- Oddity. It cannot have escaped the attention of alert readers that while the Greek government bond was over-subscribed, the Chinese government bond was under-subscribed.
- Greece. The Greeks' got over-subscribed because investors know that her Euro-colleagues will stand behind any bonds issued. Indeed, this is what Mario Draghi so famously proclaimed months ago, namely, that he would do "anything that it takes..." Well, the markets believe him - despite all of those problems which Greece/ Europe has and which you know about.
- China. Meanwhile, just this Friday, China's Ministry of Finance (MoF) sold only RMB 20.1 bn out of a planned RMB 27 bn worth of bonds. The popular reason is that people did not want to buy this one-year paper on account of expected rate rises this month or next. But that popular reasoning does not hold water
- Repeat performance. Just last June, the government failed in its attempt to raise the planned amount. No talk at that time of rates rising this month or next, was there?
- Ilogical. If "markets" truly believe in an imminent rate rise, the why are all other articles published - at least in the gweilo press - festooned with the opposite view, namely that China's Central Bank is about to loosen monetary policy and thus depress rates?
- Zhou, Draghi !. So all of a sudden, it seems as if markets have not pivoted, they have pirouetted: whereas China seemingly used to be the up and coming global economic powerhouse, this no longer seems to be the case. Instead, Greece is seen to be a powerhouse - courtesy of moral hazard. Well, I still am for that "Zhou, Draghi", the pun being that I believe more in what the Central Bank Governor of China, Zhou, has to administer than what the Central Bank Governor of Europe, Draghi , has to administer. So, the intended pun means, "Chao, Draghi", if you get my feeble attempt at humour. Read more
Dr. Enzio von Pfeil
A seasoned global economist. Enzio von Pfeil’s skill lies in understanding macro-economics, the business cycle and business operations. Hong Kong-based Enzio von Pfeil has an international education which culminated in studying inter alia under Prof. Friedrich von Hayek. He has a distinguished 30-year career (US, Germany, UK and Hong Kong) in macro-investment economics.
His understanding of currency, commodity, bond and equity movements as they relate to socio-political developments across the global economy, underscores the authority and integrity of his strategic asset allocation advice.
Ninety per cent of your portfolio’s performance is determined by strategic asset allocation.
This is precisely where Enzio von Pfeil’s depth of experience in investment economics will help you.
Enzio von Pfeil is a professional speaker and provides comments on Reuters, Bloomberg, ChannelNews Asia and RTHK. Author of five books, and with a 30-year global career as an investment economist in the USA, Germany, UK and Hong Kong, Enzio von Pfeil is a professional speaker and commentator on Reuters, Bloomberg and ChannelNews Asia on economic impacts on markets, industry sectors and corporations.