Posts Tagged
‘decoupling’
by ilene - October 29th, 2010 4:31 pm
Courtesy of Mish
China is pointing the finger at the US, complaining about "Out of Control" US dollar Printing by the Fed.
Dollar issuance by the United States is "out of control", leading to an inflation assault on China, the Chinese commerce minister said in comments reported on Tuesday.
"Because the United States’ issuance of dollars is out of control and international commodity prices are continuing to rise, China is being attacked by imported inflation. The uncertainties of this are causing firms big problems," Chen was quoted as saying by the official Xinhua news agency.
Chinese officials have criticised U.S. monetary policy as being too loose before, but rarely in such explicit language.
Decoupling Theories Renewed
I will get to loose monetary policy in just a bit, but first consider More than decoupled, China is in league of its own
Two years on from the global financial crisis, the contrast with the rich world is striking. In the United States and Europe, growth is sluggish, a slump into outright deflation is a real risk and central banks look set to loosen policy further.
So the evidence is in: China is decoupled, influenced by, but ultimately independent from other major economies.
"The crisis was a test and China passed the test. Decoupling has become a much more solid thesis now than three years ago when we only talked about it hypothetically," said Qing Wang, Morgan Stanley’s chief economist for greater China.
Chinese Money Supply Numbers from People’s Bank of China
Money and Quasi Money Jan 2009 – 496135.31
Money and Quasi Money Sep 2010 – 696384.86
"Out Of Control" Monetary Expansion Irony
I am certainly not about to defend the Fed’s misguided policies, but the complaint from Chinese commerce minister that US monetary printing is "out of control" is the ultimate in "pot calling the kettle black" irony.
Over the past few weeks I have exchanged quite a few Emails regarding China with my friend "BC" who writes …
Total Chinese money supply is up over 4 times since ’03, a 17%/yr. rate at a doubling time of just 4 years; up 66% since Jan. ’08, a 19%/yr. rate at a doubling time of 43 months; and
…
Tags: Central Banks, CHINA, commodity prices, credit expansion, decoupling, deflation, dollars, Economy, Financial bubbles, global financial crisis, inflation, monetary expansion, money printing
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by ilene - August 12th, 2010 12:13 am
Courtesy of Rom Badilla at Bondsquawk
The trade deficit widened for the fourth consecutive month on a jump in imports of consumer goods from China, signaling weaker economic growth for the U.S. The Department of Commerce revealed that the U.S. Trade Balance for June totaled a deficit of $49.9 billion from a revised prior period gap of $42.0 billion. The widening was driven by both a 1.3 percent fall in exports and a 3.0 percent increase in imports. The June number disappointed the market as economists forecasted a negative trade balance of $42.1 billion.
Since January of 2010, the trade gap has widened 42 percent suggesting that economic activity during that period was weaker than originally thought. Imported goods from China and Mexico highlight much of the activity as the numbers reveal. Year to date, the trade balance with China totaled a deficit of $119.5 billion, a year over year increase of nearly 16 percent. Similarly, trade with Mexico reflects a negative balance of$33.1 billion for an increase of 56 percent from a year ago.
Today’s widening suggests that economic growth in 2010 may be weaker than originally estimated due to a change in assumptions of the calculation of GDP data. BNP’s chief economists, Julia Coronado stated in an email to clients that the widening deficit “has been a significant weight on GDP in 2010.” Furthermore she added that the “advance estimate of Q2 GDP had assumed a widening in the trade deficit in June; however the data showed an even greater deficit than assumed. Combined with other incoming source data that has been weaker than assumed, Q2 GDP looks to be tracking 1.5% q/q saar, down from the 2.4% advance estimate.”
In addition, the Mortgage Bankers Association released its weekly applications index. For the week ending August 6, mortgage applications increased by only 0.6 percent from a prior period increase of 1.3 percent. This anemic numbers partially coincides with stagnant mortgage rates, which influences demand for home purchases and mortgage refinancings.
According to Bankrate.com, the 30 Year Conventional National Average Rate was unchanged at 4.56 percent from the prior week. Interestingly and given that interest rates are generally correlated, the 10-Year U.S. Treasury dropped 9 basis points to 2.82 percent during the same time-period.
With yesterday’s FOMC announcement that they will reinvest maturing mortgage and agency…
Tags: CHINA, decoupling, GDP, Mexico, mortgage spreads, Trade Deficit, trade gap, U.S. Trade Balance
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by ilene - September 16th, 2009 2:04 pm
Courtesy of Mish
As goes the US consumer so goes Chinese manufacturing. Here is a long but educational video produced by Vanguard on several Chinese manufacturing cities and what the economic downturn has meant for them. It’s well worth a play.
That video is more confirmation of the Chinese manufacturing and unemployment woes outlined in How Will China Handle The Yuan? and over a year ago in Is China’s Growth Story Coming Unglued?
Yet the myth of Chinese decoupling still persists.
Some day China will be far less dependent on the US but that day is not in the immediate foreseeable future. The videos are proof enough. Moreover, a strong case can be made that Obama Risks Global Trade War With Misguided Tariffs.
For now, stock are rising along with the biggest global reflation in the history of the world, by central bankers in nearly every country in the world, including China.
However, such stimulus is not infinite and is not without cost. Nor can temporary increases in demand caused by massive give-away programs be cause for permanent celebration. At best, stimulus programs shift demand forward stretching out the recovery period.
At worst, such programs add to malinvestments in housing, commercial real estate, and other areas. Government programs seldom, if ever, allocate resources effectively. The wildly popular cash-for-clunkers program actually destroyed productive assets, a repeat on a small scale of misguided efforts by FDR in the great depression to drive up prices of goods.
Yet for all these efforts unemployment is still rising, and even Fed officials admit the outlook for employment and consumer spending is far from rosy. Please see The Problem with Janet Yellen’s Recovery Outlook for details.
Mike "Mish" Shedlock
Tags: CHINA, Commercial Real Estate, decoupling, global reflation, Housing, Outsourcing Unemployment, stimulus programs, unemployment
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by ilene - June 24th, 2009 3:06 pm
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Courtesy of Mish
Those who think Asia is going to lead the recovery need to think again. Please consider Japan Export Slump Deepens, Casting Doubt on Recovery.
Japan’s export slump deepened in May, casting doubt on the nation’s growth prospects as the economy struggles to emerge from its worst postwar recession.
Shipments abroad dropped 40.9 percent from a year earlier, more than April’s 39.1 percent decline, the Finance Ministry said today in Tokyo. The median estimate of economists surveyed was for a 39.3 percent decrease. From a month earlier, exports fell 0.3 percent, the first deterioration since February.
Declines in shipments to Asia accelerated for the first time since January, damping hopes that demand from the region will spur a recovery in the world’s second-largest economy. A worldwide stock market rally stalled this month on concern that the global recession will deepen.
“Final demand just isn’t picking up and it’s still hard to expect a very strong economic recovery,” said Azusa Kato, an economist at BNP Paribas in Tokyo. Kato said the economy will “barely expand” in 2010 once the effect of Japan’s own economic stimulus measures fades.
Steel, autos and semiconductors led the slump. Shipments to China, Japan’s biggest trading partner, fell 29.7 percent, more than April’s 25.9 percent. Exports to Asia slid 35.5 percent from 33.4 percent a month earlier.
China’s 4 trillion yuan ($585 billion) in stimulus measures haven’t been enough to offset sales declines in the U.S. and Europe.
Far too many have equated a rise in the price of commodities for sustainable growth in China independent of demand in the US and Europe. The idea is as silly now as it was in 2008 when various books were promoting decoupling theories. It’s important to remember that Speculation In China Does Not Mean Inflation In The US or sustainable growth anywhere.
Those looking for significant decoupling are still many years, perhaps even a decade or more early.
Mike "Mish" Shedlock
Tags: Asia, CHINA, decoupling, inflation, japan, Recovery, speculation
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January 3rd, 2012 8:20 am
Courtesy of MarketMontage. View original post here.
Ray Dalio has created a machine at hedge fund Bridgewater – not only have assets surpassed $120B, the fund continues to churn out some fantastic results for investors. Through end of August last year, the fund was up 25% YTD (and that was after an awful August for markets, and before the stampede upward of October); this after a 44% gain in 2010. Longer term, ...
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December 28th, 2011 5:24 pm
Courtesy of Blain.
The US Dollar was up and the market was down on minimal volume. And yup, that's about the extent of today's action. The biggest gainer on my watch list of 125 securities was Bankrate (RATE) with a paltry +0.8% return. Updated market charts below. See you tomorrow!
...
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November 9th, 2011 5:48 pm
Courtesy of John Nyaradi.
Major US Markets including (NYSEARCA:
DIA), (NYSEARCA:
SPY), (
NASDAQ:QQQ), and (NYSEARCA:
IWM) dropped over 3% each on Italian bond fears and an increased worry that Europe will not be able to bail out its 4th largest economy. Furthermore, the iShares MCSI Italy Fund (NYSEARCA:EWI) wiped out over 9% today, further illustrating the dire situation in Italy and the European Union: ...
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November 4th, 2011 5:13 pm
Courtesy of John Nyaradi.
Markets dropped slightly lower today on G-20 news, mixed economic reports, and Grecian woes.
After the confusing market action on Wall Street this week, it seems that markets cannot make up their minds after last week’s euphoric rally and Euro-zone compromise. It appeared that markets were on a meteoric rise that could have possibly carried us into Christmas, however Prime Minister Papandreou’s referendum call for Greece and MF Global’s bankruptcy soured the mood.
The SPDR Gold Trust (NYSEArca:GLD) dropped half a percent today; the fall likely represents the current troubles of MF Global Holdings (NYSEArca:MF), which filed for bankruptcy earlier this week. MF Global has ...
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August 29th, 2011 10:52 am
Courtesy of ZeroHedge. View original post here.
Submitted by Tyler Durden.
The second economic disappointment of the day comes from the Dallas Fed, which dropped from -2.0 to -11.4 on expectations of -9.0- this was the 4th consecutive negative print month. The report was, in a word, horrible, with just 2 of the 15 constituent indices posting an increase, and the bulk solidly in the red, led by Unfilled and New Orders which dropped 16.8 and 11.2, respectively: not good for economic growth. On the employment side there was nothing good either, with both employment and hours worked declining by -...
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May 25th, 2011 4:59 pm
Courtesy of Benzinga
Bloomberg reports that Diana Containerships (NASDAQ: DCIX) files to offer stock up to $172.5M. Diana Containerships says that Diana shipping will also buy $20M of stock.
Visit Benzinga >
...
http://www.insidercow.com/ more from Insider
March 12th, 2011 12:00 am
Top 5 RisersStockRatingAnalysis
VLOSTRONGBUYAn increasingly positive growth rate of past earnings, along with improving expectations for long term growth, make Valero a good prospect for high returns.
KROSTRONGBUYKronos Worldwide has been gaining recognition from analysts as a good canditate for achieving higher than expected earnings along with higher overall projected valuation.
SFIBUYiStar is one of the top candidates projected to achieve both higher than previously projected earnings in the short run and a higher earnings growth rate in the long run.
AMATSTRONGBUYApplied Materials has been...
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March 10th, 2011 4:33 pm
Today’s tickers: S, FTR, JTX & SBUX
...
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March 6th, 2011 11:25 pm
This post is for live trades and daily comments. Please click on "comments" below to follow our live discussion. All of our current virtual trades are listed in the spreadsheet below, with entry price (1/2 in and All in), and exit prices (1/3 out, 2/3 out, and All out).
We also indicate our stop, which is most of the time the "5 day moving average". All trades, unless indicated, are front-month ATM options.
Please feel free to participate in the discussion and ask any questions you might have about this virtual portfolio, by clicking on the "comments" link right below.
To learn more about the swing trading virtual portfolio (strategy, performance, FAQ, etc.), please click here
Optrader
Swing trading virtual portfolio
One trade virtual portfolio
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March 6th, 2011 8:22 am
NEW: Elliott and Ilene are available to chat with Members regarding topics presented in SWW, comments are found below each post.
Here's the newest Stock World Weekly: Illusion Based on a Fantasy
Comments welcome... share your thoughts.
Download Newsletter 3/6/11
Stock World Weekly archives here >
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March 1st, 2011 9:42 am
February is now past, and the Biotech Porfolio is loaded with winners and a miss (PLX). MRK is down a bit, but I expect that trade to recover, and one could be more agressive and double down on it, or play another round at the Jan13 $30 options for roughly the same price. Below is the summary, and note the grey boxes are ones that did not fill. I am still a fan of BMRN, and like DEPO as well. Now let's look at a few others.
Table 1. PSW Biotech Plays Since January 2011
 
Our newest play is Momenta Pharmaceuticals (MNTA), who is pursuing a three-part business model which includes complex generic equivalents in partnership with the Sandoz division of Novartis, proprietary compounds, and follow-on- biologics (FOB). It seems that this company is tied up in competition/litigation wit...
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