News Ticker

Financial markets

Business models and dollar funding of global banks

26 March 2018

Notes on BIS Working Paper No 708, March 2018 Iñaki Aldasoro, Torsten Ehlers and Egemen Eren Abstract from BIS: Since the eurozone crisis, there has been a stark divergence between European banks and Japanese banks in their dollar uses and sources. We show that these shifts have implications for [read more]

The GDP of Bridges to Nowhere

26 March 2018

MICHAEL PETTIS In most economies, GDP growth is a measure of economic output generated by the performance of the underlying economy. In China, however, Beijing sets annual GDP growth targets it expects to meet. Turning GDP growth into an economic input, rather than an output, radically changes its [read more]

The Problems of Excess Chinese Debt

13 December 2017

Alice laughed. “There’s no use trying,” she said: “one can’t believe impossible things.” “I daresay you haven’t had much practice,” said the Queen. “When I was your age, I always did it for half-an-hour a day. Why, sometimes I’ve believed as many as six impossible things [read more]

Is China’s Economy Growing as Fast as China’s GDP?

7 September 2017

by Michael Pettis If local governments and state-owned enterprises in China systematically invest in projects that are not economically justified, to the extent that these projects are not correctly marked to market, China’s reported GDP will be overstated by that amount, as will its total wealth [read more]

China is going to hit a wall

29 August 2017

CHRISTOPH GISIGER   Anne Stevenson-Yang, co-founder and research director at J Capital, warns that the monster bubble in the Chinese housing market is ripe to pop and that the Chinese currency will crash. It’s been exactly two years now since turmoil in China’s currency markets threw [read more]

A Review of “Grave New World”, by Stephen D King

4 July 2017

Published: Yale University Press (2017) I was looking forward to reading this book, Stephen D King has an excellent reputation and he has a key role at HSBC, while also advising the House of Commons Treasury Committee. The advance notices were also excellent and the author is writing about an [read more]

Does Cutting Taxes on the Wealthy Lead to Greater Growth?

26 June 2017

Michael Pettis Policies that increase income inequality can in some cases lead to higher savings, higher investment, and greater long-term growth. But, in other cases, such policies either reduce growth and increase unemployment or force up the debt burden. What determines which of these outcomes [read more]

Guaranteeing Employees Against Losses

15 June 2017

MICHAEL PETTIS A number of Chinese companies are trying to shore up their stock prices with programs that encourage employees to buy shares and ensuring them against losses. These programs have implications about leverage in China and about the way losses may be distributed within the banking [read more]
1 2 3 5