To change your current location please select from one of Julius Baer’s locations below. Alternatively if your location is not listed please select international.


Please select
Additional e-Services

*The location identified is an approximation based on your IP address and does not necessarily correspond to your citizenship or place of domicile.


Sign up for Insights newsletter


Sign up for Insights newsletter

How to win a loser’s game

Fears that China’s second largest property sales company may miss an upcoming coupon payment on Thursday, potentially triggering a cross default of its offshore debt, is sparking contagion fears in the market. Yet, we do not see this as China’s ‘Lehman’ moment.




Key take-aways

  • Winning in politics and investing is about making less mistakes than the others. This week is a prime opportunity for Chinese authorities and central banks to set examples.
  • Investors should brace themselves for buying risk assets as sentiment approaches contrarian territory.

Policy mistakes have become the biggest risk to the economy and financial markets. This is what we highlighted time and again over the summer of 2021. Policy mistakes pertain to both central banks and governments, as their rescue measures have saved the day when handling the health crisis over the past 18 months. So a premature or disruptive removal of policies could have a bigger impact than the pandemic ever had. “It’s a loser’s game”, as the saying goes for the investment business. It is all about making less mistakes than the competitors. The same holds true for politics, where Winston Churchill always claimed, “Democracy is the worst form of government except for all the others”.

The coming days and weeks offer the best opportunities for political leaders to set a good example. First, Chinese authorities are confronted with what some observers have coined ‘China’s Lehman moment’. We doubt the parallel holds true when considering the low importance of Evergrande for China’s banking system (see our Number Of The Week):

Number Of The Week

The potential for policy mistakes is spooking investors: when looking at investors’ surveys, the risk appetite has dropped below the lows of this year and is approaching those from 2020. This means investors should brace themselves for contrarian buying opportunities but wait to take action once the actors have proved to be on top of the ‘loser’s game’.

How should you position your portfolio in the view of Julius Baer's experts?

> Contact us to find out

We use cookies to make our website user-friendly for you. Please click "accept" or "customise settings" to customise which cookies will be set. Your preferences expire after six months. A default 'no consent' option applies in case no choice is made. Detailed information on the handling of cookies and data privacy, as well as your right to withdraw your consent at any time, can be found in our Data Privacy Policy.