{"id":14018,"date":"2015-10-31T15:16:27","date_gmt":"2015-10-31T20:16:27","guid":{"rendered":"http:\/\/olduvai.ca\/?p=14018"},"modified":"2015-10-31T15:16:27","modified_gmt":"2015-10-31T20:16:27","slug":"weekly-commentary-developing-or-developed","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=14018","title":{"rendered":"Weekly Commentary: Developing or Developed?"},"content":{"rendered":"<h3 class=\"post-title entry-title\"><a href=\"http:\/\/creditbubblebulletin.blogspot.ca\/2015\/10\/weekly-commentary-developing-or.html\" target=\"_blank\">Weekly Commentary: Developing or Developed?<\/a><\/h3>\n<div class=\"post-header\">BloombergView (By Matthew A. Winkler): \u201cIgnore China\u2019s Bears: There&#8217;s a bull running right past China bears, and it\u2019s leading the world\u2019s second-largest economy in a transition from resource-based manufacturing to domestic-driven services such as health care, insurance and technology. Just when the stock market began its summer-long swoon, investors showed growing confidence in the new economy &#8212; and they abandoned their holdings in the old economy. These preferences follow Premier Li Keqiang&#8217;s directive earlier in the year at the National People&#8217;s Congress to \u2018strengthen the service sector and strategic emerging industries.\u2019\u201d<\/p>\n<p>Bubbles always feed &#8211; and feed off of &#8211; good stories. Major Bubbles are replete with great fantasy. Even as China\u2019s Bubble falters, the recent \u201crisk on\u201d global market surge has inspired an optimism reawakening. August rather quickly became a distant memory.<\/p>\n<p>In the big picture, the \u201cglobal government finance Bubble \u2013 the Granddaddy of all Bubbles\u201d is underpinned by faith that enlightened global policymakers (i.e. central bankers and Chinese officials) have developed the skills and policy tools to stabilize markets, economies and financial systems. And, indeed, zero rates, open-ended QE and boundless market backstops create a \u201cgreat story\u201d. Astute Chinese officials dictating markets, lending, system Credit expansion and economic \u201ctransformation\u201d throughout a now enormous Chinese economy is truly incredible narrative. Reminiscent of U.S. market sentiment in Bubble years 1999 and 2007, \u201cWhat\u2019s not to like?\u201d<\/p>\n<p>Never have a couple of my favorite adages seemed more pertinent: \u201cBubbles go to unimaginable extremes \u2013 then double!\u201d \u201cThings always turn wild at the end.\u201d Well, the \u201cmoneyness of Credit\u201d (transforming increasingly risky mortgage Credit into perceived safe and liquid GSE debt, MBS and derivatives) was instrumental for the fateful extension of the mortgage finance Bubble cycle. At the same time, Central banks and central governments clearly have much greater capacity (compared to the agencies and \u201cWall Street finance\u201d) to propagate monetary inflation (print \u201cmoney\u201d).<\/p><\/div>\n<div class=\"post-body entry-content\">\n&#8230;click on the above link to read the rest of the article&#8230;<\/div>\n<div class=\"post-body entry-content\"><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Weekly Commentary: Developing or Developed? BloombergView (By Matthew A. Winkler): \u201cIgnore China\u2019s Bears: There&#8217;s a bull running right past China bears, and it\u2019s leading the world\u2019s second-largest economy in a transition from resource-based manufacturing to domestic-driven services such as health care, insurance and technology. Just when the stock market began its summer-long swoon, investors showed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[1806,124,130,7756,2088,534,661,690],"class_list":["post-14018","post","type-post","status-publish","format-standard","hentry","category-economics","tag-bubble","tag-central-banks","tag-china","tag-credit-bubble-bulletin","tag-faith","tag-monetary-policy","tag-qe","tag-risk"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14018","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=14018"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14018\/revisions"}],"predecessor-version":[{"id":14019,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/14018\/revisions\/14019"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=14018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=14018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=14018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}