On China capital outflows . . . the U.S. middle class . . . no more quarterly earnings guidance?

Some notable quotes from what we’ve been reading today:

“Private citizens [in China] are now allowed to take up to $50,000 per year out of the country.  If just one of every 20 Chinese citizens exercised this option, China’s foreign-exchange reserves would be wiped out.”

   -Kenneth Rogoff, Harvard economics professor in “The Great Escape from China”  https://www.project-syndicate.org/commentary/china-devaluation-capital-flight-by-kenneth-rogoff-2016-02

Source:  Sydney Morning Herald

Source:  Sydney Morning Herald

“. . .while we’ve heard a lot about the economic decline of the [U.S.] middle class, the cultural decline of the white middle class isn’t discussed nearly as often.  It should be . . .We compliment ourselves that a generally meritocratic system is open to far more people than was true 50 years ago.  And it has been – but the resulting culture of ambition paradoxically erodes middle-class confidence.  Today the vast middle of the middle fears that unless you’re on the way up, you’re on the way down.”

   -R.R. Reno, “How Both Parties Lost the White Middle Class,” The New York Times  http://www.nytimes.com/2016/02/02/opinion/campaign-stops/how-both-parties-lost-the-white-middle-class.html

 

Source: Financial Times

Source: Financial Times

“Over time, as companies do a better job laying out their long-term growth frameworks, the need diminishes for quarterly EPS guidance, and we would urge companies to move away from providing it.  Today’s culture of quarterly earnings hysteria is totally contrary to the long-term approach we need.”

   -Laurence D. Fink, chief executive of BlackRock in an open letter to CEOs  http://www.nytimes.com/interactive/2016/02/02/business/dealbook/document-larry-finks-2016-corporate-governance-letter.html