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China: Hugh Hendry warns investors' infatution is misguided

Hugh Hendry wonders whether professional money managers' infatuation with China could prove unrewarding?

Published: 9:09AM GMT 12 Feb 2010
Comments 44 | Comment on this article
UK Telegraph

Hugh Hendry warns of investrs' infatuation with China Robert Prechter, the eminent American observer of social and economic trends, wryly contends that stock markets usually deceive those people who argue for outcomes based on seemingly logical causation.

Could our professional money managers' infatuation with China prove similarly unrewarding? China's economy is certainly on a tear; economic growth has averaged 9pc a year over the past 10 years, compared with a paltry 1.9pc for the British economy. Last year, despite the credit crunch, China posted a remarkable growth rate of 10.7pc against a British contraction of 3.2pc. This is impressive stuff.

The spell cast by a contemporary cult is undoubtedly hard to resist and some brave souls, willing no doubt to extrapolate present trends forward, are even proclaiming that China will usurp the United States as the world's largest economy. Goldman Sachs' chief global economist, Jim O'Neill, even taunts the naysayers, saying, "You either get it or you don't." Such is his conviction.

However, the composition of China's growth has undergone a potentially treacherous change: in the absence of expanding foreign demand for its exports, it has instead come to rely on a massive surge in domestic bank lending to fuel its growth rate.

Indeed, when measured relative to the size of its economy, the 27pc point jump in bank loans to GDP is unprecedented; at no point in history has a nation ever attempted such an incredible increase in state-directed bank lending.

What a turnaround: from an export juggernaut to a credit addict. Who would have thought it necessary back in 2001, the year everything all started to work out for China?

That was the year the Chinese gained entry into the World Trade Organisation. The ascension to the WTO also coincided with the American Federal Reserve's loose monetary policy response in the aftermath of the NASDAQ crash. Exports surged, especially to the US, and China's current account surplus increased from a modest 2pc of its economy to a monumental 11pc, all by 2007.

This appetite for cheap Chinese exports, which had at one point seemed insatiable, means that we in the West have come to owe our largest Asian trading partner quite a hefty sum of money. China has become the world's biggest creditor, after amassing nearly $2.3 trillion of foreign exchange claims on us. However, the spectre of a creditor nation running persistent trade surpluses has ominous historical portents. It has happened only twice before, with the US economy in the Twenties and with the Japanese economy in the Eighties.

Economics is a cruel master and in both of the previous examples a failure to allow exchange rates to adjust to the new reality created a large speculative pool of credit that, in turn, led to overvalued domestic assets and, eventually, an economic crisis. Never forget that in economics, first can become last.

The China bulls assure us that this time it is different. Yes, the banks are lending money at breakneck speed, but look at what they are doing with it! They suggest a new era reminiscent of Protestant Capitalism. They want us to believe the atheist Chinese are prepared to work harder and defer their gratification for longer.

Undoubtedly, China's state planners have favoured investment over consumption. High-speed rail networks, first-class infrastructure projects and the urban migration of 55 million people every year are common explanations for the ability of the nimble Chinese to overcome the frailties of this global economy. But can too much of a good thing be bad for you? The goal of economic policy, after all, is to maximise households' wellbeing and consumption. Unfortunately, unlike in most countries, China's share of consumption within its economy has fallen relentlessly, reaching 35pc of GDP in 2008. Something isn't right.

The ancient ethical system of Confucius is silent on the subject of modernisation. There is no proverb counselling that "wise men not invest in over-capacity". Perhaps there should be: in China, investment spending has tripled since 2001 and the consequences are staggering. A country that represents just 7pc of global GDP is now responsible for 30pc of global aluminum consumption, 47pc of global steel consumption and 40pc of global copper consumption. The overriding problem is that the Chinese model leads to a deflationary spiral that is perpetual in nature. Domestic consumption never grows fast enough to absorb the supply, prompting the planners to commit to ever-higher levels of investment. Over-capacity inevitably plagues many sectors of the economy and Chinese profitability is already low.

Remember, it is one thing to create economic growth, but it is another thing to truly create wealth. If I commit to building a new commercial property in Shanghai I will undoubtedly contribute to GDP growth. However, if I have no tenants and the city already has a vacancy rate of 20pc, then I am probably destroying wealth.

Adam Smith taught us that real wealth comes not from piles of gold or their modern-day equivalent, the foreign exchange reserves amassed from a profitless succession of current account surpluses.

Rather, Smith suggests that real wealth is founded on the skills and productivity of a country's citizens. This is the central concern regarding the sustainability of the Asian economic model. Power without profit can prove ephemeral. This is an axiom the Japanese are all too familiar with. We cannot say we have not been warned.


http://www.telegraph.co.uk/finance/personalfinance/7219178/China-Hugh-Hendry-warns-investors-infatution-is-misguided.html


Comments: 44

China's problem is the same as Japan's circa 1990: a rapidly aging population. China's working age population peaks in 5 years. The iron law of demographic transition will bring the China story to an unpleasant end.
adam
on February 15, 2010
at 09:43 PM
Report this commentInteresting article - seems Mr Henry is not the only manager expressing concern: the New York Time ran an article a few weeks ago on James Chanos (who apparently built a fortune by predicting the collapse of Enron and other companies whose stories were too good to be true).

Apparently (if what the NYT reports is true) Chanos thinks that speculative inflows of capital could cause China huge problems and that the countries growth figures may be suspect.

Cynic
on February 15, 2010
at 07:00 PM
Report this commentSpot-on Mattias. I remember him on CNBC Europe banging the table for Potash stocks, they went on to crash. He missed the equity rally last year and is now a government bond fanatic. He has a big name due to ????
Bad Dreams & Stress.
on February 15, 2010
at 05:24 PM
Report this commentSpot-on Mattias. I remember him on CNBC Europe banging the table for Potash stocks, they went on to crash. He missed the equity rally last year and is now a government bond fanatic. He has a big name due to ????
Bad Dreams & Stress.
on February 15, 2010
at 05:23 PM
Report this commentSpot-on Mattias. I remember him on CNBC Europe banging the table for Potash stocks, they went on to crash. He missed the equity rally last year and is now a government bond fanatic. He has a big name due to ????
Bad Dreams & Stress.
on February 15, 2010
at 05:23 PM
Report this commentIn the summer of 2008 Hugh Hendry was a potash loving commodity super cycle bull. In the autumn he changed his mind and became a deflationary Prechter wannabe.

I think he's great fun and interesting, and he's probably a great money manager, but his forcast record is not that impressive.

I think his problem is that he always wants to be the contrarian. Everybody wants to be a contrarian today, but it's easy to forget that most contrarian calls turn out be wrong. It's just that we remember the good contrarian calls som much better.
Mattias
on February 15, 2010
at 10:34 AM
Report this commentOne thing I worry about China is that now they are a very wealthy nation and have built up massive military strength, if they ever face an economic collapse, how will the CCP react? They are becoming ever expansionist in their mindset. Will the neighbouring countries have to fear? What about Tibet - will they crush any possible desire for Tibetans for an autonomous land?

China is highly unorthodox and equally volatile.
Anton
on February 15, 2010
at 06:14 AM
Report this commentThere are numerous problems in China and there is no doubt the bubble will burst in the next few years. The heavy reliance on exports of cheap manufactured goods and being the factory to the world will come to haunt them.

China has to ensure it always keeps up with trends because the products they supply to the world will see a drop in demand as newer products replace the existing ones with better technology. Can their factories adapt and mass-produce these high-tech goods like they do cheap electrical goods and the like.

Its an economy that is manipulated by the CCP with so much government intervention with not much free-market practices. And these type of economies have never done very well in the long run because of the huge inefficiencies that plague it.
Anton
on February 15, 2010
at 06:14 AM
Report this commentWhy is everyone quacking on about property prices in select Chinese urban centres? This isnt the issue. At all.
The answer to why anyone would buy equities in Chinese companies is, do they expect earnings growth? Whether that earnings growth is stimulated by Govt. intervention (ie what we saw in Western stock markets March 2009 to present) or rising consumption or increased export growth is irrelevant. Its all about the earnings and whether they'll grow or not. And anyone who looks at the S Curve for Chinese growth and compares it with Japans in the 50's and Taiwan and Korea in the 70's and 80's and doesnt think Chinese companies will expand their earnings is a fool.
China is currently the worlds second largest economy. It's stock market capitalisation is currently the 9th largest. That is an anolomy which will correct when Chinas stock market becomes the second largest. And it will.
GC
on February 14, 2010
at 09:02 PM
Report this commentChina has never been investor friendly.May be the antagonistic properties may have come down off late.
However the curbs and civil rights restrictions make business difficult for any organisation from west.
Any product or brand will be easily out priced by the china manufacturers.
Comparatively India has been found to be a more compatible and safe place for investment. After China India is the fastest growing economy, and a politically and geographically stable place for investment.
The english speaking workforce are an asset for any investor.

Shyam
www.twitter.com/shyam17
Shyamsunder Panchavati
on February 14, 2010
at 07:27 PM
Report this comment"The goal of economic policy, after all, is to maximise households' wellbeing and consumption." Err...no it isn't. That is like saying that a company's first reponsability is towards its shareholders. Just doesn't work.The chinese for the moment seem to be more intent on getting the country to function and households be damned if necessary. The economic policy you mention seems to have gone down like a fart in a spacesuit in the UK yet the Chinese are supposed to follow suit??? Something isn't right...
Jez
on February 14, 2010
at 05:46 PM
Report this commentFor anyone looking at investing in Chinese equities the issue is not just whether China's impressive GDP growth can continue. Even if it does for a some time yet there have been many studies from around the world showing little correlation between GDP and equity price behaviour. Consider that more businesses being set up can increase GDP but lead to less profit per company ie making existing equities less attractive. Alternatively, additional or simply higher taxes might be levied on companies reducing their net profit and hence ability to pay dividends. Since Chinese equities currently have relatively modest yield they are assuming high dividend growth to come. Hence that's making a oneway bet on the China's export markets being able to absorb all the new output from its investment boom. Seems to me the US & Europe will be lucky just to flatline over the next few years.

Regarding people's criticism of Hugh Hendry, i have an interest in his hedge fund and so always listen to his views. Yes, he can come across as a bit theatrical and sometimes arrogant but those foibles/traits don't detract from the soundness of his views. Unlike many he does give them fairly unambiguously in public and acknowwledges when he's been wrong - far better than many other in the financial industry who either withold their predictions or give them with enough wriggle room to always claim to be right afterwards whatever happens.

For anyone interested, a link to one of his walkabouts in Shanghai is http://www.youtube.com/watch?v=ektMQGbW3wk
Luke Knight
on February 14, 2010
at 04:38 PM
Report this comment@ Trevor Corning

when you adopt an English name to post your Chinese Government sponsored (50 Cent) postings - you need to do at least a spell check. Remember- criticism of a Government is not a bad thing, it is essential to its future success and prosperity. 50 cent posters and their ilk are deeply unpatriotic.
Puppet hunter
on February 14, 2010
at 01:45 PM
Report this commentAs an earlier posted link says - we do not want the UK govt to run businesses so why should we accept the Chinese can do any better? Especially when it is a govt without any need to achieve consensus from the electorate. Growth fuelled by cheap exploitable labour only has a limited lifespan. A nice cleansing correction is only natural - would be somewhat foolish not to plan for it.
Tiger
on February 14, 2010
at 01:36 PM
Report this commentI would always take what a hedge fund manager has to say in public about a country or a company with a huge pound of salt; they have a terrible reputation of talking their books in desperate attempts to salvage their losing bets; and if any one here has viewed his posting on Youtube on Shangahi property on one of his rare trips to the far east, probably would agree he paid local "news agents" the way the NYT or WSJ pay such agents for human rights stories. How else could he know which new development are vacant on his occasional trips to the far east? One certainly has take note of the huge amount of speculation in asian real estate, but nothing compares to UK, Australian or Spanish prices skyrocketing of the past decade. Sure we all hope a competitor does badly, but it is unmistable for frequent travellers to the far east that Adam Smith's principles are adhered to in far larger extent than the socialize debt, privatise wealth formula of a UK with totally disfunctional manufacturing sector, a soon-to-fail Europe and the champion of socialist states, the US of Zimbawe.
Trevor Corning
on February 14, 2010
at 01:21 PM
Report this commentThe Chinese are good, really good. They are better than anyone else in the world at blocking the internet, at censorship, at national repression of human rights, holding millions in gaol for political discension, at building cities and malls which are unoccupied and even better than the British and Americans at massaging economic data and calling it growth. they even excel in stupidity by investing most of their nation's saving in American paper which means that America could bankrupt them through devaluation and massive inflation which ofcourse is planned. If anyone wants to believe the statistics of these evil morons then good luck. I do not. Roger
Roger Levinson
on February 14, 2010
at 01:12 PM
Report this commentDaliankid
on February 14, 2010
at 08:49 AM

"everything is made to look good on the outside, but once you look inside, it is hollow.."

sounds uncannily like the UK
wasted
on February 14, 2010
at 12:57 PM
Report this commentRichard Branston - I'm not sure we have done business in the same China. Your views on the honesty and integrity and ease of doing business with the Chinese does not reflect mine nor 95% of the expats I have known over my almost 15 years in China.
Steve
on February 14, 2010
at 11:48 AM
Report this commentI spent 9 years living in north China. Every employee in our company got loans from the banks to buy houses they could not afford. Once the jobs stop, they will be literally millions and millions of bad loans. I guarantee it. In China, everything is made to look good on the outside, but once you look inside, it is hollow. Everything from the grand openings of businesses, to the construction techniques. I would get out now. It may grow another 5-10%, but you need to lock in those gains
Daliankid
on February 14, 2010
at 08:49 AM
Report this commentToo much talk of property here which is not the main driver in China. It is a gamble and the Chinese love a gamble with the risks involved which they fully understand.

What is fundamental is the work ethic of the Chinese which is being rewarded slowly.

When I first traded in China 25 years ago the infrastructure was terrible and risks of running any production high and quality in the main low.

Workers moved from the countryside,and still do in state organised moves of course, and lived in dormitories miles away from anywhere but they had paid living and food and sent as much home to the country as possible.

Nowadays many workers have transport, modest maybe like an electric moped, and live in apartments which they pay for although dorms are still available free. However they have improved their lifestyle and spend money on all those western style things like mobile phones but in the main made in China. Nothing wrong with that.

Production quality has improved and it is rare indeed to find the old sweat shops of old. Thing is though that one can choose the quality of production as factories are set up to reflect that in pricing and that is the trick in the area, choose the factory to fit your requirements carefully and control inspection yourself.

Find a problem on getting a new product into production? No problem - the tooling guys for example will work all night on the mods necessary to be up and running next day. This is a fantastic work situation which over the years has produced great products for me, all designed in the UK but production engineered in China.

In amongst this I have made many long lasting friendships with Chinese people who I trust and they trust me. It is not just based in the next order as happens so often with westerners not prepared to make the good relationships they would consider normal in the West.

So China may have ups and downs but I continue to back them and they me and we are having a good old time getting new stuff out which the markets want.

Kung Hei Fat Choi!

Richard Branston
on February 14, 2010
at 08:49 AM
Report this commentThe debt growth in China says it all. China was already growing fast, asset prices were bubbly and not that corrected last year,so this new burst of debt cannot be healthy. Maybe the recent harshness of the regime is a sign of nervousness?
slrachmont
on February 14, 2010
at 06:46 AM
Report this commentThe problems of overcapacity and excessive credit creation are well documented. There will surely be some kind of banking crisis within the next five years as many of these loans turns sour. But that does not make China a ponzi scheme, or mean that the progress there is not real. Even after the Wall Street crash and the depression, the US went on to become the dominant superpower in the second half of the century. Japan's bust happened at a different stage of the country's development. If you want to talk about wealth creation, the fact is that per-capita income and standard of living have remained very high in Japan since the crash.
China's asset markets probably are too hot at the moment. A bigger bubble may be in the process of inflating. But on a longer view, China is developing and it's economy will get bigger. It is following the same trajectory as Taiwan, South Korea and the other Asian tigers, only on a much, much bigger scale.

matthew
on February 14, 2010
at 06:46 AM
Report this commentI live in Beijing, have done for a decade. I made quite a bit of money on real estate but exited early last year. Got the timing 'wrong' as could have made another 20%. However - no regrets. You only have to walk the streets of this city and especially other secondary and tertiary cities to see the enormous inefficiencies in investment to realise that a sharp adjustment down will come.

"Build and they shall come" is a favourite remark of ours when we see the latest white elephant standing unused and decaying.

Loans creates fabulous headline grabbing wealth for a few, some paper wealth for many but precious little substance to the masses. When you look at China be careful to separate 'real wealth' creation from asset price rises. A trip to the bureau that taxes house sales is an absolute eye opener on where much of the money comes from. Or drive around huge multi-lane roads in large soulless high rise new towns with enough cars to justify a single road and not enough people for a village.

My non-professional assessment is that there will be a dramatic crash once people who have brought property on speculation realise that eventually some one has to live in it and pay the rent.
Bermused
on February 14, 2010
at 06:37 AM
Report this commentoldasiahand,

I have no idea whether Hugh Hendry has spent much time in China. I suspect that some people who have spent time in China lately are so dazzled by the astonishing scale of building they have seen that their critical faculties are impaired.

You know, if I had been out of the United States for fifteen years and someone showed me the immense McMansion subdivisions, I would probably think the country had become much wealthier in my absence.
Psittakos
on February 14, 2010
at 06:15 AM
Report this commentGood article. Almost time to sell China, sell metals, and sell Australia.

No ... wait. China is sure to use economic collapse as an excuse for war on Taiwan. They've had plenty of time to prepare for that. War will restimulate their economy, just as a junkie turns to stronger drugs. And a war footing will help stave off the social upheaval that the government fears most of all.
R Hughes
on February 14, 2010
at 06:14 AM
Report this commentLike oldasiahand, I too have spent decades in the region - Taiwan, Hong Kong & Macau - and concur with him on the 'reality' of the progress made by China and other states in this part of the world. No romanticism here, just eye-witness experience. The reality of modern China has come about because of the genuine work ethic of its people and dare I say The System (label it any way you like), a system that enables economic policy by the 'nimble Chines'to be enacted with the turn of the political tap. On/off, easy as that. By comparison, the West resembles an ocean going liner taking three miles to change economic direction. The biggest concern China has is that its central and western regions are denied a piece of the cake. The cadres are therefore adamant that growth continue to a minimum of 8%p.a., which is where they see potential social flashpoint territory. Greece is a sideshow? Greece is now.
Anotheroldasiahand
on February 14, 2010
at 06:11 AM
Report this commentWhat is Hugh really warning about? He is warning of a secondary correction which is long overdue in China.

All growth stories need to have corrections to get rid of the excess. All western nations went through periodic periods of this.

Nothing fundamental in that. Make no mistake, China will modernise - simply because the government wants it to. But dont expect a western modern economy. Its gunna be a Chinese one, so if you dont know how to invest in that environment - u better leave.
Tom
on February 14, 2010
at 06:10 AM
Report this commentTo:
oldasiahand
on February 12, 2010
at 10:04 PM

To make a statement such as this "To quote Robert Prechter as this articles does, is to quote an all time loser in the financial markets" is a clear indication that you are delusional.
LT
on February 13, 2010
at 12:20 PM
Report this comment@oldasiahand,

Not sure what you mean by the transformation being "real." When you spend more than 50% of GDP on fixed infrastructure investment and banks lend money on quota at zero percent interest through fixed fee loan brokers, I suppose the effects of radically loose, centrally managed monetary policy look pretty "real." Things get built, people get pay checks, and everything "looks" like a real, functioning economy. This, particularly, when the government controls the flow of information and money in equal measure and, in self-serving fashion, fans the flames of resurgent nationalism so that any mention domestically that something is not right with the China miracle is shouted down (or completely censored out) as anti-Chinese. Bhah! You are a panda hugger, plain and simple. All that is necessary to know that you are wrong is to look at the facts rather than the romantic delusions of an "old China hand."
Ortiz
on February 13, 2010
at 06:25 AM
Report this commentThe Chinese overcapacity bubble will soon bust.

- South China Mall, the second-largest shopping mall in the world (second only to Dubai Mall), opened in 2005. It has 1,500 store capacity, 7.1 million square feet, and 99% of its space is empty.

- The city Ordos was built in Inner Mongolia for 1 million residents on spec. Ordos is a ghost town; it is empty.

The Chinese government lies:
http://tinyurl.com/yaxlqm9


Barry
on February 13, 2010
at 06:19 AM
Report this commentChina does not have the ability to absorb the capital inflows that the US did for many years as the consumer of last resort. Already they are turning off the spigot because off inflationary pressures.

When people realize this, and look at a world of over capacity, we will fall into a new and deeper crisis. Greece is just a sideshow.
purple
on February 13, 2010
at 06:07 AM
Report this commentChina's overcapacity is scary for a world which is looking for it to be our new engine of growth.
1931
on February 12, 2010
at 11:31 PM
Report this commentIt is easy to fall in love with the China story and it is almost as easy to ridicule it as Hugh Hendry does here. To quote Robert Prechter as this articles does, is to quote an all time loser in the financial markets. in fact I wonder if Hendry has ever been to China and, if so, for how long. I have been living in and studying Asia for 40 years. I have seen the transitions there and they are real.

The truth is that the transition in China is real and the progress is real. It does not mean there will not be big problems ahead.I'm sure there are. Some will be internally created and others created by a frightened west that fears losing its two century dominance of the global economy.

China is not just any emerging economy such as Brazil. It is a reemerging superpower reclaiming its historic seat at the top table. When Marco polo went to China seven centuries ago china and india amounted to 70 percent of the global economy. in 1950 they were about 10 percent and today perhaps 20 percent. China is on its way to becoming 20-25 percent of the global economy in 15-25 years. the journey will not be smooth or certain but it has momentum. it is more akin to the opening up of Americanin the 1800s than it is to the implosion of Japan after 1990.
oldasiahand
on February 12, 2010
at 10:04 PM
Report this commentSA-Stimulus for infrastructure for which the majority of a population cannot use because their income is so low, looks good, but, of course, is largely useless at this stage.

Peter K-The markets for gov't debt is precisely what stands in the way of a gov't destroying its citizenry via inflation. If you think 'speculators' in gov't debt are evil, then you sadly do not understand the function nor role of markets.

China is clearly running a bubble economy. If the infusion of credit isn't a sign of a terminal credit bubble phase, then I don't know what is. It will end badly and likely soon.
Sonny
on February 12, 2010
at 09:51 PM
Report this commentI agree totally with the Chinese article.Something is not right.The west have not suddenly started buying again,yet the chinese economy powers ahead-it must be on borrowed money.Look where that got us!
Dr Joe
on February 12, 2010
at 08:58 PM
Report this commentHugh,

Your performance on Newsnight was superb. People just don't get it that hedge fund managers know what is about to happen and put their money where their mouth is without having to mislead unlike bankers and polititians.

I would like to see more of you and your views on TV since it is about time people knew the truth of how bad the polititians they voted for have messed up, and of what is to come.

George
on February 12, 2010
at 08:39 PM
Report this commentHugh,

Your performance on Newsnight was superb. People just don't get it that hedge fund managers know what is about to happen and put their money where their mouth is without having to mislead unlike bankers and polititians.

I would like to see more of you and your views on TV since it is about time people knew the truth of how bad the polititians they voted for have messed up, and of what is to come.

George
on February 12, 2010
at 08:39 PM
Report this commentAlthough anti-capitalists and socialists are no doubt breathless over the Chinese "miracle" of central planning and would love to see it spread to every corner of the planet, the story that I have heard more than once is that Chinese peasants have been getting loans and buying commodities such as physical copper and storing it on a speculative basis. I view this as the equivalent of getting your market tips from the shoeshine boy.... time to leave!

Whether you like Hendry or not, view him as an arrogant smug jerk or not is really irrelevant. He is most likely correct; has any other economy anywhere else ever posted those type of growth rates? I didn't think so.
TR
on February 12, 2010
at 08:18 PM
Report this comment9% growth every quarter for almost 10 years? Chinese corruption is unparalled. Their books will make Enron look like a well-run and profitable enterprise. And just for the heck of it, throw in 1billion uneducated peasants into the equation.
Chairman Mao
on February 12, 2010
at 07:08 PM
Report this commentThey are going under.
GEOFFREY
on February 12, 2010
at 06:23 PM
Report this commentThis is why Chinese leaders want to change their policy. They know it, but it is too late too little. They are afraid of unrest. They have to keep massive lending until....
GEOFFREY
on February 12, 2010
at 05:50 PM
Report this commentEverywhere has overcapacity. Hugh appears to be a China expert now or he is just speculating. But he has sufficiently demonstrated his ego/arrogance. Only he knows and only he is correct. And he is recommending to buy US Treasury?
Mr. Hugh can show your real trading activities for your career? Let us see how good you are.
SS
on February 12, 2010
at 04:39 PM
Report this commentIf I am not mistaken this article is by the utterley obnoxious man who appeared recently on Newsnight. If ever the hedge-fund industry (I use the term loosely) could find a more typecast individual to live up to its villanous reputation. I would certainly treat almost anything this man puts into the public domain with extreeme caution given he presumably wants to point the herd in one direction before heading the opposite way.
Peter Kinnaird
on February 12, 2010
at 01:30 PM
Report this commentThe state planners used much of the increase in lending to bypass the budgetary process in funding stimulus projects. The surge in lending should be seen as classic stimulus. Much of the money goes towards infrastructure improvements that are much needed.