Practical analysis for investment professionals
14 August 2014

Weekend Reads for Global Investors: The Missing Recovery

Posted In: Weekend Reads

At the recent CFA Institute China Investment Conference held in Shanghai, Goldman Sachs economist Jiming Ha painted a not-so-rosy picture of China’s economic growth outlook. He believes government spending has already become stretched in recent months and is simply not able to keep the economy on the current growth trajectory. The latest data released all indicate that the risk of an economic slowdown is on the rise.

The real headline news for this past week, however, came from Japan. Japanese GDP took a sharp dive in the latest quarter, something we have not seen in a major industrialized country for a while. Although the contraction was mostly caused by the increase in sales tax, it still injected more uncertainty into the outlook for Japan’s economic recovery.

The Bank of Korea was probably not encouraged either by its neighbors’ poor showing, or Korea’s own anemic growth picture, for that matter. On Thursday, it announced a 0.25% cut in its benchmark interest rate.

Stock markets, however, decided to take it in stride. Investors apparently believe in not fighting the central banks, as they all seem ready to step back in again like the Bank of Korea to save the world from another recession.

Investors may want to pause and ask themselves: Is it really wise to pump more money into the stock markets while economic recovery is still “missing”?

While the missing economic recovery is affecting the lifestyle of millions, the passing of comedian Robin Williams was the truly tragic story of the week. The talented actor who brought laughter to so many people was not able to recover from severe depression. We have attached a heart-warming story of his friendship with Christopher Reeve.

Global Markets Reaching New Highs on Poor Economic News

Investing

Robin Williams

Making and Spending Money

And Now for Some Truly Weekend Reading


Please note that the content of this site should not be construed as investment advice, nor do the opinions expressed necessarily reflect the views of CFA Institute.

Photo credit: ©iStockphoto.com/temmuzcan

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About the Author(s)
Larry Cao, CFA

Larry Cao, CFA, senior director of industry research, CFA Institute, conducts original research with a focus on the investment industry trends and investment expertise. His current research interests include multi-asset strategies and FinTech (including AI, big data, and blockchain). He has led the development of such popular publications as FinTech 2017: China, Asia and Beyond, FinTech 2018: The Asia Pacific Edition, Multi-Asset Strategies: The Future of Investment Management and AI Pioneers in Investment management. He is also a frequent speaker at industry conferences on these topics. During his time in Boston pursuing graduate studies at Harvard and as a visiting scholar at MIT, he also co-authored a research paper with Nobel laureate Franco Modigliani that was published in the Journal of Economic Literature by American Economic Association. Larry has more than 20 years of experience in the investment industry. Prior to joining CFA Institute, Larry worked at HSBC as senior manager for the Asia Pacific region. He started his career at the People’s Bank of China as a USD fixed-income portfolio manager. He also worked for US asset managers Munder Capital Management, managing US and international equity portfolios, and Morningstar/Ibbotson Associates, managing multi-asset investment programs for a global financial institution clientele. Larry has been interviewed by a wide range of business media, such as Bloomberg, CNN, the Financial Times, South China Morning Post and the Wall Street Journal.

2 thoughts on “Weekend Reads for Global Investors: The Missing Recovery”

  1. RW says:

    It’s disappointing that for whatever reasons, the format of this has changed so much over the past few months. The content has gone from interesting insights and thought provoking philosophical views on investing to a weekly link fest on news stories.

    1. Larry Cao, CFA says:

      Dear RW,

      We appreciate your continued interest in the Weekend Reads series. It’s loyal readers such as yourself and feedback such as what you provided that encourage us to keep on improving our content.

      Warm regards,
      Larry

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