Industrial production in China accelerated in November to 6.2% from an abysmal 5.6% in October. As per usual, any similar change is met with assurances that this time, unlike all prior, everything is working. It has become a regular game of ill-considered contention, as every single move in IP or some other factor that stops declining is immediately and confidently [...]
The latest developments from China’s monetary realm were the IMF’s inclusion of RMB into its “reserve” basket, and at a proportion greater than either the pound or yen. None of that is surprising, however, nor is it truly meaningful as a practical matter. The change is more of an official stamp upon what transpired long ago, with little bearing on [...]
There are times when you can distill the utterly complex into something elegantly simple. This is one of those times, as there really should be no doubt as to “what” and “why” about December so far. From repo to crashing EM’s to crude oil, the common theme is both eurodollar and Asian “dollar.” In that sense, it might be fair [...]
This belongs with the last post on the highly “disturbed dollar” but I felt it deserved its own separate piece to feature downstream of funding. Given the liquidity backdrop describing a broad range of extraordinarily disconcerting prices and liquidity rates, the selloff picking up pace in junk is anticipated. Even still, the nature of the crash and that it is [...]
The problem with exchange rates is that they don’t always tell us anything about what everyone seems to think. In fact, the more wholesale financial exhibitions in a particular currency, the less traditional interpretations conform. In many ways, this is very much like transitioning between classical physics in the Newtonian, deterministic paradigm into quantum physics’ often strange and seemingly incoherent [...]
China’s trade estimates continue the trend of the global economy pushing closer to recession, assuming that it is not already there. We know that the lower part of the global supply chain below Chinese manufacturing and assembly, the resources and materials flow, has already been pushed beyond simple recession in some places, like Brazil, into defining a new disastrous economic [...]
While some are shocked that China may have “used” a huge amount of “reserves” in November, that is only because so many myths and anachronisms continue to abound in the mainstream and beyond. Any conversation about forex in the context of central banks and national government agencies is one that still views money from a traditional standpoint – as if [...]
Crude oil prices are exhibiting all the signs of an increasingly difficult funding environment. The front end of the futures curve is being bent dramatically in relation to even close maturities just outside the next few months. Such contango is the obvious imprint of finance, though that is not to say that economic expectations are neutral in the curve. Far [...]
If the junk bond bubble was this week’s most visible inducement toward illiquidity, there have been more than enough indications that might corroborate and explain. With a few more days trading, the huge jump in BofAML’s CCC junk index rate has been confirmed – with another albeit smaller surge again yesterday. At now 16.74%, that is significantly above the prior [...]
Chinese stocks “unexpectedly” plunged last week in a fit of stormed selling that reminded of August rather than the placidity that has been claimed of China since. By mainstream account, China has fixed its bout of “selling UST” and “outflows” while also providing two double doses of “stimulus.” The PBOC had even taken to a higher fix in the middle [...]
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