China Law Blog

Helo, This is really interesting ! Hope china economy will keep going.

Cheers, Alain

I agree with your last sentence. The repurcussions for china are probably more severe than we think.

During the last five years of his tenure as CEO of now-bankrupt Lehman Brothers, Richard Fuld's total take was $354 million. John Thain, the current chairman of Merrill Lynch, taken over this week by Bank of America, has been on the job for just nine months. He pocketed a $15 million signing bonus. His predecessor, Stan O'Neal, retired with a package valued at $161 million, after the company reported an $8 billion loss in a single quarter. And remember Bear Stearns's Chairman James Cayne? After the company collapsed earlier this year and was up for sale at bargain basement prices, he sold his stake for more than $60 million.

Daniel Mudd and Richard Syron, the former heads of Fannie Mae and Freddie Mac - aka the gods who failed - are fighting to keep severance packages of close to $24 million combined - on top of the millions in salary each earned last year while slaughtering the golden calf. As it is written in the Gospel According to Me, when the going gets tough, the tough get going.

Never predict China's Economy. The book "the black swan" tells us everything could happen. God bless all Chinese. We had enough pain on stock market, don't give us another hard time on slow economy.

Chris.

The proposed bailout would only serve to hurt the global economy in the long run. Capital markets will remain tight and inflation will sky-rocket. We've painted ourselves into a corner with no easy exit. Instead of a massive bailout that will never come off the books, I would like to see the mark-to-market rule change. While there will still be a downturn, this could prevent people from yelling "Armageddon" in the streets.

Obama’s top economics adviser is Austan D. Goolsbee, a Skull & Bones member and University of Chicago economics professor. According to Naomi Klein’s book “The Shock Doctrine”, it is/was Milton Friedman’s University of Chicago economics department that gave birth to The Shock Doctrine. The essence of The Shock Doctrine is that “shocks” (natural or man-made disasters, such as wars, financial crises, etc.) are necessary to bring about radical political and economic transformations, usually authoritarian, free market coup d’etats.

From Wikipedia: ‘Austan D. Goolsbee is an economist and is currently the Robert P. Gwinn Professor of Economics at the University of Chicago Graduate School of Business.

@JR - "Don't taze me bro!"

@Dan - Your spam filter seems to be throwing out anything with links in it, so check out yesterday's warning about China from SocGen's global strategist over at The Telegraph. Myself, I can't see how China could be more at risk than the UK/USA from the effects of the credit crunch, but the piece made interesting reading.

Dealing with China is a headache, I really hope our economy get's stronger. Do not do Business with __________ Corporations, ________, _______ or any staff at _________ Corporations is a FRAUD!! _________ Corporations steals your product ideas and manipulates your business into failing with cheap workmanship on your products while _______ Corporations steals your products and sells them to your customers directly. ________ Corporations is a FRAUD, _______is a FRAUD, _________ is a FRAUD! You have been warned doing business with ________ Corporations is like dealing with the devil!

EDITORS NOTE: This comment did contain the names of various companies, but we deleted those names. We could not allow a comment like this because it just would not be fair. Yet we left it up with the company names removed because it is, overall, a good lesson on the need to be careful when doing business internationally and to be sure to mind the "know your client/customer/supplier/vendor rule.

Here's the latest analysis from Philip Ehrman of the Jupiter fund:

"Growing demand from Europe, Asia, and commodity rich economies has filled any gap that might have appeared from declining US orders. Looking forward, one should question whether Europe's faltering economies will result in a drop in demand for Chinese goods. In our view it is likely that the impact of the credit crunch on the Western economies will see China's export growth slow to a rate of 5-8 per cent next year, thereby reducing the influence of this important driver of the economy.

Taking these elements together it is easy to see where some contribution to China's growth rate is likely to be "lost" over the next 12 months. However, China's economy has become far more balanced now than in the past and should prove to be resilient.

Domestic consumption and fixed asset investment remain strong. For example, urban fixed-asset investment has continued to accelerate, rising 27.4 per cent year-on-year in the first eight months of 2008, while retail sales grew 23.2 per cent in August. Inflationary pressures, in part stoked by the overly strong economic performance last year, appear to be receding as reflected by August's drop in the consumer price index, which slowed to a 4.9 per cent year-on-year rate after hitting a 12-year high of 8.7 per cent in February.

Significantly, China's authorities are in a strong position to use their tool-kit of monetary, fiscal, and administrative measures to balance the expected slowdown in exports and fixed asset investment. As a reflection of this, the People's Bank of China last week announced the first cut in interest rates for 6 years and moved to ease reserve requirements for smaller banks. This is a clear indication of a willingness to move to a more accommodating monetary stance. "

Sounds convincing, although the author is the manager of the Jupiter China Fund, so he does have an interest in talking up China, but it seems much less alarmist and far more in tune with what you hear from other sources.