1/4
As Beijing tries to limit the money entering real estate and wealth-management products, both of which have assumed bubble-like proportions in the past several years, it seems that money is now pouring into mutual funds, which were up 48% in 2020.
ft.com/content/e9a7f4…
As Beijing tries to limit the money entering real estate and wealth-management products, both of which have assumed bubble-like proportions in the past several years, it seems that money is now pouring into mutual funds, which were up 48% in 2020.
ft.com/content/e9a7f4…
2/4
Such is the frenzy for new funds that 20-30% of the cash raised by new equity funds is redeemed within six months. Investors seem to be churning new fund launches the way they churn IPOs, buying new funds for an expected pop in value and then quickly flipping them.
Such is the frenzy for new funds that 20-30% of the cash raised by new equity funds is redeemed within six months. Investors seem to be churning new fund launches the way they churn IPOs, buying new funds for an expected pop in value and then quickly flipping them.
3/4
This isn't an especially new problem in China, but it does reinforce the lesson – one we've seen many times before in many other economies – that you can't really control bubble-like behavior by clamping down on the symptoms of any particular bubble. If the underlying...
This isn't an especially new problem in China, but it does reinforce the lesson – one we've seen many times before in many other economies – that you can't really control bubble-like behavior by clamping down on the symptoms of any particular bubble. If the underlying...
4/4
structural liquidity conditions haven't changed, clamping down on one asset will only shift speculative excesses to another. For those old enough to remember the Japanese financial markets of the 1980s, a lot of this will seem pretty familiar.
structural liquidity conditions haven't changed, clamping down on one asset will only shift speculative excesses to another. For those old enough to remember the Japanese financial markets of the 1980s, a lot of this will seem pretty familiar.
By the way here is yet another article about further attempts by regulators to try to slow real estate speculation, this time by punishing banks that look the other way as property investors use personal and business loans to speculate on real estate.
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