iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
23,467 Blog Posts

CHINESE STEEL DEMAND EVAPORATING AT ‘UNPRECEDENTED RATE’

I am sure Janet Yellen and her board of retarded governors are reading this tonight, scratching their balls saying “hey, we should raise interest rates.”

Ahead of tomorrow’s Fed meeting, this sort of news can do nothing but help make the case for another round of QE

“Production cuts are slower than the contraction in demand, therefore oversupply is worsening,” said Zhu at a briefing by the China Iron & Steel Association. “Although China has cut interest rates many times recently, steel mills said their funding costs have actually gone up.”

China’s mills — the linchpin of the global industry, producing half of worldwide output — are battling against oversupply and sinking prices as local consumption shrinks for the first time in a generation. The fallout from the industry’s struggles is hurting iron ore prices and boosting trade tensions as China’s mills seek to sell their surplus overseas.

“China’s steel demand evaporated at unprecedented speed as the nation’s economic growth slowed,” Zhu said. “As demand quickly contracted, steel mills are lowering prices in competition to get contracts.”

Now I know what you’re thinking.

“Why do more QE, since it has done nothing for us thus far?”

Oh really? Your science if off, mate. Just because the economy isn’t booming 1999 style, that doesn’t mean QE did nothing. As a point in fact, one could make the argument that without QE the euro would’ve collapsed and all of our stupid, fucking, banks too.

The economy needs more easing because there is deflation. Once the Fed comes around to the facts, stocks will be crashing bears’ fucking skulls again.

Goodnight.

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12 comments

  1. Marc David

    Well said.

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  2. kasparov

    How might one harness this deflationary vortex for fun/profit?

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  3. vandamme

    QE is deflationary.

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  4. it is showtime

    They are already in at least, 2 fagboxes.
    Shoot stocks higher again, continue the deflation-equity divergence
    Enter, fagbox, #3

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  5. tradingnymph

    Well Yes, Global QE/Stimulus allowed loans to buy Global Commodities, which in turn allowed Speculators to use those commodities as collateral to buy more commodities. Which in turn they got more loans using those commodities as collateral to buy more commodities…Miners, Drillers started over production because the speculators bought more commodities so they could get more loans. Repeat, Repeat. That money in turn went into money laundering out of Machau to get it out of China, flooding F/X markets, real estate. No true global growth…just a huge bubble of commodity loans that are going into default. All ugly.

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  6. ironbird

    When broke grannies and grandpas start living like the untouchables in India. Possibly fucking over savers will look like a bad policy. Being an asset owner I’m not complaining this ZIRP is awesome. They are old and Top Ramen is not really that bad.

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  7. ironbird

    Rents are at all time highs. Fucking food costs are also sky rocketing. Love the six strips of bacon “pounds”. Or the half empty box of Cheerios. There must be a limit to what the poor will accept. Surprisingly they are eating something that must be free. Dirt?

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  8. superpositron

    Why would the Fed commit more QE with US stocks still near the highs?

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  9. levrage

    How is the Fed supposed to raise rates when central bankers around the world are engaged in one big circle jerk? The FOMC will have to grab a dick and join the party. They won’t raise rates this year, and possibly next year, given that its an election year.

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  10. pb

    superpositron: My thought exactly. Not only that, but I am unconvinced that further QE will have the intended effect.

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  11. razorsedge

    R u yellen at us.

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