Good morning
The headlines:
- The Chinese Congress continues.
Link: behind closed doors?
Outgoing president Hu Jintao has told the Party that they must double per capita income in China by 2020. Which is…[pulls out calculator]…an increase of roughly 9% per annum. And given that China’s historical average is 9.91% (between 1979 and 2010), I think Mr Jintao is just telling his guys to carry on as planned.
I recently listened to a lecture given by Loretta Napoleoni, the author of “Maonomics: Why Chinese Communists make Better Capitalists Than We Do”. She talked about economic growth being the Social Contract between the Chinese people and the Communist Party. She mentioned a figure of 8% as being a hypothetical minimum that the Party can settle for (in the long term) – and without it, the Party would begin to lose its power. It’s an interesting thought – as she’s suggesting that the democratic concept in China is more about profit and distribution than it is about voting.
There are some reformative concepts on the discussion agenda: break-up of state monopolies, interest rate liberalisation, anti-corruption movements, a shift away from exports toward boosting internal demand…
It could just be talk – but the progress is more in the fact that the Chinese can even talk about it.
- Republicans extend hand of negotiation?
Link: maybe we won’t die after all.
House Speaker John Boehner (a Republican) has said that the Republican party in the House of Representatives is “willing to accept new revenue under the right conditions”.
Which is a non-commital way of saying that a tax increase could be worked around.
Let the political positioning begin.
- JPM makes some earnings announcements.
Link: only 10 days of losses in the quarter.
JPM only lost money on 10 days in the third quarter of 2012. It’s better than 28 days in the previous, where there was all the derivative bet/London Whale saga. And the $2 billion loss turning into a $6 billion loss.
But that improvement from one quarter to the next didn’t really help the share price, which is still reeling from Mitt-not-winning (check out the most recent portion of the graph!):
Probably a good time to buy? Or maybe we should wait for the inevitable panic in December: the one just before the investment banks, Cher and the cockroaches make their post-apocalyptic from-the-ashes comeback in January 2013.
- And you WILL buy these ones.
Link: Banking in Zimbabwe.
Earlier this week, we were talking about the new capital raising that the Zimbabwean Government/Reserve Bank* is undertaking. And, more specifically, how the commercial banks don’t seem to be buying it. At which point, the Finance Minister (Tendai Biti) issued an ultimatum that no one quite understood.
The Reserver Bank Governor, Gideon Gono, has cleared that all the way up, now that Tuesday’s sale of treasury bills has failed. As Mr Gono has put it:
“Extraordinary circumstances require extraordinary measures. We will be introducing a battery of measures that will ensure compliance. A snub begets a snub.“
And some of the political speechwriters could learn a few things here, because that short pronouncement is filled with pith, threat, and double entendre.
The Zimbabwean banking system, Barclays included, are about to “recapitalise themselves”, I’m thinking. With NCDs** at favourable rates of interest***.
*There doesn’t seem to be even an attempt at the illusion of central bank independence…
**Negotiable Certificates of Deposit.
***Only: favourable to whom?!
That’s all for now.
Have a good day.
