Financial Sector

03
Jul

Is China Likely to Deal with an Economic or Financial Crisis? What About Other Economies?

Those who compare the 2020 situation to let’s say the Great Recession, in our opinion at least, oftentimes fail to understand the fundamental difference between an economic crisis that affects industry after industry in a meaningful manner and a financial crisis which came as a result of Wall Street recklessness correlated with consumer greed and

02
Jul

Should China (… and Other Nations) Give Markets What They Want?

Markets can be… let’s just say quite convincing. When those in charge of governments and central banks see prices collapsing and the thought crosses their mind that the financial system or even economic model could collapse on their watch, a very strong incentive to simply give the market what it wants emerges. But what if

01
Jul

Are Chinese Asset Investors Ready for an “Aggressive Fiscal Stimulus” Paradigm?

In this author’s opinion, at least, economists are underestimating the fiscal stimulus “demands” the market is making, especially in light of the fact that the let us call them ammunition levels of central banks have seen better days. Gone are the days when for example the United States criticized China for weakening its currency so

30
Jun

How Low (and, Strangely Enough, High) Can the PBOC and Other Central Banks Go?

The aftermath of the Covid-19 situation made at least one aspect perfectly clear: governments and especially central banks do not intend to let the economic dimension of the crisis simply run its course and, on the contrary, have manifested a more than obvious intention of proverbially throwing the kitchen sink at the problem. The Beijing

29
Jun

The “Deflation Followed by Inflation” Scenario for China and… Well, Everyone Else

It would perhaps be the understatement of the (21st) century that investors find it difficult to reconcile the fact that central banking policies have been “unorthodox” (extremely aggressive) for a very extended period of time with the fact that despite this aggressiveness, inflation problems haven’t surfaced. If anything, governments and central banks have been tacking

23
Jun

The (Potential) Effects of Covid-19 Panic on the Chinese Economy

As mentioned on other occasions, our expertise pertains to matters of economics and as such, we will not formulate opinions when it comes to the medical dimension. What we will (try to) make clear, however, is that the economic dimension is also worthy of our attention, especially in light of the arguably unprecedented fiscal stimulus

22
Jun

Margin Called When Trading Chinese Assets: What to Do?

In a previous article, we have made it clear or at least tried to make it clear that for Chinese assets at least, riding trading positions until liquidation is not exactly the wisest of approaches. Before continuing with this post, we would strongly recommend reading the article in question by clicking HERE and, in a

19
Jun

13 of the Most Recent Chinese IPOs

One of the most exciting places to start investing is when a company is first made available for the general public. This is especially true for Chinese companies because it will be the first time that these companies are open to foreign investors. If you’re considering investing in China, it’s definitely worth checking out some

18
Jun

Volatility in China: Are Chinese Assets (Overly) Volatile?

Let us not beat around the bush: Chinese assets can be extremely volatile and as 2020’s price action when it comes to pretty much all asset classes made clear, it hardly represents the only asset category susceptible to extreme volatility. It just so happens that just like with everything else, there tends to be a

15
Jun

Global Deleveraging and Its (Potential) Impact on China

This much needs to be understood right off the bat: for our current (worldwide) economic system to survive, debt-fueled consumption is essential. To put it differently, what we are dealing with on a global scale is a “paradox of thrift” situation, where the global financial system and subsequently global economy would risk grinding to a