July 27,2019

【Currency wars】

Opinion: America should resist the temptation to weaken the dollar.

Starting the passage:
Usually the pre-eminence of the dollar is a source of pride for whoever occupies the White House. But Donald Trump … So far this is mostly a war of words.It could easily escalate into something worse as many of the conditions for a currency war are in place.

Stating the sluggish world economy & cheap currency to gin up:
1)The IMF this week revised down further its forecasts for GDP growth in 2019.
2)Interest rates in the rich world are low and cannot fall much lower.
3)There are real or imagined constraints on the use of fiscal stimulus.

Stating the condition for America:
Printing dollars to sell would complicate monetary policy, but that is a trivial objection. The Federal Reserve is set to cut interest rates in any event. A bigger headache is which currencies to buy.

Stating the possible solution:
The best remedy for the dollar’s strength is stronger economic growth outside America. Fiscal stimulus across the euro zone would help, of course. But one policy is in the gift of the White House. An end to the trade wars would lift the fog over the world economy.

July 13,2019

【Riding high】

America’s expansion is now the longest on record: at the end of July America’s economy will have been growing for 121 months. And there is low inflation (averaged 1.6%) and unemployment rate during this period. Housing bubbles, price surges and industrial busts that used to trigger recessions are absent now.

However, just as the economy has changed, so have the risks. The author thinks 3 new kinds of problems loom: corporate unfamiliar vulnerabilities, high total private debt, politics in Washington.

【Europe’s nightmare on Wall Street】

Deutsche Bank will cut off its 18000 jobs, mostly in London and New York. The retreat ends European hopes of conquering Wall Street. The author puts forward the most likely source of competition is from China in the long run.

At the end of the passage, the author says an interesting conclusion: the share prices of most big American banks have lagged the stock market since 2008. That is, the big winners of the past quarter-century have been the industry’s employees, not its shareholders, even as thousands of Deutsche bankers are shown the door at present.

【Changing of Lagarde】

A selection between an European and Asian candidate likely exists in terms of IMF’s next boss, but issues about the fund’s future draws more attention.

What is people’s ideal for the how the IMF should work? That is, a father keeps four canes in his cupboard, one for each of his children. But he never had to use them. however, the fund rarely operates this way in practice. It is reluctant to cut its members off especially if they have powerful friends.

Further, IMF has been trying to shore up alternative sources of financing as America is opposed to increasing members’ “quotas”. And given fixed quotas, the fund will have to struggle to redistribute voting power from over-represented countries in Europe to faster-growing members elsewhere.

July 6, 2019

【Panda express】

China’s financial opening is partly a response to the trade war with America.

Foreign financial companies can seek opportunities in serving wealthy clients or handling cross-border deals.

【Cash in on your Picasso】

Borrowing against art collections can unlock their value quickly. The outstanding value of loans against art in America was estimated to reach $17bn-20bn in 2017. And lending has continued to grow at double-digit rates.


The number of public firms in America has declined by more than a third since the 1990s. Startups ties up more of their value in ideas than in fixed assets, and they can now be readily tapped from private sources.

【Raising the stakes】

Switzerland barred the trading of Swiss-listed companies’ shares on EU platforms. Swiss shares would become less liquid. The EU might also signal to Britain’s next prime minister that it is no longer willing to tolerate a pick-and-mix relationship like that.

【Sumo-sized challenge】

Japanese people need to put more aside for retirement, but they are loth to take greater risks in search for higher returns.

Japanese are highly risk-averse: the bulk of Japan’s 1.83 quadrillion in household financial assets is held in post offices or bank accounts that pay zero interest. Most of it is owned by people who remember the puncturing of Japan’s asset bubble a generation ago.

About off-balance-sheet debt


Local governments bear more public expenditure than their revenues, and they are restricted to borrow formally. Therefore, “local-government financing vehicles” are created. They are registered as companies, but creditors know – or, rather, assume – that the state stand behinds them.

As growth slows, the spectre of local-government debt looms once more. This is worrying for 3 reasons: trajectory, opacity and reliance.

Chinese government has been trying to limit LGFV borrowing since 2010. The giant debt swap is conducted, in which local governments exchanged trillions of yuan in LGFV bonds for official bonds charging lower interest. Last year LGFV bonds are permitted to default.

However, worried about slowing GDP growth, central government opened the door for provinces and cities to increase spending. As local officials are reluctant to open their wallets (once growth stabilizes, they are likely to face deleverage pressure again), central government could in effect fund LGFV bonds directly, without testing the market. For example, China Development Bank, offer long-term loans to LGFVs to replace their short-term debts.


  • It has seen better days
  • A fitting symbol for
  • Come into sharp focus
  • Miss much of what is happening
  • … higher than a year earlier, a big comedown from the previous double-digit norm

Tinted glasses


Partisanship now colors Americans’ reading of the economy, as it colors their views on many other things. It’s not any longer the economy, stupid. It’s the partisanship.


  • It is common knowledge that … (a strong economy helps an incumbent在职者)
  • Excluding the first six months of every president’s term (a honeymoon period when ratings tend to be high)
  • Be stuck in the polls 陷入同样的泥潭
  • A rapid switch in attitudes