Bob Bishop is a former Soros trader, it seems. Looks like he didn't take everything his boss taught him to heart, if at all. That's good.
Soros is totally confused about China. He believes China is facing a "debt crisis." This is the same, stupid thinking of morons like Kyle Bass.
I thought Soros was smarter. Apparently he made all his money by being lucky or getting inside information.
This Bob Bishop character is going to do just fine. And you should bet against Soros, too, when it comes to China.
Nowadays Im starting to believe that Soros made his money by inside information but the media needed someone to became a popular hedge fund star and he was chosen one
ReplyDeleteMy thoughts
China does have a lot of corporate / private debt relative to GDP. Perhaps that's what he's betting against. After all, it was that sort of debt (e.g. NINJA mortgages) that caused OUR crisis.
ReplyDelete"Bank credit" in China is government specie. Banks are the "fiscal agents" of the gov't. Here, banks issue bank credit, they're semi-private and they have to report earnings to shareholders every three months. Solvency is an issue. Even here, though, the whole subprime "crisis" could have amounted to nothing had the Fed fully understood its role of lender of last resort. It took Bernanke four months or something like that to realize that he could lend against any bank collateral, which is already government approved. And that he could lend open ended, unlimited. That would have precluded the whole thing. China has zero problems unless the guys at the controls do something stupid, like blow themselves up by listening to Soros and Kyle Bass and they're not that stupid.
ReplyDelete@ Mike
ReplyDeleteExactly.
I think this probably has to do with elites coming from a Western "capitalistic" background and Eastern elites coming from a "socialistic" background. The latter are much more cognizant of the power of the government and don't shy from using the authority of the state for effective policy. The former just don't think that way at all, and as a result don't realize the policy space they have available or don't trust it if they do.
Moreover, most Westerners completely miss Russia and China since they are thinking in a Western liberal paradigm and those countries are not, or at least not as much. They also miss that the leadership there is willing to use its power (policy space), or they assume that if the leadership does use this power, the country will blow up and they will be able to pick up the pieces for pennies.
This has happened in the past, but I suspect that the leadership there has wised up now. The fly I the ointment, though, it that both Russia and China want to integrate into the global economy, which is now run on Western liberal institutional arrangements, so they make compromises that constrict policy space.
I know that Mike Stathis (who has a really good track record) was saying a few years back that China had major issues. I wonder what he thinks now.
ReplyDeleteIf China isn't going to implode, then we should buy commodities right now.
Mike: "China has zero problems unless the guys at the controls do something stupid, like blow themselves up..."
ReplyDeleteJapan blew itself up intentionally so as to rejig the economy towards an American-style economy. It seems unlikely, but China may do the same thing. The rich and the politically connected elites may see this as their time for the biggest asset grab of all time by sending the economy into a tailspin like Japan's elites did. It's very unlikely that the "Communist" party will do such a thing, but whoever thought that Japan would deliberately inflict on itself the economic catastrophe it has?