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
May 30
1/8
 In a piece for Caixin, Wu Ge, chief economist at Changjiang Securities, writes: "The economic fallout from the real estate slump has been masked in part by strong overseas demand for Chinese goods."

caixinglobal.com/2025-05-29/com…
2/8
 "If foreign demand takes a turn for the worse," he continues, "it will become clear just how important real estate is to stabilizing China’s economy."

He's right, and he makes a very important point.
3/8
 In 2021-22 China's property sector, after reaching some of the highest levels in history, began such an extended collapse that in any other economy it would have set off much lower growth and even recession. But there was no associated slowdown in China's GDP growth rate.
Read 8 tweets
Michael Pettis Profile picture
May 28
1/7
 Very good FT article on how China achieved its dominance in manufacturing, along with the cost both to China and to its trading partners: "Using a unique combination of industrial policy, subsidies and other state-support coupled with private sector...
ft.com/content/724431…
2/7
 entrepreneurialism and ferocious competition in China’s vast market, the country was able to sharply increase the share of Chinese producers domestically and internationally in many of the sectors, in some cases matching or exceeding foreign competitors’ technology."
3/7
 Because the subsidies and other state support mostly came in the form of direct and indirect transfers from the household sector, the huge expansion in China's manufacturing sector was also the flip side of the huge contraction in the consumption share of GDP.
Read 7 tweets
Michael Pettis Profile picture
May 27
1/4
 SCMP: "China has become the leading debt collector of developing countries, shifting from a net capital provider, “as bills coming due from its belt and road lending surge in the 2010s now far outstrip new loan disbursements”."

via @scmpnewssc.mp/gtrfe?utm_sour…
2/4
 It may not seem so at first, but this has trade implications. Some analysts have argued that if the US is successful in reducing its trade deficit, China can manage the process by redirecting its exports to developing countries.
3/4
 But if developing countries are going to replace any part of the US accommodation of global trade surpluses, they can only do this with rising deficits, which in turn must be financed with rising net capital inflows.
Read 4 tweets
Michael Pettis Profile picture
May 26
1/7
 SCMP: "Xu Lin, who helped draft Beijing’s five-year plan for decades while an official at the National Development and Reform Commission, has called...
scmp.com/economy/china-…
2/7
 for China’s annual growth target to be lowered for the next five years to 4%, factoring in the likelihood of a protracted rivalry with the United States and the need to solve deep-rooted structural problems in China."
3/7
 The country's GDP growth target is not the best estimate of what the economy can deliver in any given period but rather a target designed to achieve a growth rate that satisfies political needs.
Read 7 tweets
Michael Pettis Profile picture
May 22
1/12
This Liberty Street account of trade makes the same mistakes most mainstream American economists make when it comes to explaining the US trade deficit.

libertystreeteconomics.newyorkfed.org/2025/05/why-do…
2/12
Thomas Klitgaard notes, correctly, that by definition the US current account is equal to the excess of US investment over US savings.

But then he insists that causality can only run in one direction: from the internal account to the external account.
3/12
In other words, he claims that US savings and US investment are both determined by domestic factors (mainly low US savings), and because the former is less than the latter, the US must turn to foreigners to fill the gap.
Read 12 tweets
Michael Pettis Profile picture
May 21
1/9
 Martin Wolf says the world has three options in considering the future of the hegemonic role of the dollar. One is "continued domination by the dollar". Another is that some other currency, perhaps the euro or even the renminbi, replace it as hegemon.

ft.com/content/d96568…
2/9
 And the third is "a world with two or three competing currencies, each dominant in different regions."

The first option means maintaining the existing system, with all it problems, but I suspect that this may be much easier said than done.
3/9
 Since the GFC, there has been a transformation of the way in which we think about the global trade and capital regime, along with a growing bipartisan consensus in the US that the costs to the US economy, and especially to its manufacturing sector, have become unsustainable.
Read 9 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!

:(