Posts Tagged ‘Trade protection’

China new year, and one more vote for GDP-adjusted bonds

China new year, and one more vote for GDP-adjusted bonds

snaplineCourtesy of Michael Pettis of China Financial Markets

I just got back to Beijing three days ago and am still seriously jet-lagged, but I wanted to post a piece today anyway.  Last night I celebrated the new year at D22, where a group of very cool musicians (including the amazing Snapline, for one of their very few shows this year and perhaps one of their last ever) serenaded the passing of 2009.  What a great show.

I suppose it is traditional to dedicate the new-year piece to evaluating the “year that was”, or to make predictions for the coming year, but my only concession to this tradition will be to make the very (I think) obvious prediction that trade tensions are going to rise dramatically in 2010, and even more so in 2011 as interventions initiated in 2009 and 2010 come to fruition.  I am no expert on the subject of criminal law or the environment, and so have little to add beyond all that has already been said, but the huge amount of angry criticism China has received on the very visible subjects of the Copenhagen meeting and the execution of a British subject caught smuggling drugs will make it easier for tariffs and restrictions aimed at China to generate popular approval in Europe, North America and the developing world, especially since protectionists can easily add a “moral dimension” to their arguments.

I am not sure Chinese policymakers fully understand how vulnerable China is to trade war.  This is perhaps because the “success” of the stimulus package has convinced them that they are less vulnerable to external demand than they originally thought.  But this would be a serious misreading.  The stimulus package has postponed the effect of declining net foreign demand on Chinese unemployment, but has actually increased its vulnerability by increasing the future gap between what China produces and what it consumes.  China needs foreign demand to keep absorbing its excess capacity for several more years while it engineers the difficult transition to domestic consumption-led growth, but I don’t see either China taking the necessary steps to force the transition or foreigners looking very eager to help China through the process.

As if to confirm my pessimistic trade expectations, the US on Tuesday announced that it would impose tariffs on Chinese


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Chinese railways and speculating pig farmers

Chinese railways and speculating pig farmers

China, Shanghai, bicycle and motorcycle commuters travelling over bridge

Courtesy of Michael Pettis at China Financial Markets

This weeks’ entry is fairly miscellaneous, a consequence both of the amount and variety of news coming out of China and my own hectic schedule, which prevents me from dealing with all of these issues in a more unified way.  Between lots of investor meetings and finishing up a number of writing commitments, I am preparing next week to go to New York and Washington for ten days.

As an aside, the timing of my trip was determined by an East Coast tour, centered on New York, which my music label, Maybe Mars, is arranging for some of the best Beijing musicians, including the surreal folk singer Xiao He, one of the most astonishing and creative musicians I have ever worked with.  For those of my regular readers based in or near New York who may be interested in checking out the Beijing new-music scene, I strongly recommend that you keep an eye out for the shows, beginning November 5 and running through the end of the month.  These guys are really good and I expect a great reaction from the New York music community.

But back to more mundane stuff.  Last week’s excellent economic numbers once again reinforced everyone’s existing prejudices.  I discussed why in a September 11 entry in response to similar numbers last month.   Those who believe that the stimulus package has essentially resolved China’s plight and eliminated its vulnerability to export demand saw the 8.9% year-on-year GDP growth rate (at the lower end of a narrow range of expectations) as proof that Chinese growth has solidly recovered.  Andy Rothman at CLSA in a research report released the following day had this interpretation:

Other than GDP coming in just under 9%, no surprises, and we agree with the NBS spokesman, who this morning said ‘the overall situation of the national economy was good.’  We maintain our forecast of about 8% GDP growth for this year, and 8-9% for 2010 (closer to 9% if you expect a US/EU recovery to generate a bit of a net exports boost for China).

He then went on to say something that puzzled me:

The fact that China’s GDP grew by 7.7% in the first nine months of the year while exports were still extremely
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Zero Hedge

Retail Buying Frenzy Lifts Robinhood As Ultra Rich Dump Stocks

Courtesy of ZeroHedge View original post here.

The retail euphoria phase of the stock market bubble was supercharged during the virus lockdown where millennials, with no sports to watch, stuck in their parents' basements, unemployed, and receiving stimulus checks, decided to become day traders.

Many of these youngsters, with insurmountable debts and no savings, couldn't afford to build an elaborate trading desk to run a financial terminal, used their smartphones to trade via a popular trading app called Robinhood. 

The she...



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Phil's Favorites

Before Kamala Harris became Biden's running mate, Shirley Chisholm and other Black women aimed for the White House

 

Before Kamala Harris became Biden's running mate, Shirley Chisholm and other Black women aimed for the White House

Kamala Harris, a U.S. senator from California, endorsed Joe Biden for president in March. Now she is his vice presidential nominee. Jeff Kowalsky/AFP via Getty Images

Courtesy of Sharon Austin, University of Florida

U.S. Sen. Kamala Harris, the ...



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Biotech/COVID-19

Trillions in coronavirus spending is putting AOC's favorite economic theory to the test

 

Trillions in coronavirus spending is putting AOC's favorite economic theory to the test

The Fed can create all the money Uncle Sam needs. GeorgePeters/Getty Images

Courtesy of Steven Pressman, Colorado State University

French philosopher Voltaire famously quipped: “If God did not exist, it would be necessary to invent him.” Something similar can be said of modern monetary theory, also known as MMT, because it may be the economy’s only hope to get through the pandemic.

Coined by Australia...



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ValueWalk

Bonhoeffer Fund 2Q20 Commentary - Case Study: Antero Midstream

By Jacob Wolinsky. Originally published at ValueWalk.

Bonhoeffer Fund commentary for the second quarter ended July 2020, providing a case study on Antero Midstream Corp (NYSE:AM).

Q2 2020 hedge fund letters, conferences and more

Dear Partner,

The Bonhoeffer Fund returned 21.7% net of fees in the second quarter of 2020. Given the unique portfolio Bonhoeffer manages, I have struggled to find an appropriate benchmark but have determined that the DFA International Small Cap Value Fund offers the closest representative comparison to Bonhoeffer....



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Kimble Charting Solutions

Doc Copper Bear Market Resistance Kiss In Play!

Courtesy of Chris Kimble

Is ole Doc Copper about to ends its 9-year bear market? I suspect we will find out the answer to the question very soon!

Doc Copper has created a series of higher lows inside the falling channel (1) since it peaked back in 2011.

The rally from the lows in March of this year, has Doc Copper testing the top of its falling channel as well as a support/resistance price zone at (2).

With Doc Copper still in a bear market (lower highs for 9-years), this price test comes into play as important resistance at (2).

If Doc Copper breaks out at (2), it would send...



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The Technical Traders

What Gold & Silver Bullion Bars and Coins to Own

Courtesy of Technical Traders

Join Mark Yaxley from SWP and I (Chris Vermeulen, Chief Market Strategist for Technical Traders Ltd.), as they tell you about gold and silver’s recent outbreak and what’s next for the precious metals market. Also, more importantly, what metal should you own more of, and what sizes and brand!

I provide in-depth information about the outlook for gold and silver from a technical analysis standpoint. In the second half of the video, Mark and I exchange ideas about the best ways to own precious metals, what form to buy it in, and other str...



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Chart School

Silver Big Channel

Courtesy of Read the Ticker

Big channels are the sand pit of price action. Lets review some big trends of these past months.


GLD
- Moving higher to upper solid red line channel


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XAU
- Ready to pause, or simply explode.



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SILVER
- Ready to pause, or simply explode.


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Digital Currencies

Raoul Pal: "It May Not Be Worth Owning Any Asset Other Than Bitcoin"

Courtesy of ZeroHedge View original post here.

Authored by Turner Wright via CoinTelegraph.com,

Raoul Pal, CEO and founder of Real Vision, says Bitcoin may soon become his only asset for long-term investments.

image courtesy of CoinTelegraph ...



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Lee's Free Thinking

Texas, Florida, Arizona, Georgia - The Branch COVIDIANS Are Still Burning Down the House

 

Texas, Florida, Arizona, Georgia – The Branch COVIDIANS Are Still Burning Down the House

Courtesy of Lee Adler, WallStreetExaminer 

The numbers of new cases in some of the hardest hit COVID19 states have started to plateau, or even decline, over the past few days. A few pundits have noted it and concluded that it was a hopeful sign. 

Is it real or is something else going on? Like a restriction in the numbers of tests, or simply the inability to test enough, or are some people simply giving up on getting tested? Because as we all know from our dear leader, the less testing, the less...



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Members' Corner

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

 

Coronavirus, 'Plandemic' and the seven traits of conspiratorial thinking

No matter the details of the plot, conspiracy theories follow common patterns of thought. Ranta Images/iStock/Getty Images Plus

Courtesy of John Cook, George Mason University; Sander van der Linden, University of Cambridge; Stephan Lewandowsky...



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Insider Scoop

Economic Data Scheduled For Friday

Courtesy of Benzinga

  • Data on nonfarm payrolls and unemployment rate for March will be released at 8:30 a.m. ET.
  • US Services Purchasing Managers' Index for March is scheduled for release at 9:45 a.m. ET.
  • The ISM's non-manufacturing index for March will be released at 10:00 a.m. ET.
  • The Baker Hughes North American rig count report for the latest week is scheduled for release at 1:00 p.m. ET.
...

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Promotions

Free, Live Webinar on Stocks, Options and Trading Strategies

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Feb. 26, 1pm EST

Click HERE to join the PSW weekly webinar at 1 pm EST.

Phil will discuss positions, COVID-19, market volatility -- the selloff -- and more! 

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Mike will show off the TradeExchange's new platform which you can try for free.  

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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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