Sat, Feb 6, 2016
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. How Einhorn survived a nightmare year[more]

    From Bloomberg.com: Even when a hedge fund has an awful year, which was the case for David Einhorn's Greenlight Capital, there are lessons to be learned. Many funds would have had a tough time surviving a year like Einhorn experienced in 2015, when all the stars seemed to align against him and Green

  2. Legal - Hedge fund founder wins early release in U.S. insider trading case, Gramercy seeking $1.3 billion from Peru over land-bond dispute[more]

    Hedge fund founder wins early release in U.S. insider trading case From Reuters/Streetinsider.com: Former hedge fund manager Doug Whitman on Tuesday won a reprieve from serving the remainder of his two-year sentence for insider trading after several judges expressed skepticism that his 2

  3. Investing - David Einhorn finds a winner in Michael Kors[more]

    From Thestreetinsider.com: Greenlight Capital hedge fund manger David Einhorn took his lumps in 2015. The fund lost over 20 percent on the year amid bets gone bad being long a plunging SunEdison and short a couple high-flying FANG stocks. However, today Einhorn is again showing his stock picking pro

  4. Investing - Avenue Capital's Marc Lasry: We like European bank loans, Comment: A bunch of hedge fund managers are chasing the 'dream of crushing a major structural problem'[more]

    Avenue Capital's Marc Lasry: We like European bank loans From CNBC.com: European banks are under immense pressure, but at least one prominent hedge fund has found what it thinks is a good opportunity in the wreckage. Marc Lasry, co-founder and chief executive of hedge fund Avenue Capital

  5. Computer-driven hedge funds make money during January’s selloff[more]

    Komfie Manalo, Opalesque Asia: Commodity trading advisers (CTAs) that use computer programs to guide how they trade, made millions of dollars during last month’s market selloff on the back of declining oil prices and global equities and big moves in currencies. Data provider