“Beauty is truth, truth beauty --- that is all
ye know on earth, and all ye need to know”
In 2010, even the most romantic of poets would be hard pushed to write anything nice about Greece. Its debts and deficit (13.6% of GDP) have caused panic in the equity and capital markets with the S&P 500 off 12% since 23 April and the Euro touching its lowest level in four years against the US dollar on 19 May ($1.2144). But Keats had an explanation for this, too. He said that beauty and/or perfection can only truly exist in an artificial state such as a painting, sculpture or marble urn. Human beings, on the other hand are imperfect (ergo economic management). We live life experientially (which is a posh word for ‘trial and error') and the sooner we realise this, the better. So let’s not be too hard on our Hellenic neighbours; remember they ruled the known world in the fifth and fourth centuries BC.
China is endowed with great art and a great Ancient, Imperial and expansionist history dating back to 2100 BC; but it is also imperfect and has learned, like we all do, from empiricism. Right now it is sitting on its hands in terms of fiscal and monetary tightening – and on the value of the Yuan against the dollar. Quite right too, as its biggest trading partner (a fifth of exports go to Europe) wobbles and the Euro tanks (off 14% against the Yuan in four months); and the dollar appreciates against all major currencies. Shanghai was also the first major global mark to enter bear territory and last week was the worst for 15 months.
That said, the Market rose 1% on Friday and 3% so far today and the Country’s national pension fund said it would invest $2 billion in the forthcoming World record IPO of AgriBank, the third largest domestic lender. Similarly Geithner (Mr) and Clinton (Mrs) are in Beijing today pressing the flesh and offering words of praise and co-operation; the former also said that a Greece-triggered debt crisis should have only a small effect on the broader global recovery. Finally, the very wise Birinyi Associates in New York said that “if we assume the bull market ended on April 23rd, it would be one of the weakest and shortest gains in the last 48 years. A more likely scenario is that the current bull market is experiencing its first official correction. Investors should buy. In each of the 13 rallies since 1945, the market bottomed and rose to a new high”. Truth is beautiful.
- Stocks rise on China policy speculation
- US seeks “more open” China and balanced growth
- Hu says that China intends to move gradually and independently on the Yuan
- Clinton urges “level playing field” in China trade
- China Pension Fund invests $2.2 Billion in Agricultural Bank
- Investment banking boom
