…

Posted by Gwen Robinson on Jun 09 08:40.

One of the most hotly debated topics among emerging markets watchers is Chinas economic direction both in the long and short-term.

Indeed, says Hong Kong-based research house Gavekal in a Wednesday note, in the US and Europe, it seems that most of the people we talk to are firm partisans of the Jim Chanos line that the Chinese economy is on a treadmill to hell.

In Hong Kong, however, investors are typically of the view that most Westerners looking at China are a little too keen to notice the splinter in their brothers eye, without perceiving the wooden beam in their own eye, it adds.

Driving the point home, Gavekals long-time China commentator Arthur Kroeber and investor/commentator Marc Dr GloomBoomDoom Faber locked verbal chopsticks in a video debate on the question of whether China is overheating. The occasion was to launch Reuters new multimedia website Reuters Insider.

Kroeber observed that recent Chinese labour unrest could only force companies to improve wages and conditions, and therefore will help shift the economy towards greater consumption.

A litte more cheekily, perhaps, came Kroebers low-key response to Fabers typically bleak observation that China was an accident waiting to happen, amid huge over-capacity in infrastructure and property development.

You have no idea how big China is, Kroeber rejoindered.

Video here:


Edited by AvidFan
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Just one thing, if the Chinese increase wages while they're still producing crap they'll be in real trouble.

In the case of the Japanese the quality of products went up in tandem with wages.

The west will not pay top dollar for rubbish....

They're going to go through the inflationary phase the West did (and Japan).

Rising prices means cost cutting and real wealth destruction (wage/price spirals, etc.). Think of the UK in the 1970's to know what China's next phase will be.

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They're going to go through the inflationary phase the West did (and Japan).

Rising prices means cost cutting and real wealth destruction (wage/price spirals, etc.). Think of the UK in the 1970's to know what China's next phase will be.

Difficult to compare unionised, ex- empire 70s Britain to China. Japan is far more similar.

Prices of many things in Japan are around the same as they 40 years ago btw.

Not only are their products second rate, if they improve their products as the Japanese did then who will buy? (their productive capacity is ten times the size.)

Anyone on here interested in buying a new Chinese made car as I heard they'll be arriving this year? Expect them to be as good as a Proton for around 10K.

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In the last 30 seconds he says "short Australia - a disaster is about to happen".



Judging from of Australian bank employees, Australia's debt bubble is ready to implode soon. Please consider Bank workers fret over customer debt.

The survey by the Finance Sector Union showed that 29 per cent of its members felt uncomfortable about their customers' ability to meet their financial obligations with new debt products.

About 43 per cent said they were ''are under pressure to sell debt products, even if customers don't ask for them and may not be able to afford them''.

Worries from bank tellers and workers come as the total Australian mortgage debt for owner-occupied housing hit a record $774 billion in April, while debt for investment purchases totalled $330 billion, according to data from the Reserve Bank. Personal loans totalled $141 billion in April.

Of the major banks, Westpac-owned St George ranked the highest with 75 per cent of workers reporting an emphasis on debt selling. For ANZ and credit unions, 64 per cent of employees noted an increase in debt selling.

For Commonwealth Bank, 63 per cent of workers reported the debt-selling pressure, while 53 per cent of Commonwealth Bank-owned Bankwest employees reported the focus.

Less than half of National Australia Bank employees, or 49 per cent, said they had been instructed to push more credit on customers.

Bernanke Sees Recovery Gaining Traction

Australia is all set to implode but in the US Bernanke sees recovery gaining traction.

Federal Reserve Chairman Ben Bernanke said Monday he is hopeful the economy will gain traction and not fall back into a "double dip" recession.

"My best guess is we will have a continued recovery, but it won't feel terrific," Bernanke said.

That's because economic growth won't be robust enough to quickly drive down the unemployment rate, now at 9.7 percent, he said in remarks to the Woodrow Wilson International Center for Scholars, a nonpartisan research group.

Asked when the Fed will start raising interest rates, Bernanke quipped "in the future."

Wishin' and Hopin'

I have a message for Bernanke: Recoveries are not built on loose monetary policy, nor imprudent fiscal stimulus, nor taxpayer bailouts of banks, nor Wishin' and Hopin'.

I wonder if this what he's referring too about Australia?

Although to be fair most banks do make their money by selling debt. However it is best to sell the debt to those that can afford to repay it.

Edited by interestrateripoff
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