For a number of years now I have been getting strange looks and my views on global economics have come into question. There is a plain and simple reason, I don't buy China. All the Chinese growth notwithstanding I am not impressed and never have been. There is a great big difference between a location, a product or a business being a great investment vehicle and an actual force.
Since there have been a lot more murmurs here on WSO and throughout the financial media about China's aura of invincibility waning, I decided to bring up a point that is seemingly ever ignored. You see, my fellow monkeys it is not the GDP numbers, the stock markets or the PPP which tell us the real economic strength of a nation. It is the people. The people who live there, the people who work there and in modern day China's case, the people who cannot wait to get out.
Though I don't really consider myself an old timer I definitely agree with a few dinosaurs that I have spoken to. These men who came up in the "by the bootstraps" era of Wall Street, claim today's financier to be a one trick pony. A spreadsheet and algorithm devouring automaton who is a master of numbers but completely and totally incompetent when it comes to looking at the simple truth in front of him.
When a society lacks basic free market principles such as, but not limited to: freedom of expression, property and inheritance rights, a non-criminal taxation system, a non-manipulated currency and intellectual property, then that society's best and brightest will seek their fortune elsewhere.
This is precisely what we are seeing the early blips of in China. We are seeing the highest achievers seeking greener pastures due to the economically centralized, leftist, morally and ideologically bankrupt backbone of China. One that will sooner devour its populace than accept inevitability.
The recent thread about the bamboo ceiling in finance really made me laugh. Funny how nobody thought to mention that the worst example of a "bamboo ceiling" exists in China, of all places.
Sitting at the bar last night, watching James Shields implode against the Texas Rangers high powered offense I was once again reminded of the ways we value companies, investments and economies. James Shields completed more games and had more shutouts this year than any American League pitcher in 20 years. He would have easily won 20 games had he received decent run support. Given a 3-0 lead on Texas and with Tampa Bay having already won the first game, statistics would have predicted an easy victory for the Rays. Statistics would have been wrong.
James Shields may have the nickname Big Game James, but he surely is not. China may be the darling of many economics fans, but she doesn't have what it takes to compete in the post season. She doesn't have her best and brightest, because they are all dreaming about free agency.