Month: September 2014

From Goldman’s Yu Song:

Domestic media (Sina) reported that the PBOC conducted RMB 500bn of Standing Lending Facility operations with the big 5 commercial banks (ICBC, BOC, BoCOM, CCB, ABC). The reports note that the duration is 3 months and the RMB 500 bn is evenly split among the banks. This amount is roughly the same as a 50 bps cut to RRR for the whole banking system on a static basis (though the impacts of RRR cuts tend to be larger because they have ongoing effects).

 

There is no official confirmation from the PBOC yet. Still, such an easing would be consistent with our expectation that (1) monetary policy will loosened amid the drastic slowdown in activity growth and falling inflation, and (2) full scale RRR and interest rate cuts are unlikely because they would be viewed as aggressive stimulus (see China: Sharp slowdown in activity in August, September 14, 2014).

 

We expect monetary conditions to loosen modestly, which will provide some much needed support for demand growth. Other policies may follow. Front-loading of fiscal expenditure is one possibility–a disproportionate share of fiscal outlays (close to 20%) occurs in the last month of the year– and could reduce recurring criticism of the year-end rush to spend. The government may also step up pressures on government agencies and local authorities to maintain momentum on investment growth. However, we see no indication of these measures yet.

 

Given policymakers have shown a willingness to loosen in the face of weaker data, we believe growth will rebound in the coming months and the government will be able to reach the “around 7.5%” full year GDP growth target for 2014 (after positive effects of the expected GDP methodology adjustment to include R&D.

* * *

It will rebound… for one quarter, then tumble once more as we explained yesterday in “Why China’s Latest Mini-Stimulus Failed Again, In One Chart”  thanks to the magic words: “Credit Impulse”

via Zero Hedge http://ift.tt/1u2RXzA Tyler Durden

From Goldman’s Yu Song:

Domestic media (Sina) reported that the PBOC conducted RMB 500bn of Standing Lending Facility operations with the big 5 commercial banks (ICBC, BOC, BoCOM, CCB, ABC). The reports note that the duration is 3 months and the RMB 500 bn is evenly split among the banks. This amount is roughly the same as a 50 bps cut to RRR for the whole banking system on a static basis (though the impacts of RRR cuts tend to be larger because they have ongoing effects).

 

There is no official confirmation from the PBOC yet. Still, such an easing would be consistent with our expectation that (1) monetary policy will loosened amid the drastic slowdown in activity growth and falling inflation, and (2) full scale RRR and interest rate cuts are unlikely because they would be viewed as aggressive stimulus (see China: Sharp slowdown in activity in August, September 14, 2014).

 

We expect monetary conditions to loosen modestly, which will provide some much needed support for demand growth. Other policies may follow. Front-loading of fiscal expenditure is one possibility–a disproportionate share of fiscal outlays (close to 20%) occurs in the last month of the year– and could reduce recurring criticism of the year-end rush to spend. The government may also step up pressures on government agencies and local authorities to maintain momentum on investment growth. However, we see no indication of these measures yet.

 

Given policymakers have shown a willingness to loosen in the face of weaker data, we believe growth will rebound in the coming months and the government will be able to reach the “around 7.5%” full year GDP growth target for 2014 (after positive effects of the expected GDP methodology adjustment to include R&D.

* * *

It will rebound… for one quarter, then tumble once more as we explained yesterday in “Why China’s Latest Mini-Stimulus Failed Again, In One Chart”  thanks to the magic words: “Credit Impulse”

via Zero Hedge http://ift.tt/1u2RXzA Tyler Durden

Submitted by Simon Black via Sovereign Man blog,

Gallup released a new poll late last week showing how many (or few, as it were) Americans are ‘satisfied’ with the direction of the country. 23%. That’s it. 76% are NOT satisfied. Only 1% aren’t sure.

The chart below shows the astounding, long-term decline since 2000.

Note, this is a trend that has outlasted three Presidents and six Congresses. It’s not about a single politician, or even ALL the politicians. It’s about the system itself.

Bottom line, people are fed up. The system has failed. And people are starting to realize it. Where do you think this goes?

via Zero Hedge http://ift.tt/1qK1hLd Tyler Durden

China has announced a new stimulus program.

 

The Government in the People’s Republic is walking a tightrope. On the one hand, if the economy tanks, there will be an increase in civil unrest. And on the other hand, if the Chinese Government spends too much stimulating the economy, inflation will rip out of control (nearly 40% of the population of China lives off of $2 per day).

 

So we continue to see the Chinese government inflate the economy, and then pull back, inflate the economy and then pull back.  The Chinese stock market has reflected this as it has largely been moving sideways since the 2008 collapse.

 

 

In an economy in which so much of GDP comes from investment, China is hoping that QE will work for it despite the clear evidence that QE has been a dud in Japan, the US, and the UK.

 

The bigger issue for China is the fact that the rest of the world is in the doldrums. China is the biggest exporter to the EU. And the EU economy is in the toilet… again. The US isn’t faring much better. And these two regions alone account for over a third of Chinese exports.

 

China is hoping it can shift its economy away from exports to domestic consumption, but with 40% of the population living off of $2 per day… and much of the wealthy fleeing the country the first chance they get, the likelihood of this isn’t great.

 

Will this latest stimulus plan be the one to ignite growth again in the People’s Republic? We’ll see…but given that globally the world economy is slowing again… the odds aren’t good.

 

This concludes this article. If you’re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled Protect Your Portfolio at http://ift.tt/170oFLH.

 

This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.

 

Best Regards

 

Phoenix Capital Research

 

 

 

 

 

via Zero Hedge http://ift.tt/1u2RXj5 Phoenix Capital Research

China has announced a new stimulus program.

 

The Government in the People’s Republic is walking a tightrope. On the one hand, if the economy tanks, there will be an increase in civil unrest. And on the other hand, if the Chinese Government spends too much stimulating the economy, inflation will rip out of control (nearly 40% of the population of China lives off of $2 per day).

 

So we continue to see the Chinese government inflate the economy, and then pull back, inflate the economy and then pull back.  The Chinese stock market has reflected this as it has largely been moving sideways since the 2008 collapse.

 

 

In an economy in which so much of GDP comes from investment, China is hoping that QE will work for it despite the clear evidence that QE has been a dud in Japan, the US, and the UK.

 

The bigger issue for China is the fact that the rest of the world is in the doldrums. China is the biggest exporter to the EU. And the EU economy is in the toilet… again. The US isn’t faring much better. And these two regions alone account for over a third of Chinese exports.

 

China is hoping it can shift its economy away from exports to domestic consumption, but with 40% of the population living off of $2 per day… and much of the wealthy fleeing the country the first chance they get, the likelihood of this isn’t great.

 

Will this latest stimulus plan be the one to ignite growth again in the People’s Republic? We’ll see…but given that globally the world economy is slowing again… the odds aren’t good.

 

This concludes this article. If you’re looking for the means of protecting your portfolio from the coming collapse, you can pick up a FREE investment report titled Protect Your Portfolio at http://ift.tt/170oFLH.

 

This report outlines a number of strategies you can implement to prepare yourself and your loved ones from the coming market carnage.

 

Best Regards

 

Phoenix Capital Research

 

 

 

 

 

via Zero Hedge http://ift.tt/1u2RXj5 Phoenix Capital Research

In a worrying sense of deja-vu all over again, today’s rip higher reflects perfectly the US equity market’s knee-jerk reaction to the last ‘Stealth QE’ from China on July 28th. That did not end well as hot money flowed out to the instantaneously “easiest” central bank in the world…

The USD dumped.. triggering algos to see risk-on carry trades and ripped stocks higher for the day… but that did not end well…

 

as fast money chased SHCOMP higher…

 

Chart: Bloomberg

via Zero Hedge http://ift.tt/1u2RX2x Tyler Durden

In a worrying sense of deja-vu all over again, today’s rip higher reflects perfectly the US equity market’s knee-jerk reaction to the last ‘Stealth QE’ from China on July 28th. That did not end well as hot money flowed out to the instantaneously “easiest” central bank in the world…

The USD dumped.. triggering algos to see risk-on carry trades and ripped stocks higher for the day… but that did not end well…

 

as fast money chased SHCOMP higher…

 

Chart: Bloomberg

via Zero Hedge http://ift.tt/1u2RX2x Tyler Durden