Share this page!

Enter URL or ID to Unroll

You can paste full URL like: https://x.com/threadreaderapp/status/1644127596119195649
or just the ID like: 1644127596119195649

How to get URL link on X (Twitter) App

  1. On the Twitter thread, click on or icon on the bottom
  2. Click again on or Share Via icon
  3. Click on Copy Link to Tweet
  4. Paste it above and click "Unroll Thread"!
  5. More info at Twitter Help
Michael Pettis Profile picture
@michaelxpettis
Sep 2, 2019 • 4 tweets • 2 min read • Read on X
Nobody who bought Argentine bonds in this century was making a long-term investment decision about the country’s eventual ability to grow out of its debt, at least nobody who should be allowed to manage a bond fund. They were all...
ft.com/content/5cfe7c… via @financialtimes
@FinancialTimes ...speculators, hoping to ride the short-term wave and get out before Argentina was back against the wall which, given the debt burden, everyone (except the IMF, apparently) knew was just a question of time. That’s why there is no reason Argentina’s creditors – those who bet...
@FinancialTimes ...and lost – shouldn’t be forced to accept the loss and take a major haircut, the sooner the better. Restructuring the debt with IMF support just means bailing out speculators and rolling out the loss over many years, during which time the Argentine economy will do worse...
@FinancialTimes ...than ever. The history of sovereign debt restructurings is the history of making the same set of mistakes made over and over again.

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Michael Pettis

Michael Pettis Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @michaelxpettis

Michael Pettis Profile picture
Nov 30
1/10
WSJ: "What saves American finance is the dollar’s status as the must-have global asset and trading currency. Both roles face challenges, though, and the more the U.S. exploits foreigners, the higher the risk they look elsewhere."

via @WSJwsj.com/finance/invest…
2/10
While this is widely believed, it isn't true. Foreign capital inflows don't fund fiscal deficits. They fund current account deficits, and they must be matched domestically either by higher US investment, higher US unemployment, or higher US household and fiscal debt.
3/10
For those who understand accounting identities, these are the three main ways foreign inflows can result in wider gap between investment and saving. When there is an increase in net foreign inflows, in other words, one (or some combination) of these must occur.
Read 10 tweets
Michael Pettis Profile picture
Nov 28
1/12
Weijian Shan is right: China does need to let the renminbi rise, and substantially. An appreciating currency would "subsidize" imports and "tax" exports – the opposite of what tariffs are supposed to do. Given that households are net importers...
ft.com/content/5bb8ed…
2/12
and manufacturers are net exporters, an appreciating currency is effectively an income transfer from manufacturers to households.

This, as former PBoC governor Zhou Xiaochuan explained many years ago, would be a very effective part of the income rebalancing process.
3/12
In fact any policy that correctly rebalances the distribution of income towards more domestic consumption works the same way, raising the household share of GDP – by increasing wages relative to productivity, raising interest rates, expanding social welfare spending, etc.
Read 12 tweets
Michael Pettis Profile picture
Nov 28
1/8
 Xinhua: "China aims to "achieve a notable increase in household consumption as a share of GDP," and to increase the role of domestic demand as the principal engine of economic growth over the next five years, according to the new MIIT plan".
english.news.cn/20251127/5539c…
2/8
 But while everyone in government now acknowledges the urgent need to raise the consumption share of GDP, and wants to be seen doing something to achieve the goal, it isn't clear that they know what to do. This new "comprehensive" plan "to improve the alignment of...
3/8
 the supply and demand of consumer goods" seems mainly to focus on producing more and better consumer goods, as if the problem in China is that households have plenty of money to spend, and are eager to spend it, but just don't have anything to spend it on.
Read 8 tweets
Michael Pettis Profile picture
Nov 26
1/18
Martin Wolf wonders whether the US or China will be the first to abandon its current follies on trade imbalances, but I don't think this is the right way to understand the current "fracturing" of globalization.
via @ft@ftft.com/content/b5157c…
2/18
As I see it, everyone (even Europe, eventually) is relearning what we used to know: a highly globalized trading regime can only work when all major economies choose more or less the same tradeoff between global integration and economic sovereignty.
3/18
That's because economies that exert more control than their trading partners over their external accounts (i.e. choose more economic sovereignty and less global integration) are also able to exert more control over their internal accounts, i.e. they are able to structure...
Read 18 tweets
Michael Pettis Profile picture
Nov 26
1/7
 Good FT article on declining investment growth in China: "A sharp decline in reported investment in China suggests President Xi Jinping’s campaign against excessive industrial competition may be having an impact on the Chinese economy."

via @ftft.com/content/008738…
2/7
 While some of the decline may reflect “a statistical correction of previously over-reported data”, as Goldman suggests, at least part of it shows that Beijing's battle against involution is working.
3/7
 But here's the problem. The massive, post-2022 surge in investment in the industries that later suffered from involution was no accident. It was the engineered response to the collapse in property investment after 2021-22.
Read 7 tweets
Michael Pettis Profile picture
Nov 26
1/14
This very good Robin Harding article points out that the purpose of trade should be the exchange of goods, and not the mercantilist accumulation of assets abroad.
ft.com/content/f294be…
2/14
However he makes a mistake when he says: "There is nothing that China wants to import, nothing it does not believe it can make better and cheaper, nothing for which it wants to rely on foreigners a single day longer than it has to."
3/14
That is not why China (or any other surplus country) doesn't import nearly as much as it exports. There are always foreign goods that people would like to import, especially from Europe, and in a well-managed global trading system, even in the extremely unlikely case that...
Read 14 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us!

Send Email!

:(