here we go again

true. actually fun fact. if you look at stocks by sector. utilities have the highest percentage of companies that outperformed the S&P 500 i nterms of total return in the last 10 years.

with that said they have a ton of debt are way overlevered when looking at NI or FCF.

who makes money? China?? what using child labor to make office chairs we’re sitting on or smart phones?? US makes money. We invent and design stuff and train chinese and other 3rd world how to make it for cheap so we rake in more money…we have the best universities and if our education system is so damn broke why do we have foreign students paying triple what we pay to get one year of education at a state school in the US?

look at all the tech in use by the civilian world…most likely invented in the US by American firms - with the backing of US govt to provide capital. I used to semi-cover defense sector…

case in point is F35 program which at a cost over 1.5 trillion. But in 10 years those patents will slowly spill over into the civilian world not to mention absolute superiority over loving but aged A10. F35s DLINK abilities, and the JTAC tech will enable 35s to be out of sight but pinpoint in real time troop movements without visual or laser sightings. many many more the media fails to acknowledge.

I’d buy US debt if i have to choose between Japan and Chinese debt. whats wrong with tax exempt 4% coupon. coupled with occasional 15% rally like we’ve seen a few years ago.

china has been able to increase their gdp per capita and overall gdp at a faster rate than the us in the last 50 years. china has done something incredible. it doesnt matter if what they did is considered backwater or immoral. they were able to do it, wheras the us with all that technology was not as good at generating the bottomline: which is productivity!

also i didnt ask about us debt because we all have home bias. id bet the chinese think the same way.

China is not doing anything incredible…they’re merely following the footsteps of other Asian countries that have made this trip in the 70s and 80s and blueprint made and designed by American companies with help of US government with sometimes forceful trade treaties. China is a country that bans certain postings online and use of certain apps outright and create their own and force everyone to use that app (appoint a CEO who is connected with Big Brother and pay in some offshore accounts) and their gdp per capita is a quarter of that of US. Both socially and economically…they have long long ways to go…

I get super annoyed when some chinese guy i meet in some high finance network boasts about China…really?? just 10 years weren’t you guys killing off your daughters and eating dirt?? Now, you think you’re the ruler of the world because…1 in 6 people in the world is Chinese or because what??

HUH?? you’re saying China’s productivity figure is superior to that of the US??? US is top 5 and CHina is outside of top 50 in the world…look up reports from OECD and World Bank and heck even our own Fed…

you are looking at current gdp per capita.

i am talking about the growth of gdp per capita.

to grow gdp per capita with their population is godly

I mean look, in reality they’re both screwed not least of which because they’re co-dependent. Sovereign debt has filled the gap for most expansion in the wake of the global baby boomer demographic.

The real situation is the US has let it’s infrastructure erode beneath it and under invested in its asset base while funding its median lifestyle and benefits growth with debt that was siphoned into corporations while the median American fell behind in competitiveness. All of these great advancements in tech are made by elite innovators in a country both socially and economically defined by massive dispersion. The day is rapidly approaching where reality is going to strike for the US as infrastructure and aging boomer liabilities come due.

China is equally screwed because the majority of their growth in the last 10 years has been purely debt and speculation funded. There are major dispersions there as well and the reality is having a debt level commiserate with the US with a GDP per capita 1/3 of ours (meaning long road of development that will likely require debt yet ahead) is not going to end well and they don’t have the mechanisms to deal with it. The boomer problem is even more magnified in China demographically and they will be fighting the effect of a declining population with no real safety net.

But these are all long term problems, not sure when they’ll hit, but the next 10 years will definitely have some interesting moments. It’s no longer just a permabear debate. I’ve seen this get serious airtime recently from Rick Rieder and Gundlach just put on a clinic on this in his last two calls. For anyone interested in this topic, I highly recommend checking out the Total Return webcast replay from March 12th and going to the Deficit segment around the 21 minute mark starting on slide 24.

https://doublelinefunds.com/webcast-schedule/

Yeah I agree with you. “I do scratch my head at the economics of consumer lending and real estate prices right now though.” This really cracked me up. Same here though