BC GOVERNMENT
Saved by @jacobhtml

1/9

While debt-to-GDP ratios already have a limited but very misunderstood use, it seems economists are finding bright new ways of misunderstanding them. Now we say that when nominal interest rates are lower than nominal growth rates, the

 2/9

downward pressure on the debt-to-GDP ratio makes rising government debt and larger government deficits more sustainable and more easily justified.

This is totally confused. When the nominal interest rate is lower than the nominal GDP growth rate, it only means that net...
3/9

borrowers are getting a disproportionate share of growth relative to net lenders. This in and of itself changes the comparability of the debt-to-GDP ratio, so the fact that the ratio may decline tells us nothing about its sustainability which, I'm glad to say, isn't...
4/9

a mistake Olivier Blanchard makes in this article.

At least three things matter. First, whether or not rising debt is sustainable depends almost wholly on underlying conditions in the real economy, and only trivially on the arithmetical relationship between...
5/9

the interest rate and the growth rate. Second, this approach simply assumes away financial distress costs, in which case debt capacity is infinite anyway and the interest rate becomes irrelevant. And third, it assumes that the nominal debt level matters independently...
6/9

of its structure, and while this assumption allows economists to write well-regarded academic papers, it would fail you in finance class.

In the end, if more fiscal spending results in an increase in the real value of goods and services produced domestically, the real...
7/8

debt-servicing costs to the economy are self-liquidating. When government borrowing results instead mainly in income transfers, then it can be either positive or negative, depending on whether those transfers increase demand or overall welfare (e.g. transfers to the...
8/9

poor) or reduce it (transfers to rich savers).

It should be obvious, for example, that in cases where financial repression leads to investment misallocation, debt becomes less sustainable, not more, even though the interest rate is lower than the growth rate. Drawing...
9/9

conclusions about debt sustainability from the relationship between the nominal interest rate and the nominal expected growth rate may at first seem like a clever trick, but it is just bad bond math.

More from Michael Pettis

Michael Pettis
Michael Pettis
@michaelxpettis
1/9

Good article. But while growing international criticism and rising trade tensions may have had some impact, as the article suggests, I don’t think they really explain the great reversal in BRI lending of the past few years.

2/9

As I have been writing since 2011, China’s development lending was always likely to follow the pattern of other countries when they first “went out” (e.g. the US in the 1920s, USSR in the 1950s, Japan in the late 1970s). Because of little historical...

3/9

knowledge and no previous experience, an early rapid rise in development lending would be driven mainly by underestimating risk and an overestimation of their own business "success" in making loans, and would of course be further supported by geopolitical ambitions.

4/9

This combination would inevitably lead to bad lending decisions, followed just as inevitably by debt restructuring, loan losses, and a contraction in development lending. In the 1920s, for example, the US set off quite explicitly and aggressively to displace England in...

5/9

Latin America, and American businesses and banks assumed they “understood” Latin America much better than the English did, in spite of the vast English experience there, but their early displacement of British lending only resulted in the huge loan losses of the 1930s.
ECONOMY
Michael Pettis
Michael Pettis
@michaelxpettis
1/11

An article worth thinking about: “As changes to the world structure accelerate, China’s rule is in sharp contrast with the turmoil in the West,” says Beijing.

I agree, but I draw a different conclusion. The world is certainly currently

2/11

through "a period of turbulent change", in Beijing’s words, and great structural adjustments, but usually when that happens, what matters in the long run is not how stable a system seems but rather how successfully political, economic and social institutions adjust to...

3/11

the new conditions. In the past these adjustments have almost always been messy, chaotic, and disheartening to most, but ultimately they were necessary even if we were unable to judge them so at the time.

I would argue that the world today is undergoing both a reversal...

4/11

and rejection of the current model of globalization and an urgent need for most countries in the world, including China, to initiate a major rebalancing of the way income and wealth (and ultimately political power) is distributed, but there are few if any historical...

5/11

precedents in which this level of restructuring and rebalancing have been neat or orderly.

Beijing's response, which is to do whatever it takes to maintain stability, may look good in the short term, as this strategy always does, but if it prevents the necessary...
GOVERNMENT
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Michael Pettis
Michael Pettis
@michaelxpettis
1/10

This is a really tough problem to resolve, especially if the massive increase in inflows from the trade and financial accounts are sustained, as I expect they will be well into 2021.

Clearly the PBoC would like to see the RMB gradually...

2/10

strengthen. This would keep financial markets stable and promote rebalancing, but the RMB has already strengthened a lot, and this puts unwanted pressure on exporters and “international circulation”.

Although PBoC reserves have been flat, other state-controlled Chinese...

3/10

banks have bought large amounts of dollars, but this is expensive. If these banks have half a trillion dollars of exposure, for example, they are losing at least $15-17 billion annually on negative carry, plus another $20-30 billion just this year from the rise of the RMB.

4/10

Beijing seems also to be trying other measures to slow the rise. The regulators are relaxing capital controls on outflows. In mid October the PBoC cut to zero the reserve requirement ratio for banks doing FX forward trading. This requirement was created in 2018 to reduce...

5/10

downward pressure on the RMB. In late October it suspended the counter-cyclical factor in RMB fixing, which was introduced in 2017 also to reduce downward currency pressure. But in both cases while the RMB dropped a few pips on the news, it quickly resumed its upward climb.
ECONOMY
Michael Pettis
Michael Pettis
@michaelxpettis
1/16

It is a little frustrating to see the response many analysts had to the GDP growth data Chinese released today. These numbers aren’t especially good, and they certainly shouldn’t have been surprising. Back in April and May, when most

2/16

were projecting negative or barely positive GDP growth for China in 2020 (the OECD, for example, expected China’s GDP to contract by 3.7%), I insisted that GDP growth for 2020 would be positive, and probably between 2% and 3%.

Today, it was reported as 2.3%. How did...

3/16

I know? Because I knew that while most of the healthy sources of Chinese growth would contract (except for exports, which would expand given Beijing’s intense supply-side response to the impact of Covid-19), Beijing was going to respond to a significant...

4/16

worsening of the healthy parts of its economy by unleashing enough of the unhealthy, non-productive growth it has long tried to constrain – basically real estate and infrastructure investment – in order to achieve as much economic activity as it...

5/16

needed for domestic political ends.

And that’s exactly what happened. While GDP grew by 6.5% in the fourth quarter, even with substantial tailwinds its retail sales measure – a proxy for consumption – was only up 4.6%, and it was down 3.9% overall in 2020.
ECONOMY
Michael Pettis
Michael Pettis
@michaelxpettis
1/9

China is aging so rapidly that it urgently needs to address the problem of a rapidly declining work force in a slowly declining population. To give an idea of relative population changes among the three most populous countries, today

2/9

are 4.3 Chinese for every American and 4.7 Chinese of working age (ages 15-64), while there is just over 1 Chinese for every Indian and 1.1 Chinese of working age.

By the end of the century, however, there are expected to be 2.5 Chinese for every American and...

3/9

just 2.4 Chinese of working age, while there will be 1.4 Indians for every Chinese and 1.5 Indians of working age. Over the rest of this century, in other words, while China’s population declines quite rapidly relative to that of the two other most populous countries, it...

4/9

also switches from having a much better dependency ratio than either to having a worse one than either, with far more of its dependents being the elderly rather than children. In effect its working age population will drop by half relative to those of the other two.

5/9

This is going to be a very tough problem to resolve, although to the extent China succeeds, it will be very useful as an example for other countries. I am not sure they are going about it the right way, however. Making seniors make better use of smart technology sounds...
CHINA

More from Government

J.B. White
J.B. White
@RattlerGator
1 of 52

As our national civics lesson continues to unfold on its march toward our 59th Presidential Inauguration on January 20, 2021 and Donald Trump’s second term, 45’s unmasking exercise (that’s a large part of what his first term had to be) continues toward its big climax.

2 of 52

In his 2017 Inaugural Address, President Trump proclaimed on behalf of his administration, “we are transferring power from Washington, D.C., and giving it back to you, the people.”

3 of 52

From my very biased vantage point, here’s how I like to think of that sentence.

It likely was the announcement of his two-pronged military campaign.

The first prong is obvious; it’s against foreign interference.

4 of 52

As we now clearly see, nothing short of a military campaign would suffice when global influencers have totally co-opted elements of our two major political parties.

5 of 52

The other prong has an internal focus: Washington, D.C.
GOVERNMENT
Tyler Rogoway
Tyler Rogoway
@Aviation_Intel
Let me take a stab at this after years of reporting on Marine One, HMX-1, Continuity of Government, etc. None of this is definitive, but it could help explain what folks are seeing:

1.) HMX-1, which flies the VH-3D and VH-60N 'White Top' helicopters used to move... 1/X


the President and VP around, those helos being called Marine One or Two when either is onboard, need to train. The urban landing zones, including WH and VP Residence, are not simple to get in and out of. So, crews need some currency training. They are not just tasked with... 2/X

moving POTUS and VP to get them around the region and to Andrews AFB for long-haul flights, they are essential to Continuity of Government operations. This means that if a threat were to emerge, they need to be ready to snatch POTUS and VP in minutes. This is partially... 3/X

why they have a full forward operating location at Naval Support Activity Anacostia, just 3 miles from the WH. As such, practice is important and considering the state of things, it is critical now more than in any recent memory. 4/X

2.) Considering what happened last week, including mobs of Trump supporters screaming in unison to hang the VP for doing what the constitution states, absolutely despicable in every way, security has been tightened just as it has been all over. Using the helicopters instead.. 5/X
GOVERNMENT
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AF
AF
@apf_nyc
And #BigDickAnon is back in his CIA Fren persona, this time in thread titled, "China is the modern day Nazi Germany" headed by the tweet below from Clay Travis.

https://t.co/49yWJyfZLb


"The Chinese leadership knows China is a dying country and that explains their aggressive behavior. It is an attempt to save China through expansion before the clock runs out. The environmental damage that industrialization has cause Chinese cannot be underestimated."

"A secret Chinese study conducted 4 years ago laid out a grim future for the country. Currently only 23
% of China`s water is safe. Over 50% of the land is poisoned and air pollution is creating such destruction over 40% of the population has lung poisoning and..."

"...the figure is rising. The biggest danger in the short run is the damaged caused by the insane population polices of limiting families to small sizes. This has created havoc with the population demographics and basically China is an aging country with..."

"...the wrong mix that is creating a disaster with too many old people. The most telling sign though was the Xi visit to Trump in the first year of his presidency. American intelligence bugged Xi`s plane and on his stop in Alaska on the way back to China Xi declared to..."
GOVERNMENT
Simon Wardley
Simon Wardley
@swardley
X : Thoughts on private companies being on the boards of ICS (integrated care systems).
Me : Conflict of interest question? Supplier determining needs?
X : Yes
Me : It's ok, as long as
a) you have effective spend control
b) those private companies are JVs which Gov owns 51% of.

X : What if they are not 51% owned JVs?
Me : Ah, that's a bad idea. You really want your boards to have your interests at heart.
X : What about experience, partnership?
Me : Those are advisors and you take it with a pinch of salt and as much as possible use critical friends.

Suppliers will always tell you that they want to be your partners, to build a relationship, to be your friends, to find the win/win in much the same way a second hand car salesperson wants to be your buddy ... but their interests are not yours and never can be.

X : Critical friends?
Me : Occassionaly you can find critical friends. People that we willing to tell you the truth as they see it regardless of the consequences. They are not very common and it normally requires a deep sense of duty that exceeds any loyalty to others.

X : Can the relationship be symbiotic?
Me : Rarely but that depends. If the organisation has a core overiding principle of focusing on the customer need and I don't mean lip service to this but absolutely embedded into its very core then yes i.e. places like Amazon, Alibaba etc.
GOVERNMENT
Dr. SpoonyT DNP, MSN/Ed
Dr. SpoonyT DNP, MSN/E...
@SamWitherspoon4
What should have been enough for @GOP @LeaderMcConnell @LindseyGrahamSC @ChuckGrassley but seem to make up excuse after excuse

What should have been enough: Charlottesville should have been enough. Then Ukraine. Then Covid failure. Then Attack on our Capitol. If you don’t #LeaveTheGOP then you have no moral compass

What should have been enough
Federal civil rights VIOLATIONS at Trump properties

WHAT should have been enough
The Central Park Five should have been enough

What SHOULD have been enough
Birtherism should have been enough.
GOVERNMENT

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Reshu Nath
Reshu Nath
@ReshuNath
'Tera mera rishta kya, hindu, hindu,hindutva' is a clear take on 'tera mera rishta kya,la ilaha illallah'. As much as Hindutva hates the monotheistic religions especially Islam, there's a strange wistfulness and subliminal need at display now, to BE that they hate. 1


Charlie Hebdo doesn’t come up as a cautionary tale now but rather 'why cant we be like that'?
Growing up, Hanuman was an adorable deity for us, who swallowed the sun, or who couldn’t figure out what was Sanjeevani booti so he picked up a whole mountain and came back with it. 2

Or he was loyal, admirable and when he cleaved his chest, you saw both Ram and Sita. Now we have a lot of “Angry Hanuman” stickers. Why is a cute childlike God angry? We don’t know. It's a convenient blank space where to paint all the angst of Hindu Khatre mein hain narrative. 3


The other strange thing that has started happening is pictures of Ram appearing sans Sita. “Jai Siya Ram” has become “Jai Shri Ram”. Some people disingenuously explain it as being the same thing - because Shri is a name of Lakshmi. Not really. Siya is an apbhransh of Sita. 4


Shri is a prefix of respect in this case. Hinduism is being militarised. A woman/Sita has no place in it. Even the militaristic Goddess that is Durga has no place in this conception of neo-Hindu divinity, as evidenced by Dilip Mandal wondering where Durga came from. 5
RELIGION
Noah Smith
Noah Smith
@Noahpinion
1/OK, data mystery time.

This New York Times feature shows China with a Gini Index of less than 30, which would make it more equal than Canada, France, or the Netherlands. https://t.co/g3Sv6DZTDE

That's weird. Income inequality in China is legendary.

Let's check this number.

2/The New York Times cites the World Bank's recent report, "Fair Progress? Economic Mobility across Generations Around the World".

The report is available here:

3/The World Bank report has a graph in which it appears to show the same value for China's Gini - under 0.3.

The graph cites the World Development Indicators as its source for the income inequality data.


4/The World Development Indicators are available at the World Bank's website.

Here's the Gini index: https://t.co/MvylQzpX6A

It looks as if the latest estimate for China's Gini is 42.2.

That estimate is from 2012.

5/A Gini of 42.2 would put China in the same neighborhood as the U.S., whose Gini was estimated at 41 in 2013.

I can't find the <30 number anywhere. The only other estimate in the tables for China is from 2008, when it was estimated at 42.8.
SOCIETY
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Anshul Pandey
Anshul Pandey
@Anshulspiritual
IMPORTANCE, ADVANTAGES AND CHARACTERISTICS OF BHAGWAT PURAN

It was Ved Vyas who edited the eighteen thousand shlokas of Bhagwat. This book destroys all your sins. It has twelve parts which are like kalpvraksh.

In the first skandh, the importance of Vedvyas


and characters of Pandavas are described by the dialogues between Suutji and Shaunakji. Then there is the story of Parikshit.
Next there is a Brahm Narad dialogue describing the avtaar of Bhagwan. Then the characteristics of Puraan are mentioned.

It also discusses the evolution of universe.( https://t.co/2aK1AZSC79 )

Next is the portrayal of Vidur and his dialogue with Maitreyji. Then there is a mention of Creation of universe by Brahma and the preachings of Sankhya by Kapil Muni.


In the next section we find the portrayal of Sati, Dhruv, Pruthu, and the story of ancient King, Bahirshi.
In the next section we find the character of King Priyavrat and his sons, different types of loks in this universe, and description of Narak. ( https://t.co/gmDTkLktKS )


In the sixth part we find the portrayal of Ajaamil ( https://t.co/LdVSSNspa2 ), Daksh and the birth of Marudgans( https://t.co/tecNidVckj )

In the seventh section we find the story of Prahlad and the description of Varnashram dharma. This section is based on karma vaasna.
RELIGION
Novid Houellebecq (That's Hollaback)
Novid Houellebecq (Tha...
@GarouGothic
Ok, here is a thread for you.
What happens when you have:
Netflix
Apple
Amazon
WarnerMedia +
Disney+
SonyCrackle (Reboot)
Verizon All Access (after they buy CBS/Viacom)
UniversalSkyMedia
By 2021
Answer? Internet Slows To A Craw and Dies.
Why?
Bandwidth.

Netflix's gets 35% of all internet traffic.
Now we all know Apple Coming to Netflix Corner.
We know that WarnerMedia Planning One
We Know about Disney+
Now how will the net handle 8 Streaming Platforms all at once?
Answer - IT CANT.

But Novid, the speed, the 4K the all everything?
NOOOOO BUDDY.
Even if you could do it and even if AWS ran six million clouds, The Net Will still slow to a crawl. 35%, goes to nearly 90% if any of the 8 or all of the 8 eat at netflix's numbers.

Oh, they wouldn't be running at once.
FOOL. You forget how bad things were when game of thrones season premieres came around. HBO SERVERS FALL DOWN GO BOOM!

Now see if a season like 2021 come around and they air shows on a same day. It gets crazy. AT&T and others gonna realize they cant build out forever. Something will give and it might be your entertainment consumption big time.
TECH
Simon DeDeo
Simon DeDeo
@SimonDeDeo
"I lied about my basic beliefs in order to keep a prestigious job. Now that it will be zero-cost to me, I have a few things to say."


We know that elite institutions like the one Flier was in (partial) charge of rely on irrelevant status markers like private school education, whiteness, legacy, and ability to charm an old white guy at an interview.

Harvard's discriminatory policies are becoming increasingly well known, across the political spectrum (see, e.g., the recent lawsuit on discrimination against East Asian applications.)

It's refreshing to hear a senior administrator admits to personally opposing policies that attempt to remedy these basic flaws. These are flaws that harm his institution's ability to do cutting-edge research and to serve the public.

Harvard is being eclipsed by institutions that have different ideas about how to run a 21st Century institution. Stanford, for one; the UC system; the "public Ivys".
LIFE