SAVINGS CULTURE

[rffrydr]

Feet-on-the-ground case study on this global powerhouse who's seemingly intractable savings-rate represents half of its GDP. If you guessed the Confucian tradition combined with healtcare has something to do with it, you're right:

http://downloads.bbc.co.uk/podcasts/worldservice/docarchive/docarchive_20090903-0906a.mp3


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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Only 10% arable land--and growin' on every square inch of that....I don't think Healthcare is going to go too far in curbing this savings instinct.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Savings Culture, yes. Savings in Western Banks, no. It is a measure of the strength of our asian convictions that fully a decade after our bank's "investment" in which we were left holding nothing but a chinese stock that the FT, for example, can still stand there shaking its finger:

BofA: tricky decisions in Asia

Imagine you’re David Darnell or Tom Montag at Bank of America. You have just been promoted to run the bank’s consumer businesses in the case of the former or the investment bank in Mr Montag’s case. Cost cutting is a priority. Already your boss has said publicly that up to 30,000 jobs will be reduced across BofA’s consumer bits before the knife turns to investment banking. Understandably, you want to delay the hard decisions: so you get started with Asia.

Predicting the future of banking is tricky, but one thing for certain is that as the developed world begins a long period of deleveraging, fast-growing regions such as Asia simply must have deeper and more sophisticated financial systems. For BofA, Asia is already outperforming all other markets in terms of growth. Even excluding China (BofA owns 5 per cent of China Construction Bank), its total exposure to Asia exceeded that of all other emerging markets combined last year.

So when Mr Darnell compares his 550-odd wealth advisers in Asia with the 15,500 in the US, say, it seems obvious where the axe is more likely to fall. Indeed, the reality is that anything consumer-facing stands a better chance of success in Asia than in BofA’s home market. The trickier decisions, therefore, are to be found in investment banking. That is because while BofA is pumping talent into the region – for example, five new business heads have started since 2010 and 80 per cent of the MSCI Asia Pacific index is now covered by the bank’s equity analysts – so is everyone else.

BofA is ranked fifth by share in Asian equity research, but barely makes the top 10 in equity trading and flow derivatives. It is nowhere in fixed income, commodities and currencies. All these businesses demand scale – in Asia, as everywhere else. BofA must aim for top three, or nothing at all.

Not only are banks a national(istic) enterprise in china, western banks are the anti-bank

Just list their companies, finance the onslaught of investment here, and advise the great tide who will come to the same for advice.
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Today is the Tomorrow you worried about Yesterday!

[diesel]

Yeah my feeling is that market forces may be forcing ‘currency adjustment’ from that angle as China undergoes the transformation from employment growth via exports to employment growth via domestic demand. World demand for their exports remains on the soft side for now...
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All cats are gray in the dark.

[rffrydr]

Hey, D. JPM looking at it from the inside:

http://ftalphaville.ft.com/blog/2010/10/19/374286/dont-fight-china-upgrade-it-says-jpm/

That direct investment will be interesting to follow.
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Today is the Tomorrow you worried about Yesterday!

[rffrydr]

Chinese rural consumption stimulus getting a typical cool western macro thumbs-down. But these are "first spenders." They're jump-starting a competitive purchasing culture in primary goods. And the social measure of dramatically reducing the rat population (thereby increasing food) is just what it implies....fundamental.
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Today is the Tomorrow you worried about Yesterday!