Comments on: The Chinese bubble economy http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html Finance, Economics and Markets Fri, 10 Feb 2012 00:37:00 +0000 hourly 1 By: The Wikinvest Daily Angle » The Chinese bubble economy http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-9121 The Wikinvest Daily Angle » The Chinese bubble economy Wed, 13 Jan 2010 09:12:26 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-9121 [...] Angle comes from Wikinvest Wire member Edward Harrison of CreditWritedowns.com. You can read the full article on Edward’s blog. Flash Player 9 or higher is required to view the chart Click here to download Flash Player [...] [...] Angle comes from Wikinvest Wire member Edward Harrison of CreditWritedowns.com. You can read the full article on Edward’s blog. Flash Player 9 or higher is required to view the chart Click here to download Flash Player [...]

]]> By: bensyd http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58074 bensyd Tue, 12 Jan 2010 04:04:00 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58074 I'd be interested in knowing how much of the increase in imports is attributable to the growth in exports, ie what are they importing to use in the production process as raw materials etc. Once you remove that component then you'd get a more accurate picture of domestic demand. I’d be interested in knowing how much of the increase in imports is attributable to the growth in exports, ie what are they importing to use in the production process as raw materials etc. Once you remove that component then you’d get a more accurate picture of domestic demand.

]]> By: Joe Blow http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58073 Joe Blow Mon, 11 Jan 2010 21:34:00 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58073 Who is going to bail out China? Do you think they are doing this on purpose- perhaps to get a bit of revenge? Who is going to bail out China? Do you think they are doing this on purpose- perhaps to get a bit of revenge?

]]> By: demandside http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58069 demandside Mon, 11 Jan 2010 17:26:00 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58069 Very good summary. Being right should eventually redeem Xie's credibility. Although I think it was Keynes who said it is better for an economist's career to be respectably wrong with the crowd. Very good summary.

Being right should eventually redeem Xie’s credibility. Although I think it was Keynes who said it is better for an economist’s career to be respectably wrong with the crowd.

]]> By: Dave http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58068 Dave Mon, 11 Jan 2010 15:25:00 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58068 Replace "China" with "Ireland"; "peg to dollar" with "euro membership", go back a couple of years, and you're there. Export growth falls way below that of imports, but large trade surplus relative to GDP means that the aggregates still look good, and huge property bubble takes over as GDP driver in low interest rate environment, pushing up tax revenues and keeping government finances strong so everything seems fine. Big country or small, dynamics are the same. Just wait. Replace “China” with “Ireland”; “peg to dollar” with “euro membership”, go back a couple of years, and you’re there. Export growth falls way below that of imports, but large trade surplus relative to GDP means that the aggregates still look good, and huge property bubble takes over as GDP driver in low interest rate environment, pushing up tax revenues and keeping government finances strong so everything seems fine. Big country or small, dynamics are the same. Just wait.

]]> By: Vangel http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58067 Vangel Mon, 11 Jan 2010 15:24:00 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58067 For the sake of argument let us accept Andy Xie's logic and evidence. The problem is that Andy has used similar logic and evidence to make the same argument for about a decade and has been wrong time after time. While he may get it right eventually, that won't make him any more credible as an analyst. The bottom line is that he has shown himself to be very inaccurate and somewhat incompetent. For the sake of argument let us accept Andy Xie’s logic and evidence. The problem is that Andy has used similar logic and evidence to make the same argument for about a decade and has been wrong time after time. While he may get it right eventually, that won’t make him any more credible as an analyst. The bottom line is that he has shown himself to be very inaccurate and somewhat incompetent.

]]> By: Edward Harrison http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58066 Edward Harrison Mon, 11 Jan 2010 14:26:00 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58066 While I look at asset price appreciation that is 2 standard deviations above trend as a bubble, there is no acceptable definition of what a bubble is. This is one reason that Ben Bernanke and even Paul Krugman believe less attention should be paid to trying to burst a bubble. Instead, one has to look at the fundamentals underlying the asset prices and crack down on reckless lending which can lead to the bubble. In practice this means limiting money supply growth and regulating the provisioning of credit. While I look at asset price appreciation that is 2 standard deviations above trend as a bubble, there is no acceptable definition of what a bubble is. This is one reason that Ben Bernanke and even Paul Krugman believe less attention should be paid to trying to burst a bubble.

Instead, one has to look at the fundamentals underlying the asset prices and crack down on reckless lending which can lead to the bubble.

In practice this means limiting money supply growth and regulating the provisioning of credit.

]]> By: Anonymous http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58065 Anonymous Mon, 11 Jan 2010 14:02:00 +0000 http://www.creditwritedowns.com/2010/01/the-chinese-bubble-economy.html#comment-58065 What is the definition of a bubble? What is the definition of a bubble?

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