Argonautica

Our recent visit to China highlighted significant challenges for its economy: although it is an economic model based around low cost manufacturing, China continues to lose competitiveness by pegging its currency to the ever stronger US dollar; its economy is not sufficiently capitalist for its banking system to recognise bad loans and for non-productive capacity to be shut down; infrastructure build continues to be the main government policy tool for stimulus even though the multiplier effect on…

Standard Chartered has this morning announced a loss-making Q3, accompanied by a $5.1bn1 rights issue and a strategic review. As we wrote in August, 'Here for good, or just for now?' we believe that the company had previously been run with too much emphasis on top-line growth and too little regard to prudent provisioning for potential bad loans: in short, previous management of Standard Chartered forgot that banking was a cyclical industry and that with Asian and Emerging Market economies continuing…