Tianchen Xu on expected fiscal stimulus measures in China

Our overall take is quite positive in that MoF is willing to tackle China’s many economic challenges by leveraging its borrowing room.  The immediate benefits to the economy will be limited, as the MoF avoided large-scale direct cash handouts to households.  However, its commitment to restoring local public finances through fiscal transfer and debt replacement is highly commendable. 

In the medium term, it will put an end to the aggressive deleveraging by local governments and ease the resulting deflationary pressure.  And as their financial position stabilises, local governments will be better positioned to support the economy by providing public services and embark on public investments.

~ Tianchen Xu, Senior Economist, Economist Intelligence Unit, "China's briefing on stimulus gets lukewarm investor reception," Reuters, October 12, 2024

(Xu reacted to news conference with Finance Minister Lan Foan announcing more "counter-cyclical measures" this year without providing details on size of fiscal stimulus.)

Lauren Templeton and Scott Phillips on bargain hunting in the stock market

The thrill of locating more bargains should be far more rewarding than sitting back and relishing your recent successes.  This idea is embedded in the notion that focusing on the future is more important than focusing on the past.

~ Lauren Templeton and Scott Phillips, Investing the Templeton Way

2008

Jim Grant on value investing

It's an arithmetic truism that bearishness prepares the ground for bullishness; nothing succeeds in the long run like a low entry point.

~ Jim Grant, "Tale of two decades," October 11, 2024

Brendan Ahern on how global investors are underweight Chinese equties

Bank of America does a global portfolio manager survey and they say to mutual fund managers, "what are your favorite trades?"  The #1 trade was [long] Mag 7 and the #2 trade was short China.  And so a lot of that short selling was in Hong Kong and ADRs.  So offshore China...  So those investors who were short China just got run over...  But more importantly, why you're seeing this reaction is that investors globally have been very underweight China.  China's economy is $18 trillion GDP, but India at $3.5 trillion actually was a bigger part of global indices...  It makes no sense, but it just shows there's this incredible underweight Chinese equities globally.  Some of that money that came out of China went into U.S. tech or India or Japan and what you're seeing is a re-rating back in...  That supertanker of underweight doesn't turn on a dime.

~ Brendan Ahern, "Don't Believe the China Boogeyman Narrative," Stansberry Investor Hour, October 7, 2024

Kevin Duffy on the Left and Right

Both sides engage in different forms of tribalism.  The Left is at war with the rich.  The Right is at war with various boogeymen around the world.  Left and Right are at war with each other. 

The state absolutely THRIVES on tribalism.  It's like oxygen.  "War is the health of the state." 

~ Kevin Duffy, tweet, October 9, 2024

Marcus Stanley on $1.6 billion House bill to deliver anti-China propaganda overseas

Since at least 2016, foreign interference in American elections and civil society have become central to American political discourse. The issue is taken extremely seriously by the U.S. government, which has levied sanctions and called out foreign adversaries for sowing “discord and chaos” through their propaganda efforts. 

But apparently Washington takes a different view when it comes to American propaganda operations in foreign countries. On Monday, the House passed HR 1157, the “Countering the PRC Malign Influence Fund,” by a bipartisan 351-36 majority. This legislation authorizes more than $1.6 billion for the State Department and USAID over the next five years to, among other purposes, subsidize media and civil society sources around the world that counter Chinese “malign influence” globally. 

That’s a massive spend — about twice, for example, the annual operating expenditure of CNN. If passed into law it would also represent a large increase in federal spending on international influence operations.

~ Marcus Stanley, "House passes $1.6 billion to deliver anti-China propaganda overseas," Responsible Statecraft, September 11, 2024

Brendan Ahern on the false China narrative

In general, Western media is a source of disinformation.  It’s not a good source for what’s going on [in China]…  Business people and investors have been getting along just fine and the diplomats from both sides have not.  I think the media plays with what DC wants.

~ Brendan Ahern, "Don't Believe the China Boogeyman Narrative," Stansberry Investor Hour, October 7, 2024