I am beginning to feel as if I am being gaslighted. For those not familiar with the reference. Gas Light was a 1930s play in which a scheming husband keeps turning the gas lights in his house up and down, then keeps telling his wife that she is crazy when she comments on the changes. […]
Read more...China is not playing nicely in the sandbox. The nitty gritty of trade seldom gets the attention it warrants, but enough mercantilist measures can trigger retaliation, which most observers agree would merely precipitate a race to the bottom. And China, which in many ways has the most to lose from protectionism, has been tempting fate. […]
Read more...One of the alleged reasons for cheer on the economic front is that major foreign economies are bottoming. For instance, Japan reported the biggest increase in industrial production in 56 years roughly two weeks ago, A comment from a Bloomberg story on that release: This is not so much a green shoot as it is […]
Read more...The bits of evidence that provided the strongest support to green shoots backers have been the rise in stock prices and possible signs of slowing in job losses. However, the rally warrants considerable critical scrutiny. First. violent rallies are more characteristic of bear market head fakes than new bull markets. And this rally has featured […]
Read more...As we have said, electricity use is a very reliable contemporaneous economic indicator. China’s power output and consumption figures say the economy is contracting. From China Stakes (hat tip reader Michael): China’s power consumption in May continued to decline. Although the National Bureau of Statistics denied the conflict between economic growth and power consumption decline […]
Read more...The Fed has a mess on its hands. Yields on ten and thirty year Treasuries have shot up in the last few days as investors have become fixated on burgeoning Treasury supply in coming months and years. and, as belief in the “green shoots” story is rising, a shift to riskier assets. In addition, while […]
Read more...Even though it is risky to be skeptical when at a remove, we had trouble buying into the bullish talk on China. First, in the Great Depression, it was the creditor/exporter America that had a far more difficult adjustment than the wastrel debtors, who simply defaulted. Second, the stimulus package, which has been widely touted, […]
Read more...So much for the green shoots theory, at least as far as an early Chinese recovery is concerned. From AFP (hat tip reader Michael): Chinese exports fell 22.6 percent in April from a year earlier in the sixth straight monthly decline, state media said Tuesday,… Exports from the world’s third-largest economy totalled 91.94 billion dollars […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns On Monday, I mentioned that the Asian Development Bank Fund was a clear sign that Asia was cutting loose from the west and looking to take care of things domestically. WIlliam Pesek of Bloomberg News put out a piece this morning echoing those sentiments, but also […]
Read more...As readers may know, power use is considered a good gauge of economic activity. And while many have pointed to loan growth as an indicator that China is making a recovery, energy consumption has yet to confirm it. From ChinaStakes (hat tip reader Michael): Power generation in China dropped again in April, indicating that the […]
Read more...It’s easy for Americans to pooh-pooh bearish talk about the dollar. Yet the sterling was once the reserve currency, and has fallen, what, by 80% since it lost its standing. With increasingly dubious accounting and lax enforcement, the US capital markets no longer stand out by virtue of being better regulated. Yes, they still may […]
Read more...Submitted by Edward Harrison of the site Credit Writedowns China is really looking at a lot of other options to get away from the U.S. dollar. The latest report is that it has been building huge gold reserves. There is no doubt that China wants to get out and away from the U.S. dollar now. […]
Read more...We’ve mentioned earlier that it was inevitable that China would reduce its purchases of Treasuries, independent of its desire to diversify away from them. With trade falling (although China still has a high surplus) and hot money inflows reversing direction, China has less reason to buy foreign assets. From the New York Times: Reversing its […]
Read more...We’ve been treated as being a bit daft when we dared suggest that the dollar’s status as reserve currency was at risk. But after the Fed moved officially to quantitative easing last week (after saying it they might go that route back in December), the euro strengthened. Many have argued that that the ECB lacked […]
Read more...Ooh, the posturing is getting interesting. As we noted in Links last night, Timothy Geithner has already climbed down from his “currency manipulator” saber rattling by pressing the G-7 to deliver a much more China-friendly statement on what they’d like to see it do with the yuan (the original version urged letting it appreciate. the […]
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