Wednesday, November 13, 2013

Morning news, including postplenary pithiness


First, here's what Billy Bishop at Sinocism had to say about the Third Plenum:
If you want to take a more positive view, I think you can find the possibility for aggressive reform within the very ambiguous language of the document. But if you have a more negative bent you can easily read it as just more bureaucratically paralyzed boilerplate. We may have a slightly better idea when a version of the full report is released, possibly within the next week.

I will guess that this document is going to lead to significant reforms that will play out over the next few years.

One of the most important measures announced in the communique is the establishment by Party Center of a “Comprehensively Deepening Reform Leading Small Group”. This group is not just tasked with economic reform[....]

According to Xinhua the group will “be in charge of designing reform, arranging and coordinating reform, pushing forward reform and supervising the implementation of plans.” It would be a mistake to dismiss this as a punt on hard reforms or just another bureaucratic impediment. These leading small groups are very important. The leadership and composition will be key and I will bet it will be chaired by a PBSC member, which will give it the heft to push difficult reforms through the bureaucracies.

This document is not a blueprint but a statement of high-level intentions. Lots of reform could happen based on what is written in it, or very little. Political will and implementation will be the deciding factors, and it may be a long time before we see tangible results or can form an informed opinion about this meeting.

One term we may start hearing more about is “六个紧紧围绕” (The “six tightly revolve arounds” for lack of a better translation). Awkward, but probably not to be ignored.
So,

1. trading on the initial statement, before the full report comes out, is retarded;

2. the Leading Group announcement is indeed significant, according to someone who has his head in Chinese politics instead of up Wall Street's ass;

3. this ten-year program will take years to implement, and is simply a statement of intentions, and therefore isn't something you put short-term trades on.

In other words, Wall Street should quit being ignorant cokeheads.

And now, the news:


FT Alphaville - the morning after the plenum. Seems the markets are unimpressed by the plenum, because they weren't handed either democratic reforms or neoliberal policy. In other words, they're disappointed because the Chinese leadership is going to enact changes for the good of China, and not for the good of Whitey.

Daniel Drezner - the mother of all authoritarian capitalism experiments. Wherein he focuses on the major Whitey disappointment, the very obvious and succint language in Doc9 that indicates plainly to even the most incompetent observer (i.e. Wall Street) that the Chinese leadership fully and completely reject economic neoliberalism.

WSJ China Realtime - China to be more decisive on natural resources. Here's what should be making Wall Street buy miners:
In overseas markets, the government appears to be encouraging state-owned companies to compete for major global metal assets. Three or four consortia of Chinese companies are duking it out for Glencore Xstrata PLC’s Peruvian copper asset Las Bambas, which has been valued at about $5 billion, Glencore senior executives have said.
Interesting, no?

Bespoke - BRICs, EMs hold on for dear life. I guess cos the "Dectaper" or something. Funny how there's all those headlines have disappeared about how undervalued the EMs are.

PS Dave - what's in it for me. A post far too late on how junior miners suck™. Quote:
One place we have not seen contraction is at the corporate management level. I have seen some news release touting 10% cuts at the corporate level but that is usually the low hanging fruit like clerks, assistants, receptionists etc... Not the $100,000-$500,000 salaried officer positions, those cuts are yet to materialize. 10% cut really means you had 20 people in your office and now you are down to 18 and if you just got rid of your marketing girl and the accounting clerk all you really did is cut $80,000 in salaries. Meanwhile some Corporate Secretary pulls $250,000, the Director of Corporate Communications $300,000 or the CFO $500,000 and the CEO, we have harped on about those numbers enough. We all know "what's in it for them', but "what's in it for me"?

Instead of a dividend a few companies attempted to follow through on a "Normal Course Issuer Bid", this is where a CEO gets to make the bold promotional statement " We believe our share price is to low and exceptional value therefor we are going buy the stock back". Rarely does a company ever buy back the allotted amount they claim they are going to buy. I have read many articles that most NCIB's fail to deliver value. In fact one company has managed to buy .19% of their allotted 5% that they can buy and have more shares outstanding today than when they announced the NCIB. There was something it for someone, but what was in it for me?
If a management-level person at a publicly-listed corporation has no fucking clue how to keep capital happy, then his company will go out of business period. Capital does what's best for capital. What amazes me is how few of these clowns understand that this is exactly what's happening to their industry.

Mineweb - Stillwater takes $290M impairment charge on Altar. Hey guys! Thanks for that one-day 150% profit I made on Peregrine! Who the hell ever said I shouldn't try to sell to someone stupider than me?


5 comments:

  1. gold trader/chart maniac explains 40 years of gold prices http://peterlbrandt.com/chart-history-gold-market-revised-november-2013/

    ReplyDelete
    Replies
    1. Gold trader who lost everything and went insane when his brokerage went under and all his money was stolen from his account, you mean.

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  2. Replies
    1. Yeah, he got screwed in one of the big commodity broker collapses - I think the one where the boss embezzled all the money and tried to kill himself.

      Made Brandt a hard read for a while.

      This thing you link to is just a bunch of TA.

      Delete
    2. I'm always on the lookout for a bunch of TA.

      Delete