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China’s Financial Stability: A Squeeze and a Strangle

By |2019-11-26T16:44:18-05:00November 26th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

I do get a big kick out of the way Communists over in China announce how they are dealing with their enormous problems especially as they may be getting worse. Each month, for example, the country's National Bureau of Statistics (NBS) will publish figures on retail sales or industrial production at record lows but in the opening paragraphs the text [...]

China’s Next Warning

By |2019-09-06T16:03:51-04:00September 6th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Chinese monetary authorities announced today what will be for some of its banks a seventh round of “stimulus.” For the largest institutions, it will "only" be their sixth and the first one since January 2019. The PBOC has decided it is time for more RRR cuts. Effective September 16, the ratio all banks are required to hold of reserves will [...]

Dimmed Hopes In China Cars, Too

By |2019-06-12T17:40:03-04:00June 12th, 2019|Markets|

As noted earlier this week, the world’s two big hopes for the global economy in the second half are pinned on the US labor market continuing to exert its purported strength and Chinese authorities stimulating out of every possible (monetary) opening. Incoming data, however, continues to point to the fallacies embedded within each. The US labor market is a foundation [...]

Commodities And The Future Of China’s Stall

By |2019-06-10T18:49:51-04:00June 10th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Commodity prices continued to fall last month. According to the World Bank’s Pink Sheet catalog, non-energy commodity prices accelerated to the downside. Falling 9.4% on average in May 2019 when compared to average prices in May 2018, it was the largest decline since the depths of Euro$ #3 in February 2016. Base metal prices (excluding iron) also continue to register [...]

Copper And Oil Walked Out On The Last Puppet Show

By |2019-06-05T16:07:26-04:00June 5th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Where have you gone, green shoots? The Fed turned dovish, a bunch of transitory factors, and, above all, so much Chinese stimulus. That’s what got everyone through the winter. Markets were truly harsh to end 2018, a sharp slap in the face after all year the unemployment rate. One of the big ones that seemed evidence for green shoots was [...]

China’s Big Stimulus

By |2019-05-22T11:30:53-04:00May 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this month, the People’s Bank of China (PBOC) reduced the percentage of liquid reserves some banks are required to hold. Effective May 15, the Chinese central bank estimated that the policy change would release about RMB 280 billion into the system. This RRR discount, however, was only applied to small and medium-sized banks. The reserve rate for large banks [...]

Global Doves Expire: China’s Big 3 Stats Put To Rest RRR Myths

By |2019-05-15T12:55:50-04:00May 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Fed has its pause. The ECB is going to conduct another T-LTRO. But of all the central bank responses to the “unexpected” global weakness of late 2018, the Chinese’s was supposed to be the leader. The most forceful pushback against a worldwide downturn was reported to have been the PBOC’s “powerful” RRR cuts. China’s central bank conducted two of [...]

A Green Shoot Amid The Dirtied Shirts?

By |2019-04-01T18:42:03-04:00April 1st, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Chinese economy had been sailing along fairly smoothly in the aftermath of the Great Somehow Global “Recession.” While the economies of Europe and the United States seemed suspiciously subdued especially given the scale of the contraction which registered in each, EM economies appeared unbothered. Then came 2011. There were already escalating warnings coming out of 2010, but in the [...]

China Has No Choice

By |2019-03-05T12:51:57-05:00March 5th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

China’s central bank was given more independence to conduct monetary policies in late 2003. It had been operating under Order No. 46 of the President of the People’s Republic of China issued in March 1995, which led the 3rd Session of the Eighth National People’s Congress (China’s de facto legislature) to create and adopt the Law of the People's Republic [...]

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