Chinese Economics Thread

steel21

Junior Member
Registered Member
In case anyone has not been following the news.....

GME is up 85x since August.
----------------------------------------------------------------------
from Bloomberg
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A Treasury Department spokesperson declined to comment.

A retail-investor frenzy over the company has caused GameStop’s shares to soar in recent weeks, squeezing hedge funds with large short positions in the company.

Shares in the video-game retailer more than doubled as of 1 p.m. in New York, triggering at least two volatility halts as it at one notched its biggest-ever intraday advance. GameStop has surged eightfold in the past week, adding almost $20 billion to its market value.

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GameStop’s meteoric rise has captivated Wall Street, as an army of small traders spurred on by Reddit message board posts have pushed the company’s stock price to unheard-of levels. Shares in the company began the year at just $19. Hedge funds who held short positions in GameStop, such as
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, have closed out of them as the rally continued, suffering billions of dollars in losses.

While some commentators have cast the frenzy as a populist uprising against Wall Street institutions, others see a dangerous play that could eventually leave investors exposed to major losses. Some wondered if it was the result of purposeful market manipulation.
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I think this has a National Security nexus:

1. If bunch of mofos on reddit can cause this much chaos, imagine what a wealthy sovereign fund can do.

2. As money moves into equity speculation is could create a opportunity cost as it sucks the oxygen out from tangible investments in greenfield CAPEX, such as labor and real R&D.

3. When the dust settles, there could be a run for the exit as investor seek stable shore of China.

Thoughts?
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Between the GameStop fiasco and the hiatus on the ban, prepare for significant jump on Chinese equity tomorrow.
 

NiuBiDaRen

Brigadier
Registered Member
I have a friend who had Gamestop stock and he cashed out saying he just paid for his son's UC Berkeley tuition.
I just want to advise people not to plunge into the stock market after hearing a success story. For every person lucking into Gamestop, there's going to be a couple who are buying Gamestop just as the bubble is about to burst and return the stock to its previous levels, and consequentially blowing all their savings.

Assassin Mace's friend was already probably a wealthy guy who had lots of money to throw around to begin with.
 
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AssassinsMace

Lieutenant General
I just want to advise people not to plunge into the stock market after hearing a success story. For every person lucking into Gamestop, there's going to be a couple who are buying Gamestop just as the bubble is about to burst and return the stock to its previous levels, and consequentially blowing all their savings.

Assassin Mace's friend was already probably a wealthy guy who had lots of money to throw around to begin with.
No he's not wealthy, more middle class. I believe he lucked out in having the stock already. He actually told me what happened before all this news broke to the public. I didn't hear the details of what was going on with Gamestop until a day later. Yes, when you hear about stuff like this, it's most likely already too late for newcomers.
 

Skywatcher

Captain
In case anyone has not been following the news.....

GME is up 85x since August.
----------------------------------------------------------------------
from Bloomberg
Please, Log in or Register to view URLs content!

A Treasury Department spokesperson declined to comment.

A retail-investor frenzy over the company has caused GameStop’s shares to soar in recent weeks, squeezing hedge funds with large short positions in the company.

Shares in the video-game retailer more than doubled as of 1 p.m. in New York, triggering at least two volatility halts as it at one notched its biggest-ever intraday advance. GameStop has surged eightfold in the past week, adding almost $20 billion to its market value.

Please, Log in or Register to view URLs content!


GameStop’s meteoric rise has captivated Wall Street, as an army of small traders spurred on by Reddit message board posts have pushed the company’s stock price to unheard-of levels. Shares in the company began the year at just $19. Hedge funds who held short positions in GameStop, such as
Please, Log in or Register to view URLs content!
, have closed out of them as the rally continued, suffering billions of dollars in losses.

While some commentators have cast the frenzy as a populist uprising against Wall Street institutions, others see a dangerous play that could eventually leave investors exposed to major losses. Some wondered if it was the result of purposeful market manipulation.
--------------------------------------------------------------------------

I think this has a National Security nexus:

1. If bunch of mofos on reddit can cause this much chaos, imagine what a wealthy sovereign fund can do.

2. As money moves into equity speculation is could create a opportunity cost as it sucks the oxygen out from tangible investments in greenfield CAPEX, such as labor and real R&D.

3. When the dust settles, there could be a run for the exit as investor seek stable shore of China.

Thoughts?
Hedge funds are mostly scams (or if you're feeling generous, "congenitally over-optimistic").

For every Ray Dalio, you're going to get a thousand hedge fund honchos who would have been better off putting all their money into low fee ETFs and the such.
 

Gatekeeper

Brigadier
Registered Member
I just want to advise people not to plunge into the stock market after hearing a success story. For every person lucking into Gamestop, there's going to be a couple who are buying Gamestop just as the bubble is about to burst and return the stock to its previous levels, and consequentially blowing all their savings.

Assassin Mace's friend was already probably a wealthy guy who had lots of money to throw around to begin with.

No he's not wealthy, more middle class. I believe he lucked out in having the stock already. He actually told me what happened before all this news broke to the public. I didn't hear the details of what was going on with Gamestop until a day later. Yes, when you hear about stuff like this, it's most likely already too late for newcomers.

Very wise, my friends. For every success story. Their are ten failures. My investment banker once told us in a conference. She said:

We've a philosophy in our investment.

Once the retail (Joe public) get in, we (professional institution investors) get out! That thinking has been with me ever since.

Putting aside insider information. History should tell us what happened in a bull run. You'll get trampled. Looked at one if the most brilliant minds in world history, Isaac Newton. He lost everything jumping into stock in a speculative south seas bubble!
 

NiuBiDaRen

Brigadier
Registered Member

Hybrid capitalism is serving China well​

What the West keeps missing when it maligns China's state-owned enterprises
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"When the facts change, I change my mind. What do you do, sir?"

John Maynard Keynes is credited for having said this. While economists the world over claim to respect Keynes, many do not seem to follow his teachings -- at least not when it comes to analyzing China. Since China embarked on its economic reforms 43 years ago, Western analysts have maintained two predictions.

First, that China would sell most of its state-owned enterprises and allow the private sector to prevail. Along the way, it was thought, China would become a Western-style democracy. But as time has gone by, these analysts have become increasingly frustrated by their mistakes. China does not fit their chosen ideological mold.

In the 1990s, China did sell a large number of SOEs including retailers, restaurants and small manufacturers of fertilizers, pesticides, clothing and footwear. But China has maintained control over virtually all important sectors of the economy including finance, oil, energy, aviation, education, telecoms, autos, transport infrastructure and medical care.

Ironically, most SOEs we see today were created during the past 10 to 20 years. There has actually been a massive reversal of the initial privatization program. This is on top of the large numbers of private-sector businesses that have been acquired by the state. Outsiders taking a close look at China's economy would be shocked to see the growing dominance of the state sector. In banking and finance, for example, virtually all of the 4,000-odd institutions -- banks, trust companies, leasing, insurance, asset management and securities companies -- are state-owned and have been built up in recent years.

Western economic thinking dictates that the private sector must be more efficient than the state sector. But the metrics Western analysts use are deeply flawed. Each year, for example, hundreds of thousands of private-sector businesses go bust and drop out of the statistics, leading to a survival bias.

Confronted with this inconvenient truth, Western analysts argue that SOEs enjoy unfair competitive advantages in China because they have greater access to finance at lower interest rates. Sure, that is all true. But comparing the private sector with the state sector based on return on equity -- or other measures -- is a pointless exercise. Additionally, simple comparisons on ROEs ignore social returns and the spillover effects to society at large.

Some analysts draw comfort from private sector standouts such as Ping An Insurance Group and China Vanke. But are they really private-sector enterprises? Of course not. They started out with government money and the state remains a significant shareholder. The fact that they have been given more autonomy does not make them private-sector entities.

By the same token, the fact that many companies are listed does not make them private-sector entities either. One has to ask who is calling the shots? It is true that some of the big technology companies are all private-sector owned. But the likes of Alibaba Group Holding, Tencent Holdings and JD.com and their ecosystems remain a relatively small part of China's economy. And they have benefited hugely from lax regulations on personal data and unnecessarily tight rules on their incumbent competitors as well as zero taxes on online sales.

In terms of research and development, the dominance of the state sector is even more noticeable. With a few exceptions, China's thousands of universities and polytechnic colleges are all state-owned and state-funded, and they shoulder most R&D projects.

Roads, railways and ports have always been constructed by the state, and this has helped private-sector enterprises thrive. Across China, urban infrastructure projects employ hundreds of millions in various forms. It is there that workers have their wages and pension contributions reliably paid, safety and dignity protected, and essential training provided. It is there that large numbers of private-sector businesses have been able to become feasible, including catering, hotels, personal care and retail, not to mention the suppliers of raw materials and components.

Mariana Mazzucato, professor in the economics of innovation and public value at University College London, has demonstrated that the real driver of innovation is not lone geniuses but state investment. This is true not just in Europe and the U.S. but everywhere.

Both the global financial crisis in 2007-08 and the pandemic in 2020 have highlighted how critically important the state is to the stability, and even survival, of capitalism. It is just that China has chosen to provide the safety net through SOEs rather than the helicopter money and zero interest rates favored by the West. Still, the jury is out as to which approach is more efficient and equitable.

When it comes to China, some Western analysts have turned themselves into missionary-like figures. But they have little to show for their stubborn efforts over the past four decades. Twisting definitions of the private sector does not make the private sector's performance any better looking. While many Chinese officials and members of the public openly criticize the bloated and corrupt state sector, their view of the private sector is even dimmer.

The truth of the matter is that 43 years into the current age of prosperity, China's private sector has credibility issues. Western scholars ought to see the uniqueness of China's historical path and admit exporting Western capitalist ideas to China is a lost cause.

Unlike the West, China has long stopped trying to export its ideology. China does not blow its own trumpet to other third-world countries on how to grow an economy, or how to develop a society. The West should do the same. One thing I have learned as a student of development economics is that, in poor countries, capital is scarce, but organization -- or governance -- is even rarer. China's state sector has provided that crucial organization for economic activities to happen.
 
Last edited:

ZeEa5KPul

Colonel
Registered Member
In case anyone has not been following the news.....

GME is up 85x since August.
----------------------------------------------------------------------
from Bloomberg
Please, Log in or Register to view URLs content!

A Treasury Department spokesperson declined to comment.

A retail-investor frenzy over the company has caused GameStop’s shares to soar in recent weeks, squeezing hedge funds with large short positions in the company.

Shares in the video-game retailer more than doubled as of 1 p.m. in New York, triggering at least two volatility halts as it at one notched its biggest-ever intraday advance. GameStop has surged eightfold in the past week, adding almost $20 billion to its market value.

Please, Log in or Register to view URLs content!


GameStop’s meteoric rise has captivated Wall Street, as an army of small traders spurred on by Reddit message board posts have pushed the company’s stock price to unheard-of levels. Shares in the company began the year at just $19. Hedge funds who held short positions in GameStop, such as
Please, Log in or Register to view URLs content!
, have closed out of them as the rally continued, suffering billions of dollars in losses.

While some commentators have cast the frenzy as a populist uprising against Wall Street institutions, others see a dangerous play that could eventually leave investors exposed to major losses. Some wondered if it was the result of purposeful market manipulation.
--------------------------------------------------------------------------

I think this has a National Security nexus:

1. If bunch of mofos on reddit can cause this much chaos, imagine what a wealthy sovereign fund can do.

2. As money moves into equity speculation is could create a opportunity cost as it sucks the oxygen out from tangible investments in greenfield CAPEX, such as labor and real R&D.

3. When the dust settles, there could be a run for the exit as investor seek stable shore of China.

Thoughts?
LMFAO r/wallstreetbets
 

ansy1968

Brigadier
Registered Member

Hybrid capitalism is serving China well​

What the West keeps missing when it maligns China's state-owned enterprises
Please, Log in or Register to view URLs content!

"When the facts change, I change my mind. What do you do, sir?"

John Maynard Keynes is credited for having said this. While economists the world over claim to respect Keynes, many do not seem to follow his teachings -- at least not when it comes to analyzing China. Since China embarked on its economic reforms 43 years ago, Western analysts have maintained two predictions.

First, that China would sell most of its state-owned enterprises and allow the private sector to prevail. Along the way, it was thought, China would become a Western-style democracy. But as time has gone by, these analysts have become increasingly frustrated by their mistakes. China does not fit their chosen ideological mold.

In the 1990s, China did sell a large number of SOEs including retailers, restaurants and small manufacturers of fertilizers, pesticides, clothing and footwear. But China has maintained control over virtually all important sectors of the economy including finance, oil, energy, aviation, education, telecoms, autos, transport infrastructure and medical care.

Ironically, most SOEs we see today were created during the past 10 to 20 years. There has actually been a massive reversal of the initial privatization program. This is on top of the large numbers of private-sector businesses that have been acquired by the state. Outsiders taking a close look at China's economy would be shocked to see the growing dominance of the state sector. In banking and finance, for example, virtually all of the 4,000-odd institutions -- banks, trust companies, leasing, insurance, asset management and securities companies -- are state-owned and have been built up in recent years.

Western economic thinking dictates that the private sector must be more efficient than the state sector. But the metrics Western analysts use are deeply flawed. Each year, for example, hundreds of thousands of private-sector businesses go bust and drop out of the statistics, leading to a survival bias.

Confronted with this inconvenient truth, Western analysts argue that SOEs enjoy unfair competitive advantages in China because they have greater access to finance at lower interest rates. Sure, that is all true. But comparing the private sector with the state sector based on return on equity -- or other measures -- is a pointless exercise. Additionally, simple comparisons on ROEs ignore social returns and the spillover effects to society at large.

Some analysts draw comfort from private sector standouts such as Ping An Insurance Group and China Vanke. But are they really private-sector enterprises? Of course not. They started out with government money and the state remains a significant shareholder. The fact that they have been given more autonomy does not make them private-sector entities.

By the same token, the fact that many companies are listed does not make them private-sector entities either. One has to ask who is calling the shots? It is true that some of the big technology companies are all private-sector owned. But the likes of Alibaba Group Holding, Tencent Holdings and JD.com and their ecosystems remain a relatively small part of China's economy. And they have benefited hugely from lax regulations on personal data and unnecessarily tight rules on their incumbent competitors as well as zero taxes on online sales.

In terms of research and development, the dominance of the state sector is even more noticeable. With a few exceptions, China's thousands of universities and polytechnic colleges are all state-owned and state-funded, and they shoulder most R&D projects.

Roads, railways and ports have always been constructed by the state, and this has helped private-sector enterprises thrive. Across China, urban infrastructure projects employ hundreds of millions in various forms. It is there that workers have their wages and pension contributions reliably paid, safety and dignity protected, and essential training provided. It is there that large numbers of private-sector businesses have been able to become feasible, including catering, hotels, personal care and retail, not to mention the suppliers of raw materials and components.

Mariana Mazzucato, professor in the economics of innovation and public value at University College London, has demonstrated that the real driver of innovation is not lone geniuses but state investment. This is true not just in Europe and the U.S. but everywhere.

Both the global financial crisis in 2007-08 and the pandemic in 2020 have highlighted how critically important the state is to the stability, and even survival, of capitalism. It is just that China has chosen to provide the safety net through SOEs rather than the helicopter money and zero interest rates favored by the West. Still, the jury is out as to which approach is more efficient and equitable.

When it comes to China, some Western analysts have turned themselves into missionary-like figures. But they have little to show for their stubborn efforts over the past four decades. Twisting definitions of the private sector does not make the private sector's performance any better looking. While many Chinese officials and members of the public openly criticize the bloated and corrupt state sector, their view of the private sector is even dimmer.

The truth of the matter is that 43 years into the current age of prosperity, China's private sector has credibility issues. Western scholars ought to see the uniqueness of China's historical path and admit exporting Western capitalist ideas to China is a lost cause.

Unlike the West, China has long stopped trying to export its ideology. China does not blow its own trumpet to other third-world countries on how to grow an economy, or how to develop a society. The West should do the same. One thing I have learned as a student of development economics is that, in poor countries, capital is scarce, but organization -- or governance -- is even rarer. China's state sector has provided that crucial organization for economic activities to happen.
@Crang

During the 1997 Asian financial crisis, it's a fire sale for gov't assets especially public utilities. The same MANTRA that IMF and the WORLD BANK champion, private equities are more efficient, cheaper with good service while under the state control it is more corrupt. The Philippine had no choice put to comply cause we need the money. 24 years later, the same problem exist with more bad service with multiple prices increase. For a developing nation we had the highest rate (both water and electricity owned by the same corp), 2nd behind Japan, it affected our competitive advantages and our quality of life. Now China comes along and show us how it should be done. What do you think most developing nation FEEL. Deceived? The developing countries had studied China and are following its model out of necessity and practically not of ideology, China INC is an alternative model and some in the west have started to appreciate its effectiveness, but it frighten them and they fear retribution because what they sell/advise to people is a lie to benefit themselves.
 
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hullopilllw

Junior Member
Registered Member
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In other words... the US is afraid that China can track who the US is sending money to in order to cause China trouble like those delinquents in Hong Kong and vice versa showing proof the US or anyone else is directly working to undermine China.

They are fast. Already spewing terms like digital authoritarianism. A sudden show concern for the world's privacy, which in turn justify the need to sanction China's digital currency. And also thus the need for others to adopt US' CBDC instead.
 
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