Fri, Oct 20, 2017
A A A
Welcome Guest
Free Trial RSS
Get FREE trial access to our award winning publications
Alternative Market Briefing

Stanley Druckenmiller: Expansion in credit during slower GDP growth is a problem for China

Tuesday, June 25, 2013

amb
Stanley Druckenmiller
Benedicte Gravrand, Opalesque Geneva: - In its latest Equity Research report, Goldman Sachs examines the rising cost of growth in China and Asia, which is hurting profits and returns. The authors, Hugo Scott-Gall and Sumana Manohar, ask two questions, namely, who does China need, and who needs China. "The answer to the first is solutions providers to the rising costs and constraints (e.g. energy efficiency, food science, shale expertise)", the report states. "Second, for those who need China, for either low-cost goods or capital (i.e. debt heavy, consumption-driven economies) or to buy hard commodities, the future maybe tougher, while those who rely on China as a source of export growth need to ensure that domestic competition won’t undermine them."

Stanley Druckenmiller, chairman and CEO of Duquesne Family Office (which used to be Duquesne Capital Management from 1981 to 2010), tells Goldman Sachs in an interview that the problem in China is in its expansion in credit just when the GDP growth is slowing down. He believes it is all due to the 2009-11 stimulus, which slowed down future growth by crowding out more productive investments.

"The system’s building enough leverage and misallocation of resources to warrant risks of a financial crisis," he adds, although the timing of such an event is uncertain. The credit growth outpacing economic growth that we see in China sinc......................

To view our full article Click here

Today's Exclusives Today's Other Voices More Exclusives
Previous Opalesque Exclusives                                  
More Other Voices
Previous Other Voices                                               
Access Alternative Market Briefing

 



  • Top Forwarded
  • Top Tracked
  • Top Searched
  1. Regulatory - David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge, Carried interest tax: How much does it matter?, Odey sees 'terrifying' mix in MiFID, tapering, asset values, Hedge funds come together to share cost of MiFID and research, SEC turns up the heat on U.S. investment advisers, India's Sebi asks hedge funds to report investments in commodity derivatives[more]

    David Stockman: Trump tax reform overhaul is a pipe dream, stocks are heading for 40-70% plunge From CNBC.com: David Stockman is warning about the Trump administration's tax overhaul plan, Federal Reserve policy, saying they could play into a severe stock market sell-off. Stockman, the R

  2. North America - Puerto Rico rejects loan offers, accusing hedge funds of trying to profit off hurricanes[more]

    From TheIintercept.com: Puerto Rico has rejected a bondholder group's offer to issue the territory additional debt as a response to the devastation of Hurricane Maria. Officials with Puerto Rico's Fiscal Agency and Financial Advisory Authority said the offer was "not viable" and would harm the islan

  3. Investing - WPP targeted by short-selling American hedge fund, Sun co-founder sells secretive hedge fund on big chip trade[more]

    WPP targeted by short-selling American hedge fund From Cityam.com: An American hedge fund has mounted a bet against WPP, the world's largest advertising group, with a trade worth almost £90m. Lone Pine Capital has built a short position worth 0.51 per cent of the FTSE 100 company,

  4. Hedge funds up as industry adjusts to rising rates[more]

    Komfie Manalo, Opalesque Asia: Hedge funds have reshuffled their portfolio after nearly four weeks of rising rates as the Lyxor Hedge Fund Index was up +0.2% from 19 September to 26 (+1.1% YTD), fuelled by strong results of global macro funds, Lyxor Ass

  5. Manager Profile - How the world's hedge fund king used 'idea meritocracy' to become a billionaire[more]

    From Forbes.com: In 1982, Ray Dalio made what he calls the biggest mistake of his life. He made a bet that there would be an economic collapse stemming from a debt crisis. And he was wrong. He lost money. He lost his client's money. He had to let people go from his firm and borrow money from his dad