James Pethokoukis

A quick look at Chimerica/Americhina

July 27, 2009

Here are three chart to give a feel for the current state of the US-China economic relationship (via the econ team at Action Economics):

Prof. Copper and the V-shaped recovery

July 27, 2009

Ed Yardeni takes note:

The S&P 500 is one of the ten components of the Index of Leading Economic Indicators. It seems to be forecasting a robust V-shaped economic recovery. This has got to be the most contrary scenario of all right now. Everybody is hung up about the anemic outlook for employment. I am too. So what is the S&P 500 seeing out there? How about yet another global bubble boom? This one is led by China, where M2 was up 28.5% y/y in June. Professor Copper seems to agree with this outlook. The price of this basic metal rose to $2.52 a pound at the end of last week, the highest since October 7, 2008. China’s Dow Jones Shanghai Composite is up 53% since March 6, well ahead of the S&P 500. It actually bottomed on November 4, 2008, and is up 122% since then to 383.78. That’s certainly an impressive meltup. Even more impressive would be if it recovers back to its record high of 588 on October 16, 2007. Anything is possible in a bubble.

China’s tax-cut success story

July 27, 2009

Chinese and American officials meet today in the latest edition of the “strategic dialogue” between the two nations. Here is an interesting 1998 take from Alvin Rabushka of the Hoover Institution about the role of tax policy in China’s economic ascent.

Is China experiencing a credit bubble?

July 17, 2009

Here are several great charts from Wachovia looking at the Chinese economy in an effort to determine if the nation is experiencing a lending bubble. The firm doesn’t think so — at least not yet — but given government influence in its capital allocation system and the need to keep growth high in a weak global economy, I have to wonder.

A Chimerica stimulus policy?

July 13, 2009

David Goldman of the great Inner Workings blog loves the Chimerica concept, a furthering of the economic relationship between China and America. He even thinks it would make a great stimulus and long-term economic recovery program:

Is Falling America losing out to Rising China?

July 10, 2009

There was a bit of a kerfuffle about the new Fortune global 500 rankings which showed  that the number of U.S. businesses fell to lowest level ever while more Chinese entries appeared than ever before. A few thoughts:

Asia, the dollar and gold

June 4, 2009

OK, so it looks like Rising Asia is trying to get on the same currency page. Now lots of people think rumblings of the region dumping the dollar are empty threats. Where are they going to go, right? The euro? Please. David Goldman of the fantastic  Inner Workings blog thinks he has it figured out bold is mine):

A ‘what if’ on GM, Hummer and China

June 3, 2009

Daniel Ikenson of the Cato Institute makes a great point on the Hummer deal:

The willingness of this Chinese company to purchase Hummer serves as a stark reminder of what could have been. Had George W. Bush not allocated TARP money to GM last December, in circumvention of Congress’s rejection of a bailout, then GM likely would have filed for bankruptcy on January 1. At that point, there would likely have been plenty of offers from foreign and domestic concerns for individual assets to spin off or for equity stakes in the New GM. There would have been plant closures, dealership terminations, and jobs losses, as there is under the nationalization plan anyway. But taxpayers wouldn’t be on the hook for $50+ billion, a sum that is much more likely to grow larger than it is to be repaid. It is also a sum that will serve as the rationalization for further government interventions on GM’s behalf.