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Category Archive: Asia
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Japan: Inflation Expectations and Real Interest Rates
There is evidence that inflation expectations are firmly moving into positive territory after languishing below zero following the onset of the global financial crisis. The 7y breakeven has stabilized at around 0.53% over the past couple of weeks, after averaging -1.1% from December 2008 to December 2011. This jump has helped move the 7y real [...]
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What’s Driving China’s Real Estate Rally? Part 1
The buzz is that China real estate is back. After nearly a year of steep discounting, with both land and housing sales in April looking like they were falling of a cliff, the market was electrified in late May by stories of would-be home-buyers lining up around the block and entire luxury developments selling out [...]
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Pakistan: Hostile and Disliked
The Pew research organization (see http://www.pewglobal.org/2012/06/27/pakistani-public-opinion-ever-more-critical-of-u-s/?src=prc-newsletter, from which these data are taken), conducted public opinion polls in 20 countries, including Pakistan, in the spring of 2012. Using a Pakistani polling company, more than a thousand Pakistanis across the country were interviewed by Pakistanis. The results are startling. Pakistani views of the U.S. are overwhelmingly negative. [...]
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Am I a China Bear?
There are two schools of thought on the Chinese economy right now. The first says “It’s always darkest just before the dawn.” The second says “It’s always darkest just before it goes pitch black.” It’s clear that China’s economy is slowing. But what happens next is far from clear, and the subject of much debate. [...]
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Whither China?
Recent economic reports from China are, at the least, mixed. The responses to Friday’s GDP report are illustrative. From IHS-Global Insight (Xianfeng Ren): China has reported the worst quarterly GDP growth, 7.6%, in almost three years. This is a less vicious downslide compared with the Global Financial Crisis if measured by peak-to-trough deceleration, but nearly [...]
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Strategic Briefing: Deflation Risk in China
Price Data Suggest Specter of Deflation in China The New York Times | July 9 Prices are tumbling across the Chinese economy, according to government data released on Monday, as a flood of goods pouring out of the nation’s vast and ever-expanding factory cities exceeds anemic demand from Chinese households and businesses. China Official: 2012 [...]
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Recovery with Chinese Characteristics
While China is not immune to the debt crises in the West, it is better positioned to cope with them. Last Thursday, the People’s Bank of China lowered the benchmark deposit rates by 25 basis points and cut lending rates by 31 basis points; the second time in a month. The cuts fueled concerns that [...]
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India Is Likely to Move Out of Policy Logjam
The last few months of Pranab Mukherjee (India’s prime Presidential candidate now) being at the helm of India’s Ministry of Finance has been tumultuous, to say the least. Maybe, not as much for him but surely for the economy, as a whole. Not that the entire blame lies at his doors. The global economy continued [...]
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What Is Financial Reform in China?
Premier Wen’s recent attack on the Chinese banking system last month has highlighted what was already a very interesting debate on Chinese banks and the Chinese financial system. There is a growing sense that the Chinese banking system is deeply flawed and needs to be reformed. But why should China reform its banking – hasn’t [...]
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China: Falling Dominoes
Last month, I called attention to an article in Caixin magazine about the implosion in Beijing of something called a “credit guarantee company,” and examined the potential risks such entities pose to China’s financial stability. Today, Caixin published another must-read article about a new crisis in which credit guarantees — this time directly between borrowers [...]
