UBS Chief Economist Paul Donovan Resumes Publication After “Chinese Pig” Scandal
Nearly four months after UBS chief economist Paul Donovan published a rather off-color, if hardly ill-meaning and career-ending joke about “Chinese pigs” which forced his employer to put his daily notes on hold following some high profile complaints from Beijing, the UBS strategist is back with his first note since June 12.
As a reminder, Donovan set off a scandal during a discussion of Chinese consumer prices, which had risen because a pig virus drove up pork costs. The situation mattered, he said, “if you are a Chinese pig. It matters if you like eating pork in China.”
“Chinese consumer prices rose. This was mainly due to sick pigs. Does this matter? It matters if you are a Chinese pig” – UBS
— zerohedge (@zerohedge) June 12, 2019
A particularly nosy Chinese twitter commentator quickly condemned the first remark, interpreting it as a derogatory reference to local people rather than to ill swine, which then escalated to the highest levels and forced UBS to shelve Donovan for a few months.
So, without further ado, here is his just published bulletin, whose dry humor content is “just right”, even if understandably lacking in commentary on the catalysts for China’s surging food inflation (in retrospect, Donovan was right: Chinese pork prices just hit an all time high.
From Paul Donovan’s audio comment: “Worry, without overreacting”
- Asian equities are lower after yesterday’s weak US ISM manufacturing sentiment poll. Globally, the gap between sentiment and reality is the widest since 2012. Trade taxes worry manufacturers. When asked, manufacturers say they are less than happy about life, but their actions are more positive. Investors should worry about trade taxes. They should not panic about sentiment.
- Global bond yields rose yesterday. Some yield curves steepened. Do steeper yield curves predict an economic boom? They do not, any more than inversions predict a recession. Weaker bond markets reflected a poor Japanese auction. This reflected fewer “captive” investors (who buy for non-economic reasons). Such investors distort bond markets and bond market signals.
- In the interminably tedious EU-UK divorce process, UK Prime Minister Johnson speaks at the Conservative Party conference. Exit proposals to the EU are expected. There is no certainty among investors about the proposals, if the EU will agree a deal, if the British Parliament will pass a deal, or if Johnson will remain as prime minister.
- A trio of Federal Reserve speakers entertains us today, including New York Fed President Williams (an economist, not a lawyer – increasingly rare in central bank circles). Fed comments are likely to attract more attention than ECB comments.
Wed, 10/02/2019 – 08:04