Category Archives: China

Scary Bad Hot Money Influx Into China

I’ve tried to have more dignified labels for recurrent phenomena, but I keep defaulting to “scary bad” when I get updates on China. The latest is that Michael Pettis does his usual workmanlike job of trying to make sense of China’s generally incomplete reporting on its funds flows. While one suspects the gaps are in […]

Fed On Hold Till the Fall (Despite Calls to Raise Rates)?

It appears the US central bank got taken to the woodshed at a conference hosted by the New York Fed for overly aggressive rate cuts, but despite jeering from the peanut gallery, it looks likely that the Fed will hold pat until at least the fall. While I have no idea of how representative his […]

Scary Bad Increase in Chinese Foreign Currency Reserves

In general, I’m not terribly fond of imprecise and emotion-laden terms such as “scary bad”. However, in this case, the more accurate description might be “mind-numbingly awful, pointing to increased financial instability.” Michael Pettis gives us a very thorough report on the stunning and mystifying report from China that its FX reserves increased by $75.4 […]

Soros: Skyrocketing Oil Prices a Bubble

Veteran investor George Soros, in an interview with the Telegraph, describes speculation as a significant factor in the recent spike in oil prices. However, he doesn’t expect prices to break until there are signs of economic weakening. Later in the post, I’ll provide some information that suggests how traditional supply/demand forces could have been swamped […]

2016 Oil Futures Rise 14% to $140 in Three Days

I’m just a wee observer of skeptical temperament. A move of this magnitude based on one analyst’s reading seems a bit disproportionate. Even Abby Joseph Cohen and Mary Meeker didn’t have this sort of sway in their heyday. However, contracts that far out are thinly traded, so it doesn’t take much of a change in […]

"China’s Long-Term Prospects Look Grim" and the Rest of the World Doesn’t Look So Hot Either

I am leery of featuring one writer too often in succession (Martin Wolf is a notworthy exception). However, Ambrose Evans-Pritchard presents a thesis that I thought would lead to some informative reader comments. In “The crisis rotates from America to Europe, and Asia,” Evans-Prichard argues that many of the world’s other large economies will start […]

The New Imperialist: China to Buy Agricultural Land Abroad

The great imperial struggles of the 1800s were over control of strategic or otherwise prized resources, and the hostilities they generated helped stoke World Wars I and II. Many believe the Iraq war was all about oil. China is considering adopting a contemporary variant of the colonial model. A Ministry of Agriculture proposal suggests that […]

US-China Co-Dependent Behavior Worsens

Alliance: When two thieves have their hands so deeply plunged into each others’ pockets that they cannot separately plunder a third party. Ambrose Bierce, The Devil’s Dictionary The US and China bicker like an unhappily married couple, but Brad Setser warns us that the squabbling is getting nastier. And worse, both parties seem to fail […]

More on the Jump in China’s Reserves

We commented the other day on the surprisingly large jump in China’s foreign currency reserves, noting that the monthly gain wa the biggest on record, when an appreciating yuan ought to put the growth in reverse (although one must note that the yuan hasn’t gained much if any ground relative to non-dollar currencies). I’m following […]

China’s Foreign Reserve Increases Accelerate Despite Yuan Appreciation

In a very bad bit of news for the US, the Los Angeles Times (hat tip Lune) reports that the Chinese policy of letting the yuan appreciate has not succeeded in reducing the country’s massive increases in foreign reserves. In fact, the situation is getting worse rather than better. Normally, when a country’s currency appreciates, […]

China Tries to Goose Flagging Stock Market

I am late to this story, which ran Thursday in the Financial Times, but is sufficiently important as to merit comment (and my quick search of the usual suspect blogs showed it went unreported there too). The Chinese temporarily suspended tax collection on mutual funds to bolster share prices. China’s stock market, which has been […]

Commodities: "The big fall is coming"

David Roche, who heads Independent Strategy, a London-based investment consultancy, argues today in the Financial Times tha the bull run in commodities is soon to come to an end. A big factor in the outlook for commodities is whether you believe our credit crisis will lead to inflation or deflation. Bernanke’s aggressive rate cuts and […]

Dollar, Asian Stocks Tank on Carlyle Capital Collapse, Credit Market Worries

Asian markets opened lower, then took a nosedive after the release of a report that troubled mortgage bond hedge fund to Carlyle Capital failed to reach a standstill with creditors (hat tip reader cb). The Nikkei fell 3.5% to 12,400. The dollar dropped to 100 to the yen. I bought yen at around 111 in […]

"Fears of a commodity crash grow"

Today we offer two contrasting takes on the commodities market, although they are also looking at very different issues. The post immediately prior to this one, on Martin Wolf’s worries about the impact of commodities price rises, contrasts with Ambrose Evans-Pritchard’s view that in many commodities markets, the recent price spikes are driven more by […]