Posted on 08/22/2015 3:10:52 AM PDT by dennisw
Short-seller Jim Chanos, who has been bearish on China's economy for several years, has a disturbing insight on China: Its worse than you think.
Whatever you might think, it's worse," he told CNBC.
He spoke as worries of a deepening China economic slowdown intensified Friday after a private survey showed the factory sector shrank at its fastest rate in almost 6-1/2-years in August, hammering global stocks and commodity prices.
U.S. stocks dropped sharply for a second day following a sell-off in major indexes around the world on the growing evidence that China's economy is slowing. The Dow Jones industrial average fell 296 points, or 1.7 percent, to 16,694 as of midday Friday Eastern time.
Chanos did not classify the drop as a correction or a bear market. But he noted that the years long bull market in the U.S. shows that "we've gotten a little complacent."
Earlier Friday in China, the preliminary Caixin/Markit China Manufacturing Purchasing Managers' Index (PMI) stood at 47.1 in August, well below a Reuters poll median of 47.7 and down from July's final 47.8. Special: New Probiotic Fat Burner Takes GNC by Storm
It was the worst reading since March 2009, in the depths of the global financial crisis, and the sixth straight one below the 50-point level, which separates growth in activity from contraction on a monthly basis.
"Uncertainty about China growth is now the main swing factor in markets," "Today's data reinforced the doubts about global growth."
Chanos said the Chinese government's reaction to a stock spike, "panic responses" from investors and recent currency devaluation has "given investors pause."
"People are beginning to realize the Chinese government is not omnipotent and omniscient," he said. "In fact, like many of us, sometimes they don't have a clue."
(Excerpt) Read more at newsmax.com ...
I got to thinking about that a while back, and googled it. Turns out that its actual origin is I, Pencil, an article written in 1958 by Leonard E. Read. Friedman just made good use of Reads insight.But when I actually study it, the actual point of I, Pencil can best be expressed as, It isnt government that makes a pencil, and it really isnt Eberhard Faber who makes the pencil. It is society which makes the pencil, lead by Eberhard Faber."
SOME writers have so confounded society with government, as to leave little or no distinction between them; whereas they are not only different, but have different origins. Society is produced by our wants, and government by our wickedness; the former promotes our happiness POSITIVELY by uniting our affections, the latter NEGATIVELY by restraining our vices. The one encourages intercourse, the other creates distinctions. The first is a patron, the last a punisher.Society in every state is a blessing, but Government, even in its best state, is but a necessary evil . . . - Thomas Paine, Common Sense (1776)
Fifty years from now, it would surprise me to see anything but you are no doubt younger than I am and, anyway, I take your point.
We conservatives face the challenge of shaping an economy that somehow distributes wealth generated by robots to people who are no longer on the assembly line. Somehow the distribution must be made or the status will come in and seize the means of production. Somehow we have got to reward initiative, diligence, productivity and risk-taking in a situation in which those to succeed will perhaps largely succeed in doing it without others, that is with drones.
As technology becomes more sophisticated it will unquestionably spin off more jobs in new industries that we cannot even now conceive of but history shows us that there is always a lag time in such developments. One need only consider the Luddites in the beginnings of the Industrial Revolution to see how dislocations can occur. Those lag times are open season for leftists.
” Again, the shallow mind cannot contemplate it, which is probably your issue.”
I merely addressed your snarky post about Trump. As one who OBVIOUSLY thinks he has a SUPERIOR understanding of all things, could you please take us all by the hand and point out to us what was superior about YOUR POST that I responded to. And, how many billions of dollars have you accumulated that enables you to assume Trump is such a sapling when it comes to economics?
Does it take a superior mentality to observe that the United States is on the ropes economically?
And why do you waste your superior mental talents on such a common site as this?
let me add a piece of the puzzle to you...that apparently you have never thought of.
When China sells an American corporation cheap steel, the protectionist and the liberal say “TRADE DEFICIT” and LOST JOBS..
But dude, WTF do you think is done with that steel. OTHER stuff is manufactured or built. And because the steel is maybe 30-40% less expensive, A LOT MORE cars and tractors and commercial buidlings and lawn mowers and everything else is made -producing jobs, wealth, and goods that consumers and other corporations need. This includes rockets and jet fighters and all kinds of high tech high paid jobs producing goods!!!
Why are a few thousand steel workers more important than the millions of people hurt by steel that’s artificially high due to tariffs and other taxes, liberal regulations and so on? Answer? THEY ARE NOT.
If China wants to screw their own people with a weak Yuan or other policies, there’s not a damned thing Donald Trump or anyone else can do about it. But if we got rid of our own liberalism (taxes, regulations, unions, etc) - our country wouldn’t even know China existed.
I can’t stand China. I think all they are good for is providing slave labor to the rest of the world, building ghost cities and highways to nowhere. And pollution, they are excellent at making pollution and poisonous products, too.
Having said that, their stock market is still way up for the year.
Concerning global markets, the one big thing to take notice of is the big selloff in commodities. That can’t be ignored.
Your first statement is stupid, because I never said we weren't on the ropes. I said, and stand by the fact, that it's SELF INFLICTED LIBERALISM that is CAUSING it. You need to grow up and think past what...to WHY. The WHY is not China. It's only to a small degree MEXICO. It's US. It's OUR government, our liberalism. And apparently it DOES take a superior intellect to understand that. The intellect of Sowell and Friedman and Williams and Reagan and so on...people I learned from. You ought to try learning sometime. You'd be amazed.
And what can I say, I love this country, I have the heart of a teacher/coach - and it pains me to no end when conservatives buy into shallow liberalism because they never asked the "why" question.
If you have to say it then probably the opposite is true.
As technology becomes more sophisticated it will unquestionably spin off more jobs in new industries that we cannot even now conceive of but history shows us that there is always a lag time in such developments.
“and it pains me to no end when conservatives buy into shallow liberalism because they never asked the “why” question.”
Did my posts assign the causes of our economic decline, or is it liberal of me to notice the decline?
The economic cycle works vigorously in either direction. It is being forced in the downward direction by policies of both Republican and democrat administrations.
The more capital the more robots the more robots the more wealth etc. One can foresee a system in which access to the means of getting wealth becomes more and more exclusive. This is to be distinguished from software development such as Facebook or Google but might include places where Amazon is going with huge plants thoroughly robotized producing millions of actions a day.
As wealth becomes more and more concentrated through technology, expect leftists to offer solutions and none of them will be built around liberty.
Kurt Vonnegut wrote a book called “Player Piano” in the early 1950s that uncannily predicted where we are going.
And, yes, the capital barrier to software development is low. However, that is not immune to automation either.
Frankly I would not mind if the Chinese bought Detroit and Los Angeles and colonized them
Do a little housecleaning and start a couple of new Hong Kongs
What has propped up the US economy is cheap energy via fracking and the Federal Reserve money creation machine. Also some good technology advances by Apple and others too but Facebook? Who needs that crap and it is a big tech money machine
Technology and advanced communications such as internet and cell phones has been concentrating wealth while it eliminates lots of middle class and lower class jobs. Its called the winner take all economy and we are moving in this direction. The guy who owns uber is worth a billion while a million US taxi drivers and limo will see their earnings cut
Rise of the Robots: Technology and the Threat of a Jobless Future Hardcover May 5, 2015
http://www.amazon.com/Rise-Robots-Technology-Threat-Jobless/dp/0465059996/ref=sr_1_1?ie=UTF8&qid=1440257200&sr=8-1&keywords=rise+of+robots
Wonderful insight. Unfortunately, most Americans will not understand or see the truth in your words.
I have most of von Mises's works. His raw intellect is equal to Einstein's.
If countries followed the Austrian school the world would be a much, much better place.
Your posts are always insightful.
Thanks.
I like your ideas. However, to really pull in massive investment we need a 0% corporate tax.
The compliance cost savings alone would be an extra bonus.
The less the IRS parasites interacts with business the better.
you assigned the causes in a way that indicates liberal prescriptions. Thus, yes, you were wrong about that.
I have explained why my way is far superior to yours...and you’re too stupid to understand - or not man enough to admit defeat.
Therefore, if it helps your little brain to go the shallow route, the idiot route, the non thinking emotional route, suit your teeny tiny little pathetic self.
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