By April last year, it had become clear that conditions in China were heading into dangerous territory. Even though most mainstream attention was fixed on the then-still growing stock bubble, there was so much that was wrong almost everywhere else. The economy would not stop slowing, and indeed still has not. The financial system was worse, so much so that [...]
The PBOC’s balance sheet was relatively quiet in February, with no large moves on either side of its ledger. In fact, these minor shifts appeared to be more so adjustments than the more extreme efforts the central bank had become used to undertaking. The heavy lifting was accomplished in January at least as far was what is visible, leaving February’s [...]
China’s Total Social Financing hugely disappointed in February, as January’s surge was not followed as if renewed economic enthusiasm. The net flow was RMB 780 billion compared to the record RMB 3.42 trillion the month before. This latest update was instead among the lowest monthly totals since 2010. New loans added up to just RMB 727 billion after increasing RMB [...]
Crude oil prices in the US have jumped back up to above $38 again, leading various financial correlations toward much less depressing interpretations (chiefly stocks). That in turn has allowed the proliferation of the “it’s all over” narrative despite fundamental accounts that continue to suggest otherwise. Being the sharpest rally in WTI since really last April, these reflections appear to [...]
I wrote last week about the OECD’s sudden alarm over global growth “flatlining” but I think it important and relevant to further emphasize why. If you go back only to June last year, their economic outlook for the world sounds distinctly familiar. The OECD has cut its global economic growth forecast for this year but says it expects lower oil [...]
Total Social Financing (TSF) in China jumped in January which really wasn’t surprising given that the figure captures much of the central bank and whatever it does – which was a lot in January. Loan growth, too, surged giving the mainstream a desperate boost even if these estimates don’t mean what everyone seems to think. This is the typical response [...]
Very quietly, the PBOC has been fixing its middle exchange rate against the dollar higher and higher (in dollar terms). Today’s reference rate was 6.3895, up from 6.378 a week ago, with the CNY exchange coming close to 6.40 again for the first time since the disastrous period in late September. Unlike August, there has not been the flood of [...]
Even a quick glance at recent t-bill rates commands further attention. There is obviously a lot going on in the bills market just in the past few months, which may only be unexpected in the sense that there isn’t a plain connection between US government bills and the fireworks elsewhere. T-bills used to be, however, the primary source of repo [...]
Janet Yellen wasn’t the only central banker boxed in by recent “dollar” strife. The Brazilian central bank sparked a counter rally in the real after it had crashed to an all-time low. After absorbing a relentless and devastating devaluation, Banco do Brasil had run itself out of further options. They had already claimed that raising the benchmark SELIC rate to [...]
At first glance, the TIC view of the global “dollar” short was quite placid in April. That makes some sense given that the March 2015 FOMC meeting has been established as a durable inflection in the outward projection of “dollar” funding. The flow direction, at least among what are listed as “private” sources, would seem to conform to that interpretation. [...]
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