Tag Archives: China

The conventional interpretation of “reflation” in the second half of 2016 was that it was simply the opening act, the first step in the long-awaiting global recovery. That is what reflation technically means as distinct from recovery; something falls off, and to get back on track first there has to be acceleration to make up that lost difference. There was, to me anyway, a lot of Japan in it, even still if “globally...

In February 2013, the Chinese Golden Week fell late in the calendar. The year before, 2012, New Year was January 23rd, meaning that the entire Spring festival holiday was taken with the month of January. The following year, China’s New Year was placed on February 10, with the Golden Week taking up the entire middle month of February. For economic statistics, that meant extreme difficulty translating year-over-year...

US imports rocketed higher once again in December, according to just-released estimates from the Census Bureau. Since August 2017, the US economy has been adding foreign goods at an impressive pace. Year-over-year (SA), imports are up just 10.4% (only 9% unadjusted) but 9.3% was in just those last four months. For most of 2017, imports were flat and even lower. The question is, obviously, what has changed? Did the boom...

The chief development in the capital markets has been the sharp drop in equities after a significant rally since late last year and the rise in yields. The dollar had fallen alongside the exuberant appetite for risk assets. Anecdotal evidence supports the idea that the greenback was used as a funding currency to purchase those risk assets. The Dollar Index’s first weekly advance since the middle of last December amid...

According to China’s official PMI’s, those looking for a boom to begin worldwide in 2018 after it failed to materialize in 2017 are still to be disappointed. If there is going to be globally synchronized growth, it will have to happen without China’s participation in it. Of course, things could change next month or the month after, but this idea has been around for a year and a half already. Without China, growth won’t...

China’s official manufacturing purchasing manager index (PMI) came in at 51.3 in January, down slightly from December (51.6). The Markit PMI (also known as the Caixin PMI) stayed at 51.5, the same as in the previous month (Chart 1). The official non – manufacturing PMI rose slightly to 55.0 in January from 44.8 the previous month. The official composite index, which is a weighted average of the manufacturing and non –...

The Chinese economy ended 2017 on a strong note. In Q4 2017, China’s GDP amounted to Rmb23.4 trillion (about USD3.7 trillion), rising 1.6% over the previous quarter and 6.8% year-over-year (y-o-y) in real terms. Full-year GDP came in at Rmb82.7 trillion (about USD12.9 trillion), growing by 6.9% in real terms and beating the consensus forecast as well as our own estimate (both at 6.8%). The strong 2017 growth number...

The advent of open and transparent central banks is a relatively new one. For most of their history, these quasi-government institutions operated in secret and they liked it that way. As late as October 1993, for example, Alan Greenspan was testifying before Congress intentionally trying to cloud the issue as to whether verbatim transcripts of FOMC meetings actually existed. Representative Toby Roth (R-WI) quizzed the...

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 times when that very trait applies still. In 2009, neurologists in the UK conducted function...

The combination of a falling dollar and rising US interest rates has sparked a concern never far from the surface about the foreign demand for US Treasuries. Moreover, as the Fed’s balance sheet shrinks, investors will have to step up their purchases. This Great Graphic was created by the Institute of International Finance (IIF). It is drawn from the US TIC data that tracks foreign holdings of US Treasuries. The most...