Weighing The Week Ahead: Time To Worry About China? [View article]
Corzine should be in jail and the US should be worrying about its own 0% fake government debt driven economy because its about as shaky as the EU. The only thing propping it up is that US dollars are used to settle oil contracts. Otherwise US Treasuries would be about as popular as Italy and Greece's debt.
China A Long Way From A Hard Landing [View article]
I would not buy Chinese stocks per say, however, I agree that China's economy is certainly more manageable than say the US which is wallowing in debt. China's slowdown is a product of their efforts to control inflation and suppress real estate speculation. The softening of both is a positive towards controlled sustainable growth although their real estate is still unsustainable and too high due to rampant speculation.
I like all the Chinese oil companies. As for China, the real issue is mainly inflation which cold be countered more effectively by raising the value of the RMB (the real root of the problem) and re-exporting it back to the source which is the USA.
As for China banks, they have a growing problem but none really worse than the US banks that are dependent on the government to bail them out of most all home loans via Fannie Mae and Freddie Mac and are still hemorrhaging from prior unbooked losses and hidden derivatives positions. If you want to talk about unrecognized liabilities with China why don't you talk about off book accounting in the US where the whole derivatives still remains hidden from view and growing ever bigger.
Who Says China Inflation Is Under Control? [View article]
China's problem stem from the weak dollar and US exporting inflation coupled with the RMB peg and China's massive imbalance of exports. Although much lays at the feet of China it also is a direct result of America's policies as well. If the RMB was to depeg the US would experience massive inflation as the Federal Reserve's monetary laxness and our government's deficit spending come home to roost where it is created.
An End to QE (Even if Temporary) Seems Perfectly Timed for China [View article]
The end to QE is great for China which is fighting raging inflation due to US dollar overprinting spilling over into their economy and driving up inflation. A stronger dollar will help exports, contain inflation, and increase the value of their dollar reserves. However, in the long run it may make the US deal with its gaping deficits and trade imbalance that could crimp exports in the future. If that happens it will be good for the US and bad for China. It seems China is betting the US doesn't have the willpower to curb its voracious appetite for consumption. I would tend to agree for now. If the government can't act responsibly it is seriously impossible for its people to be expected to.
America Can't Escape China's Inflation [View article]
The US can only beg indulgences from Saudi Arabia once. We just blew out that card to lower oil prices by a dollar or two. After this "high" is over the terrible facts of inflation are liable to take hold unless the economy falls into a double dip.
China Needs to Focus on 'Soft Power' to Keep Foreign Investment [View article]
China has no problem getting foreign money inflows. In fact their inflation is mainly caused by their undervalued currency drawing in too much foreign currency and a giant trade surplus.
As for soft power, the author is right that China has always been overply protectionist at the cost to their own consumers which is frankly preventing the flourishing of a consumer economy. This is because the powers that be think that if trade surpluses drop it will be the end of the world when in fact it is not. Ttrade surpluses will naturally drop whether they like it or not as low skilled work migrates to lower cost countries similar to what happened to Japan, Taiwan, Korea, Singapore, etc.
China needs to soften their own stance on their domestic market to survive. If China blocks competition and foreign goods it will be hard for them to realize the value of global products and appreciate their allure so they can innovate competitive new ones. China tends to be insular thinking that their own internal economy is enough, but frankly this is not so. Global competition will always cause advances to accelerate much faster than any given domestic economy. If it wants to be on top for a long time to come they must realize this and embrace globalization. Otherwise, their rise to relavance will be overshadowed by a failure to move up the value chain.
China has a right to be concerned with the US and other's hard power of trying to thrust their imports on China (beef, Qualcomm, etc.) however, blocking unthreatening competition or all competition is a very poor solution. As for the reason China is amicable to the tech industry, the reason is clear. China gets a lot more from the tech industry than they give up, and they recognize that they need to allow their people to experience technology from all over the world to stay competitive. Hopefully, they will mirror this realization with regards to everything else in the future.
As for telecom, the US has some of the most uncoordinated worst networks in the world. It is funny to see them lambast anyone when standards and reception are so poor, they restrict competition by not requiring everyone offer unlocked phones, and only recently let you keep your old number when switching carriers. There is favoritism and corruption even in the US, especially in military contracting where they restrict and ban foreign competition. So even the US has a ways to go in learning about global competition. In the meantime, they will continue to get ripped off by their own no compete or restricted military contractors like Haliburton.
Which Country Funds Have the Highest and Lowest ROE? [View article]
This obviously doesn't take into account currency devaluation. You need to make a good 10% a year just to counter the US' money printing devaluation these days.
China Imposes More Liquidity Restraints: Faber Warns of Market Crash [View article]
A decent chines blow-off of 20-35% would actually be healthy if it stabilizes afterward and if it contains rampant real estate speculation. As we have learned with the US, small down cycles are preferable to big ones caused by overblown bubbles.
After all, it's not like China hasn't had an incredible decade long run. A correction would still put investors way ahead, something that can't be said for US investors.
China Learns Keynesianism the Hard Way [View article]
This won't stop anything. People wanting to speculate in a third home will just work with relatives to buy under other people's names. It is already a common practice in Asia.
As for Keynsian, China's economic policies are not Keynsian. Their roots really lie in a completely managed economy. Keynsian economics is premised on a free floating economy where the government intervenes occasionally to re-set the economy when it hits the doldrums. In that sense of the word, our economic policies aren't so Keynsian either since government intrusion is persistent in good times and bad and stimulus happens before, during, at the bottom, and after an economic rut. And so do the deficits.
We too are treading towards a managed economy with Fannie Mae and Freddie Mac socializing the housing market. In fact, our housing market would cease to function without them since they have squeezed most all the legitimate home loan business out of existence (all except jumbo loans). So China is not the only country toying with the free market and manipulating the housing market. We can find it here on our own soil.
Growth vs. Return on Capital: The Chinese Dilemma [View article]
You tend to call what China is doing a type of economic bootstrapping and closely mirrors India, Japan, Singapore and others. Indeed it is led through a command economy and lots of infrastructure and low wage mass production. This can be very successful for a time,however, the critical test is always if it can transform itself into developing and growing higher value added enduring economic activity.
Japan has its strong high tech base, Singapore fostered a strong banking base, and Hong Kong has become a nexus for international business. China's strong foray into process patents is a first step into locking in a true manufacturing base not tied to cheap labor and low environmental controls.
The economic rise of China has not been completely written. We will see in the next 10 years if it can keep rising as textile and other business starts to move to new low wage countries such as Vietnam and Thailand. Only then will we know if China's rise will be a lasting one or if it will implode under the weight of excessive capital spending and infrastructure.
This is the effect of government intervention. Let's see if it cools the real estate market like they are hoping it will. If so, this will be a success. If so, hopefully the US could learn to emulate them and try to deflate bubbles before they pop.
So much for veteran central banks. They apparently are less mature than a country just learning how capitalism works.
U.S.-China Relations: The Future Is Becoming Clear [View article]
First off Where is the WTO. Such laws flaunt the idea of free trade.
2nd, you can see that Adam Smith is right, those who own factors of production get to dictate things on their terms. The US better read their own economists and get back to their roots. Depending on cheap overseas labor for everything puts our whole economy in grave danger as well as our future.
Last, there is nothing wrong with a hard days work or blue collar workers. I respect them much more than what most bankers do.
This sounds no different to the US manipulating inflation and unemployment numbers. They do not lie, they just selectively choose methodologies that give them what they want to see.
Thanks for the data. As for every country, it is best to try to compare it with outside data if possible. If the US says no inflation tracking oil prices, gold, and other commodities are a more accurate indicator (and tell a much different story). If the US says there is a recovery looking at total population percentage employed and total jobs numbers is better than official unemployment numbers. Then look at imports and exports. If the number is falling, it probably is not a recovery no matter what the official government numbers say.
Likewise, US and other disclosure of Chinese imports is much better insight into China's prospects than say the governments GDP numbers. Face it, China is an export dominated country no matter what people say these days.
Weighing The Week Ahead: Time To Worry About China? [View article]
China A Long Way From A Hard Landing [View article]
Warily Watching China [View article]
As for China banks, they have a growing problem but none really worse than the US banks that are dependent on the government to bail them out of most all home loans via Fannie Mae and Freddie Mac and are still hemorrhaging from prior unbooked losses and hidden derivatives positions. If you want to talk about unrecognized liabilities with China why don't you talk about off book accounting in the US where the whole derivatives still remains hidden from view and growing ever bigger.
Who Says China Inflation Is Under Control? [View article]
An End to QE (Even if Temporary) Seems Perfectly Timed for China [View article]
America Can't Escape China's Inflation [View article]
China Needs to Focus on 'Soft Power' to Keep Foreign Investment [View article]
As for soft power, the author is right that China has always been overply protectionist at the cost to their own consumers which is frankly preventing the flourishing of a consumer economy. This is because the powers that be think that if trade surpluses drop it will be the end of the world when in fact it is not. Ttrade surpluses will naturally drop whether they like it or not as low skilled work migrates to lower cost countries similar to what happened to Japan, Taiwan, Korea, Singapore, etc.
China needs to soften their own stance on their domestic market to survive. If China blocks competition and foreign goods it will be hard for them to realize the value of global products and appreciate their allure so they can innovate competitive new ones. China tends to be insular thinking that their own internal economy is enough, but frankly this is not so. Global competition will always cause advances to accelerate much faster than any given domestic economy. If it wants to be on top for a long time to come they must realize this and embrace globalization. Otherwise, their rise to relavance will be overshadowed by a failure to move up the value chain.
China has a right to be concerned with the US and other's hard power of trying to thrust their imports on China (beef, Qualcomm, etc.) however, blocking unthreatening competition or all competition is a very poor solution. As for the reason China is amicable to the tech industry, the reason is clear. China gets a lot more from the tech industry than they give up, and they recognize that they need to allow their people to experience technology from all over the world to stay competitive. Hopefully, they will mirror this realization with regards to everything else in the future.
As for telecom, the US has some of the most uncoordinated worst networks in the world. It is funny to see them lambast anyone when standards and reception are so poor, they restrict competition by not requiring everyone offer unlocked phones, and only recently let you keep your old number when switching carriers. There is favoritism and corruption even in the US, especially in military contracting where they restrict and ban foreign competition. So even the US has a ways to go in learning about global competition. In the meantime, they will continue to get ripped off by their own no compete or restricted military contractors like Haliburton.
Which Country Funds Have the Highest and Lowest ROE? [View article]
China Imposes More Liquidity Restraints: Faber Warns of Market Crash [View article]
After all, it's not like China hasn't had an incredible decade long run. A correction would still put investors way ahead, something that can't be said for US investors.
China Learns Keynesianism the Hard Way [View article]
As for Keynsian, China's economic policies are not Keynsian. Their roots really lie in a completely managed economy. Keynsian economics is premised on a free floating economy where the government intervenes occasionally to re-set the economy when it hits the doldrums. In that sense of the word, our economic policies aren't so Keynsian either since government intrusion is persistent in good times and bad and stimulus happens before, during, at the bottom, and after an economic rut. And so do the deficits.
We too are treading towards a managed economy with Fannie Mae and Freddie Mac socializing the housing market. In fact, our housing market would cease to function without them since they have squeezed most all the legitimate home loan business out of existence (all except jumbo loans). So China is not the only country toying with the free market and manipulating the housing market. We can find it here on our own soil.
Growth vs. Return on Capital: The Chinese Dilemma [View article]
Japan has its strong high tech base, Singapore fostered a strong banking base, and Hong Kong has become a nexus for international business. China's strong foray into process patents is a first step into locking in a true manufacturing base not tied to cheap labor and low environmental controls.
The economic rise of China has not been completely written. We will see in the next 10 years if it can keep rising as textile and other business starts to move to new low wage countries such as Vietnam and Thailand. Only then will we know if China's rise will be a lasting one or if it will implode under the weight of excessive capital spending and infrastructure.
China Gets Left Out of the Rally [View article]
So much for veteran central banks. They apparently are less mature than a country just learning how capitalism works.
U.S.-China Relations: The Future Is Becoming Clear [View article]
2nd, you can see that Adam Smith is right, those who own factors of production get to dictate things on their terms. The US better read their own economists and get back to their roots. Depending on cheap overseas labor for everything puts our whole economy in grave danger as well as our future.
Last, there is nothing wrong with a hard days work or blue collar workers. I respect them much more than what most bankers do.
A Tale of Two GDPs [View article]
Thanks for the data. As for every country, it is best to try to compare it with outside data if possible. If the US says no inflation tracking oil prices, gold, and other commodities are a more accurate indicator (and tell a much different story). If the US says there is a recovery looking at total population percentage employed and total jobs numbers is better than official unemployment numbers. Then look at imports and exports. If the number is falling, it probably is not a recovery no matter what the official government numbers say.
Likewise, US and other disclosure of Chinese imports is much better insight into China's prospects than say the governments GDP numbers. Face it, China is an export dominated country no matter what people say these days.
Don't by the hype!
Is a New Bear Market Beginning in China? [View article]