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Asia-Pacific is home to a rise in new self-made billionaires

bloomberg.com

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Re: Asia-Pacific is home to a rise in new self-made billionaires

#111

Post by RA_Fisher »

RA_Fisher wrote: post #110
BenoitEssiambre wrote: post #34

Earlier quoted context omitted.

It's not really a redistribution to asset holders. These people get about the same in the long run. It's more like the removal of a subsidy on government paper. This promotes private asset creation. https://medium.com/@b.essiambre/the-world-deserves-a-pay-rai... There is no reason for a correction if they continue running a sufficiently inflationary monetary policy.

That's a great article! I read about 3/4 and I'll come back for the rest. Your arguement is the ying to my yang. Where I depart is: wages adjust much more slowly than assets. Wages are negotiated over long spans of time vs. liquid assets. Wage holders think they're negotiating for real value X but it's eroded. Just look at baby boomers. Their wage flows are ~ fixed. Sure many get the benefit of asset appreciation but…

The assertion that the gov has the equilibrium interest rate (price of money) set too high is unsubstantiated in the article. We've just been through quantitative easing, so it seems unlikely we're above equilibrium. If only we'd let the market choose!

Re: Asia-Pacific is home to a rise in new self-made billionaires

#112

Post by RA_Fisher »

seanmcdirmid wrote: post #78
RA_Fisher wrote: post #10

Sure but China inflated its currency, that's a redistribution to asset holders. The acomplishments are admirable all the same, but the accelerated climb is probably boosted by inflation. I predict a correction in next year's list.

> Sure but China inflated its currency China inflated the value of its currency, they didn't inflate it by printing more (quite the opposite actually). This makes it harder for Chinese companies to do trade, not easier, so I don't see what your point is.

Considering the huge flows into SF, Vancouver and Sydney real estate, that doesn't seem likely. They even institute capital controls to prevent capital flight. That's a sign that the printer is running at a high speed!

Re: Asia-Pacific is home to a rise in new self-made billionaires

#113

Post by BenoitEssiambre »

RA_Fisher wrote: post #111
RA_Fisher wrote: post #110

Earlier quoted context omitted.

That's a great article! I read about 3/4 and I'll come back for the rest. Your arguement is the ying to my yang. Where I depart is: wages adjust much more slowly than assets. Wages are negotiated over long spans of time vs. liquid assets. Wage holders think they're negotiating for real value X but it's eroded. Just look at baby boomers. Their wage flows are ~ fixed. Sure many get the benefit of asset appreciation but…

The assertion that the gov has the equilibrium interest rate (price of money) set too high is unsubstantiated in the article. We've just been through quantitative easing, so it seems unlikely we're above equilibrium. If only we'd let the market choose!

The natural rate is hard to measure so this is a difficult one to answer. And right now, in the US, my argument probably no longer holds that well (I wrote the post a while back). It looks like the uncertainty surrounding the aftermath of the 2008 crisis finally dissipated and unprecedented government deficit spending has pushed the equilibrium up, making it easier to follow for the Fed. This means there is enough private investment to keep the economy running well and people employed.

Europe and Japan are still very problematic however.

The simple fact that people, businesses and banks hoard cash and government bonds instead of doing sufficient investment to keep people employed is strong evidence to me that the returns on government paper is above market. Excess reserves are high into these parts of the world.

A more widely recognized sign is that they keep undershooting their inflation target.

For arguments from real economists, look around these parts https://www.davidbeckworth.com/popular, https://worthwhile.typepad.com/worthwhile_canadian_initi/nic... or https://faculty.insead.edu/fatas/

One thing you can't rely on is the fact that central bank rates are zero in the problematic places. Zero is a high, above market rate when the equilibrium is negative. As I tried to emphasize in my medium post, negative rates can be quite normal and natural. If marginal private assets don't have a positive real rate on a risk adjusted, liquidity adjusted basis, the government shouldn't provide an artificial substitute. If they do, it puts a gridlock in large parts of the economy.

Re: Asia-Pacific is home to a rise in new self-made billionaires

#114

Post by baybal2 »

seanmcdirmid wrote: post #80
baybal2 wrote: post #75

Earlier quoted context omitted.

I say it's not much different from what it is in states: Old Rich People Drive Buicks.

Young rich people might drive Buicks in China. My 40ish boss had a Buick luxury minivan that they don't even make in the states.

Forty is old

Re: Asia-Pacific is home to a rise in new self-made billionaires

#115

Post by seanmcdirmid »

RA_Fisher wrote: post #112
seanmcdirmid wrote: post #78

Earlier quoted context omitted.

> Sure but China inflated its currency China inflated the value of its currency, they didn't inflate it by printing more (quite the opposite actually). This makes it harder for Chinese companies to do trade, not easier, so I don't see what your point is.

Considering the huge flows into SF, Vancouver and Sydney real estate, that doesn't seem likely. They even institute capital controls to prevent capital flight. That's a sign that the printer is running at a high speed!

If the RMB free floated on the market, it wouldn’t matter how fast they were running the printer since supply and demand would do its thing.

However, if the RMB is overvalued (meaning they say it is worth more than it is actually), then capital controls are very necessary. If the RMB was undervalued, then you would need more controls in the opposite direction (for money coming in) to prevent arbitrage.

Right now the RMB is overvalued, but not by much. Maybe it should be 7 or 7.5 RMB/dollar.

Re: Asia-Pacific is home to a rise in new self-made billionaires

#116

Post by seanmcdirmid »

baybal2 wrote: post #114
seanmcdirmid wrote: post #80

Earlier quoted context omitted.

Young rich people might drive Buicks in China. My 40ish boss had a Buick luxury minivan that they don't even make in the states.

Forty is old

Eh. Minivan means you have kids to worry about. Buick is basically dead in the states but is a viable brand in China for some reason.

Re: Asia-Pacific is home to a rise in new self-made billionaires

#117

Post by jorblumesea »

A2017U1 wrote: post #107
jorblumesea wrote: post #35

I often wonder how much of this is because of China's government sponsored espionage and theft. It's a pretty clear pattern of APT hacks and then somehow a Chinese startup is making "huge strides" in advanced metamaterials manufacturing. Then they are subsidized with cheap (basically free) government loans which undercuts the market. If the Chinese government steals trade secrets for its business and rigs the market…

Do you truly believe they are the only country on Earth committing corporate espionage? Everyone is doing it, but in Western democracies you have to hide the fact because voters on all sides frown upon such cheating. Especially stealing from your closest allies who send their troops to die in your pointless wars. The reality is China doesn't care about getting caught. Just like India shrugs off rescinding billion dol…

No, I don't think that at all. I just see it as ridiculous to pretend these are "self made" entrepreneurs or innovators in the slightest.

More like, Knighted by the Party?

Re: Asia-Pacific is home to a rise in new self-made billionaires

#118

Post by starpucks »

jpatokal wrote: post #105
starpucks wrote: post #65

Earlier quoted context omitted.

Can someone list the numbers adjusted for inflation? Because these days it seems billions are so common for companies whereas just ten years ago a ten billion dollar company was “super big”. Where did all this wealth come from? Who lost in the zero sum game ?

Wealth is not a zero sum game, but more importantly, valuations are not actual money -- they're just what the company would cost if you bought the whole thing at the same price as the last investment. If a company has a down round, billions may be wiped off the valuation, but actual losses suffered by previous investors are a small fraction of that.

Right but I just meant doesn’t true wealth have to be injected at some point ? Like at some point someone actually needs to mine new resources and inject the resources into the economy ? I don’t really see the last ten years, countries having mined a 100x increase (non inflation adjusted) in raw goods..?

So that leaves the investment. Then others are investing in all these tech companies.. it is a cyclic dependency graph if you trace through the millions of nodes (assuming you get through the offshore accounts which I presume function as sinks). Then ... these companies are getting huge valuations because everyone else is investing more and more into them? Including themselves investing into themselves ?? When does the buck stop? Doesn’t this wealth need to be backed up ultimately by some gold bars ? Even if it’s fiat and fractional reserve .. so someone’s trust rating is ultimately taking a hit? Is the us printing this money out of thin air on the back of it’s huge credit ? I know the economy is too complex to be boiled down like this but where are these 100x increases in billions coming from ultimately? People credit ratings summed over millions of people ?

I never took any Econ courses so admittedly my Econ is terrible.

Re: Asia-Pacific is home to a rise in new self-made billionaires

#119

Post by JDiculous »

rayvy wrote: post #89
threatofrain wrote: post #9

I think it's not good to frame wealth creation in terms of billionaires.

Agreed. If you're a regular reader of Bloomberg (I am myself), then you see that they almost fetishize abnormal wealth - constantly writing articles in regards to what the "elite", the "1%", the "ultra-wealthy" think/do. As someone who previously liked Bloomberg (about as much as someone can like that type of thing), the constant obsession with wealth is definitely a turn off.

Bloomberg used to be my go-to news source, but I stopped checking it after they shifted to clickbait spam articles devoid of substance and I realized my time was being wasted.

Re: Asia-Pacific is home to a rise in new self-made billionaires

#120

Post by cromwellian »

hndamien wrote: post #108
cromwellian wrote: post #99

Earlier quoted context omitted.

And what legitimate business or personal need does hashing blocks satisfy? A camera is useful even if you don't use it to produce a Youtube video. The average person buying a camera isn't seeking to make money off of it by photographic profession or vlogging. However, the vast majority of people purchasing ASIC miners think they're going to make money from them. Another example: GPUs, some people bought em for mining…

They provide network security in exchange for money.

The people who own most of the hashing power (esp those in China) aren't interested in network security, they're interested purely in money.

It's the true believers who think cryptocurrencies are going to save the world from centralized banks who are getting scammed.

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