Money managers are full of hopium that economic problems will dissipate and growth will continue to gain momentum.
Hedge funds have now increased net longs positions by 18%.
Comments »Money managers are full of hopium that economic problems will dissipate and growth will continue to gain momentum.
Hedge funds have now increased net longs positions by 18%.
Comments »The head of Iran’s army warned the U.S. against sending an aircraft carrier back to the Persian Gulf after it passed through the Strait of Hormuz a week ago.
“We usually don’t repeat our warning, and we warn only once,” Ataollah Salehi was cited as saying by the state-run Fars news agency. “We recommend and emphasize to the American carrier not to return to the Persian Gulf.”
Comments »It certainly looks like a dark cloud hovers over all dictators.
Comments »Asian markets are up 1-2% tonight, following a very strong European session.
Comments »BY GORDON G. CHANG | DECEMBER 29, 2011
In the middle of 2001, I predicted in my book, The Coming Collapse of China, that the Communist Party would fall from power in a decade, in large measure because of the changes that accession to the World Trade Organization (WTO) would cause. A decade has passed; the Communist Party is still in power. But don’t think I’m taking my prediction back.
Why has China as we know it survived? First and foremost, the Chinese central government has managed to avoid adhering to many of its obligations made when it joined the WTO in 2001 to open its economy and play by the rules, and the international community maintained a generally tolerant attitude toward this noncompliant behavior. As a result, Beijing has been able to protect much of its home market from foreign competitors while ramping up exports.
By any measure, China has been phenomenally successful in developing its economy after WTO accession — returning to the almost double-digit growth it had enjoyed before the near-recession suffered at the end of the 1990s. Many analysts assume this growth streak can continue indefinitely. For instance, Justin Yifu Lin, the World Bank’s chief economist, believes the country can grow for at least two more decades at 8 percent, and the International Monetary Fund predicts China’s economy will surpass America’s in size by 2016.
Don’t believe any of this. China outperformed other countries because it was in a three-decade upward supercycle, principally for three reasons. First, there were Deng Xiaoping’s transformational “reform and opening up” policies, first implemented in the late 1970s. Second, Deng’s era of change coincided with the end of the Cold War, which brought about the elimination of political barriers to international commerce. Third, all of this took place while China was benefiting from its “demographic dividend,” an extraordinary bulge in the workforce.
Yet China’s “sweet spot” is over because, in recent years, the conditions that created it either disappeared or will soon. First, the Communist Party has turned its back on Deng’s progressive policies. Hu Jintao, the current leader, is presiding over an era marked by, on balance, the reversal of reform. There has been, especially since 2008, a partial renationalization of the economy and a marked narrowing of opportunities for foreign business. For example, Beijing blocked acquisitions by foreigners, erected new barriers like the “indigenous innovation” rules, and harassed market-leading companies like Google. Strengthening “national champion” state enterprises at the expense of others, Hu has abandoned the economic paradigm that made his country successful.
Second, the global boom of the last two decades ended in 2008 when markets around the world crashed. The tumultuous events of that year brought to a close an unusually benign period during which countries attempted to integrate China into the international system and therefore tolerated its mercantilist policies. Now, however, every nation wants to export more and, in an era of protectionism or of managed trade, China will not be able to export its way to prosperity like it did during the Asian financial crisis in the late 1990s. China is more dependent on international commerce than almost any other nation, so trade friction — or even declining global demand — will hurt it more than others. The country, for instance, could be the biggest victim of the eurozone crisis.
Third, China, which during its reform era had one of the best demographic profiles of any nation, will soon have one of the worst. The Chinese workforce will level off in about 2013, perhaps 2014, according to both Chinese and foreign demographers, but the effect is already being felt as wages rise, a trend that will eventually make the country’s factories uncompetitive. China, strangely enough, is running out of people to move to cities, work in factories, and power its economy. Demography may not be destiny, but it will now create high barriers for growth.
Read the rest here.
Comments »You laughed, you mocked, and you said never…..
[youtube://http://www.youtube.com/watch?v=IEd7F5wBrqI 450 300]Reality check for violent village idiots…
[youtube://http://www.youtube.com/watch?v=4wKmco16cOs&feature=related 450 300]Comments »
Damn…let’s hope they are wrong as the fund predicts a decade of slow growth and high unemployment.
Comments »The Arab League was a hopeful opportunity to quell violence in Syria; they have now conceded to failure.
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Los Angeles police this morning detained and are questioning a “person of interest” in the spate of arson fires occurring around the city since Friday.
The individual, believed to be the man seen in a video police released Sunday in connection with the case, was detained near Sunset Boulevard this morning, according to an LAPD source familiar with the investigation.
However, in a statement, a Los Angeles fire official said that “it is too early to speculate if this person is responsible for the spree of arson fires.”
PHOTOS: Arson fires
The detention follows an early-morning frenzy of arson fires across the Hollywood area on Monday. Eleven fires were reported in two hours, beginning at 1:30 a.m., most to cars and carports in apartment complexes, police and fire officials said.
It was unclear early Monday if the fires were connected to a string of arsons in the Hollywood area.
MAP: Arson fires
Officials said Sunday that they have linked at least 39 fires to those arsons, which began Friday morning.
They declined to say what evidence tied the cases together or to give more information about how the fires were set. Law enforcement sources told The Times that detectives were concerned that releasing more information could prompt the arsonist or arsonists to change tactics and could encourage copycats.
FULL COVERAGE: Arson fires
An image of a “person of interest” was caught on a video that showed a car fire Saturday night inside the parking structure of the Hollywood & Highland complex on Hollywood Boulevard.
The LAPD is asking residents to leave porch and carport lights on at night and make sure cars are locked. Authorities also are asking residents to immediately report anything suspicious by calling 911.
RELATED:
Suspect arrested in string of fires
Fire-starting materials found in van, police say
Person of interest had ‘creepy’ smile, witness says
— Sam Quinones, Richard Winton and Andrew Blankstein
twitter.com/samquinones7
Photo: Los Angeles Police Cmdr. Michael Moriarty points to an image of a man caught on video walking down Hollywood Boulevard after a car fire Saturday night inside the parking structure of the Hollywood & Highland complex. Credit: Allen J. Schaben / Los Angeles Times
Comments »Experts say it could happen again, but since nobody knows why it happened it is similar to predicting a volcanic eruption of sorts.
Comments »Europe’s bourse’s experienced a rally off better than expected manufacturing data, but the trend has been consistently down for more than a quarter. Some analysy expect it will be hard to avoid recession. We on the other hand may just pull through.
Comments »Just as president Obama signs new sanctions against Iran, they decide to provide the west with a dual message….talk or walk. Iran in one move test fires a new missile why stating they want to talk about their nuclear program and most likely the sanctions their will hurt their oil export.
Let us all pray none of this escalates any further.
Comments »Overall commodities were down in 2011, but oil and gold helped to keep the index in check. Expectations for copper are down on a China slowdown, but oil and gold are expected to lead once again.
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