Who am I to write a substack?
Who am I?
This is my first foray into publishing in my own name so I think an introduction is in order. My name is Michael Spencer – not to be confused with the Nobel laureate. I have been following Asian economies and capital markets for more than thirty years, first at the International Monetary Fund and then, from 1997 to the end of 2022, at Deutsche Bank in Hong Kong where I was Chief Economist and Head of Research for the Asia Pacific region.
My introduction to Asia in 1991 was an effort to understand the implications for financial stability in Japan after the collapse of the property market. The slowly developing banking crisis was an ongoing preoccupation for a decade. Along the way, I studied the speculative attack against the European exchange rate mechanism, financial crises in emerging markets, a host of financial markets regulatory questions and, in 1993, took an early look at the emerging equity markets in China. But it was the Asian financial crisis that led me to move to Hong Kong in 1997.
There, I was exposed to the full range of market participants and business investors in Asia, whether from within the region or from around the world. Some counterparts had very short-term horizons, measured in days or weeks, that motivated our conversations. Others were considering investments that were expected to pay off over decades. There were as many unique conversations as there were clients and there were thousands of clients a year. An initial focus on how Asia would recover from its crisis soon led to an effort to educate people about the remarkable developments in China as it opened up and launched a decade of rapid growth that transformed not only that country but the global economic system.
But Asia is much more than just China and Japan. It is a wonderfully diverse region with economies both very big and quite small, with varying degrees of openness to international trade or capital flows. I was never at a loss for interesting questions to ask about the region, only the bandwidth to answer more than a few of them. My main interest, through the years, was to understand how Asian economies individually and as a group, interact with the rest of the world.
That’s what I plan to continue with this newsletter. Don’t come here looking for investment advice. I’d always left that to the strategists anyway and now that I am no longer connected to a trading floor I’m not going to be of much use if you want to understand market positioning and who’s doing what in different market segments.
Likewise, I’m not a political analyst. I’m an avid consumer of political commentary and have my own views – and these will likely become evident to readers as I proceed – but I don’t recommend you treat this as a source of political commentary.
But I can do what I have spent most of my career doing – try to make sense of data, connect it with policymakers’ revealed preferences as I understand them and form a view of how economies are likely to perform over a 12-18 month horizon, which has always been my aim. I can’t compete with Bloomberg or Reuters on instantaneous reaction to data and events, but I think I can offer analysis of Asian economic developments and prospects that rivals what you’ll find anywhere else. That was my aim for 25 years and I think I was broadly successful for most of that time.
I will not, therefore, be posting daily notes. I anticipate a roughly weekly pace of commentary. There’s a natural cycle to the data flow – it gets quite shallow late in the month – and there will be occasional political events or major economic developments that will probably provoke me to comment. While there will be an emphasis on the largest economies – China, India and Japan – my goal will be to help readers understand the region as a whole. I’ll write about the smaller economies that are much less represented in the public discourse outside their borders.
My hope is that anyone with an interest in Asia will find what I have to say interesting and helpful. And I hope readers will engage with me and make this more of a conversation than a soapbox.