China: Implications from Real Estate Crackdown and Growth Outlook

Download PDF: The news related to Evergrande default last month has reignite investors attention to the country real estate sector, which is a major driver of Chinese growth and strongly intertwined to the country’s banking sector. Moreover, property accounts for 70% of household wealth – a significantly higher portion compared to U.S. and Japan atContinue reading “China: Implications from Real Estate Crackdown and Growth Outlook”

Chinese and Asian High Yield Corporate Bonds: Feeling the Heat

The jitter surrounding Evergrande’s solvency problem has spread to other Chinese property developers that account for sizeable portion of Chinese and Asian High Yield Corporate index. Chart 1 and 2 show spreads of Chinese and Asian USD bonds have widened to 16% and 11.5%, respectively, while the total return index declined 18% and 12% fromContinue reading “Chinese and Asian High Yield Corporate Bonds: Feeling the Heat”

Chinese Slowdown, Policy Easing, and the Dollar

Download PDF: Chinese manufacturing and services PMI print for August shows growth continued to shift lower amid tight credit and fiscal condition, although it is probably worsened by the mini-outbreak and restrictions last month that distort the number to the downside. One important thing to note is that growth momentum in the rest of worldContinue reading “Chinese Slowdown, Policy Easing, and the Dollar”

Where Is The Correction?

Download PDF: For over a year, investors have been rewarded for tilting their portfolio towards risk assets on the backdrop of plentiful support for households from the government’s generous fiscal transfer that supported spending and Fed’s support on the credit market, preventing a crunch in liquidity of the debt market. The unprecedented fiscal and monetaryContinue reading “Where Is The Correction?”

Yields Meltdown, Excess Savings and EM Policy Rate

Download PDF: Global stocks continue to experience a dichotomy in recent months amid unequal economic recovery in the developed and emerging world. With vaccination rate crossing above 50% of total population and covid-19 number goes into the rear-view mirror in the rich world, both manufacturing and service sector has rebounded strongly amid last year’s pent-upContinue reading “Yields Meltdown, Excess Savings and EM Policy Rate”

Peak Growth: Cycle in Review, Commodities, and Precious Metals

Download PDF: Blow-out number of various economic indicators coming in the past weeks – PMI, retail sales, inflation – suggest that the global cycle is peaking out and the strongest period of growth is in the rear-view mirror.  In the short-term, the risk assets rally that began in March 2020 is likely to take aContinue reading “Peak Growth: Cycle in Review, Commodities, and Precious Metals”

Global Themes 2021-2030

Download PDF: Last month, we outlined our outlook for the year ahead, where Chinese growth will continue to rebound strongly and global liquidity remain plenty. This month, we are taking six themes for the coming decade, with the focus on inflation, savings-investment dynamic, and transition to renewable energy. I hope you enjoy the read. ThemeContinue reading “Global Themes 2021-2030”

Key Points on China: The Bubble That Never Pops – Thomas Orlik

As an Emerging Markets analyst, the issue on China has always been divisive. On one side, the bear points to high household and corporate leverage, alongside local government opaque finance vehicle that masks the true government borrowing. But on the other hand, the bull has gained the higher ground in the past decade as muchContinue reading “Key Points on China: The Bubble That Never Pops – Thomas Orlik”

China: Peak Housing – Rogoff, K. S.

This piece is a summary of recent NBER paper by Kenneth Rogoff and Yuanchen Yang arguing that Chinese housing market fits the characteristics of a bubble and forms a significant portion of Chinese GDP. The original paper could be found: And the PDF version of this summary could be downloaded: Real estate and its associatedContinue reading “China: Peak Housing – Rogoff, K. S.”

Equity Signposts, Commodity Rebound and Chip Wars

Download PDF: 5 Signposts for Global Equity Recovery The decline in DXY of late has arguably help global equity grind higher amid easing financial condition. For long, we have been highlighting the widening valuation between U.S. equity and the rest of the world, which has gone much cheaper post-COVID19 correction. In-line with previous crisis experience,Continue reading “Equity Signposts, Commodity Rebound and Chip Wars”