Comments on: China is set up for a big fall http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html Sun, 08 Nov 2009 04:13:13 -0700 http://wordpress.org/?v=2.8.5 hourly 1 By: Mobius: Emerging market stocks are breaking out - Credit Writedowns http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-5177 Mobius: Emerging market stocks are breaking out - Credit Writedowns Sat, 09 May 2009 01:02:07 +0000 http://www.creditwritedowns.com/?p=2932#comment-5177 [...] were decimated in 2008). He favors Brazil, Turkey and Russia as well.Now, Mobius was making the same comments back in December and I was skeptical. Nevertheless, many emerging markets had their lows in November and December [...] [...] were decimated in 2008). He favors Brazil, Turkey and Russia as well.Now, Mobius was making the same comments back in December and I was skeptical. Nevertheless, many emerging markets had their lows in November and December [...]

]]> By: Greg Norris http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-3166 Greg Norris Tue, 03 Feb 2009 11:22:49 +0000 http://www.creditwritedowns.com/?p=2932#comment-3166 Hello Mr. Harrison, RE: Edward Harrison Says: December 27th, 2008 at 3:01 pm Thanks Greg. For some reason, those links don’t process. Would you send them again? Here are the two links again (apologies for the delay in re-sending them): http://www.globalsecuritieswatch.org/PRC_Sovereign_Risk_Review.pdf and http://www.garpdigitallibrary.org/download/GRR/2089.pdf Best Regards, Greg Norris Hello Mr. Harrison,

RE: Edward Harrison Says:
December 27th, 2008 at 3:01 pm

Thanks Greg. For some reason, those links don’t process. Would you send them again?

Here are the two links again (apologies for the delay in re-sending them):

http://www.globalsecuritieswatch.org/PRC_Sovereign_Risk_Review.pdf

and

http://www.garpdigitallibrary.org/download/GRR/2089.pdf

Best Regards,

Greg Norris

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1742 Edward Harrison Sat, 27 Dec 2008 20:11:30 +0000 http://www.creditwritedowns.com/?p=2932#comment-1742 @steven: and he is looking to put more billions at work. From where I sit the emerging markets look like a place to avoid at the moment because the full force of the downturn will hit the G7 first and fan out from there. You look at countries like Brazil, Russia, Argentina, South Korea, India, and China and you see places that are getting hammered by low commodity prices and are having severe foreign exchange turbulence. I anticipate this to continue for quite a while. Only time will tell about Mobius, but one wonders whether he has become a perma-bull on emerging markets. @steven: and he is looking to put more billions at work. From where I sit the emerging markets look like a place to avoid at the moment because the full force of the downturn will hit the G7 first and fan out from there. You look at countries like Brazil, Russia, Argentina, South Korea, India, and China and you see places that are getting hammered by low commodity prices and are having severe foreign exchange turbulence. I anticipate this to continue for quite a while. Only time will tell about Mobius, but one wonders whether he has become a perma-bull on emerging markets.

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1741 Edward Harrison Sat, 27 Dec 2008 20:08:32 +0000 http://www.creditwritedowns.com/?p=2932#comment-1741 @Mothman, you make a good point. I agree with the story's analysis however and that is much of the reason I presented it. However, it would not be unreasonable to believe the reporter had an axe to grind about China. Ed @Mothman, you make a good point. I agree with the story’s analysis however and that is much of the reason I presented it. However, it would not be unreasonable to believe the reporter had an axe to grind about China.

Ed

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1738 Edward Harrison Sat, 27 Dec 2008 20:01:21 +0000 http://www.creditwritedowns.com/?p=2932#comment-1738 Thanks Greg. For some reason, those links don't process. Would you send them again? Thanks Greg. For some reason, those links don’t process. Would you send them again?

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1736 Edward Harrison Sat, 27 Dec 2008 20:00:04 +0000 http://www.creditwritedowns.com/?p=2932#comment-1736 Glen, I agree with your skepticism 100%. On the other hand, the fact that Marshall Auerback and other pretty smart analysts have a more upbeat view on China keeps me from dismissing a quick rebound scenario. I do agree with Marshall that China will still be a much better bet for growth after the recession has eased. But, for now, I see most of the risk on the downside there. Mainly, I look at China like one might see a 1970s Korea or a 1960s Japan -- and that means ty will overcome this recession eventually, but not without significant pain. Glen, I agree with your skepticism 100%. On the other hand, the fact that Marshall Auerback and other pretty smart analysts have a more upbeat view on China keeps me from dismissing a quick rebound scenario. I do agree with Marshall that China will still be a much better bet for growth after the recession has eased. But, for now, I see most of the risk on the downside there. Mainly, I look at China like one might see a 1970s Korea or a 1960s Japan — and that means ty will overcome this recession eventually, but not without significant pain.

]]> By: Glen http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1727 Glen Sat, 27 Dec 2008 04:39:17 +0000 http://www.creditwritedowns.com/?p=2932#comment-1727 It strikes me as odd how China will be able to shift their population into consumption mode when every asset class they have invested in has fizzled there by reducing their wealth. The other problem I see is that a large bulk of Chinese wages earners do not have the capacity to buy most of the goods they produce any way given their low wage rates. It's a flight of fantasy to think this can be done in 12 months when other nations have taken 20+ years to progress (regress?) to a consumption driven society. It strikes me as odd how China will be able to shift their population into consumption mode when every asset class they have invested in has fizzled there by reducing their wealth. The other problem I see is that a large bulk of Chinese wages earners do not have the capacity to buy most of the goods they produce any way given their low wage rates. It's a flight of fantasy to think this can be done in 12 months when other nations have taken 20+ years to progress (regress?) to a consumption driven society.

]]> By: Greg Norris http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1687 Greg Norris Fri, 26 Dec 2008 02:49:41 +0000 http://www.creditwritedowns.com/?p=2932#comment-1687 For readers' possible interest, here are links to two excellent reports assessing China's economic outlook: <a href="http://www.globalsecuritieswatch.org/PRC_Sovereign_Risk_Review.pdf" target="_blank">http://www.globalsecuritieswatch.org/PRC_Sovereig...</a> and <a href="http://www.garpdigitallibrary.org/download/GRR/2089.pdf" target="_blank">http://www.garpdigitallibrary.org/download/GRR/20...</a> Enjoy! Best regards and thanks for a great blog, Greg For readers' possible interest, here are links to two excellent reports assessing China's economic outlook:

http://www.globalsecuritieswatch.org/PRC_Sovereig...

and

http://www.garpdigitallibrary.org/download/GRR/20...

Enjoy!

Best regards and thanks for a great blog,

Greg

]]> By: Mothman http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1621 Mothman Wed, 24 Dec 2008 10:25:22 +0000 http://www.creditwritedowns.com/?p=2932#comment-1621 Be careful quoting Indian articles in relation to China. They are invariably negative - INdia has a big brother relationship with China - and believes their economy (unweildy democracy, lack of infrastructure, less foriegn investment) is superior to China's model. Even when the chinese economy was powering I never saw a positive article written by an Indian reporter. Be careful quoting Indian articles in relation to China. They are invariably negative – INdia has a big brother relationship with China – and believes their economy (unweildy democracy, lack of infrastructure, less foriegn investment) is superior to China’s model. Even when the chinese economy was powering I never saw a positive article written by an Indian reporter.

]]> By: steven http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1611 steven Wed, 24 Dec 2008 09:00:56 +0000 http://www.creditwritedowns.com/?p=2932#comment-1611 Just wondering how many billions of $ Mobius has lost in the Indian and Chinese stock market over the past year and a half. Just wondering how many billions of $ Mobius has lost in the Indian and Chinese stock market over the past year and a half.

]]> By: John Creighton http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1610 John Creighton Wed, 24 Dec 2008 07:03:08 +0000 http://www.creditwritedowns.com/?p=2932#comment-1610 Blaming other people is what politicians do to hide from accountability. We must not forget that the Chinese government fulled this imbalance by paging the Chinese currency against the US dollar at an artificially low rate. Blaming other people is what politicians do to hide from accountability. We must not forget that the Chinese government fulled this imbalance by paging the Chinese currency against the US dollar at an artificially low rate.

]]> By: aheadofthecurve http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1597 aheadofthecurve Tue, 23 Dec 2008 23:43:18 +0000 http://www.creditwritedowns.com/?p=2932#comment-1597 Auerback is far behind the analytical vanguard where China is concerned (I recommend you read http://mpettis.com/ ), largely because he's ignoring the export-led employment bubble that has burst. He can dismiss asset deflation as a bonus for employed Chinese, but he's got nothing to say about the millions of unemployed and soon-to-be unemployed workers and students, most of whom are male and young. I hope the CCP has an answer for this that doesn't involve blaming the situation on the West. Otherwise I think the German comparison is on-target and a dangerous proposition. Auerback is far behind the analytical vanguard where China is concerned (I recommend you read http://mpettis.com/ ), largely because he’s ignoring the export-led employment bubble that has burst. He can dismiss asset deflation as a bonus for employed Chinese, but he’s got nothing to say about the millions of unemployed and soon-to-be unemployed workers and students, most of whom are male and young.

I hope the CCP has an answer for this that doesn’t involve blaming the situation on the West. Otherwise I think the German comparison is on-target and a dangerous proposition.

]]> By: wen O wen http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1593 wen O wen Tue, 23 Dec 2008 22:08:21 +0000 http://www.creditwritedowns.com/?p=2932#comment-1593 Fake numbers every where. see Shadow stats . c o m etc. Fake numbers every where.
see Shadow stats . c o m etc.

]]> By: Edward Harrison http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1560 Edward Harrison Tue, 23 Dec 2008 18:20:20 +0000 http://www.creditwritedowns.com/?p=2932#comment-1560 @sobers, I would tend to agree with our views. It's funny you should mention Germany. I see China as another East Germany, posting economic numbers for external consumption. The question is how real are they. In East Germany's case we found out after reunification that the numbers were fake. Will the same be true in China? Only time will tell. I should point out that Marshall Auerback has a considered view greatly a odds with my own. See his recent post here: <a href="http://www.creditwritedowns.com/2008/12/china-can-handle-collapse-of-speculative-inflows.html" rel="nofollow">China can handle collapse of speculative inflows</a> Let me know what you make of his argument and feel free to give him a piece of your mind! He and I disagree but he knows China quite well. @sobers, I would tend to agree with our views. It’s funny you should mention Germany. I see China as another East Germany, posting economic numbers for external consumption. The question is how real are they. In East Germany’s case we found out after reunification that the numbers were fake. Will the same be true in China? Only time will tell.

I should point out that Marshall Auerback has a considered view greatly a odds with my own. See his recent post here:

China can handle collapse of speculative inflows

Let me know what you make of his argument and feel free to give him a piece of your mind! He and I disagree but he knows China quite well.

]]> By: sobers http://www.creditwritedowns.com/2008/12/china-is-set-up-for-a-big-fall.html/comment-page-1#comment-1559 sobers Tue, 23 Dec 2008 18:10:24 +0000 http://www.creditwritedowns.com/?p=2932#comment-1559 China will be an economic (and social) disaster zone by late 2009. We may never know how bad it may get there. The Communist govt will suppress all evidence ruthlessly, and restrict Western media access. Any nation that is as export oriented at China is today will have horrendous problems when the demand for their manufactures just stops. Given the lack of social safety net in China it could be very ugly. But as I said, we will probably never know how ugly. Germany is in a similar but lesser situation. They will suffer most in Europe I think, but given they are a nation with a welfare system, not too excessively. China will be an economic (and social) disaster zone by late 2009. We may never know how bad it may get there. The Communist govt will suppress all evidence ruthlessly, and restrict Western media access. Any nation that is as export oriented at China is today will have horrendous problems when the demand for their manufactures just stops. Given the lack of social safety net in China it could be very ugly. But as I said, we will probably never know how ugly.
Germany is in a similar but lesser situation. They will suffer most in Europe I think, but given they are a nation with a welfare system, not too excessively.

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