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
Sep 15
1/7
 In August, both growth in industrial output and growth in retail sales came in well below expectations, with the former up 5.2% and the latter up 3.4% (compared to 5.7% and 3.7%, respectively, in the previous month).
english.news.cn/20250915/7a106…
2/7
 As always, the key point is that for all the talk of rebalancing, the proxy for output growth continues to outpace the proxy for consumption growth by quite a large margin.

Meaningful rebalancing requires that consumption outpace GDP growth by roughly two percentage points.
3/7
 Some analysts argue that the weaker-than-expected growth in industrial output may be evidence that Beijing’s attempt to rein in involution is starting to work. Industrial output growth in July and August came in at the lowest paces in all of 2025.
Read 7 tweets
Michael Pettis Profile picture
Sep 12
1/8
 Bloomberg: "China urged Mexico to “think twice” before levying tariffs, a warning that could signal Beijing’s willingness to retaliate over a move it sees as giving into demands from the US."
bloomberg.com/news/articles/…
2/8
 Mexico announced plans earlier this week to impose duties of as much as 50% on cars and other products made by China and several Asian exporters.

These are the kinds of stories I think we'll see more of in the next year or two.
3/8
 In the past ten years Chinese exports to Mexico have nearly doubled, and its trade surplus has surged, to $71 billion last year.

This bilateral evolution must be understood as part of a global shift.
Read 8 tweets
Michael Pettis Profile picture
Sep 12
1/14
Barry Eichengreen warns, correctly, that "The dollar’s international primacy isn’t eternal. To be sustained, it has to be actively fostered and preserved."

But why sustain the dollar’s international primacy? Is this merely a modern monetary fetish?
wsj.com/finance/curren…
2/14
While the primacy of the dollar is certainly good for bankers, financiers, and very wealthy owners of movable capital, what's much less obvious is the extent to which it benefits or harms American workers, manufacturers and middle class households.
3/14
Some analysts will argue that being able to transact in dollars benefits American exporters and importers by reducing currency hedging costs, but the more honest ones will acknowledge that the benefits are tiny, at best, and that their lack doesn't seem to hamper rivals.
Read 14 tweets
Michael Pettis Profile picture
Sep 11
1/10
Interesting new IMF paper on the extent of industrial policy subsidies to Chinese manufacturers and SOEs (to the extent information is available) and their impact on productivity.
imf.org/en/Publication…
2/10
It measures national-level cash subsidies, tax benefits, subsidized credit, and subsidized land, which collectively amount, it says, to a high 4% of GDP. The authors note that other subsidies exist, including sub-national subsidies, but these are harder to measure.
3/10
I'd include in the latter what is perhaps among the biggest subsidies, which is over-spending on logistical infrastructure. To the extent that these cost more in resources than they create in economic value, they represent a large transfer to the users of the infrastructure.
Read 10 tweets
Michael Pettis Profile picture
Sep 10
1/5
 Is the expansion in robotaxis driven by the needs of the economy or by policy decisions? This is not a topic on which I have much information or knowledge, but last week I told a Chinese friend of mine (a well-known economist) that I had heard that as many as 30% of the...
2/5
 cars in Beijing streets were Didi drivers (China's Uber). This struck me as an incredibly high number.

He told me that he thought in fact 30% might actually be a low estimate. He also told me that he believed Didi drivers aren't able to get more than one fare an hour.
3/5
 Whatever the real numbers are, no one seems to doubt that driving Didi or delivering packages has become the job of last resort for a worryingly high number of urban dwellers. If that's the case, it's not clear how improvements in the productivity of taxis or of...
Read 5 tweets
Michael Pettis Profile picture
Sep 10
1/7
 Although August CPI deflation widened year on year to -0.4%, compared to 0.0% in July and well above expectations of -0.2%, leading many analysts to worry that deflation in China is accelerating, I think prices actually did fine.
en.people.cn/n3/2025/0910/c…
2/7
 CPI was driven down mostly by a 4.3% decline in food prices, with core inflation up 0.9%, its sixth straight month of higher year-on-year prices. More importantly, in my opinion, month-on-month CPI prices were flat in August, after rising 0.4% in July.
3/7
 The fight against “involution” may be responsible for at least part of the deceleration in deflation in the past two months, although if this is the case, it leaves open the question of how long Beijing can keep deflation at bay.
Read 7 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!

:(