The China debt crisis led by the real estate bubble burst will be unprecedented. Even a single major developer could have a trillion Yuan (US$145 billion) debt; the overall total will be a mystery. Yet, we can still have a very vague idea about how significant the debt is by doing some basic arithmetic. Life…
China’s Deleveraging Still Has a Long Way to Go
Commentary China’s second-quarter GDP grew only 0.4 percent on a year-over-year basis but contracted 2.6 percent compared to the first quarter. For years I have been reluctant to comment on the fake figures, but now the releases seem more down to the earth. Although the numbers are broadly in line with the proxy-composite PMI, which…
Currency Swap Is Hong Kong Giving CCP Access to US$120 Billion for Free
Hong Kong Monetary Authority (HKMA) announced on July 4, 2022, that it would optimize the currency swap with the People’s Bank of China (PBOC). Financial experts analyzed the Chinese Communist Party (CCP) trade as handing over US$120 billion to the CCP on a silver platter. Politics Commentator, Gordon Poon Tung-hoi, mentioned in an interview with…
Powell Is Repeating Burns’ Mistake
Commentary The recent loss of control of inflation and worry about potential stagflation ahead is to a very large extent repeating the history of the 1970s, a period that is worth serious study to learn the lesson. The appointment of Arthur Frank Burns as a new Fed chair to replace William McChesney Martin, a hawker…
Hong Kong and China Upgrade Currency Swap Line, Allowing Beijing Access to Foreign Currency Reserves
July 13, 2022
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Nearly 30 percent of Hong Kong’s foreign currency reserves are now accessible to Beijing after the People’s Bank of China (PBC) and Hong Kong Monetary Authority (HKMA) upgraded their currency swap line on July 4. Upgrading the currency swap line to a standing arrangement was one of two new policies announced by the PBC and…
The First Truly Independent Fed Chair
July 6, 2022
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Business & MarketsChinadeflationDwight Eisenhowereconomic policiesFed chairFederal ReserveFranklin Rooseveltharry trumanHK BusinessHong KonginflationJohn KennedyLyndon JohnsonOpinionTreasury DepartmentVietnam WarWhite HouseWorld War II
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Commentary The independence of the Federal Reserve was never granted; rather, it was fought for. Although the first chairman of the Federal Reserve “System” Marriner Stoddard Eccles failed to fight for independence, his effort after demotion (from chairman to normal committee member) did reward his successors. Another long-sitting successor after him was William McChesney Martin…
Chinese Property Developer Shimao Misses Repayment on $1 Billion Bond
HONG KONG—Chinese developer Shimao Group has missed the interest and principal payment of a US$1 billion offshore bond due on Sunday in the latest blow to China’s embattled property market. Shimao was unable to pay a total of US$1.023 billion in principal and interest to creditors of a senior note listed on the Singapore Exchange,…
Ernst & Young’s IPO Report Forecasts Hong Kong Annual New Stock Financing Down to US$28 Billion
According to an Ernst Young (EY) report, the chances of the Hong Kong Stock Exchange entering the top three of global fundraisers this year are relatively small, but being ranked in top five can still be a possibility. In the report, only 20 companies were listed in the first half of 2022 in Hong Kong,…
The First Fed Chair Fought for Independence, but Failed
Commentary The independence of the central bank has been increasing over the past decade or so. Central banks are regarded as panacea in the face of adverse shocks. Janet Yellen was threatened to be fired by Donald Trump, and Jay Powell was thought to be under political pressure to not withdraw liquidity early, thus leading…
On China’s Persistent Low Inflation
Commentary When the western advanced economies are losing control of inflation, China is praising herself as a global stabiliser with inflation staying as low as near two percent. True, China is one of the very few countries that can achieve the usual two percent inflation target at the moment. Nevertheless, we should question why this…
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