Join institutional investors, analysts and strategists from the world's largest banks: Subscribe today for as little as $7/month
Already have an account? log in
Get In, Comrade. We’re Going To Hell
Fool me once...
Hong Kong-traded Chinese shares rose for a 10th consecutive session on Thursday. The 4.75% advance took this week's gain to 11%. On the mainland, the CSI 300 rose a seventh day. It's likewise up double-digits for the week.
As the simple figure below shows, these count as stupendous gains. Whether they count as stupid depends on whether Beijing's efforts to put a floor under growth prove a measure of successful, or whether easing announced this week by PBoC governor Pan Gongshe
We discussed the required size of an effective helicopter money-drop before – I think I guessed USD 1BN to USD 3BN, and I’ve seen similar guesstimates from China analysts.
I recently saw a comment that with the Chinese saving rate so high, a helicopter drop of money may be less effective – most of it will be saved not spent.
Still, a helicopter sprinkle could be good cover for a statistical revision that makes 4% into 5%.
These policy statements sound like a great playground for bullshit bingo – communist party edition.
That’s a great description. “Bullshit bingo.” I’ll probably steal that, just like a stole John’s “self-storage units for people” description of new construction in America.
Good stuff. Megalomaniac hubris knows no bounds. Fixes won’t ultimately work, because waxes too similar to capitalism which Xi espouses distaste/hatred/revulsion, to be reviled and expunged at all costs. Best instead warm embrace of his suffused exaltation for life meaning. Same guy who recently showered with laudatory acclaim predecessor who ordered Tienanmen Square massacre (crush Chinese kids with tanks). Tacit acceptance of “capital light markets” won’t help regular Chinese much.
Sounds like a recipe for occupy tiananmen square.
Your “…citizens, bureaucrats, businesspeople, pigs, chickens, pigeons, rats and pandas…” line reminded me of something I learned in my studies years ago: the great Four Pests campaign. It was part of Mao’s Great Leap Forward, the brilliant reorienting of the Chinese economy along scientific lines which resulted in the greatest famine in world history. But hey, Mao was being brave and daring to innovate, so you really can’t fault him, can you?
In the case of the 4 pests though, it wasn’t pigeons and rats, it was sparrows and rats (and mosquitos and flies). The extermination of rats (an estimated 1.5 billion killed) actually (appranetly) achieved an improvement in public health through reduced disease transmission, so that’s good. Presumably the wholesale slaughter of mosquitos didn’t hurt.
The elimination of sparrows was to prevent them from eating grain. Mao’s new scientific farming was going to make China self-sufficient in grain (which is a very rough translation from the Chinese for, “Starve 30 million people to death.”) Sparrows eat grain, so…
School children were enlisted en masse to slaughter sparrows, killing an estimated 1 billion birds. Sparrows are omnivores though. They also eat locusts. Locusts eat crops. The resulting swarms of locusts wiped out grain and rice harvests. The rest, as they say, is history.
The lesson is clear: if you live in China, don’t be a sparrow. (Or, I suppose, a rat, mosquito, or fly).
North Korea, only bigger.