Macro Minute: Week of September 4, 2023

Today I want to cover a subject that can be controversial, China. I am only going to be looking at it from an economic and investment risk perspective. I have been asked if China’s economic weakness is something to be concerned about. It definitely has gotten media coverage with back-to-back Economist covers.

It is true that China’s economy has disappointed since they have reopened from Covid lockdowns and certain parts of the populace have struggled with employment. We also know that their housing construction got overleveraged and the construction companies have been failing for years. Like every economy that grows very fast, the transition into a more stable economic growth will have some casualties. Let us not ignore that China has had negative headlines many times before.

While I take these concerns seriously, I tend to look to experts with knowledge of managing these risks from an investment point of view. To that end, I recently read Louis Vincent Gave’s latest piece here. In it, he walks through how capitol markets have responded now compared to past economic and market crashes. To sum it up as succinctly as I can, he believes that bank share prices will collapse before a huge market crash caused by the financial system.

So, while there are concerns within China that merit watching, as of now it does not appear that the next financial market collapse is upon us.

DISCLOSURES:

Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Longview Financial Advisors, Inc.), or any non-investment related content, made reference to directly or indirectly in this newsletter will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this newsletter serves as the receipt of, or as a substitute for, personalized investment advice from Longview Financial Advisors, Inc. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. Longview Financial Advisors, Inc. is neither a law firm nor a certified public accounting firm and no portion of the newsletter content should be construed as legal or accounting advice. A copy of the Longview Financial Advisors, Inc.’s current written disclosure statement discussing our advisory services and fees is available upon request.