How physical capital differs from human capital with respect to the relationship with the owner? How do you think of the argument on the limited role of increasing human capital in economic growth? Physical capital is independent of its owner; that is to say that physical capital can be separated from its owner and can change ownership over the course of it development. Human capital on the other hand, is inherent to its owner and the two cannot be separated, both ensuring the owner has the possibility of enjoying benefits of investment in this type of capital, but also placing inherit limits on the quantity and potential transferability of this type of capital. The argument that the upper limits on human capital investment limits eventual marginal returns to future investment suggests that investment in human capital has a limited, or decreasing over time, impact on economic growth. We should be cautious to discredit human capital investment, however, because human capital investment also has an indirect impact on the efficiency and productivity of physical capital: as technology advances and the efficiency of physical capital depends more and more on technological advancement, human capital advancement, such as quality of schooling, becomes more and more important in the full utilization of the so called endless driving power of physical capital. Yes, our current scales of health are top censored and one can only enjoy so many years of schooling, but health standards improvements and quality of schooling are both constantly advancing targets.
On March 06, financial times published an article written by Andrew Collier: Uncovering the conduits for China’s capital flight. As we all know, capital flight is a universal phenomenon in china. Many factors attribute to this situation, just like expectations of a weaker RMB, too much money owned by wealthy people in china is made by illegal approach, evading foreign-exchange controls, avoiding regulation and high taxes and etc. In the past, there are many ways for people to transfer their money out of china. It can be divided in to current account, capital account and other illegal ways. With the development of world economy and trade shape, Chinese investors have discovered a new way to spirit money out of the country behind the backs of the country’s regulators. The commonest way is service payments. Instead of overpaying for an item, they simply pay for a service that never occurred. Many other realistic things happened recently attribute to China’s capital flight. With China’s property bubble coming to an end, the ability to generate quick profits through the Shadow Banks is no longer available to the country’s wealthier citizens. Many also are faced with President Xi Jinping’s continuing crackdown against corruption. Meanwhile, the declining GDP numbers – with Premier Li Keqiang this week pointing to 7 per cent as the new normal – has made the one way bet on the RMB less attractive. This explains why investors are looking for a safe haven for the money overseas. There are a couple of methods that have become popular over the past few months. For example, study abroad schemes, interbank borrowing, overseas branches of domestic companies and false joint ventures. In 2014 ， bankers involved estimate that as much as 40% of the larger service transactions do not involve actual services. This suggests close to $200 billion of all service payments are in reality permanent exports of capital. That number could double in 2015. I think it will have a big effect on many aspects of not just world but also Chinese economy. These would include the value of the RMB, the amount of domestic money supply and the ability of China to stimulate the economy. There is also a huge impact on the value of global assets where the money is being invested, such as overseas property and stocks. In addition, there is the unknown impact on the value of the assets held by China as foreign exchange.
1.Growth:Capital and Productivity. 2.Differences due to factor accumulation(k);Differences due to productivity(different functions fo production A);Differences due both to productivity and factor accumulation; 3.The Nature of Capital: (1)capital is productive; (2)capital is produced(not from nature); (3)capital is rival; (4)capital earns a return; (5)capital wears out; 4.Production Function:Capital's Role: (1)General aggregate production; (2)Special producton function with constant returns to scale; (3)With CRS, per capita production becomes more interesting; 5.Capitals per Worker and DMR(diminishing marginal returns);
In China, trust firms shift, rather than reduce, shadow banking riskSunday, 15 Mar 2015 | 7:30 PM ET Reuters 4 SHARES COMMENTS Start the Discussion Getty Images China's trust firms, with total assets of $2.2 trillion, are shifting more cash into frothy capital markets and over-the-counter (OTC) instruments instead of loans - blunting regulators' efforts to reduce shadow banking risk. By redirecting money into capital markets and OTC products like asset-backed securities (ABS) and bankers' acceptances, trusts are acting less like lenders and more like hedge funds or lightly regulated mutual funds. And the shift - a response to a clampdown last year on trust lending to risky real estate and industrial projects - means a significant chunk of shadow banking risk is migrating rather than shrinking. China trusts take in funds from retail and institutional investors and re-lend or reinvest that money, often in parts of the economy that struggle to obtain bank credit, like mid-sized private enterprises or municipal industrial projects. As of end-2014, total trust assets were 14 trillion yuan, according to China Trust Association data. Previously, people who bought into opaque wealth management products, many of which were peddled by banks but actually backed by trust assets, found themselves heavily exposed to real estate loans. Trust firms' changing asset mix means these investors may now instead find themselves exposed to high-yield corporate debt (junk bonds), volatile stock funds or risky short-term OTC debt instruments. While this could help keep the wealth management industry running, and by extension help the trust industry stay afloat, it could delay efforts to properly price risk. Read More A shadow banking sector has gotten 65 times larger A Reuters analysis of China Trust Association data shows that while loans outstanding grew just 8 percent last year - far below the 62 percent growth in 2013 – growth in obscure asset categories including "tradable financial assets" and "saleable fixed-term investments" was 77 percent and 47 percent, respectively. Funding stress Sources at two major trust firms, who asked not to be named due to the issue's sensitivity, confirmed they were shifting investment into the capital markets and OTC instruments. An individual at one of China's top three trusts said that in the past year his firm's investment in shares and bonds grew 30-40 percent and 50 percent, respectively - helping explain where some of the leverage that has driven recent Chinese stock and fixed income market rallies has come from, and raising questions over how sustainable those rallies may be. He said his trust had begun investing in ABS and bankers' acceptances - tradable claims on a company's future revenues - in January and October 2014, respectively, and would invest more this year. Issuance of bankers' acceptances, the riskiest form of shadow finance, slowed for most of last year only to rebound late in the year, while ABS issuance has risen rapidly over the past year as China's formal credit markets tightened. Chinese companies often use bankers' acceptances as a substitute for cash, so an increase in issuances can suggest businesses are under funding stress. Net issuance of bankers' acceptances surged from the fourth quarter of last year, and in January hit the highest level since the first quarter of last year, eclipsing trust loans and company-to-company "entrusted" loans as the largest net source of shadow finance. This could imply that regulators' efforts to squeeze the shadow finance sector have been only partially successful. A spokesperson for the China Banking Regulatory Commission declined to comment when reached by telephone. Reinvention While overall shadow finance growth slowed to 43 percent last year, according to People's Bank of China data, this 'leakage' from one kind of shadow financing to another reduces the impact of the regulatory crackdown on the sector. Trust lending was by far the fastest growing form of finance in China from 2004-2014. Loans from trust firms expanded by over 26 times from end-2005 to an estimated 5.5 trillion yuan ($878 billion) outstanding by end-2014. Total outstanding debt in the Chinese financial system during that period merely quadrupled. During that period, trusts were a vital financing channel for local governments restricted from borrowing in formal debt markets. But the explosive growth of outstanding trust loans worried Beijing and prompted last year's crackdown. Trusts have since struggled to reinvent themselves as something closer to traditional asset managers or private funds. by Taboola MORE FROM CNBC How a trader made over $1 million in two days Why Google's Schmidt says 'Internet will disappear' Cramer's Tesla warning: Musk is a total disaster Buffett: These investments are a 'fool's game' Cramer: How to play Apple and make a fortune Cramer Remix: Make a fortune on these 4 stocks
Bangkok (CNN) -- Thousands of protesters have surrounded Bangkok's Government House seeking the removal of Thailand's embattled caretaker government, amid soaring political tensions in the wake of former prime minister Yingluck Shinawatra's ouster. The People's Democratic Reform Committee (PDRC), which has been protesting against the government since November, is pushing to replace the country's caretaker administration with an unelected interim government. Protest leader Suthep Thaugsuban took to the stage and told those gathered: "We will sleep here tonight, we will eat here. After lunch ... we will go to visit the Parliament House, because there is a meeting to select a new Speaker of the House today. "If the Speaker is a slave of Thaksin, there will be one treatment; if not, there will be another treatment for them." The PDRC has been seeking to rid Thai politics of the alleged influence of former prime minister Thaksin Shinawatra, Yingluck's telecommunications tycoon brother who was overthrown in a 2006 military coup and has since lived in self-imposed exile to avoid a corruption conviction. Lt. Gen. Paradon Patthanathabut, security adviser to the prime minister told CNN that the PDRC had mobilized supporters from the countryside to join the protests in the capital. "It is still difficult to estimate the crowd at this moment. But roughly, we think between 30,000-60,000 people might join today's rally." He said smaller groups of PDRC protesters were also gathering around Bangkok television stations. "We are monitoring (the situation) closely," he said, adding that 60,000 security forces were on standby. Despite the large crowds gathered, the scene at Government House was relaxed, with stalls being erected and free food and drink handed out. A minute's silence was held for those killed in the country's longstanding political conflict. 'Judicial coup' ? The march comes at the end of a week of political chaos in Thailand, which saw Yingluck removed from office by a top court Wednesday, in what her supporters see as a "judicial coup," and indicted by an anti-corruption body Thursday. Her supporters are planning their own mass rally to protest the decisions Saturday. Members of the National Anti-Corruption Committee unanimously decided to indict Yingluck for dereliction of duty over her government's controversial rice subsidy scheme, NACC member Wicha Mahakun told reporters in Bangkok Thursday. The Senate will now vote on whether to impeach her. Asked how the 46-year-old could be impeached when she had already been dismissed from the premiership, Wicha said the case still needed to be reviewed by the Senate, as Yingluck could be banned from holding political office for five years if impeached. Analysts had speculated that the commission might also indict Yingluck's replacement as caretaker prime minister, the deputy prime minister and commerce minister Niwatthamrong Boonsongpaisan, creating a political vacuum. But Wicha did not announce any measures against the new premier. An NACC committee was also considering whether to file criminal charges against Yingluck, but had not yet found sufficient evidence, he said. The rice subsidy program, introduced in 2011, pledged to pay farmers well above the market rate for their rice, but has run into financial problems. Critics say it has wasted large amounts of public funds trying to please rural voters, hurting exports and leaving the government with large stockpiles of rice it can't sell without losing money. Yingluck has previously said she was only in charge of developing policy around the scheme, not its day-to-day implementation, accusing the commission of unfair treatment. READ MORE: Yingluck denies corruption allegations over rice program 'Political freefall' Analysts warn the week's developments leave the country facing "political freefall" and the potential resumption of violent clashes. "The post-Yingluck polarization is likely to deepen and intensify," said Thitinan Pongsudhirak, political scientist at Chulalongkorn University. "We are now looking at a political freefall... Much worse looks likely in the near term, before we can hope for improved circumstances in the longer term." Officials confirmed Thursday a grenade had been thrown at the house of one of the Constitutional Court judges whose ruling forced Yingluck and nine cabinet ministers from office. Paradon told CNN nobody was hurt in the early morning attack on the home of judge Jumpot Kaimook. "It landed on his garage," he said. The court removed Yingluck, who was elected in 2011 and had been serving as caretaker prime minister until elections could be held, after finding her guilty of violating the country's constitution for reassigning a senior security official in 2011. The official was replaced by the then national police chief, whose role in turn was given to Priewpan Damapong, a relative of Yingluck. Damapong is the brother of Thaksin's ex-wife. 'Polarization to intensify' Observers say Yingluck's dismissal and indictment has heightened the risk of clashes between opposing camps, and made near-term compromise solutions unlikely. Analyst Paul Quaglia, director at PQA Associates, a Bangkok-based risk assessment firm, said the court's removal of an elected prime minister on what he described as "fairly weak" grounds was viewed by the government's supporters as a case of politically motivated judicial overreach. "They consider it a way to usurp democratic elections," he said. Yingluck is the third Thaksin-linked prime minister to be dismissed by the Constitutional Court, which also dissolved Thaksin's Thai Rak Thai political party in 2007, raising suspicions among government supporters that the institution was biased against them. Thitinan said the appointment as caretaker prime minister of Niwatthamrong, seen as closely affiliated to Yingluck and her brother, was poor judgment, especially when another deputy prime minister, Pongthep Thepkanchana, would have been a more acceptable compromise candidate. "He lacks the stature and networks to see through an interim caretaker administration," he said. "Nevertheless, no matter who comes in as the new caretaker, the tensions will mount." Widening divide Thailand's widening political divide pits anti-government, predominantly urban "yellow shirt" protesters against the pro-government, mainly rural and working class "red shirts." The yellow shirts, drawn mainly from Bangkok's middle class, royalist establishment, allege that Yingluck is her brother's puppet and seek to rid Thai politics of her family's influence. Led by the PDRC, they began their protests in November, outraged by her government's botched attempt to pass an amnesty bill that would have paved the way for the return of Thaksin to the political fray in earnest. Parliament was then dissolved in December ahead of a snap February general election that was disrupted by anti-government protesters, and subsequently ruled invalid by the Constitutional Court. The yellow shirts are seeking a new government -- but not through elections, which the opposition Democrat Party has boycotted, arguing the alleged corruption of their political rivals makes widespread reform necessary before any meaningful vote can be held. "They claim the Thaksin clan as they call (it) is corrupt and has dominated the country's politics, and the only way forward is to remove the Thaksin influence from politics and not have elections," said Quaglia. Suthep, a former deputy prime minister for the Democrat Party, has instead called for power to be transferred to an unelected "people's council." But Quaglia said the opposition's real motivation for avoiding elections was clear. "The Democrat Party say 'No, we can't have elections,' because they know they will lose those elections." In contrast, the red shirt supporters of Yingluck and her brother, many of whom hail from the north and northeast of the country, accuse the court of bias against their side. PDRC spokesman Akanat Phrompan told CNN his movement did not recognize the legitimacy of the caretaker government. "Currently there is no government to govern this country, so we must find a way to appoint a new government." 'Breaking point' Meanwhile, the red shirts are planning their own rally in Bangkok Saturday to protest what Quaglia said they saw as "a judicial coup." In the wake of the court's ruling Wednesday, supporters at the red shirts' Bangkok headquarters were defiant. "This is the breaking point now, everything is leading up to the breaking point," Kanthira Ketawandee, a Bangkok piano teacher and Yingluck supporter told CNN. "I would say Yingluck has died (in) her duty for democracy." Thida Thavornset, a red shirt leader urged supporters to join Saturday's rally. "We won't give up until we win." Elections are scheduled for July 20, but Thitinan said he believed it was "unlikely" that a vote would proceed in the wake of recent developments. "The PDRC appears intent on pressing on for an appointment government of its preference, which can only galvanize red shirt protests," he said. "A showdown is looming." READ: Thai PM Yingluck Shinawatra dismissed from office by court
Four Reasons Why There Is No 'Pent-Up' Capex Spend Submitted by Tyler Durden on 12/17/2012 12:36 -0500 Morgan Stanley Consensus seems convinced (and short-term market prevarications suggest) that once we get past the 'uncertainty' of the fiscal cliff, then there will be a surge in pent-up spending from companies in the first half of 2013 . Morgan Stanley's Adam Parker snubs the mainstream meme and looks at the data - finding four significant reasons why a surge in capital spending is unlikely. From 'average' sales-to-capex ratios and manufacturing utlization to inventory levels and the overall trend in deprecation , Parker interestingly questions whether "high capital spending is ever good?" Via Morgan Stanley, The consensus sees pent-up demand for capital spending from C-level executives ready to spend , but who want clarity on a number of laws that may change in the coming year. While no doubt uncertainty has weighed on corporate decision-making, we thought it might be timely to look at capital spending trends a bit more holistically. Our conclusion – a large capital spending surge is unlikely. Is high capital spending ever good? We analyzed the correlation between changes in capex-to-sales and prior, current and future sales growth. If capital spending picked up in the energy sector following a fiscal compromise, that would likely be more bullish than it would be for telecom, as the former is historically associated with future sales growth, whereas the latter is generally a reaction to past sales growth. While we don’t see it as likely, a capex ramp in technology and materials is typically positive for higher sales later in the subsequent year, even if it causes a nearer-term sell-off in stocks. Generally, though, low capital spenders have usually been rewarded relative to their high-spending counterparts. In health care and materials, higher capital spending historically has been much better than in technology or telecommunications. Investment conclusion: Four reasons why we don’t think a large capital spending surge is likely. 1. Current and forecasted capital spending-to-sales levels: While global capital spending relative to sales is forecasted to be down in 2013, it is close to average levels over the past decade. Four of ten sectors (utilities, materials, energy, and technology) are forecasted to have above “trend” capital spending to sales for 2013, so upside surprise is not as likely here . 2. Manufacturing utilization: While utilization levels have risen sharply from the 2008 lows, recent trends have slowed. The steadiness of the recent decline and the ample room for higher utilization until capacity is tight suggest that a surge is not likely . Only six of 22 major industries have utilization levels above their long-term average. 3. Trend analysis: We analyzed the cyclical level of DA expense (above the trend level) and compared it with capital spending expectations at the industry group level. On the margin, we think staples and technology may spend more capex in 2013 than industrials and consumer discretionary stocks, relative to current expectations. 4. Inventory levels: Structurally, global inventory-to-sales has been downward sloping for years. However, over the last decade or so, inventory levels have stabilized at just less than 10% of sales. While US inventory levels seem leaner than those outside the US, a big inventory build requiring a capacity surge seems implausible. Perhaps auto components, electrical equipment, and construction could see some build, particularly relative to communications equipment. Source: Morgan Stanley Average: 4.6 Your rating: None Average: 4.6 ( 5 votes) Tweet Login or register to post comments 4840 reads Printer-friendly version Send to friend Similar Articles You Might Enjoy: David Rosenberg: "RIP Wealth Effect" Watch The NAR's Larry Yun Explain The Pending Home Sales Miss What Every Farmer And Commodity Trader Will Be Glued To Tomorrow at 830ET Is The Inexplicable American Consumer Rebelling? From Cautious Optimist To Skeptical Pessimist
The 15 Best Things Paul Tudor Jones Has Ever Said About Trading "The secret to being successful from a trading perspective is to have an indefatigable and an undying and unquenchable thirst for information and knowledge." "Intellectual capital will always trump financial capital." "The concept of paying one-hundred-and-something times earnings for any company for me is just anathema. Having said that, at the end of the day, your job is to buy what goes up and to sell what goes down so really who gives a damn about PE's?" (P/E is price to earnings ratio.) "Every day I assume every position I have is wrong." "Losers average losers." "There is no training, classroom or otherwise, that can prepare for trading the last third of a move, whether it's the end of a bull market or the end of a bear market." “You adapt, evolve, compete or die.” "Trading is very competitive and you have to be able to handle getting your butt kicked." "If trading is like chess, then macro is like three-dimensional chess." “The whole world is simply nothing more than a flow chart for capital.” "Failure was a key element to my life’s journey." "Where you want to be is always in control, never wishing, always trading, and always, first and foremost protecting your butt." “After a while size means nothing. It gets back to whether you’re making 100% rate of return on $10,000 or $100 million dollars. It doesn’t make any difference.” “I believe the very best money is made at the market turns. Everyone says you get killed trying to pick tops and bottoms and you make all your money by playing the trend in the middle. Well for twelve years I have been missing the meat in the middle but I have made a lot of money at tops and bottoms." "At the end of the day, the most important thing is how good are you at risk control." TraderPaul Tudor Jones.... http://video.sina.com.cn/v/b/114542530-1500481971.html
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