1 China manufacturing slows for third month (BBC) Chinese
manufacturing has contracted for the third month in a row, according to the
government's latest factory survey. The Purchasing Managers' Index (PMI) showed
a reading of 49.8 for October, unchanged from last month. A figure below 50
indicates that factory activity contracted.
The most recent growth figures showed the country's
economy growing at a rate of 6.9%, the weakest rate since the financial crisis.
It has been hit by a stock market slump and a global slowdown in demand. Economists
had expected October's PMI to show a pick-up to a reading of 50.
The government is trying to move away from being an
export-led economy to a more consumer and services-led one. It has been taking
action to try to spur growth, including cutting interest rates five times so
far this year. Economists at ANZ Bank said the latest PMI survey indicated
there could be further measures to come.
2 The next giant financial crash may have begun
(Paul Mason in The Guardian) Many indicators in global finance are pointing
downwards – and some even think the crash has begun. Let’s assemble the
evidence. First, the unsustainable debt. Since 2007, the pile of debt in the
world has grown by $57tn (£37tn). That’s a compound annual growth rate of 5.3%,
significantly beating GDP. Debts have doubled in the so-called emerging
markets, while rising by just over a third in the developed world.
This summer, the Bank for International Settlements
(BIS) pointed out that certain major economies were seeing a sharp rise in
debt-to-GDP ratios, which were well outside historic norms. In China, the rest
of Asia and Brazil, private-sector borrowing has risen so quickly that BIS’s
dashboard of risk is flashing red. In two thirds of all cases, red warnings
such as this are followed by a major banking crisis within three years.
The underlying cause of this debt glut is the $12tn
of free or cheap money created by central banks since 2009, combined with
near-zero interest rates. When the real price of money is close to zero, people
borrow and worry about the consequences later.
Next, let’s look at the price of real things. Oil
collapsed first, in mid-2014, falling from $110 a barrel to $49 now. Next came commodities.
Copper cost $4.50 a pound in 2011, but was half that in September. Inflation
across the entire G7 is barely above zero, and deflation stalks the southern
eurozone. World trade volumes have contracted tangibly since December 2014.
China – the engine of the post-2009 global recovery
– is slowing markedly. Japan just revised its growth projections down, despite
being in the middle of a massive money-printing programme. The eurozone is
stagnant. In the US, growth, which recovered well under QE, has faltered after
the withdrawal of QE.
It is in the world of geopolitics that the danger of
elite groupthink is clearest. The economic danger becomes clear if you
understand that printing $12tn incentivises every country to dump the final
cost of anti-crisis measures on someone else. But there is now also clear
geopolitical risk.
The oil price collapsed because the Saudis wanted to
stymie the US fracking industry. Right now, although Russian and American
diplomats are capable of sitting together in Vienna, their strike-attack pilots
do not communicate as they attack their variously selected enemies on the
ground in Syria. Europe, weakened by the Greek crisis, its cross-border
institutions thrown into chaos by the refugee crisis, looks incapable of doing
anything to anybody.
So, the biggest risk to the world, despite its
growing seriousness, is not the deflation of a bubble. It is the risk of that
becoming intertwined with geopolitics. Any politician who minimises or ignores
this risk is doing what the purblind economists did in the run up to 2008.
3 Knowing your career assets (Kim Thompson in San
Francisco Chronicle) Talking about your strengths and accomplishments can be
perceived as trivial matters when in reality they are the foundation of your
success. The lack of self-knowledge toward your skills often keeps talented
people from progressing forward.
What are career assets? Think of them as an
accumulation of your interests, values and personality. Everyone has
accomplishments whether it is graduating from college or contributing to the
success of a project but few people can recall specifics of what they did to
accomplish their goals.
Knowing your career assets does more than help you
land a better job — it helps boost your confidence and develops awareness. When
you can readily identify the skills you use in “getting along with others and
giving presentations”, you send a perception of energy and satisfaction.
One reason why people struggle with knowing their
career assets could be the fear of bragging or seeming arrogant. People who are
arrogant are often defensive and clueless about their areas of weakness whereas
confident people will readily admit their shortcomings and strive to improve.
Talking about what you did well is not bragging, rather it’s about the facts.
If you want to broaden your career assets, a good
place to begin in helping you identify your skills and accomplishments is with
a self-reflection exercise. Here are some questions that will help you become
more in tune with your values, strengths and interests:
Name one of your most successful projects and the
skills used to make it successful. What would you do if you knew you couldn’t
fail? Choose five core values that describe you the most. What strengths would
you describe as your “go to” strengths, the ones you use regularly? Answer the
lottery question, “What would you do if money was not an issue”?
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