Jim Jubak has been writing about the financial markets since 1984. He’s been picking stocks online since 1997 and has run a mutual fund since 2010. Way back in 1984 Mr. Jubak worked at Venture magazine, covering technology, the venture capital industry, and the financial markets. In 1992, after rising to editor, he left the magazine to write In the Image of the Brain, a look at how engineers were building neural network computers based on the workings of the human brain and how neuroscientists were using what that machine hardware told them to dive deeper into the human wetware. Writing a book being the highly lucrative endeavor that it is, Mr. Jubak soon had to get a real job, and for the next five years, he worked as senior financial editor at Worth magazine. At the magazine, he spent his summer vacations building horrendously complicated spreadsheets to rank US mutual funds. And, while working as senior financial editor, Mr. Jubak wrote The Worth Guide to Computerized Investing, the...
The Chinese premier and other leaders are touring the country to let them know that growth is OK, and this, says MoneyShow’s Jim Jubak, could have an impact in the next few months.
It’s a little different than what Bruce or Mick do, but Chinese premier Wen Jiabao is doing his own kind of economic rock tour.
He’s touring the country right now talking to entrepreneurs, CEOs, local officials, and saying to them, hey, it’s OK to grow. We’re going to make liquidity available to you, there’s going to be bank lending. We’d like you to focus on growth again.
It’s not so much a pep talk, as it is a series of meetings where basically he’s giving permission for people to pursue this policy line. He’s signaling on a very, very one-to-one, face-to-face basis that policy has changed in Beijing.
So if you were thinking that maybe the old policy, which was still to try to restart growth, meant that you shouldn’t be hiring or you shouldn’t be borrowing because you get in trouble with the authorities, what the premier is doing is saying "Nope, times have changed. We would like you to change too."
Now, if you think about it, this is a very, very large country with lots and lots of people to meet with. So it’s not like he’s going to be finished in a week. And this is going to change course. It’s part of a whole series of moves that China is trying to orchestrate to indicate to people that they don’t want to go back to the bad old days of 6.5% inflation, but "we think it’s under control enough so that we don’t really need to keep the foot on the brake and we’re going to try to get growth going again."
So, you’ve got the Premier doing that, you’ve got the People’s Bank of China loosening here, loosening there, doing their own tool where they basically meet with the big commercial banks to tell them hey, you can lend again in March it looks like, from what we can, that new bank loans increased from February. Money supply really didn’t grow, but it looks like the People’s Bank is trying to gradually get that part of it going again.
So, you’re seeing all these things and up and down the line, all pushing toward a new policy. How long it takes to convince everyone to move together in a different direction. How long it takes for—even once people have decided to move in that new direction, how long it will take to get the momentum reversed so that we’re not slowing, but we’re increasing or steady again.
It’s hard to tell, and that’s really sort of what the markets are worried about. Is this going to overshoot? Have the people in Beijing and at the People’s Bank started this too late, and we may get a harder landing than we expected?
Or is this going to turn out to be enough and in time to keep China growing at, well, somewhere about 7.5%, which is the target for 2012? We’ll find out really over the next two, three months, and it has big, big repercussions for the global economy and for global stock markets.