The Shanghai Composite Index for shares on China’s somewhat stock market peaked on June 12, a Friday before a weekend in which every major analyst and China-watcher expected the PBOC to unleash rate cuts. It wasn’t a very good week in terms of economic data for China, which is likely why the call-to-action for the PBOC was nearly universal. For [...]
There can be no mistaking that Chinese stocks are in a bubble. Since November 21, the Shanghai SSE Composite index has risen more than 100%. Going back to July 22, the gain is nearly 145%. Those dates are not random coincidence, as they mark specific points of PBOC activity. The stock bubble in China is certainly a monetary affair, but [...]
For the month of June 2014, Chinese industrial production rose to 9.2%, which was the highest rate of 2014 to that point. As with the US (as if the US and Chinese economies are related), the Chinese economy in early 2014 seemed to be suffering a bit of a slow patch though there wasn’t the Polar Vortex to divide opinion. [...]
With every piece of “unexpected” weak data from China, the calls for more “stimulus” grow louder and more desperate. And still the PBOC sits on the sidelines with only minor adjustments. The latest of those has been what amounts to a muni swap, with banks eligible to pledge municipal government debt as collateral in repurchase operations, SLF’s, MLF’s and even [...]
It is exceedingly difficult these days to detect where finance ends and the economy begins. That was intended, of course, as it was believed that greater intrusiveness on the part of the financial ends were consistent with greater, and better, economic control. Certain strains of economics have been obsessed since the dawn of the discipline with finding “optimal” outcomes. More [...]
Some people are getting very nervous about China, and as usual that stems from a misreading of the Chinese intentions. This is not to say that one should not be concerned at all, but it is much better to be concerned for the right reasons in order to find a more suitable line of inquiry and analysis. The complications of [...]
Given the dramatic inflection in “dollar” behavior surrounding the March 18 FOMC meeting there wasn’t much surprising in the latest TIC figures for that month. If anything was complicated it was due solely to the fact that this change occurred mid-month. For the most part, the heavy “tightening” trend that began anew after January was reset by the end of [...]
It still seems to be a matter of contention, but even the Chinese government may be seeking to clarify its “reform” stance in light of the orthodox baseline trying to reconcile the downward trajectory of the Chinese economy. That itself was somehow a great task, as all last year the narrative was, as the US, the global economy with China [...]
I think at this point with China, everything from here on out until whatever final resolution to the bubble era will be “unexpected.” That qualification has been overused almost everywhere during this global “recovery” that never was, the latest being China’s exports sinking in April as well as March. Analysts and economists were thinking about a tepid plus sign, expectations [...]
The conventional wisdom last year as it related to the “dollar” was that its ascent had to be confirmation of the divergence between US economic fortune and the continued and even growth misfortune of the rest of the world. That is pretty much standard orthodoxy as it seeks to align financialism with a generic view of the economy. On its [...]
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