Gekko

I REMEMBER when I lived in Canada in the late Seventies getting pompous lectures from cynical local bankers who thought the American embargo on loans to Cuba was stupidly self-destructive. Those bankers had the edifying experience of watching their loans go into default in 1981 and thereafter. They’re still selling for maybe a quarter on the dollar in a good market.

The gist of the lectures was that a firm Communist hand was perhaps the best way to ensure that the lender or investor would get his money back. Guess not. But what we learn from history seems to be that we don’t learn from history, because Hong Kong’s market has been outperforming even our own. It was up 33.5 per cent last year, and its outperformance is continuing this year. This even though the writ of Anglo-Saxon law will not run in Hong Kong after the handover to the Chinese Communist government in five months’ time. Now, the people from the People’s Republic have been entirely open about their intention to ignore even the vague reassurances they originally gave Margaret Thatcher about civil liberties, etc., etc. But the money managers back here have decided to come in right behind the PRC officials and businessmen who are buying up property and businesses, and they’re taking the U.S. public’s money with them.

JD

About the Author

John Dizard

I REMEMBER when I lived in Canada in the late Seventies getting pompous lectures from cynical local bankers who thought the American embargo on loans to Cuba was stupidly self-destructive. Those bankers had the edifying experience of watching their loans go into default in 1981 and thereafter. They’re still selling for maybe a quarter on the dollar in a good market.

The gist of the lectures was that a firm Communist hand was perhaps the best way to ensure that the lender or investor would get his money back. Guess not. But what we learn from history seems to be that we don’t learn from history, because Hong Kong’s market has been outperforming even our own. It was up 33.5 per cent last year, and its outperformance is continuing this year. This even though the writ of Anglo-Saxon law will not run in Hong Kong after the handover to the Chinese Communist government in five months’ time. Now, the people from the People’s Republic have been entirely open about their intention to ignore even the vague reassurances they originally gave Margaret Thatcher about civil liberties, etc., etc. But the money managers back here have decided to come in right behind the PRC officials and businessmen who are buying up property and businesses, and they’re taking the U.S. public’s money with them.