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 18
1/5
 It’s hard to know how significant this is, given the uncertainties created by the war, but April numbers were terrible for China. Industrial output grew 4.1% year on year in April, well below expectations.
bloomberg.com/news/articles/…
2/5
 For the first four months of 2026, industrial output grew 5.6%. Against this, retail sales grew by a measly 1.9% year on year in the first four months of 2026, and by a shocking 0.2% in April.
3/5
 Overall consumption growth is almost certainly a little higher, but it is hard to explain such a large gap between production and consumption except if more production is not resulting either in higher wages, higher profits, or stable household confidence.
Read 5 tweets
Michael Pettis Profile picture
May 17
1/4
 NYT: "President Trump departed Beijing on Friday, touting trade deals to sell American-made airplanes, farm goods and other products, the signature outcome of his two-day summit with Xi Jinping, China’s top leader."
nytimes.com/2026/05/15/bus…
2/4
 This is the kind of thing that confuses far too many policymakers and analysts. China's huge trade surplus is the result of income distribution and transfer policies that force Chinese production to exceed, by a large margin, China's total consumption and investment.
3/4
 The US trade deficit is largely driven by the extent to which economies with trade surpluses decide to balance those surpluses by acquiring US assets.

The purchase commitments last week will have no impact on either, and so won't change the imbalances.
Read 4 tweets
Michael Pettis Profile picture
May 16
1/12
Very good article by Greg Ip. I think the most important point he makes is this one: "The Achilles’ heel of Chinese industrial policy is its cost and waste. China runs bigger budget deficits relative to economic output than the U.S."
@greg_ip
wsj.com/world/china/be…
2/12
Most trade and industrial policy consists effectively of transfers from less favored to more favored sectors. In China's case this has meant very large explicit and implicit transfers from the household sector to subsidize infrastructure and manufacturing investment.
3/12
Other countries have followed similar policies, but this was taken to such an extreme in China that one result has been the lowest consumption share of GDP and the highest investment share ever seen in history (no other country even came close).
Read 12 tweets
Michael Pettis Profile picture
May 11
1/4
 According to Reuters, domestic car sales in China were down 21.6% year on year in April, even as car exports surged 80.2%. Everyone knows that domestic demand remains incredibly sluggish in China, but such sharp drops in domestic car...
reuters.com/business/autos…
2/4
 sales in the past seven months should still seem surprising, until we remember that much of the consumer-voucher programs of earlier years were directed at car purchases. This meant that Chinese households who had planned to buy cars anyway just accelerated their purchases.
3/4
 This has important implications. The consumer-voucher programs still get a lot of attention, and do cause a surge in purchases of the targeted goods, but they they mostly accelerate purchases that would have occurred anyway, and have no impact on total consumption.
Read 4 tweets
Michael Pettis Profile picture
May 10
1/7
 Bloomberg: "China pledged to step up efforts to defuse local government debt risk while supporting growth, as the State Council called for stronger policy execution in a challenging global environment."
bloomberg.com/news/articles/…
2/7
 Every few months for the past 4-5 years we have seen similar promises to get debt under control while maintaining high GDP growth rates, and every time I have the same response: China cannot do both, because the determination to maintain high GDP growth rates is...
3/7
 precisely what causes the surge in the country's debt burden. Because it cannot get consumption growth to accelerate without undermining the manufacturing sector, high GDP growth rates mean that the country must maintain high investment growth rates.
Read 7 tweets
Michael Pettis Profile picture
May 7
1/6
 SCMP: "The EU’s top trade official used her departing appearance at the EU Parliament to pour cold water on the prospect of an investment deal with China, hinting that new weapons for dealing with Chinese “macroeconomic imbalances” could be on the way."
sc.mp/6ku4s?utm_sour…
2/6
 Sabine Weyand said: “I’m not talking about a cyclical imbalance in trade, I’m talking about structural macroeconomic imbalances or what the IMF calls macro-industrial policy, which really suppresses domestic demand and creates durable imbalances in the relationship.”
3/6
 It is important to understand why the trade issue will be so difficult to resolve. In my 2013 book I argued that global imbalances had become unsustainable, and if they weren't soon reduced, a resurgence of trade conflict was inevitable.

In fact trade imbalances increased. Image
Read 6 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!

:(