Mon, Jun 26, 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. FinTech - Rise of robots: Inside the world's fastest growing hedge funds[more]

    From Bloomberg.com: Believe the hype. Quants have never been more popular. After doubling over the past decade, assets run by so-called systematic funds have hit a record $500 billion this year, according to estimates from Barclays Plc. In some ways, their meteoric rise is due to the same technolog

  2. Legal - Bond market concerns could scuttle Paulson's Fannie-Freddie plan[more]

    From Bloomberg.com: A hedge fund proposal for freeing Fannie Mae and Freddie Mac from U.S. control is poised to face stiff opposition from investors who say it risks wrecking the mortgage-bond market. The Moelis & Co. blueprint, which firms including Paulson & Co. and Blackstone Group LP sponsored,

  3. Other Voices: Are your pricing policies and procedures for less liquid instruments adequate?[more]

    Komfie Manalo, Opalesque Asia: The unrelated position mismarking incidents that quickly precipitated the closures of both Visium Asset Management and Marinus Capital have been recent focal points for market participants, but regulatory scrutiny of valuation choices for less liquid instruments is

  4. FinTech - AI hedge fund Numerai now live on Ethereum, Cryptocurrency hedge funds generate huge returns as bitcoin surges[more]

    AI hedge fund Numerai now live on Ethereum From Cryptoninjas.net: Back in February, Numerai announced numeraire (NMR), a cryptographic token to incentivize a new kind of hedge fund built by a network of data scientists. Earlier today, the Numeraire smart contract was officially deployed

  5. Investing - Advisors slash hedge fund positions, Theravance Biopharma is a top pick of investment guru Seth Klarman, As asset management industry grows a search for new revenue streams[more]

    Advisors slash hedge fund positions From Barrons.com: Financial advisors have cut wealthy clients' exposure to hedge funds by up to one third over the past 12 months, The Financial Times reports. Advisor firms in the FT's annual top-300 ranking have reduced their hedge fund allocation to