There is no right or wrong But right is right and wrong is wrong 道可道非常道 名可名非常名 至道無難 唯嫌揀擇 Train Money Brain: Personalized, practical investment training
"Everywhere, and Nowhere"
Joined June 2020
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Call for a radical deconstruction of the economic and financial discourse:
• Complete elimination of hindsight reasoning
• Elimination of all invalid assumption of ceteris paribus clause
• Elimination of the use of historical events as proof
Use only to disprove dogma
It's like blaming humor theory for an unconsequential calculation error when the whole analytical concept is wrong
Forest for the tree
Some people do not learn from mistakes: the European Commission's new fiscal rules of 2024 use 90 percent debt ratio as an additional rule for guiding debt reduction, while this number was debunked more than 10 years earlier. This is not evidence-based but error-based policy.
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Reading Brooks BS one comes to understand sell-side "strategists" are essentially glorified journalists
The selection process is not based on actual understanding but based on adapting to crowdthink
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Ludovic de Belleval - Train Money Brain retweeted
Whoever thought that XJP would accept to put Putin at same level as him and Trump on the international scene was delusional.
A scripted "summit" is not a summit.
Why don't you get ChatGPT to write it while you're at it?
"The belief that technological progress will eventually solve the problem is understandable...
But for the arithmetic... to work without a sharp slowdown..., China would need to sustain a rate of productivity growth for which there may be few, if any, historical precedents."
In my latest Substack piece, I argue that hopes for a technological breakthrough may be more the consequence of a reluctance to rebalance than the cause of its perpetual postponement.
michaelpettis858496.substack…
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Michael's voice is very valuable because it removes the psychological and moralistic basis from which much of economic thinking operates.
Both in religion and economics the natural tendency is to personify abstractions.
In economics this leads to the fallacy of composition.
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For most analysts of my generation, tariffs have been treated more as a matter of economic religion or ideology than simply as a policy instrument whose effects depend on its design and purpose. Fortunately, that approach seems to be fading.
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Ludovic de Belleval - Train Money Brain retweeted
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Beattie and Trump represent the two, highly ideological extremes that have long dominated the debate: either tariffs are always bad, or tariffs are always good.
But both views are nonsense.
Ludovic de Belleval - Train Money Brain retweeted
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Tariffs, like most economic policies, effectively redistribute income from one set of actors to another. Whether they are expansionary or contractionary depends on the circumstances and underlying conditions.
"When the government taxes you, it takes money out of your bank account—so taxation reduces the amount of money in the economy.
Government spending has the opposite effect. When the government spends, it puts money into private bank accounts.
Therefore, if the government
spends more than it takes back in taxation, it puts more money into private bank accounts than it takes out from them.
A government deficit therefore creates money. You can argue about whether this will just cause inflation or whether it leads to real growth, but the basic fact
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Good, balanced post on important and sensitive issue.
teapaw.org/RushDoshi/status/21188…
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If well played this can become a real squeeze on China growth model.
Massive Mercantilist Model
EU is now clearer about fallacy of "free trade" and determined, unlike in pre-Trump-II times.
Probably the most damaging consequence of US elections result for China.
Scoop: the EU and US will resume their dialogue on China before the end of the year, after a two year hiatus.
Comes despite transatlantic turmoil. For the first time, will the EU be the more hawkish party in the eighth edition of talks?
scmp.com/news/china/diplomac…
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The first point is strictly arithmetic.
The second is true too but requires more refined understanding of dynamics and politics.
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To repeat what should be obvious, the only way to raise the household share of GDP is to reduce either the business share or the government share. Because each way has its own set of disruptive consequences, the preferred way for now is not to rebalance.
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Ludovic de Belleval - Train Money Brain retweeted
At last! A sensible use for Neoclassical economics textbooks!
Great reporting.
"The European side, meanwhile, broached the issue carefully...
The delicate topic was couched in the diplomatic language"
The idea that a FX "model" will convince Beijing is ludicrous
Survival is at stake for them.
Scoop: EU plans high-level China currency talks as fears of new trade shock mount
Top officials will visit the Chinese capital in the coming months in a bid to persuade Beijing to revalue the yuan
scmp.com/news/china/diplomac…
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The truth is no one knows, until it happens
Because it will depend on HOW it happens
"AI unravels" is an abstraction that can recover very different realities
But the idea that it would necessarily make non-USD currencies more attractive is definitely wrong
How stable is the dollar in an age of “speedball capitalism”?
When the AI trade unravels, does the "profit dolla" go with it?
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"...once direct and indirect subsidies are backed out, much of China's exports are net value destroyers for the economy, with the losses capitalized on balance sheets in the form of surging debt."
NYT: "Surging exports and the industrial production needed to sustain them kept China’s economy growing over the past three months, even as consumer spending stagnated and investment plunged. The result is an economy increasingly dependent on selling goods abroad, even as domestic demand deteriorates."
NYT's Keith Bradsher gets this right. Many other analysts have been presenting this year's economic data as describing a two-track economy, with a sluggish domestic economy being balanced by a brilliant export economy.
But that is a very poor description of what is actually happening. Yes, net exports are surging, but this isn't a sign of a viable export sector. If the export sector were very profitable, it might make sense to describe it this way, but exports aren't especially profitable except in relation to domestic sales, where except in a few sectors businesses are struggling to make any profit at all, and once direct and indirect subsidies are backed out, much of China's exports are net value destroyers for the economy, with the losses capitalized on balance sheets in the form of surging debt.
When an economy produces far more than it can absorb through domestic consumption or investment, it must either export the balance or close down domestic production. Given how high real unemployment is, especially among the young, Beijing has no choice but to force the former, even if this comes at an economic cost.
The surge in China's net exports, in other words, is not a sigh of a strong and profitable export sector. If it takes rising debt, continued subsidies, and growing exports in order to prevent a contraction in domestic production, the surge in net exports is simply another way of describing weak domestic demand.
Surging exports are usually a good sign for an economy. Surging net exports usually are not.
nytimes.com/2026/10/18/busin…
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