191–200 of 263 posts
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and there will need to be a reckoning And yet when I read things like this I also think of the cliché, "Markets can remain irrational longer than you can remain solvent." People have been waiting decades for Japan's post-boom day of reckoning and we've not seen it.
Nikkei peaked at 40k in 1990; it has been hovering around 10-20k ever since.
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Where did you get this info? Every source I see shows China's Debt/GDP (42.90%) as much lower than the US (104.17%).
The parent is talking about total debt - public, household, and corporate. China's public debt isn't too much but the corporate debt is what has skyrocketed. Many analysts treat Chinese corporate debt as more-or-less equivalent to public debt (and don't do this for the United States), on the assumption that the government will bail out SOEs rather than allow them to fail and create widespread unemployment. That may o…
I'd say this certainly gives a lot of political leeway in China, compared to having the opposite in place. I wonder if all the major US companies that were bailed out, that their debt should be considered public debt seeing there is already a precedent in place. But something tells me I doubt moodys will have a word on that.
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It sounds more like a parable, not an actual story. The point is that if enough people make prediction, some of them will right over and over and over - even though it's all random.
> a parable Ha, that's a great observation; I hadn't thought of it. On one hand, I'm very uncomfortable with any implied comparison to the most well known practitioner of parables. On the other, many others have used the form. Maybe I'll write all my HN posts in parable form - 'those who have ears to hear' will understand; the others I won't have to deal with. I could use it for business emails too. Coming up with th…
It's a really effective technique for getting a point across to most people if they'll give you the time to listen and you're a good storyteller. It's a bit less effective in highly nerdy spaces but still worth doing.
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Are you seriously suggesting that US government deficits are run to invest in education and infrastructure? Deficits are mostly attributable to military spending. I'm doubtful that killing people in other countries who present absolutely no threat to you is productivity-enhancing.
GI bill pays for a lot of education
It's just my opinion. Otherwise we are back to Middle Age.
Ok, this is probably a silly question, but who holds all the debt now? The avg US citizen would say China holds much of the US debt, but now it sounds like China is borrowing their way into trouble too... it's not any of these third world countries... who is it?
The biggest group holding US debt are its citizens. The social security trust fund has been raided for decades by the general fund to spend on defense security state and has not been paid back. Politicians and their funders hope everyone is hoodwinked into forgiving the debt or just taxing everyone more to make up for the stolen^W borrowed money.
Where is the money in the social security trust fund kept. I had assumed it was in treasury bonds and therefore lent to the US Government general funds to be spent at the will of congress. Is the Social Security Administration actually holding VOO or physical gold?
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It seems like smart people have been predicting that China's growth is unsustainable on a regular basis for at least 15 years... it's tough for an average HNer like myself to take the time to tell which "expert" is just blowing smoke and which expert truly has a handle on the salient facts- Guess all I can really do is simply wait and see who ends up being right...
It's funny because these massive debt accumulations invariably end up either in financial collapses or period of very high inflation, both of which can have dramatic impacts on a large part of the population (particularly savers and pensioners). But they are the most predictable thing in the world. Yet no one seems to be worried about them, whether in Europe or in the US. When the collapse will happen, people will be…
But let's say a majority of voting eligible citizens decided their country needs to dial down debt-fueled growth? Well there's almost nothing they can do, even though popular opinion has changed.
In Greece, even with the fraud that went on voters still had to know bad financial choices were being made. Heck, I live in the U.S. and know when politicians are using financialeering to make the books balance better...
I think the best model to understand this is Michael Pettis's balance sheet analysis. He covers it extensively, but here's his latest digest of the model: http://carnegieendowment.org/chinafinancialmarkets/66221 It really makes clear how stark the choices are for China. The debt binge of the last ~10 years has masked the flattening out of productive investment, and there will need to be a reckoning. Hopefully it's a…
"To move from the abstract to something specific, I will assume, as occurred in 2009-10 as a consequence of the global crisis, that for reasons external to China there is a sharp contraction in its current account surplus, mainly caused by a sharp fall in exports....." (he then goes on to describe the repercussions that match his model.) Maybe I'm misunderstanding what he's saying, but isn't what he describes true of…
Moody's? Is that the same credit rating agency which intentionally inflated credit rating for risky mortgage investment and eventually fined almost $1b[1]? It is just so funny that an agency that has already destroyed its own creditability is still running around and doing credit rating for others. [1] http://www.abc.net.au/news/2017-01-14/moodys-agrees-settleme...
I think the only credible credit rating agency is Standard and Poor's. It'll be interesting to see how they react to this downgrade by Moody's.
[1] http://www.bbc.com/news/business-31115174
Should I trust what S&P is saying given their track records like this?