Morgan Stanley: China Looks To US For "Beautiful Deleveraging"

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Mark Melin
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Updated on

From 2009 to 2012, the US entered an era of “ beautiful deleveraging ,” a Morgan Stanley report recently noted, citing “a respected client” who coined the phrase. The concept was a key point of Bridgewater’s Ray Dalio and his debt cycle analysis. Now fast forward to China, where economic central planners are hoping the Asian powerhouse can engineer a similar feat as its leveraged economy. Doing so might require low global interest rates, which could be one reason China has significantly ramped up is purchases of US Treasuries. The moves come as China’s debt was recently downgraded amid concerns over…

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Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.