Tuesday, July 22, 2014

"China has a history of recurring and traumatic financial crises since liberalization"

Great y0ungmoney post:

"[Y]ou have plenty of professional investors today talking about how the China bear thesis hasn't played out, China is different because of this or that, 'urbanization' will drive growth (and not the other way around), and that shares look 'cheap'. I shudder to think of the well meaning investment professionals in this country allocating to funds raising capital to invest in distressed assets, credulously believing that this is a fair market system that respects the interests of private investors"

1 comment:

Unknown said...

Thanks for the shoutout!

I think the lack of property rights in China (and emerging markets more generally) will become a big issue when we have a real EM downturn. It will lead to widespread revulsion-- people will think, "Not only are my EM stocks down 85%, they're going to screw me out of whatever I have left!"

It's the kind of thing that's easy to ignore in a bull market and impossible to ignore once things go bad.