If for the Asian “dollar”, then China’s inability to place an economic bottom is a problem for every market and economy. The more hopeful mainstream rhetoric from the summer is now gone, just as the “dollar” would have it. China’s variations have far too closely matched these “dollar” waves which, in the midst of another, is not a hopeful sign [...]
The ISM for August was the lowest reading since the taper drama of 2013. At just 51.1, there isn’t any real basis for suggesting the manufacturing sector is even expanding (no matter what these sentiment surveys claim about that 50 dividing line). The “correct” interpretation is one which discards the exact figure for the relativism. For once, media commentary was [...]
Copper prices are getting pummeled this morning. Since copper is somewhat unique in its setting between wholesale finance and the real economy, but most especially what might fairly be termed the Asian dollar, it functions not just as a “dollar” proxy but perhaps more focused than that. We can assume by copper’s selloff today (the price for October futures delivery [...]
Outwardly, you can appreciate why central banks act as they do under serious and dangerous circumstances. Prices aren’t just what someone will pay but also represent information that is transmitted broadly to all corners. Thus, if something is going wrong there are prices that will show it, potentially diffusing contagion to other places and markets. From a child-like perspective, it [...]
With close experience to the “dollar” run in July and August, we should expect that at least the contours of that disorder would be visible in the TIC data for July. The figures provided by the Treasury Dept. did not disappoint. In fact, the “dollar” waves themselves become almost fully visible in the data here and have really illuminated the [...]
Being September 15 and thus entering the final two weeks of the quarter, it seems appropriate to review all the liquidity bottlenecks (or at least the symptoms of them). Since GC repo rates found themselves retracing the end of Q1 at the end of Q2, it feels appropriate to start there. As you might expect, the repo rates thus far [...]
I think the dominant feature of August was rising interbank “dollar” rates; everything that followed out in the open was traced to “whatever” was taking place in funding markets. Repo rates shot upward, as did unsecured LIBOR (leading to serious credit risk implications via TED). All that led into the yuan crisis escalating beyond the PBOC’s rather limited control (which [...]
There is no bottom in sight yet for China. Despite five interest rate cuts and traditional interpretations of monetary “stimulus”, the economy continues to decelerate beyond mainline understanding. Industrial production was just 6.1% in August, marking the thirteenth consecutive month (counting January, which is combined with February due to China’s New Year) below 8%, while retail sales rose 10.8%. Fixed [...]
It seems as if the PBOC is doing a whole lot and getting very little from it. That is actually expected at least to anyone not caught up in the cult of QE and the like, as that is the very nature of central banks dating back to the original at the Bank of England. Even though the focus has [...]
In a world saturated by derivatives, the concept of a bellwether of a bellwether might actually make sense. If China is one for the global economy then perhaps South Korea might be it for China. Unlike Japan, South Korea hasn’t had the yawning chasm of QQE to alter its balances, therefore the level of shipments particularly to China offer perhaps [...]
Stay In Touch