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China to inject $174B of liquidity on Monday as markets reopen

reuters.com

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Re: China to inject $174B of liquidity on Monday as markets reopen

#311

Post by bane »

adnzzzzZ wrote: post #52
bane wrote: post #20

The Chinese government's response to this situation (after some initial dithering) has been to move swiftly with big moves. I suspect that the force that overcame the initial delays in local response were powerful central government actors who could some in and simply shut cities and entire areas down and not fool around. There appears to be at least one emergency prefab hospital with about 1600 beds under constructi…

This kind of analysis I'm seeing everywhere is so misguided. The reason the local government didn't report on the situation accurately and even punished some journalists for speaking about it is a flaw of how their country is run and how their command structure incentives are poorly set up. This isn't a new problem and it's why we have converged to a different system in most of the West. The government coming in late…

I actually don't disagree with you. But I'm of the opinion that the authoritarian nature of the Chinese central government is both a blessing and a curse. As you've correctly pointed out, central authoritarian governments seem to end up with local administrations that are fairly incompetent and corrupt as their measure of success if not in good local governance, but by pleasing the central authority. On the flip side, when the proverbial "Eye of Sauron" of a central government decides to do something without reservation, this style of governance can get a lot of stuff done very quickly.

Ultimately the problem for these series of epidemics is the poor conditions and practices of many Chinese citizens that results in unsanitary conditions, especially around food animals. It's easy to look at China as a whole, take a point sampling for a given location and time, and come to a negative evaluation of the entire place. What's harder to do is to recognize that in absolute terms, China today is in much better shape than it was before the '78 reforms. China today is in much better shape than it was before 2000!

The structural problem within China, with respect to how local governing happens, is most certainly a problem. However, I think it's very easy to lob complaints across the Ocean when the West is certainly not in a present state of good order at the moment.

Re: China to inject $174B of liquidity on Monday as markets reopen

#312

Post by unlinked_dll »

koheripbal wrote: post #276
cheschire wrote: post #145

Earlier quoted context omitted.

People have been saying they expect a recession in the next 2 years for the last 2 years and now is no different. If it was easy to predict when the least risky time is to make a risky decision, then it wouldn't be risky, gambling wouldn't be a thing, and life would be forever boring.

2016 was supposed to be the year the bubble crashes. "They" also said their would be a double dip in 2012. I've heard so many doom and gloom predictions in the past - but the one thing they all have in common is a complete lack of specifics. WHAT is going to cause the crash? Which industry has a fundamental imbalance? It's always just some vague notion that "something" isn't right.

>WHAT is going to cause the crash?

A black swan, like coronavirus shutting down China.

>Which industry has a fundamental imbalance?

Consumer debt and financial services.

How has our economic output been growing without much inflation or wage growth? How did we sell 17 million vehicles domestically last year when the average American has less than $1k in the bank? How are people buying phones for $600-700 every two years?

Debt. Lots of it. And what's going to happen when consumer prices get driven up? Are people going to make their payments?

I don't know, but it doesn't look great.

Re: China to inject $174B of liquidity on Monday as markets reopen

#313

Post by samsonradu »

BenoitEssiambre wrote: post #289
koheripbal wrote: post #273

Earlier quoted context omitted.

Negative interest rates have other major problems - that are worse than a liquidity shortage.

For a large part of history, negative real returns on stores of value were the norm. Before financial systems existed, almost all investments had negative returns if you didn’t put work and energy into them. To store value, you had to accumulate stuff, buildings or land. Most options either had high maintenance costs, were subject to risk of damage from natural causes and theft, were very volatile or required hard la…

Can you elaborate a little on this? Investments having a negative return does not mean the market (reference) interest rate is negative.

Take the gold standard, do you think anyone was able to borrow gold and pay less back? Isn’t that the actual interest rate we are discussing here?

Re: China to inject $174B of liquidity on Monday as markets reopen

#314

Post by mrtksn »

jmnicolas wrote: post #33
wwwtyro wrote: post #2

Here's a map with the latest coronavirus data: https://gisanddata.maps.arcgis.com/apps/opsdashboard/index.h...

According to your link the survivability rate is almost 98% (305 deaths for 14628 cases). (I'm trying to inject a bit of optimism here, people are so gloomy).

People don't die or survive at the time of infection confirmation, you need to put the time dimension into your calculations. From 14628 conformed cases, we only know that 305 died and 443 survived. For the 13880 people, the outcome is undefined.

https://getyarn.io/yarn-clip/efe83207-5eaa-4538-ad85-86676f0...

But you are right, no need to be gloomy. We have a lot of tools to deal with this, it would be alright eventually.

Re: China to inject $174B of liquidity on Monday as markets reopen

#315

Post by fspeech »

testfoobar wrote: post #18

The net figure matters. Bloomberg: "The central bank said Sunday it will use reverse repurchase agreements to supply 1.2 trillion yuan of liquidity on Monday, with the figure coming to 150 billion yuan ($21.7 billion) on a net basis, according to Bloomberg calculations." https://www.bloomberg.com/news/articles/2020-02-02/china-s-2...

One needs to look at this on a seasonal basis. Typically they inject a large amount of cash before the Chinese new year and start draining it afterwards. So the effect is larger than the net amount though maybe less than the gross number.

Re: China to inject $174B of liquidity on Monday as markets reopen

#316

Post by BenoitEssiambre »

bra4you wrote: post #287
BenoitEssiambre wrote: post #266

Earlier quoted context omitted.

The poor are much much more hurt by overly tight money. I tried to explain why here: https://medium.com/@b.essiambre/the-world-deserves-a-pay-rai...

"I tried to explain why here" Well, you failed. Interest rates are historically low. We have seen a gigantic amount of liquidity injected over the last decades. "The poor are much much more hurt by overly tight money." What is the most expensive acquisition in their life for the majority of the people? Real Estate. Prices are through the roof thanks to the central banks. Young people are just getting priced out of th…

Prices of houses may be high but affordability is not because of cheap financing. Payments could have been made lower with easier money and even cheaper financing. Asset prices are bounded by the cost of producing new houses and also, high house prices create good jobs for house builders.

Re: China to inject $174B of liquidity on Monday as markets reopen

#317

Post by leftyted »

siracusa23 wrote: post #297
leftyted wrote: post #269

Earlier quoted context omitted.

The gulag hosted ~20 million people. How many people went through rendition? Your attempt to equate these things is frankly shocking.

Is this about numbers? Or the fact that both countries did something horrific? How about how many wars the Americans started? How many people killed, left without homes? How about the fact that Americans bombed the Japanese? Why can't people accept that bad is bad no matter who does it or how many times they do it. This is not you vs. me, democrats vs. republicans, conservative vs. liberals, Russia vs. US, it's not t…

Killing one person is not as bad as killing one hundred people. Saying "both countries did something horrific" is denying your ability to draw distinctions between things which is the same thing as denying your ability to think. I don't know why you would voluntarily give up your ability to think.

> How about how many wars the Americans started? How many people killed, left without homes? How about the fact that Americans bombed the Japanese? Why can't people accept that bad is bad no matter who does it or how many times they do it.

No one is arguing that Americans never do anything wrong.

> I'm not defending the USSR, Europe or US. I'm saying all are bad and all of them have done horrifying things, the only thing we can do is to hope that we can become better. And this can only be done if we stop saying "oh but he did it worse/first, mom" but understand that we need to do better.

Saying that all countries have done horrifying things is facile. The idea that, in order to "do better," we have to first convince ourselves that killing millions of people by forced labor is the same as kidnapping 3000 people and torturing them is bizarre. It's all-or-nothing nonsense. The fact that no country is perfect does not mean that no country is better than any other country.

This argument didn't start because someone said "rendition was okay because the gulags were worse". It started because you objected to the statement that the USSR was much worse than the US.

Re: China to inject $174B of liquidity on Monday as markets reopen

#318

Post by sytelus »

If US or China stock market was to go down, govt will immediately infuse such massive cash that things would be back up in no time. I'm wondering this is why there had been no recession past the entire decade and very likely none ahead. Somehow we have arrived at economic prosperity level where enough wealth is "buffered" to smooth out downturns.

Re: China to inject $174B of liquidity on Monday as markets reopen

#319

Post by brobinson »

K0SM0S wrote: post #181
c789a123 wrote: post #152

I have warned many times that CCP is an evil regime and will cause big disaster for whole human society. Whoever in the free world still trying to make some profits collaborating with CCP, just remember: dance with the devil, just wait for the music to stop.

I would just like to point out that this is exactly, almost word for word and certainly in spirit, how anti-Americanism is expressed e.g. in Europe (where I grew up, born 1982). It's crossing a line where one's ethnocentrism paints the other not just as "different" but fundamentally "lesser": e.g. many Europeans consider the USA to be "ethically behind" comparably rich countries for its arguable lack of reverence for…

The OP's criticism was directed at the CCP, not the nationals of the PRC. You can dislike a government without having a negative opinion of its people.

Re: China to inject $174B of liquidity on Monday as markets reopen

#320

Post by grecy »

leftyted wrote: post #260
grecy wrote: post #183

[flagged]

There's a huge difference between "manufacture of consent" type propaganda, in which the citizenry is complicit in its own indoctrination, and Soviet-style propaganda where there was no free press and people were killed and jailed for criticizing the government. Wondering aloud if the Soviet system might not be better "because at least people were aware of it" is shocking and cruel.

You misunderstood. I'm not saying the Soviet system was better or anything like that.

I'm saying it's interesting to realize that everyone on all sides are fed propaganda. As 'siracusa23' points out, he is very aware that both Americans and Soviets continue to be fed propaganda.

What I said was that today, the vast majority of Americans have no idea they are constantly being fed propaganda, and they openly take offence if you say as much.

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