Is China’s Politburo spoiling for a showdown with America? – Telegraph

Posted by Matt in March 14th, 2010 | no comment

Published in China, 1920s, 1980s, Beijing University, Bonds, Case Professor, China Economy, China S Economy, Credibility, Dysfunctional, Gdp, Global Gdp, Indictment, Local Governments, Margins, Michael Pettis, Modern History, Politburo, Professor Victor, Realities, Shuh, Telegraph, Trillion, Wafer, Yuan

Michael Pettis from Beijing University argues that China’s reserves of $2.4 trillion – arguably $3 trillion – are a sign of weakness, not strength. Only twice before in modern history has a country has amassed such a stash equal 5pc to 6pc of global GDP: the US in the 1920s, and Japan in the 1980s. [...]

China economy: What are the risks of a China crash? | GARP

Posted by Matt in March 12th, 2010 | no comment

Published in China, Economy, Banking Sector, China Economy, Chinese Communist Party, Chinese Government, Economic Crash, Gdp, Gdp Growth, Global Association, Lead, Legitimacy, Pockets, Political Instability, Public Spending, Rapid Economic Growth, Regime Change, Risk Professionals, Worst Case Scenario

The worst-case scenario, for both the government and business, would be an economic crash that reduced the rate of annual GDP growth to below 5%. This could lead to a rise in political instability (and possibly even regime change), as the legitimacy of the Chinese Communist Party rests on its ability to deliver rapid economic [...]

China’s Leadership in Crisis Mode

Posted by Matt in March 9th, 2010 | no comment

Published in China, beijing, China People, Crisis Mode, Domestic Consumption, Economic Model, Economy China, Equitable Growth, Export Sector, Factories, Gdp, Gdp Growth Rates, Global Economic Crisis, Gross Domestic Product, Hefty Rise, Inefficiencies, National People S Congress, Npc, Remarkable Resilience, Stimulus Package, Successes

China’s National People’s Congress (NPC) remains in session. As usual, the meeting has provided Beijing an opportunity to highlight the past year’s successes and lay out the problems that lie ahead. On the surface at least, China has shown remarkable resilience in the face of global economic crisis. It has posted enviable gross domestic product [...]

Risk taking, regulatory capture and bailouts: The doomsday cycle | vox

Posted by Matt in February 23rd, 2010 | no comment

Published in Economy, Financial, Best Route, Crises, Disaster, Doomsday, Economic System, Economists, Federal Reserve, Financial Collapse, Financial Crisis, Financial Risk, Gdp, Interest Rates, Last Three Decades, Lead, Proportions, Safer System, Trajectories, Vox

Over the last 30 years, the US financial system has grown to proportions threatening the global economic order. This column suggests a ‘doomsday cycle’ has infiltrated the economic system and could lead to disaster after the next financial crisis. It says the best route to creating a safer system is to have very large and [...]

The Demise of the European Welfare Nation

Posted by Matt in February 17th, 2010 | no comment

Published in Europe, Adult Life, Adults, Birth Rates, Chunk, Demise, Early Retirement, Gdp, Greece, Industrialized Nations, Italy Population, Italy S Population, Life Expectancy, Norm, Pensions, Populations, Retirement Age, Spain, Troubled Countries, Welfare Nation, Workforce

Europe’s other most troubled countries share many of Greece’s characteristics. Italy and Spain have birth rates that have slipped as low as Greece’s and shrinking labor working age populations. Yet early retirement is the norm. In Italy the average retirement age is 59, among the lowest in industrialized nations, and Spain is ranked only slightly [...]

Russian Protests Grow as Economic Hardships Persist – The Jamestown Foundation

Posted by Matt in February 4th, 2010 | no comment

Published in Russia, Decline, Economic Crisis, Economic Downturn, Economic Hardships, Gdp, inflation, Jamestown, Jamestown Foundation, Leadership, Political Discontent, Populace, Prime Minister, Propaganda, prosperity, Protests, Recession, Russia, Stagflation, Stagnation, Vladimir Putin

The economic downturn in Russia seems to have transmuted into growing political discontent within the populace and the governing structures. Since last summer, Prime Minister Vladimir Putin has been proclaiming publicly that “the worst of the recession is over and growth is resuming” (Interfax, June 9). The populace believed the vocal state-run propaganda, hoping that [...]

How a Chinese Real Estate Bust Could Hurt the U.S. – DailyFinance

Posted by Matt in January 29th, 2010 | no comment

Published in China, Economy, Financial, Banks, Bubble, Bust, China, Chunk, Economic Contraction, Gdp, Interest Payments, Interest Rates, Lead, Money, National Debt, People, Real Estate, Trillion

Nevertheless, if people who borrowed money could not pay it back, China might need to scramble to raise cash to keep its banks above water. In that case, it might sell a chunk of its $2.2 trillion in U.S. debt — which would likely drive up interest rates in the U.S.
How so? Such selling [...]

World Economic Forum: Seeing Light Through the Gloom in Davos – World Economic Forum: Davos 2010 – TIME

Posted by Matt in January 22nd, 2010 | no comment

Published in Economy, Forecasts, 2000s, Boom, Charles Roxburgh, Debt Overhang, Downturn, Drag On, Economic Terms, Excess Capacity, Expand 2, Forum Davos, Gdp, Gdp Growth, Global Economy, Gloom, Mckinsey Global Institute, Seven Years, Snapshot, Unemployment Crisis, World Bank, World Economic Forum

In strictly economic terms, it’s not hard to display a snapshot of where things stand now. After declining an estimated 2.2% in 2009, the global economy is projected to expand 2.7% in 2010, according to the World Bank. But recovery is fragile. Excess capacity continues to dampen expectations of growth, and the unemployment crisis in [...]

When the Fed Stops the Music

Posted by Matt in January 18th, 2010 | no comment

Published in Economy, Asset Markets, Bill Gross, Dollar Deficit, Downdrafts, Federal Reserve, Fiscal Deficit, Foreigners, Gdp, Government Debt, Investment World, Mortgage Purchases, Mortgage Rates, Mortgage Securities, National Citizens, Physical Assets, Political Parties, Trillion, Trillions, Us Government, Vigilance

The Federal Reserve has been very clear about the fact that they intend to stop the quantitative easing program at the end of March. What that means in practice is that they are going to stop buying mortgage securities. That does two things. As Bill Gross so aptly points out, those mortgage purchases helped keep [...]

Why Economists Failed to Anticipate the Financial Crisis

Posted by Matt in January 8th, 2010 | no comment

Published in Economy, 15 Months, Asset Prices, Ben Bernanke, Capitalism, Collapses, Consumption Binge, Debt Problem, Earnings, Economists, Economy, Federal Reserve, Federal Reserve Board, Financial Crisis, Gdp, Insanity, Lehman Brothers, Liquidity, Manipulation, Massive Amounts, Ny Times, Paul Krugman, Ponzi Scheme, Reason, Rocket Science, Unsustainable Growth, Zero Rates

This economic Ponzi scheme is what I have labeled the asset-based economy. As with all things Ponzi, it must come to a spectacularly bad end. One can only Inflate asset prices to perpetuate a debt-fuelled consumption binge so far. At some point, the Ponzi scheme collapses. And we are nearing that point. We still have [...]