Note the wording Goldman used in describing the implications of the decline in income tax revenues in China, via Bloomberg (hat tip reader MIchael): “Tax data show much sharper deceleration in income and consumption in the past few months than suggested by official retail sales or income growth figures,” Goldman Sachs analysts Joshua Lu, Caroline […]
Read more...Economy could begin to recover in April, claims Gordon Brown Telegraph. Subhead: “The economy could begin to recover as early as April 2, Gordon Brown has signaled.” If by “recover” one means “temporarily looks as if it is no longer getting worse,” even I might agree that is possible. From Merrill Lynch’s Fund Manager Survey […]
Read more...Although fuel supply trends are only a crude (no pun intended) indicator of economic activity, the reversal of China from stockpiling diesel to being a net exporter is considerable, and demand for diesel is weak. While the steep contango for diesel indicates that traders believe the low prices are temporary, the glut is so large […]
Read more...The China bulls have commented approvingly on the growth in loans in China, seeing it as a sign of pending recovery, along with an upswing in stock prices. We’ve pointed out that economist and China commentator Michael Pettis has heard quite a few reports that many of these loans were in fact sham transactions to […]
Read more...It is risky indeed for someone like me, on the other side of the world, commenting on a country with spotty economic data (a function of size and maturity of its information gathering apparatus, as well as possible intent to put lipstick on pigs) to take issue with an emerging consensus. Nevertheless, I will stick […]
Read more...The big year to year fall in Chinese exports, at 17.%, far in excess of expectations, was accompanied by an even bigger decline in imports, still leaving China with a near-record monthly trade surplus. Thus, while China’s foreign exchange reserves are continuing to mount, the fall in each side of the trade equation, exports and […]
Read more...On the one hand, the demand by China that the US somehow guarantee its $682 billion in Treasury holding reads like a political and negotiating strategem rolled into one. It reenforces the idea that the economic crisis is the solely the fault of the corrupt, profligate West and it constitutes a demand that the US […]
Read more...Kenneth Rogoff, writing for Project Syndicate, argues that if China’s stimulus succeeds, it will do so at the expense of intermediate-term growth. He echoes the widely-held view that China needs to move towards a paradigm that gives more weight to domestic consumption. The problem is, however, that a transition will be awkward and is likely […]
Read more...Before we get to the substance of this post, I feel compelled to address the responses I have increasingly been getting when I post on unemployment in China, particularly demonstrations by workers (who often show up to work, find the factory shuttered and themselves stiffed for their last paycheck) and the fact that many of […]
Read more...To be fair, Willem Buiter’s latest post strives for a bit of gallows humor via its title, “YES WE CAN!! have a global depression if we really continue to work at it…,” before getting down to serious business, namely, that the powers that be risk missing the opportunity to salvage the global economy. What makes […]
Read more...When we have featured articles that mention growing unrest in China, we’ve been told that it’s overblown. The usual arguments: most of the people losing their jobs in Guangdong were young women who could go back to the provinces; that the violence wasn’t organized and hence posed not real threat to the authorities; that the […]
Read more...Wellie, lots of commentators (see here and here for a sampling) have taken note that Timothy Geithner contradicted himself royally today in his Congressional testimony. And mind you, this was WRITTEN testimony, so one cannot give him the benefit of the doubt (such as that he did a bad job of tap dancing when faced […]
Read more...The 30 year Treasury bond has fallen from roughly 140 to its current level of 125-ish, so absent an intensification of deflation worries, one might surmise that at least some of the air has come out of the Treasury bond bubble. One might also take the view that the Chinese played this one astutely (or […]
Read more...If you believe the China fourth quarter GDP release, I have a bridge I’d like to sell you. Some analysts see power consumption as a more accurate proxy of economic activity than GDP releases. Consider then the following report from Bloomberg on January 12: Power consumption fell 4 percent in October from a year earlier, […]
Read more...Further confirmation of deteriorating economic conditions in China come via its latest employment release. Note that China’s unemployment rate is its “urban” rate, which does not include migrant workers, so real unemployment is certain to be higher. In addition, the level officially projected for 2009 would put it at a 30 year high. That means […]
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