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Australia Is “Going Down Under”: “The Bubble Is About To Burst”, RBS Warns
Australia Is “Going Down Under”: “The Bubble Is About To Burst”, RBS Warns Thanks to a variety of idiosyncratic political crises and country-specific stumbling blocks, Brazil, Turkey, Malaysia, and to a lesser extent Russia, have received the lion’s share of coverage when it comes to assessing the EM damage wrought by the comically bad combination […]
India “Surprises” 51 Out Of 52 “Experts”, Slashes Rates More Than Expected As Easing Bonanza Continues
India “Surprises” 51 Out Of 52 “Experts”, Slashes Rates More Than Expected As Easing Bonanza Continues Late last month, we asked how long it would be before the RBI hit back in the wake of China’s yuan deval. The Indian government’s chief economic advisor Arvind Subramanian had just told ET Now television that India may need to […]
Currency Wars, Battles, And Hostile Actions
Currency Wars, Battles, And Hostile Actions With its recent miniscule 2% devaluation of the Yuan, media pundits noted that China had now also entered into the global currency war. What this comment implies is that other countries with the ability to issue or print their own currency, including the U.S., have been participating in a […]
Buiter: Only “Helicopter Money” Can Save The World From The Next Recession
Buiter: Only “Helicopter Money” Can Save The World From The Next Recession It is to be expected that economists – even economists working for the same team – have different views about the likelihood of different future outcomes. Economics isn’t rocket science, and even rockets frequently land in the wrong place or explode in […]
China Loses All Control, Spends 600 Billion Yuan On Plunge Protection In August, Tightens Capital Controls
China Loses All Control, Spends 600 Billion Yuan On Plunge Protection In August, Tightens Capital Controls Back on July 20, Caijing reporter Wang Xiaolu suggested that China Securities Finance – the state-owned plunge protection vehicle – may be set to exit the market. That sent futures plunging and ultimately led to Mr. Wang’s arrest late […]
The Numbers Are In: China Dumps A Record $94 Billion In US Treasurys In One Month
The Numbers Are In: China Dumps A Record $94 Billion In US Treasurys In One Month Shortly after the PBoC’s move to devalue the yuan, we noted with some alarm that it looked as though China may have drawn down its reserves by more than $100 billion in the space of just two weeks. That, we went on […]
Don’t Forget China’s “Other” Spinning Plate: Trillions In Hidden Bad Debt
Don’t Forget China’s “Other” Spinning Plate: Trillions In Hidden Bad Debt To be sure, there’s every reason to devote nearly incessant media coverage to China’s bursting stock market bubble and currency devaluation. The collapse of the margin fueled equity mania is truly a sight to behold and it’s made all the more entertaining (and tragic) […]
China’s Central Bank Chief Admits “The Bubble Has Burst”
China’s Central Bank Chief Admits “The Bubble Has Burst” In a stunningly honest admission from a member of the elite, Zhou Xiaochuan, governor of China’s central bank, exclaimed multiple times this week to his G-20 colleagues that a bubble in his country had “burst.”While this will come as no surprise to any rational-minded onlooker, the fact […]
“This Time May Be Different”: Desperate Central Banks Set To Dust Off Asia Crisis Playbook, Goldman Warns
“This Time May Be Different”: Desperate Central Banks Set To Dust Off Asia Crisis Playbook, Goldman Warns Early last month, Bloomberg observed that plunging currencies were “handcuffing bankers from Chile to Colombia.” The problem was described as follows: Central bankers in commodity-dependent Andes economies aren’t even considering interest-rate cuts to revive growth, even as prices for oil, […]
Exorbitant Privilege: “The Dollar is Our Currency but Your Problem”
Exorbitant Privilege: “The Dollar is Our Currency but Your Problem” The Global Monetary Architecture: Change is on the Horizon There is no better way to descibe the international monetary system today than through the statement made in 1971 by U.S. Treasury Secretary, John Connally. He said to his counterparts during a Rome G-10 meeting in […]
China Takes “10 Steps Back,” Slaps 20% Reserve Requirement On Currency Forwards
China Takes “10 Steps Back,” Slaps 20% Reserve Requirement On Currency Forwards Overnight, China decided to take steps to reduce “macro financial risks.” And by that they mean “do something quick to help ease pressure on the yuan” and by extension, on the PBoC’s rapidly depleting FX reserves. To that end, starting October 15 banks will […]
China: Doomed If You Do, Doomed If You Don’t
China: Doomed If You Do, Doomed If You Don’t Whichever option China chooses, it loses. Many commentators have ably explained the double-bind the central banks of the world find themselves in. Doing more of what’s failed is, well, failing to generate the desired results, but doing nothing also presents risks. China’s double-bind is especially instructive. While there an […]
How China Cornered The Fed With Its “Worst Case” Capital Outflow Countdown
How China Cornered The Fed With Its “Worst Case” Capital Outflow Countdown Last week, in “What China’s Treasury Liquidation Means: $1 Trillion QE In Reverse,” we took a look at the potential size of the RMB carry trade, noting that according to BofAML, the unwind could, in the worst case scenario, be somewhere on the […]
2 days of gains push oil up 17%, TSX up 3.6%
2 days of gains push oil up 17%, TSX up 3.6% Global stocks calmer after a week of volatility set off by doubts about China’s growth After a week with wild swings in the values of stocks and commodities, oil futures ended up gaining 17 per cent in two days and the TSX was up […]
The Great Unwind, China Begins Dumping Treasuries
The Great Unwind, China Begins Dumping Treasuries charts from: http://www.globalpost.com/dispatch/news/regions/americas/united-states/150204/chart-us-foreign-debt Behind the scenes is an event unfolding that has the market shaking in its boots. Yet you don’t hear this discussed by the mainstream media, let alone investment bankers. The reason? It is an event that has been talked about throughout China’s rise to prominence. It […]
