131–140 of 263 posts
My countries economy is very closely tied to Chinas. I wonder what a Chinese financial crisis would look like here.
Like a local financial crisis. On the plus side, tier 1 cities are going to cool off (real estate price wise) if a lot of Chinese money gets burned up instead of outflowed.
Earlier quoted context omitted.
like CNN, you don't get to define fake news. Fake news is as simple as it sounds: articles that are factually incorrect. Sadly, from random images to all major media, everyone is guilty of it.
> you don't get to define fake news. Fake news is as simple as it sounds: articles that are factually incorrect. I'm happy to debate the nuance of the term fake news, but I think it's ironic that you presume to glibly assert your own definition of fake news right after exclaiming that one cannot do so (unless you're suggesting that CNN and myself, in particular, are forbidden from doing so). Anyway, fake news is not…
edit: these comments are mostly made out of frustration with news today. Maybe I'm old, i know that i'm older than the median here now. News was different as a kid. There's always been biases, but less subtle. And 'news' used to be the gold standard in editing and investigating. Now, I see error prone articles that seem to have no editing at all, and swings toward propoganda on both sides. Maybe it's a reflection of our own ignorance and biases. But to me, it's the great fall of media, debasing the term 'news'
The day after the Fukushima nuclear incident, the top-voted article on HN was an extremely confident-sounding article by an expert about how this was a minor incident, sure to be contained and forgotten. The comments in the article were dismissive about alarm. I remember feeling a sigh of relief that the experts had pronounced it a minor incident. As the days rolled by, the news about Fukushima turned from bad to wor…
> A survey computed that of some 300,000 evacuees, approximately 1,600 deaths related to the evacuation conditions, such as living in temporary housing and hospital closures that had occurred as of August 2013, a number comparable to the 1,599 deaths directly caused by the earthquake and tsunami in the Prefecture.
Contrast that with the actual death that occurred/will occur due to radiation:
> In 2013, WHO reported that area residents who were evacuated were exposed to so little radiation that radiation induced health impacts were likely to be below detectable levels. (...) According to a linear no-threshold model (LNT model), the accident would most likely cause 130 cancer deaths.
In other words, if the Japanese government had told everyone that this was a minor incident and everyone should stay at home, it's likely that less people would have died as a result. Of course, hindsight is 20/20, and even with perfect information it would have been political suicide anyway.
Such is the danger of nuclear power. The world's second worst nuclear disaster was literally less dangerous than running away from it.
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…
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.
What appeals to me about Pettis's analysis is it's rooted in a simple quantitative model that rests on accounting identities. When you've got a model that fundamental, it's easier to make strong predictions.
Also, "markets being irrational" is a claim about asset bubbles. What we're discussing here is much larger, and subject to its own laws of dynamics. It's not a bubble, per se -- it's more like a bad loan that keeps getting rolled over and bigger, and no one acknowledges the loan won't be repaid. Someone is going to lose out, but the day you can't cover the interest payments is the day you have to acknowledge the loss.
In the case of China in 2017, the debt is held by banks, who are functionally insolvent if the bad loans (usually to property developers and commercial entities) were called in. Many of these commercial entities (large, state-owned enterprises, or state-adjacent conglomerates) simply have no possible way to service the actual loans, short of rolling over more debt.
This isn't about asset prices, or a bigger fool bidding up the price of, say, housing stock: it's about the ratio of debt to productive capital. And the reason debt ballooned post 2008 is because the regular investment engine (mostly infrastructure and housing) had started to lose steam. The growth in debt in the economy was a rational response to the need to keep growth numbers high.
But deferring the reckoning doesn't make it better. Though it's held in the corporate sector, much of China's debt behaves almost like revolving consumer credit in the US.
(Also: one form of reckoning is flat growth for an extended period of time; Japan's lost decade is entering its third decade now, and systemic debt is still really bad. Pettis holds up Japan as one example of how not to correct the imbalances.)
Earlier quoted context omitted.
Sustainability is a function of total annual deficit relative to growth in ability to service the debt. Deficits that lead to productivity-enhancing investments will pay for themselves: education, infrastructure, etc. Deficits that result from cutting taxes will not: the idea that we're on the virtuous part of the Laffer curve has been thoroughly debunked in economic, if not political, circles. Furthermore, debt in t…
> Furthermore, debt in the US is a result of exogenous capital flows, not the other way around. If the US government tightened belts and cut heavily, leading to a fiscal surplus (or even just balanced gov't budget), we would see a growth in private sector debt. Yes. http://cepr.net/blogs/beat-the-press/national-income-account...
(Probably: Pettis assumes his readership already knows these things; I'm definitely not as savvy as his intended reader I think.)
Earlier quoted context omitted.
Sustainability is a function of total annual deficit relative to growth in ability to service the debt. Deficits that lead to productivity-enhancing investments will pay for themselves: education, infrastructure, etc. Deficits that result from cutting taxes will not: the idea that we're on the virtuous part of the Laffer curve has been thoroughly debunked in economic, if not political, circles. Furthermore, debt in t…
> Sustainability is a function of total annual deficit relative to growth in ability to service the debt And at some point the growth stops, but the policy of expanding generally doesn't. Reality is, Europe and America are going to have further population declines a la Japan. Shrinking population = shrinking growth.
Japan has very little immigration. Europe and America are obviously grappling with these issues politically, but it's pretty clear from the economic numbers that immigration is important for growth if you don't have stable population growth. (Japan and parts of Europe are in decline, as would the US be if not for immigration, I believe.)
Earlier quoted context omitted.
But Fukushima was a minor incident...
Thousands of families have forced out of their homes and displaced by a radiation-polluted landscape, which the conservative government is trying to pass off as safe so they can pull their disaster relief subsidies: https://www.theguardian.com/world/2017/mar/10/japan-fukushim... https://www.theguardian.com/world/2014/sep/10/fukushima-nucl... I pray that nothing similar happens to you or that you have to suffer the in…
Earlier quoted context omitted.
Sustainability is a function of total annual deficit relative to growth in ability to service the debt. Deficits that lead to productivity-enhancing investments will pay for themselves: education, infrastructure, etc. Deficits that result from cutting taxes will not: the idea that we're on the virtuous part of the Laffer curve has been thoroughly debunked in economic, if not political, circles. Furthermore, debt in t…
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.
In the US, we're doing a bad job of making our deficits count. That will be bad in the medium and long term. In the short term, any spending is mildly stimulative. (Though spending that doesn't create future growth is essentially what creates the situation China is in: you're creating future debt-servicing obligation without creating debt-servicing capacity -- so you're making yourself poorer.)
I was just making a point about economics. I'll spare you my political opinions about the utility of US deficits, or the direction we're going, but based on your tone I imagine we might agree quite a bit more than you think.
Earlier quoted context omitted.
Not the OP, but 15,000 people died because of the tsunami. No one died from the radiation release at Fukushima and: "A comprehensive assessment by international experts on the health risks associated with the Fukushima Daiichi nuclear power plant (NPP) disaster in Japan has concluded that, for the general population inside and outside of Japan, the predicted risks are low and no observable increases in cancer rates a…
No one dying quite glibly ignores the economic and social consequences of displacing somewhere in the neighborhoods of 120,000 people. That aside, are we to believe that no one's medical conditions were made more severe by the stress and displacement caused by this disaster? And no one died as a result? Something of the scale of Fukushima can't be so easily dismissed by this kind of cursory analysis of radiation rela…
As s/he summarizes, more people died as a result of running away from the disaster than would have died if they'd stayed put.
Earlier quoted context omitted.
> The central banks, obviously. Many of them not being beholden to a nation but to private individuals. Example? The largest countries' central banks are accountable to their governments.
They are not. They are legally independent in many countries incl. the US, Japan, India (de facto), S. Korea, and Thailand.
We're saying the same thing. Most central banks, e.g. the Federal Reserve, were created by law. The Congress giveth and the Congress taketh away. In any case, the comment I was replying to seemed to imply central banks are privately owned. That's what I was refuting.