Now raising intellectual capital
They’re a cheerful lot at Societe Generale. Here is uber-bear Albert Edwards pointing out that things are getting worse, not better, in the west’s financial plumbing. As if that’s not ominous enough, Dylan Grice has come up with a chilling analysis of the nasty similarities between China today and Japan a quarter of a century ago.
Edwards’ pessimism has been something of a comfort to the dwindling bunch of bears, as they’ve watched asset prices romp away while they were caught in cash or (worse) short. Grice’s arguments open up a whole new stretch of forest for them to roam.
In the early 1980s, Japan was going to overtake the west; as its stock market capitalisation passed that of Wall Street, predictions that its economy would be bigger than that of the United States within 20 years became commonplace.
We were urged to look at the state we were in, and become more like the Japanese. Their form of savings-based, quasi-stateÂ capitalism produced spectacular growth, an enviable trade surplus and obviously worked better than ours.