There have been three separate occasions in my life where I almost wound up in China. Two of which on my own accord, and the third a simple ” dart throw at the map” after nearly seven years in Costa Rica. I am fascinated by nearly “all things Chinese”. As of late a number of “pyramid complexes” hidden under dense undergrowth and forest …..said to possibly rival those of Giza. Interesting to say the least.
The Chinese economy has been barrelling forward for several years now at annual rates of GDP that would make your head spin, and has contributed around 1/3 of global GDP over the past year alone. That’s what I call a major contributor no?
The simple fact of the matter is – any slowing in China will obviously have an impact. A massive impact.
As we’ve seen via the Australian Dollar (AUD) smash down over the past few months – this should come as no surprise, coupled with IMF / World Bank global growth projections ( not looking great ), the continued “mess” in Europe ( which I can assure you – has not even come close to being repaired) the big picture “macro” has seen five solid years of liquidity injections / stick saves / emergency meetings / blah blah the list goes on out of the U.S – and still…….no “real recovery”.
China’s “cooling” at this point is an unfortunate “circumstance” timing wise ( as it’s just a normal part of the business cycle for the Chinese – domestically speaking) as it now comes at a time when a number of other global factors – don’t look good.
I hate the way China is portrayed in Western media as being the “cause” of downturns, or that their “very responsible” monetary policy is viewed as the “root of all evil”. That’s a mighty big ship they are turning over there, and doing a pretty good job of it I’d say. Dare we even consider comparing?
They’re gonna “crank back growth” to 7.4% from projections of 8.2%! Not a bad problem to have no?
China is looking to cool the jets yes – and as suggested earlier…regardless of the short term squiggles – we are clearly on the other side of the mountain now.
More “specifically” tomorrow gang.
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Road trip: taking on riders to Chactun in Campeche.
Hey Kong thanks for the post. When you say ‘other side’ are you think multi-week correction or multi-year top or wha wha? Berskank has always said if he sees a slip he will increase asset purchases, China still has good growth, Japan is well…an experiment, and the EZ might pull through. Not terribly bearish in my mind. A 20% spx correction would even make sense right now even for a bull.
I’m very much in the “larger correction” camp yes…..and assume things would continue lower thru the summer….then come Sept Fed can look like the “hero”.
Even a complete doubling of asset purchases wouldn’t be out of the question, although looking even further out – I seriously don’t think it will do the trick as interest rates start to make the climb regardless of Bernanke efforts.
For this week….just waiting for the USD bounce to peter out…. Looks like a couple more days.
And yes….I am also of the mind set that things “may” pop higher as a “spike” but top was in some weeks ago.
one word
RATEOFCHANGE
Ok thanks. Ya I’m in the big correction camp but still bullish for a couple years yet.
Anybody buying bond futures yet? Today might be the day.
Thanks for the post, good read for sure. My co-worker grew up in Costa Rica and suggested a vacation during the off-peak summer months to Flamingo Beach. What say you?
Flamingo Beach is a fantastic little area, although I would advise taking a real good look at the expected weather conditions during your trip.
When it rains in CR – it rains! and I know of more than a couple people looking for a cheap/reasonable “get a way” – only to have spent 2 straight weeks in a leaky lil hotel room with several of the roads in and out – washed out!
Picked up a long zn sept 13 just now. AUDJPY previous low still holding right around breakeven for me. Added an ES long today as well. Make me some money. I got figh keeds ta feed foo