You do have to wonder to whom the increasingly shrill bond market declarations are being directed. It’s very likely that Bloomberg’s now daily haranguing “the yield curve can’t possibly be right” tirades aren’t meant for UST investors. Rather, it is perfectly evident that the treasury market is going to do what it does regardless, and that the media, in general, [...]
The Communist Chinese government views banking as a core industry, the securities business a core concept of banking. Their domestic sector has therefore been given preference and protection despite market reforms adopted elsewhere in China’s economy. Foreign bank presence has been ostensibly nothing, a fact that the government I believe wanted as a measure of symbolic openness rather than head [...]
One day after the China’s government reported disappointing but consistent trade figures, that country’s National Bureau of Statistics published inflation estimates that are being branded at least on this side of the Pacific as some degree of “hot.” As is usually the case, the characterization is wildly off. China is no closer now to an inflation problem, thus solid growth, [...]
Hong Kong stock trading opened deep in the red last night, the Hang Seng share index falling by as much as 1.6% before rallying. We’ve seen this behavior before, notably in 2015 and early 2016. Hong Kong is supposed to be an island of stability amidst stalwart attempts near the city to mimic its results if not its methods. Thus, [...]
Back in June, China’s federal bond yield curve inverted. Ahead of mid-year bank checks, short-term govvies sold off as longer bonds continued to be bought. It was for some a rotation, for others a reflection of money rates threatening to spiral out of control. On June 19, for example, the 6-month federal security yielded 3.87% compared to a yield of [...]
Hong Kong carefully built its sterling reputation (pun intended) over many years and decades. Through mostly careful rule and careful adherence to rules, there was no imbalance too big or too tough that the HKMA could not readily handle or absorb. The result was a condition that every central bank and monetary authority should strive for. As I wrote back [...]
The most significant part of China’s 19th Party Congress ended in the usual anticlimactic fashion. These events are for show, not debate. Like any good trial lawyer will tell you, you never ask a question in court that you don’t already know the answer to. For China’s Communists, that meant nominating Xi Jinping’s name to be written into the Communist [...]
I really don’t think people quite understand just how much trouble China is in right now. That’s no mystery because in the Western media the Chinese economy is almost always described as somewhere between awesome and magnificent (only slight hyperbole). Their government, on the other hand, is not fooled. General Secretary Xi Jinping opened the Communist Party’s 19th Congress with [...]
Chinese producer prices accelerated in September 2017, while consumer price increases slowed. The National Bureau of Statistics reported this weekend that China’s PPI was up 6.9% year-over-year, a quicker pace than the 6.3% estimated for August and a 5.5% rate in July. Earlier in the year producer prices were driven mostly by 2016’s oil rebound, along with those in the [...]
Chinese imports rose 18.7% in September 2017 year-over-year. That’s up from 13.5% growth in August. While near-20% expansion sounds good if not exhilarating, it isn’t materially different from 13.5% or 8% for that matter. In addition, Chinese trade statistics tend to vary month to month. What is becoming very clear is that China’s economy is behaving no differently than the [...]
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