Economist Feb 15th 2014

《The parable of Argentina》

  • Embraced Washington consensus in the 1990s but the crunch in 2001 left it permanently suspicious of liberal reform
  • Argentina’s decline has been largely self-inflicted: protectionism, prefer quick-fix rather than thorough reform of the country’s schools

《A century of decline》

Three deep-lying explanations:

  • Rich but not modern 100 years ago: low literacy rates, lowest secondary-school attendance;
  • Being out of sync with the rest of the world, trading policy: the divide between farmers and workers;
  • Not evolving political apparatus, short-termism;

《The petrostate of America》

  • Franking: should have added 2-4% to American GDP;
  • Oil boom, owed less to geological luck than enterprise, ready finance, and dazzling technology;
  • Foreign policy might not change, but energy policy should: lift the oil export ban, getting permits of gas export more easily; generating cash to pay foreign policy dividends; also might cause domestic gas prices to rise a little;

《Saudi America》

  • Turn America into a swing producer; make both dollar and the economy less sensitive to oil prices;
  • Back to stabilizing role it played in the 1960s;
  • Crude-oil could start more or less straight away; but the political debate is only in its infancy;

《TV star》

  • Advocating of consolidation: more power to negotiate with content companies; margins only 50% compared to broadband 100%;
  • Financial discipline, better control cost than conventional Hollywood boss;
  • “Not the best at innovating, but the best at scaling others’ innovations”

《Fixing forward guidance》

  • Specific threshold of Fed and BoE: 6.5% and 7%; they are muddying them now;
  • Fed downplayed; BoE scrapped the unemployment threshold – a clearer message;

《Closing the gap》

  • Gap between actual and potential output, hard to discern; three different indicators tell different stories;

《The growth paradox》

  • No link between economy growth per capita and stock market returns: “value” effect; stock market not a perfect representation of the domestic economy (real dividend growth more slowly than the economy);

《No profits, we promise》

  • JD is pursuing an “asset-heavy” model that puts scale and market-share above short-term profits;
  • Two big questions: logistic infrastructure and local rivals (Tencent and Alibaba)

《A number of great import》

  • Current account surplus narrowed to only 2% of GDP last year; but by far the largest services deficit in the world (already helped by less competitive yuan, which rose over 7% last year);

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