Independent Strategy’s latest report, “China’s credit bubble: the missing piece in the jigsaw” makes a persuasive case that China’s debt fueled growth model is due for a hard landing, but the timing is uncertain, since the debt is funded internally. China is barely past an episode of dealing with banks chock full of bad loans […]
Read more...By Marshall Auerback, a fund manager and investment strategist who writes for New Deal 2.0. Arthur Conan Doyle’s literary creation, Sherlock Holmes, once solved a murder by noting the dog that didn’t bark. It doesn’t take Holmes’s ingenuity to see that the plan on offer for Greece is clearly a rescue package which doesn’t rescue. […]
Read more...Andrew Dittmer, who was an important collaborator on ECONNED, sent me pdfs of the notorious Citigroup Plutonomy reports for leisure reading. Michael Moore highlighted these two research reports (2005 and 2006) in Capitalism: A Love Story . On the one hand, the authors, Ajay Kapur, Niall Macleod, and Narendra Singh get some credit for addressing […]
Read more...It is astonishing that the words “rescue” and “bailout” are being applied to the headfake announced by the EU for Greece last week. Rebecca Wilder at Angry Bear blandly noted, “All I’m saying is that this plan, in its current form, is really not much of a plan at all.” Ed Harrison stressed that voters […]
Read more...While we have enjoyed a period of relative calm after the 2007-2008 financial crisis, the improvement in economic conditions exists in parallel with growing geopolitical tensions. None of the causes of the crisis have been resolved. We still have global imbalances. We still have powerful, predatory, and unconstrained capital markets players firmly in control of […]
Read more...A story in China Daily indicates that the Chinese offiicaldom foresees a record trade deficit for March: The country will probably see a “record trade deficit” in March thanks to surging imports, Minister of Commerce Chen Deming said on Sunday, while warning that Beijing will “fight back” if Washington labels China a currency manipulator. Speaking […]
Read more...The widely-extolled idea, that the EU would find a way to muddle through the Greece crisis, looks very much in doubt. The pressure has not simply put the rescue of Greece into disarray, but appears to have led to some positions being taken that, if they hold, could lead to the partial dissolution of the […]
Read more...Has the Chinese export sector become hostage to WalMartization, the ability of powerful retailers to squeeze vendor profit margins? Reader Michael Q called our attention to a key remark in a Wall Street Journal story: Vice Commerce Minister Zhong Shan, in an exclusive interview Thursday ahead of a visit to the U.S., said that the […]
Read more...A post by Edward Harrison In reading Scott Sumner’s take on the China currency peg dilemma, I see that both he and Paul Krugman hit on the fundamental problem in the debate: reserves. Everyone is talking about the peg as if relaxing the peg will be the magic bullet to America’s current account problem. But […]
Read more...A post by Edward Harrison I am going to talk here a little bit about the looming trade war between China and the United States. But I am going to come at it from a side angle via some historical analogies. Common folklore in the United States says that the Soviet Empire collapsed in large […]
Read more...The Financial Times’ Martin Wolf gives a cogent and sober assessment of what he deems to be a destructive refusal to adjust policies on behalf of the world’s two biggest exporters, China and Germany. The problem is that both simultaneously want to have their cake and eat it too. As we stressed in a recent […]
Read more...A post by Edward Harrison. I was talking to a friend of mine who does emerging market investing for a living and I asked him what he made of recent China-bullish comments by Stephen Roach. The Morgan Stanley Asia head was in Germany speaking to German business daily Handelsblatt last week. The guys from Handelsblatt […]
Read more...Relations between the US and China have been deteriorating. Although both sides have poked each other in various ways (Obama meeting with the Dalai Lama, China dissing Obama in Copenhagen by standing him up for a meeting, some tit for tat on tariffs), the major, unresolved bone of contention is China’s pegging of its currency, […]
Read more...By Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute Reader note: please see yesterday’s post for a discussion of the fiscal balances map. As evident from the financial balances map, there are a whole range of possible combinations of current account […]
Read more...By Rob Parenteau, CFA, sole proprietor of MacroStrategy Edge, editor of The Richebacher Letter, and a research associate of The Levy Economics Institute The question of fiscal sustainability looms large at the moment – not just in the peripheral nations of the eurozone, but also in the UK, the US, and Japan. More restrictive fiscal […]
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