Hi Long time China expert pointing out one thing- China is screwed. It cannot deal with the NPL debacle because what the central committee and Xi is aware of is that the only time there has been regime change is when there has been very bad youth unemployment. This is the reason that NPLs are just kicked down the road. Truly unraveling of this situation increases the unemployment by the amount that would lead to regime change. The Central Committee knows its history better than anyone.
I'm confused by the second 3x3 matrix. Looks like the row and column labels are the same as the first 3x3 matrix. Should the row and column labels be updated with the second set of probabilities?
Hi Long time China expert pointing out one thing- China is screwed. It cannot deal with the NPL debacle because what the central committee and Xi is aware of is that the only time there has been regime change is when there has been very bad youth unemployment. This is the reason that NPLs are just kicked down the road. Truly unraveling of this situation increases the unemployment by the amount that would lead to regime change. The Central Committee knows its history better than anyone.
yup
Great series.
I'm confused by the second 3x3 matrix. Looks like the row and column labels are the same as the first 3x3 matrix. Should the row and column labels be updated with the second set of probabilities?
FWIW my America states are more like:
Decline 60-70%
Muddle 30-40%
Reform ~0%
Nobody is going to want to rock any boats at all while the S&P 500 is doing this ___/
China isn’t the only government with a narrative they dare not puncture.
Loved the post.
Just a corollary: how would you hedge?
gold and silver “in China” (aka short rmb)