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CLIPS: GDP, WMP AND MARKETS

My latest batch of clips will probably seem like gibberish to anyone in the US. First up is a story I reported before going back to the US for Christmas that just came out on Thursday online. The glamorously named asset class that is wealth management products (WMPs) might be thought of as the Chinese equivalent of the US mortgage-backed security – in other words, most people have no idea how they work and they could potentially cover up a growing mass of toxic assets.

The government definitely knows more than they are releasing to the public about them, but whether they have it “under control” is an open question. A recent scandal involving one of these WMPs falling apart and provoking customer protests will force Beijing to arrive at an official stance on these products, and none of the avenues available to regulators will be easy. That story can be viewed here.

Second, China announced in January that fourth-quarter GDP growth accelerated, breaking a seven-quarter streak of slowing growth. But that is hardly cause for celebration as growth is expected to slow again in the second half of the year. Also, a host of other factors not in the headline figures – the wealth gap, growth of shadow banking and China lying about their stats – are cause for serious concern. You can see that editorial here.

Last, I’m back on the markets beat (if you can say CER has beats) and will be doing a weekly markets roundup every Friday, starting this with this past Friday. I’m excited about this because it means talking to investment bank analysts, which I like for reasons I’m still figuring out. Maybe it’s that the interviews always must be very quick and to the point because stock analysts are some of the busiest people on earth when the market is open. I also like being up on all the lingo, like beta (variance), PE, P-to-B or price spreads, and then translating it into plain English.

There’s additionally a degree to which you get the door slammed in your face (the “I won’t talk to you”) that makes it feel more rewarding when I actually get someone to talk to me. And having that analyst you have a relationship with (even if just over the phone), who you know will take your calls and answer your questions in the future, is pretty damn satisfying.


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