fai

Anchoring Globally Synchronized Growth, Or We Gave Up Long Ago?

By |2018-05-15T16:58:22+00:00May 15th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

January was the last month in which China’s National Bureau of Statistics (NBS) specifically mentioned Fixed Asset Investment (FAI) of state holding enterprises (or SOE’s). For the month of December 2017, the NBS reported accumulated growth (meaning for all of 2017) in this channel of 10.1%. Through FAI of SOE’s, Chinese authorities in early 2016 [...]

No Suggestion of Growth, Only L

By |2018-04-17T12:32:08+00:00April 17th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

In 1979, Chinese Premier Deng Xiaoping designated four areas as Special Economic Zones (SEZ). Three were located in Guangdong Province, the southeastern region that wraps around the city of Hong Kong. One of those, situated just on the other side of the water from the then-British controlled jurisdiction, Shenzhen would be transformed from a sleepy [...]

China’s Exports Are Interesting, But It’s Their Imports Where Reflation Lives or Dies

By |2018-04-13T12:29:55+00:00April 13th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Last month Chinese trade statistics left us with several key questions. Export growth was a clear outlier, with outbound trade rising nearly 45% year-over-year in February 2018. There were the usual Golden Week distortions to consider, made more disruptive by the timing of it this year as different from last year. And then we have [...]

China’s Questionable Start to 2018

By |2018-03-14T18:31:15+00:00March 14th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese government reported estimates for Industrial Production, Retail Sales, and Fixed Asset Investment (FAI) for both January and February 2018. The National Bureau of Statistics prepares and calculates China’s major economic statistics in this manner at the beginning of each year due to the difficulties created by calendar effects (New Year Golden Week). Despite [...]

The Blatant Dishonesty of the ‘Boom’

By |2018-01-18T18:02:00+00:00January 18th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Why do humans tend to behave in herds? It’s a fundamental question that only recently have researchers been able to better understand. On the one hand, it doesn’t take an advanced degree in some neurological science to see the basis behind it; survival for our ancestors often meant getting along with the crowd. There are [...]

The Dea(r)th of Economic Momentum

By |2018-01-12T17:04:22+00:00January 12th, 2018|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

For the fourth quarter as a whole, Chinese exports rose by just less than 10% year-over-year. That’s the highest quarterly rate in more than three years, up from 6.3% and 6.0% in Q2 2017 and Q3, respectively. That acceleration is, predictably, being celebrated as a meaningful leap in global economic fortunes. Instead, it highlights China’s [...]

Chinese Are Not Tightening, Though They Would Be Thrilled If You Thought That

By |2017-12-14T18:13:31+00:00December 14th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The PBOC has two seemingly competing objectives that in reality are one and the same. Overnight, China’s central bank raised two of its money rates. The rate it charges mostly the biggest banks for access to the Medium-term Lending Facility (MLF) was increased by 5 bps to 3.25%. In addition, its reverse repo interest settings [...]

PBOC RMB Restraint Derives From Experience Plus ‘Dollar’ Constraint

By |2017-09-19T18:05:25+00:00September 19th, 2017|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Given that today started with a review of the “dollar” globally as represented by TIC figures and how that is playing into China’s circumstances, it would only be fitting to end it with a more complete examination of those. We know that the eurodollar system is constraining Chinese monetary conditions, but all through this year [...]