Posted by Larry Doyle on August 4th, 2014 8:21 AM |
“Property prices have always gone up more than inflation . . . just like they believed in the US.”
Would you know as asset bubble if you saw it? Well if you saw 60 Minutes last evening as I did then you saw what is certainly a bubble in the Chinese real estate market. The Chinese cities and towns constructed but sitting vacant look strikingly similar to the backdrops used for sets at Disney amusement parks. Where are all the people?
This shocking 12-minute clip is a must view if you have any interest in navigating our global markets and economic landscape.
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Posted by Larry Doyle on March 11th, 2014 9:24 AM |
As I navigate the markets and global economy, I am always on the lookout for sectors and regions where leverage has built up to the point where it bubbles over and needs to be reined in. In the process, markets tend to retrace.
On this note, I drew attention to what I deemed our current, greatest market risk when I wrote in mid-January about the shadow banking system in China (What Is Greatest Global Risk Lurking In Shadows? Look East).
Much as the shadow banking system in our country grew to the point where it was lending 40-45% of the total credit that flowed into our economy, the explosive growth in the shadow banking system in China now equates to a not insignificant ~60% of China’s GDP. Why should we be concerned? Did you notice the recent 8% decline in the price of iron ore and a similar decline in the price of copper stemming from concerns over the Chinese economy? A slowing in China presents a challenge for those entities that have borrowed short (paying dearly in the process) and lent long and leveraged up in the process.
Institutional Investor writes a “must read” for anybody who cares about keeping their pulse on risks in the global markets and economy. (more…)
Posted by Larry Doyle on October 16th, 2013 9:55 AM |
Regardless of where you fall along the political spectrum, you can rest assured we will all pay ever increasing costs for the dysfunction on display in Washington.
Some may discount that reality and think the political power plays properly executed trump the costs incurred. I can assure you they do not.
Who holds the ultimate trump card in the current rendition of Washington’s political game of chicken? The bond market. And who especially within the bond market? Foreign holders of dollar-denominated assets. And who is the biggest holder? The People’s Republic of China. Let’s navigate eastward and get some insights on what folks there think about our dysfunctional government: (more…)
Posted by Larry Doyle on July 30th, 2013 8:08 AM |
People of faith are likely very familiar with the seven deadly sins: pride, envy, gluttony, lust, anger, greed, and sloth.
I think it goes without saying that our nation would be a better place if we had less of these vices on display. That said, our greatest virtues emanate from the very freedom that allows the aforementioned vices to gain a foothold. What if we did not have our freedom, though? Then what?
To explore this question, let’s navigate to The People’s Republic of China and review a recent report from Global Post that highlights:
In a directive reportedly distributed last month to local party committees, China’s top propaganda officials issued new
restrictions banning discussion of seven topics deemed to be “dangerous Western influences.” (more…)
Posted by Larry Doyle on June 6th, 2013 10:03 AM |
President Obama is poised to meet Chinese President Xi Jinping at a secluded estate in California for a two day summit.
Given China’s current enormous economic surplus, it wields ever more power on the world’s stage. As the US is weighed down and held back by the burden of our massive deficits, China is nimbly and strategically utilizing its power and position extensively in its own backyard and beyond. Let’s navigate and take a closer look.
Brahma Chellaney, Professor of Strategic Studies at the New Delhi-based Center for Policy Research, writes at Project Syndicate of China’s Stealth Wars,
NEW DELHI – China is subverting the status quo in the South and East China Seas, on its border with India, and even concerning international riparian flows – all without firing a single shot. (more…)
Posted by Larry Doyle on April 22nd, 2013 8:38 AM |
If you were in serious debt and your largest creditor offered an opinion on how you managed your affairs, do you think you might listen?
Well, if we care to see the political gamesmanship involved in a relationship between debtor and creditor played out on the world’s largest stage, let’s navigate and take a look as to what The People’s Republic of China has to say to our leaders in Washington.
Posted by Larry Doyle on March 14th, 2012 6:55 AM |
A regular reader of Sense on Cents recently returned from three weeks in the People’s Republic of China. I hold this individual in very high regard for his understanding of our economy, markets, and national psyche.
We exchanged messages recently in reaction to a commentary I had run. With his permission, I welcome sharing what he defines as:
An Obituary for the Declaration of Independence and the Constitution.
When Washington houses the worst offenders, where are the people to turn?
I just returned from three weeks in China. The citizens there are proud of their country and proud to be a citizen of the PRC. While their confidence level in their own form of government is not 100 % (no country rates itself that high) it is certainly far higher than in the US, where “honest politician” and “public servant” have become oxymorons. (more…)
Posted by Larry Doyle on June 29th, 2010 10:47 AM |
As markets are breaking down in America this morning, the waves of selling actually emanated in Asia. To that end, how do we get an unfiltered and unbiased perspective on economic and market related developments from that part of the world? Welcome to Sense on Cents.
A close personal relationship of mine works for Credit Suisse in China and provides the following commentary: (more…)
Posted by Larry Doyle on June 17th, 2010 8:15 AM |
With ongoing issues here in the U.S. and more so in Europe, clearly global investors need to focus more on investing in Asia generally and China specifically, correct?
I do not disagree that investors need a global perspective, but as with any investment let’s open our eyes and assess risks before diving into the deep end of the pool. Remember, Wall Street analysts touting Asian investments are in the business of selling products. Let’s navigate further and find some independent analysis.
Today’s Financial Times provides just that from Michael Pettis, a Senior Associate at the Carnegie Endowment for International Peace and a finance professor at Peking University’s Guanghua School of Management, where he specializes in Chinese financial markets.