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8 Oct, 11 tweets, 8 min read
1. Is financial market pricing in some heightened Taiwan Strait war risk this week? Yes, a little. No perfect measure. With China on holiday last wk, can attribute some pop of 5-yr CDS price as caused by heighted attention, which happens around Oct with back to back national days
2. To put in context, China 5 Yr CDS value is 48.87, reveals a 0.81% implied probability of default, on a 40% recovery rate supposed. US 5 Yr CDS is 17.4, reveals a 0.29% implied probability of default. Recent increase in US mostly by the debt ceiling fight. #MintTheCoin hahaha
3. @PredictIt betting market doesn't have a Taiwan specific market, but has 3 China related contracts. Betting on who would be confirmed for next US Ambassador to China, and Pres. Xi's chance of staying as party General Secretary for next 10 years.
4. The 3rd China related @PredictIt contract is interesting. The law is changed for President to continue beyond 10 yrs, but for Prime Minister of China is still term-limited. I guess having a contract with Hu #Chunhua and no one else suggest high odds? en.wikipedia.org/wiki/Hu_Chunhua
5. Eternal optimist, still believe these political and economic attention on Taiwan is Oct. being Oct, plus TW DPP local politics with coming referendums. The WSJ news on US Special ops in TW is news to a point. It is already somewhat suspected last yr.
6. Here comes the fun. Both sides released an air force video. TW quoted late Air Force colonel and flying ace Kao Chih-hang (高志航, 1907-1937), which read: "As the Air Force, how can we allow enemy planes to fly over our heads!" Yes, 1937.
taiwannews.com.tw/en/news/4308665
7. Call me naïve but I think both air force videos actually played down the conflict and used restraint and appealed to domestic audiences for grandeur. The Chinese language used is fun to listen because it refers to each other as if it is year 1946.
@threadreaderapp unroll #Taiwan #China #conflict #Financial #risk #CDS #default #probability #US #marine #airforce #Referendum #political #predictions
No, I didn't make this up!

Pres. Xi Speech on Taiwan given for 110th anniversary revolution. As expected, language spin of existing doctrines.

The first shot of that revolution? It is two army men who couldn't take each other any more and discharged while having a fight.
Only Wiki's Chinese has the details.

Soldier walking around.
Commando: What r u doing? R u having a revolution?
Soldier: Revolution, Revolution, Yes, I am having a revolution!

Hand combat, then accidentally discharged the first shot for the revolution.
zh.wikipedia.org/wiki/%E6%AD%A6…
The rest history of XinHai Revolution that leads to the first Republic in China is clustered with details, I mostly have returned everything back to the HS history teacher. Every shortcut you took when young will come back and bite you at middle age.
en.wikipedia.org/wiki/Wuchang_U…

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More from @liqian_ren

Liqian Ren Profile picture
9 Oct
4. Is this regulation something new? It is officially codifying existing facts on the ground. The rumor is after the Edu regulation debacle/Edu Minister fired, this is govt trying to set it officially, so private capital doesn’t come in, then got banned, raising another uproar.
5. Will @caixin_intel /@Caijing be banned now? Likely not. They are state owned media, as Twitter labelled them thus, even though in China, they are considered somewhat opposition media and got article censored left and right.
6. What about Weibo/Tencent? First order effect are small because they were only in news distribution business, never in having actual journalists and news creation business. But there are some secondary effects.
Read 9 tweets
Liqian Ren Profile picture
7 Oct
1. Another question I constantly get: Can Chinese data be trusted? High Frequency data shop like Baidu or other private data source advertise their data showing similar thing as govt economic data, but more real time = acknowledgement of recent higher quality govt economic data.
2. Around 2014, the central government was extremely concerned that several northern provinces’ reported GDP numbers were overinflated by local officials. In 2016, the LiaoNing province in the north was asked to reduce its reported GDP figure by 22.4%.
3. 2018, after the fourth national economic census, 12 out of 15 northern provinces’ GDP estimates were adjusted lower, while 14 out of 16 southern provinces were adjusted higher. Jilin and HeilongJiang, both northern provinces, have respectively been adjusted down more than 20%.
Read 6 tweets
Liqian Ren Profile picture
6 Oct
1.@AmbassadorTai not a trade but US Industrial Policy speech: "make smart domestic investment to increase competitiveness. invest in R&D and clean energy technology, strengthen manufacturing base, incentivize to Buy American up and down the supply chain." Self reliance anyone?
2. I thought I was the optimistic one for both US and China, but Marko Papic of Clocktower argued that in the near future, US-China relationship will get WORSE AND both US and China will have growth that surprises on the POSITIVE side!
3. In some way, it's not an unreasonable proposition. Both US/China are going to invest heavily at home in human/physical capital, which should bid well for near term growth. It's easy to see China/US in an investment race. The bills coming out of congress are in Trillions.
Read 7 tweets
Liqian Ren Profile picture
4 Oct
1. Is #Evergrande stock suspended news? If you've followed me, you know I've said many times the screenplay on how to restructure is largely already laid out in past restructuring of companies like HNA or Huarong. #HNA Group is turned into a trust to pay to bond holders.
2. How long will it take? Majority of HNA restructuring took about 10 months, with the rest still ongoing. It's broken into 4 pieces with three parts introducing strategic equity investors, with the rest turned into a trust for bond holders.
3. How about the those wealth management products? HNA bankruptcy procedure mentioned that if all law is followed, they are likely so low in debt priority to get nothing. But it gave each person Yuan30k, with the rest going into official pool of debtors. Call it socialism.
Read 5 tweets
Liqian Ren Profile picture
1 Oct
1. Better headline: "Will Common Prosperity Make Japan Great Again?" MJGA!😂 We have deep expertise and top indexes on Japanese equity, particularly currency hedging. Below is the list of some under appreciated things of Japanese equity.
2. Underappreciated: If US fiscal/monetary response to the pandemic is large, Japan's is even a larger share of GDP. Lay person language: money money money for the economy.
3. Our colleague reviewed how Warren Buffet's Japanese investment last September has turned out. Following Mr. Buffet, global investors have been putting money there quietly for a while. wisdomtree.com/blog/2021-05-0…
Read 9 tweets
Liqian Ren Profile picture
28 Sep
1. A recap on #China electricity shortage, National Development and Reform Commission (#NDRC) that’s at the center of news, and what’s next.
2. Like any sudden shortage, it’s demand, supply, low slack and sudden shock. Due to low price of Coal in 2020 right after Covid, and government's push to reduce overcapacity and carbon emissions, coal inventory was low. China electricity is 70%+ coal power.
3. This September 3rd Moody’s report on coal sector was a 2 weeks early to be noticed. They mention 10 largest producers – all SOEs – accounted for nearly 53% of China's coal production in 2020, while three regions represented 70% of total production
moodys.com/research/Moody…
Read 19 tweets

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