Posts tagged 'Michael Pettis'

Abenomics might eat itself, a Pettis production

It may seem like an odd time to stress out about Japan running an overly aggressive current account surplus, which might in turn push Abenomics off the tracks, but since the fears over a deficit have been so well covered… Read more

About China’s capacity to absorb more capital

We’ve all heard, many times, the story that China’s capital stock is nowhere near that of more advanced economies, therefore it will inevitably increase. And we can count on continued efforts to build roads, buildings, airports, and other infrastructure — just look at how the less-developed eastern provinces have been pouring money into new projects, the argument has gone, more recently. Or went.

We really hope it’s not necessary, here, to go into the weaknesses of that argument. Here are a few places to start, but it’s partly a causal problem — does growth cause increased capital stock or vice versa? What kind of growth are we talking about, anyway? Read more

China’s Pettis moment

The reactions to Chinese macro data tend to go something like this…

Beat: Bulls are okay with this. Bears say it’s unsustainable, usually because of inflationary risks, policy tightening risks, credit risks, or the imbalances. FT AV commenters say the numbers are made up anyway.

Miss: Bears are okay with. Bulls say not to worry as it means more stimulus/loosening will happen. FT AV commenters say the numbers are made up anyway. Read more

Does the world really need China’s rapid growth?

The mood at the World Economic Forum this week in Tianjin has been a study in contrasts — bullish foreigners and gloomy Chinese.

As the FT’s Jamil Anderlini reportsRead more

The China OMG moment

It seems that lately every time we come back from holidays look around, people are becoming ever more freaked out about China. Josh Brown has possibly the best headline of the latest lot. Josh’s shock and awe was prompted by a Barron’s cover story on China which we agree is a very good read, although it covers a lot of ground that’s already appeared here, among other places. Nomura’s 1-in-3 chance of a hard landing call, the economic imbalance, misallocation and over-capacity, property bubbles, Nicholas Lardy, unfavourable demographics, bad loans being rolled over, rising wages, capital outflows, and… you get the idea. Plus this eye-catching quote from Jim Chanos:

“I’m being conservative when I say that the coming bust in China‘s real-estate market will be a thousand times that of Dubai,” Read more

Spain, Bankia and the credibility problem

Spain’s government has been left looking increasingly desperate/reckless/ineffective by its plans to rescue Bankia, as today’s FT describes:

Mr Rajoy and his government are facing growing domestic criticism over repeated errors of strategy and communication, which that have given an impression that Madrid has run out of ideas on how to handle its financial and economic crises. Read more

Michael Pettis challenges The Economist, global economic bragging rights and sweet gig for Chinese band at stake

At the end of last year, The Economist predicted that Chinese GDP would surpass US GDP at market exchange rates in 2018. (Click table to enlarge)

 Read more

China is not rebalancing a) yet, or b) enough

Answer according to your view on the very important question of China’s economy rebalancing towards a higher consumption-to-GDP ratio.

The debate isn’t really about whether China needs to or will inevitably rebalance, but whether it already has begun to do so. A note from Barclays Capital by Yiping Huang made the case that household consumption as a proportion of GDP is already beginning to riseRead more

Is China already rebalancing?

There is plenty of disappointment floating around concerning the big Chinese finance policy meeting which ended on Saturday. The general criticism is the lack of a signal of any concrete moves – but particularly, on interest rates for depositors.

Or as SocGen’s Wei Yao wrote: Read more

Alphachat: Sal Arnuk on high frequency trading

It’s taken a while but our second podcast, a discussion with Sal Arnuk about high frequency trading, is now live.

(You can find our first podcast with Michael Pettis, on the Chinese economic model, here.) Read more

Pettis and Kroeber go glass-half-full on China

Well, everyone needs a change sometimes.

We’ve written about so much bearish questioning on China that it wouldn’t be fair to ignore a couple of more upbeat comments from economists who are not the usual China bulls. Read more

China’s medium-soft landing

The bearish-on-China is going all mainstream on us. Or at least, more prominent. For example, 12 per cent of economists in a Bloomberg survey last week believe the country’s growth will fall below 5 per cent.

Well, a more convincing rebuttal to this than a Chinese State Council official comes from Standard Chartered’s chief China economist Stephen Green. Read more

Stop worrying about China and US Treasuries

An exasperated Michael Pettis always makes for an enlightening Michael Pettis column.

This time he trains his eye on the possible implications of the recent announcements by China that this time it means what it says about diversifying its reserve holdings out of USD assets. Sure. Read more

Introducing Alphachat, the FT Alphaville podcast

We’re trying something new here at FT Alphaville, and like all our experiments we have no idea how this one will turn out.

We’ve started a podcast, which you’ll find below alongside a bio of our guest, a guide to the themes we explored, and links to which we refer. There’s also another audio file of outtakes with questions and answers that we couldn’t include in the podcast itself because of time constraints. Read more