Two General Tso's Chicken?
At Macronomics Two General's Problem... "Because acknowledgement of message receipt can be lost as easily as the original message, a potentially infinite series of messages are required to come to consensus...
we believe a credit crisis will stem either from China's property market or the US corporates market. Both of these markets have inflated to alarming levels....
If China's CPI inflation rise above 3% (which we consider an optimal level) in 2017, we would expect fairly aggressive PBoC tightening, which could lead to the bursting of China's property market bubble....
In regards to realistic expectations, with the latest US GDP in Q4 rising only 1.9% and below the expected 2.2%, one could argue that given the heavier debt load which has been accumulated in recent years, some would be wise to review their growth expectations in the light of US growth being lower for longer, but we ramble again."
We Natter... I suspect with PBOC tightening or more likely additional "dollar"/RMB ill-liquidity, Enter the Dragon as Chinese RE pops. As for US corporate's, one of the three biggest lies and "the check is in the mail". As in, a reality check, one which has been sent with delivery confirmation (for those in the "Two General's Problem").
The PBOC and FED continue to tighten, GDP keeps falling, yet equities keep rising to lofty valuations with unrealistic multiples.
In any event, rising cost of loan funds, which may ensue without any central bank tightening, on both of those inflated asset fronts (US, China) would stir up a wok full of real spicy Two General Tso's Chicken.
The Two General's Problem :Two armies, each led by a general, are preparing to attack a fortified city. The armies are encamped near the city, each in its own valley. A third valley separates the two hills, and the only way for the two generals to communicate is by sending messengers through the valley. Unfortunately, the valley is occupied by the city's defenders, and there's a chance that any given messenger sent through the valley will be captured. While the two generals have agreed that they will attack, they haven't agreed upon a time for attack. It is required that the two generals have their armies attack the city at the same time in order to succeed, else the lone attacker army will die trying. They must thus communicate with each other to decide on a time to attack and to agree to attack at that time, and each general must know that the other general knows that they have agreed to the attack plan. Because acknowledgement of message receipt can be lost as easily as the original message, a potentially infinite series of messages are required to come to consensus.
we believe a credit crisis will stem either from China's property market or the US corporates market. Both of these markets have inflated to alarming levels....
If China's CPI inflation rise above 3% (which we consider an optimal level) in 2017, we would expect fairly aggressive PBoC tightening, which could lead to the bursting of China's property market bubble....
In regards to realistic expectations, with the latest US GDP in Q4 rising only 1.9% and below the expected 2.2%, one could argue that given the heavier debt load which has been accumulated in recent years, some would be wise to review their growth expectations in the light of US growth being lower for longer, but we ramble again."
We Natter... I suspect with PBOC tightening or more likely additional "dollar"/RMB ill-liquidity, Enter the Dragon as Chinese RE pops. As for US corporate's, one of the three biggest lies and "the check is in the mail". As in, a reality check, one which has been sent with delivery confirmation (for those in the "Two General's Problem").
The PBOC and FED continue to tighten, GDP keeps falling, yet equities keep rising to lofty valuations with unrealistic multiples.
In any event, rising cost of loan funds, which may ensue without any central bank tightening, on both of those inflated asset fronts (US, China) would stir up a wok full of real spicy Two General Tso's Chicken.
The Two General's Problem :Two armies, each led by a general, are preparing to attack a fortified city. The armies are encamped near the city, each in its own valley. A third valley separates the two hills, and the only way for the two generals to communicate is by sending messengers through the valley. Unfortunately, the valley is occupied by the city's defenders, and there's a chance that any given messenger sent through the valley will be captured. While the two generals have agreed that they will attack, they haven't agreed upon a time for attack. It is required that the two generals have their armies attack the city at the same time in order to succeed, else the lone attacker army will die trying. They must thus communicate with each other to decide on a time to attack and to agree to attack at that time, and each general must know that the other general knows that they have agreed to the attack plan. Because acknowledgement of message receipt can be lost as easily as the original message, a potentially infinite series of messages are required to come to consensus.
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