41–50 of 63 posts
The spark that started it all?
This is crazy:
> Credit Suisse estimates that 6-9% of China’s market capitalisation is funded by credit, nearly five times the average in the rich world.
> Kemian Wood Industry, which used to boast of the quality of its composite floorboards, took radical steps to deal with the downturn. It switched its focus to online gaming and changed its name. > A hotel group rebranded itself as a high-speed rail company, a fireworks maker as a peer-to-peer lender and a ceramics specialist as a clean-energy group. I've heard of pivoting, but this goes way beyond that. Doing a comp…
Earlier quoted context omitted.
The Economist has always been "The answer is free markets! What was the question?". I always find it a reassuring read, in the sense that well-written, well-researched, persuasive articles that I disagree with are a sign that I haven't been completely engulfed by my own little information bubble, but take it with a pinch of salt.
I have been a subscriber to the Economist for over 25 years. In recent years, I have noticed a subtle, but noticeable, change from the small-business-friendly to the statist, big-business-friedly tone . A look at the ownership structure may explain the shift - The Economist is now 50%-owned by big business interests http://en.wikipedia.org/wiki/Economist_Group BTW, they endorsed B. Obama for president twice, in 2008…
Given their supposedly liberal (old-school) leanings, you'd expect a criticism of large businesses which you don't find anymore.
> Kemian Wood Industry, which used to boast of the quality of its composite floorboards, took radical steps to deal with the downturn. It switched its focus to online gaming and changed its name. > A hotel group rebranded itself as a high-speed rail company, a fireworks maker as a peer-to-peer lender and a ceramics specialist as a clean-energy group. I've heard of pivoting, but this goes way beyond that. Doing a comp…
It makes you wonder what the determinants of success are for a Chinese business. Would you trust cars made by Nike, if they suddenly started making them, or a airline run by the Hilton Group?
Earlier quoted context omitted.
The answer to what question? The policy has to be to defer the bubble collapse as much as possible in hope of the mythical "soft landing". Far more than western countries they depend on continuous economic growth as the tradeoff for lack of political freedom.
Deferring bubble collapses doesn't work so good as they just pop later and bigger.
I may be completely off about this, but isn't it the term suppose to be "going concern"? I thought I had discovered a phrase I didn't know, but then I did a Google search and the only occurance is this article. That said, if China's market goes under it may be pretty gory. :)
Similarly, people are also replacing the correct "used to" with "use to".
Earlier quoted context omitted.
Are China's capital controls really tight enough to prevent Chinese nationals from finding a way to invest in the same stocks on the HK index for a 30% discount? The answer has to be yes - otherwise, as you say, it would be arbitraged away. It's still a bit leaky, but when it leaks it seems that investors much prefer to diversify into ownership of overseas property. Why capital controls? Because China is more nationa…
China follows a nasty policy of financial repression ( https://en.wikipedia.org/wiki/Financial_repression ) in which the interests of "the people" is an afterthought at best. ADDED: combine that with little to no social safety net, and the One Child policy which most? often results in 4 grandparents supported by 2 children supported by 1 grandchild (not quite so bad in the rural areas, but still inadequate, especiall…
Then the banks loan out this savings to the party's preferred business partners (still at negative real interest rates) which can be incredibly profitable (cheaper-than-free money will do that) and spend their wealth on a privileged few.
Some day it's all going to come crashing down (and if push comes to shove, the property rights of foreign investors will probably be pretty low on the priority list).
> Kemian Wood Industry, which used to boast of the quality of its composite floorboards, took radical steps to deal with the downturn. It switched its focus to online gaming and changed its name. > A hotel group rebranded itself as a high-speed rail company, a fireworks maker as a peer-to-peer lender and a ceramics specialist as a clean-energy group. I've heard of pivoting, but this goes way beyond that. Doing a comp…