Around The World In 22 Charts

Tyler Durden's picture




 

Courtesy of Diapason's Sean Corrigan, here are some 22 charts taking us around the world's markets and back.

The US:

Europe:

Bonds:

Stocks:

Commodities:

And as a bonus, here are Corrigan's spot on views on recent developments in China:

From Sean Corrigan's Material Evidence via Diapason Commodities Management

No-one can surely need to be told that the last few months have seen a modest improvement in the Middle Kingdom’s fortunes which has auspiciously coincided with the induction of the new leadership. In part, this was grounded on the usual year-end orgy of spending undisbursed government budgets, in part on the typical fourth quarter acceleration which took place in the money supply. This last quickened to a 34% annualized rate from the third quarter’s unchanged pace – impressive enough, perhaps, but still the slowest closing burst in four years. Furthermore, the volume of new loans granted – seemingly hamstrung by lacklustre deposit formation – touched a 3-year low, with the important medium- long term sub-category dipping to a 4-year nadir.

But if the banks were not officially in the game, the ‘shadow system’- including Xiao Gang’s Ponzi component - certainly came up trumps!

‘Total Social Financing’, as it is called (and less equity issuance), outstripped boring old bank loans by a factor or 1.7:1 in the final  quarter of the year and constituted no less than 72% of all new credit extended in December. Compared with the same month in 2011, new, official, on-balance sheet bank loans declined 38% from CNY733 billion to CNY453 billion, while all other forms of credit rose 112% from CNY538 billion to CNY1, 139 billion.

Now some of this shift is probably not entirely a retrograde step, at least not to the extent that it represents a genuine entrepreneurial attempt to circumvent China’s antediluvian, financially repressed, SOE-favouring, bank-coddling regulatory framework and instead tries to put people’s savings to work at a suitable rate of interest, funding genuine productive undertakings.

The problem is that we also now some sizeable – if necessarily unquantifiable – fraction also comprises local government boondoggling, loan sharking, and outright fraud. No wonder the central authorities moved last week to clamp down on the activities of the lower tiers of government in this regard.

To put all of this in come kind of context, it looks as though every extra renminbi of incremental GDP in 2011 was ‘bought’ with around CNY1.76 in new credit: last year the ratio was 3:1. Capital efficiency, anyone?

Moreover, when we look at liquidity, matters become even more pressing. In 2011, the system was already pyramiding Y5.50 on top of every new Y1 of actual new money created (2.54:1 for the shadow component). Last year the overall ratio was 8.22:1 and the shadow one stretched to 3.87:1.

And what is all this moolah being used for? For moving away from a malinvestment-led graveyard of capital such as has been  constructed over the past decade of SOE princeling dominance? It certainly doesn’t look like it.

‘Urbanization’ may be the new buzz word (and one about whose exact meaning we still maintain certain caveats), but this just means that instead of crushing returns at home and abroad (and piling up zombie loans on the books of the pliant state-owned banks) in such sectors as aluminium, steel, shipbuilding, photo-voltaic, etc., China now seems to wish to emulate post-bubble 1990s Japan with a whole host of non-paying propositions aimed at the domestic, rather than the international, market.

Take commercial real estate. Forced to cut back on their residential excesses, developers have been parlaying a good part of those new funds into building shopping malls wherever they can cut a deal with those paragons of municipal virtue, their buddies at the local land office. And, typically, they have not done things by halves for, as a recent press report made known, between now and 2015, if all goes according to schedule, China will add no less than 600 million square metres of mall floor space (around 120,000 football pitches’ worth).

For comparison the ICSC estimate of the existing stock of US shopping malls comes in at around 650 million, around half the nations’ overall retail area. Then there are the subways. All well and good in principal to reduce congestion, increase safety and convenience and lower logistic costs, but they are hardly going to pay even their maintenance charges, much less their construction costs if the present economics are anything to go by.

As the China Daily reported in what was - for the sensitive tenor of the times – an unusually critical article, doubts are already surfacing about the sustainability of the current programme.

Keen to spare the new bosses the loss of face of a  soggy end to a soft year, in September, the NDRC suddenly approved 25 subway projects in 18 cities, for a total investment of more than CNY800 billion. Still furiously pump-priming, by November they had authorised four more cities — Beijing, Nanchang, Fuzhou, and Urumqi — to commit to plans requiring another CNY135 billion even though 35 cities had already broken ground on such projects in 2012, for an estimated ante of CNY260 billion, said the paper, citing a report of the Comprehensive Transport Research Institute of the commission.

Among the doubters, was one Wang Mengshu of the Chinese Academy of Engineering who told the interviewer that:- “A city is eligible to build subways only if it has an urban population of more than 3 million, an annual GDP that exceeds 100 billion yuan, and a local government budget higher than 10 billion yuan. In addition, the one-way traffic flow must reach 38,000 people at peak time, according to the National Development and Reform Commission…”

"However, some less developed cities in inland China have manipulated the figures to meet the requirement," he concluded

Quelle surprise!

One other thing to note is that, despite running a trade surplus of $235 billion and attracting FDI inflows of what will turn out to be around $95 billion over the 10 months since the last lunar holiday, the official count of foreign exchange reserve holdings shows zero net gain for the period.

Subtracting outward FDI of an estimated $70 billion (and noting that euro and sterling parities versus the US did not undergo any significant changes in the interim), that leaves a cool $260 billion unaccounted for.

No wonder the North American and Australasian press is rife with tales of Chinese visitors getting stopped at customs for not declaring $10s of 1000s of bills stuffed into their luggage, or of their less than discreet presence at housing auctions in their destination countries. All well and good, you may say, ifthe external surpluses are being recycled into the hands of private individuals, rather than being directed, via purchases of government securities, to the dead hand of the state, but it nonetheless speaks volumes about how the insiders view the prospects for wealth preservation, much less further capital gain, at home.

It is presumably on such grounds as these that Bernard Connolly recently compared present day China to 1830s America – an era your author dealt with in the fifth chapter of ‘Santayana’s Revenge’. Glancing back at what we wrote, we can see where the similarities lie: a vast orgy of infrastructure spending taking place in a wildly uncontrolled manner at the behest of eager local governments; a febrile property market in denationalized land; and rampant speculation in commodities – all financed by pliable, politically- controlled banks and their shadow market counterparts.

Tick…tock… tick… tock!

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Sun, 01/20/2013 - 12:06 | 3170557 tooriskytoinvest
tooriskytoinvest's picture

Off Topic:

FACEBOOK RED ALERT: App Update For Android, Without Your Confirmation, They Will Hear And See What You Do!!!

http://investmentwatchblog.com/facebook-red-alert-app-update-for-android...

Sun, 01/20/2013 - 12:17 | 3170568 Ralph Spoilsport
Ralph Spoilsport's picture

Not a FaceBook supplicant so I don't see why people expose themselves to crap like this.

Sun, 01/20/2013 - 13:52 | 3170665 francis_sawyer
francis_sawyer's picture

+1000 internets for you RS

Sun, 01/20/2013 - 14:28 | 3170747 economics9698
economics9698's picture

Remove the battery or get a prepaid non GPS phone.

Sun, 01/20/2013 - 16:25 | 3171057 AvoidingTaxation
AvoidingTaxation's picture

Where can I find a non GPS cell phone?

Sun, 01/20/2013 - 18:06 | 3171221 Ralph Spoilsport
Ralph Spoilsport's picture

Try 7-11 or one of the dollar stores.

Wed, 01/23/2013 - 11:57 | 3179056 MeelionDollerBogus
MeelionDollerBogus's picture

You can’t. even without a true GPS antenna the modern phones all use AGPS (ASSISTED gps).

If someone has an older phone for re-sale in usable condition then that’s an option.

Sun, 01/20/2013 - 13:19 | 3170638 Skateboarder
Skateboarder's picture

Scary, but it's not like we didn't see it coming. Watch as they drain your battery with continuous monitoring... without your confirmation.

I wonder if Joe Average bothers to read the application permissions before installing anything. Only an idiot would agree to these kinds of outrageous permissions...

Sun, 01/20/2013 - 14:26 | 3170728 Ralph Spoilsport
Ralph Spoilsport's picture

I won't carry a cell phone that has a non-removeable battery like the iFones. Works for me since I only carry one to make emergency calls when one of my aging fleet of vehicles breaks down.

Sun, 01/20/2013 - 14:01 | 3170676 TWSceptic
TWSceptic's picture

No way that this isn't going to be used by FBI/NSA/PDs some day (if not already). It's shocking to see how easy all of this is intruding society with most people oblivious to it.

 

It also begs the question if the success of Facebook is a coincidence / result of smart ideas by the creator or simply a gov/MSM promoted big brother tool.

Wed, 01/23/2013 - 12:00 | 3179067 MeelionDollerBogus
MeelionDollerBogus's picture

99% of the people will go along with the program so long as given a choice, even subliminally

Ergo...vis a vis... bitchez

Sun, 01/20/2013 - 15:10 | 3170857 Never One Roach
Never One Roach's picture

It's no wonder the South China Post newspapers report local gubbermint officials in the PRC are buying handfuls of apartments in Beijing and Shanghai (where their own local poplation cannot see them stashing the Loot) and carrying suit cases of cash to Vancouver. How could a tiny town gubbermint man buy $500,000 apartments on a $23,000 a year salary? That's why they buy far away from their home town.

 

It will be interesting to see of the 'new leader' stops this corruption. Its a good article.

Sun, 01/20/2013 - 12:09 | 3170561 Snakeeyes
Snakeeyes's picture

Eurppe is a mess and the USA is behaving like Bulgaria.

http://confoundedinterest.wordpress.com/2013/01/15/game-of-thrones-gold-...

Sun, 01/20/2013 - 12:45 | 3170597 Atomizer
Atomizer's picture


Speaking about Bulgaria, did you see one of the poorest Hollywood performances? Stop at 11 seconds on video & read the background. More failed brainwashing attempts.

  


Edit: WWE Best Of The Best Highlight Video

Sun, 01/20/2013 - 12:14 | 3170570 Son of Loki
Son of Loki's picture

Green shoots all over yes?

 

Sun, 01/20/2013 - 12:19 | 3170572 Motorhead
Motorhead's picture

Now those are some charts, bitchez!

Sun, 01/20/2013 - 12:23 | 3170573 Atomizer
Atomizer's picture

Market correction choreographed with debt ceiling increase. How much longer do they think this [crisis] circus trick will work?

Sun, 01/20/2013 - 12:24 | 3170576 aleph0
aleph0's picture

I admit , I only read the first few lines , but ... if I had to sum it up in one line :

"The Real Economy produces wealth while the so-called "Financial World" just steals it via the Money System."

Sun, 01/20/2013 - 12:31 | 3170591 walküre
walküre's picture

Put up a chart of recent bombings in Greece since 2009. They're increasingly frequent and more destructive. Just yesterday a shopping mall was hit.

Greece is NOT fixed. Nothing is fixed. The propaganda is just getting worse and smells more foul as each day passes. That's why journalists and politicians in Greece are being targeted for example. They blame anarachists. When its not the run of the mill terrorist, it has to be anarchists. Freedom fighters perhaps?

The more they lie, the quicker you stack.

Sun, 01/20/2013 - 12:42 | 3170603 FoeHammer
FoeHammer's picture

Do you know of a site where folks upload live or unadulterated footage?

Sun, 01/20/2013 - 12:53 | 3170612 inevitablecollapse
inevitablecollapse's picture

you might check out liveleak.com

Tue, 01/22/2013 - 02:43 | 3174894 FoeHammer
FoeHammer's picture

Awesome. Thank you. I found a bunch of very interesting reading and viewing materials

Sun, 01/20/2013 - 13:16 | 3170634 Snakeeyes
Snakeeyes's picture

It is sad that Europe and the USA are all showing downward trends in the charts. But at least Greece is improving (well, sort of).

http://confoundedinterest.wordpress.com/2013/01/15/game-of-thrones-gold-...

Sun, 01/20/2013 - 13:55 | 3170669 TeddyBear
TeddyBear's picture

 

Thanks for the charts.

 

New 52 week highs all over.

TZA new 52 week low, Direxion Daily Small Cap Bear.

(iShares MSCI France Index (EWQ) new high, France is booming!)

Don't fight the tape.

I am putting tight stops here, I need some dry powder.

I sell by setting stop at previous days low.

My gold buy at xmas is green, I only buy gold ETFs, In & out is making soo much $$$.

My last buys, UNG  LINE     
SPPP.

~TIP: If you are not making 30% + last 4 years, Try buying 1 new 52 week high ETF every week for a year. Don't look at what it is, Just look for most volume and buy!

~~Tip for Uncle Ben B.: Buy 1 or 2 Billion $ a week of gold & silver, Put in Fort Knox. That could make you look like a very wise man one day:)


 

Sun, 01/20/2013 - 13:58 | 3170674 q99x2
q99x2's picture

Courtesy of  benzodiazepine I'll get my blood pressure back in order after looking at Diapason's charts.

Where's Geithner? Don't let him get away. Somebody stop him.

Time for Church and a little prayer M'Fer.

Sun, 01/20/2013 - 14:11 | 3170701 Ralph Spoilsport
Ralph Spoilsport's picture

Sorry you have to use benzos. My previous lady friend had to go to rehab because of them and she was a pharmacist. Lost her license because she was swallowing handfuls of them by the time I found out what her problem was. Be careful and be well.

Sun, 01/20/2013 - 14:11 | 3170703 Peter Pan
Peter Pan's picture

This bug of a world is already headed for a windshield and nothing can stop the impact other than delaying it.

In the meantime some of us can keep posting "gold bitchez" , "silver bitchez" and "fuck you bernanke" but the reality is that there is no foolproof protection and furthermore we are ALL part of the problem more so than being part of the solution.

Sun, 01/20/2013 - 14:54 | 3170836 Stuck on Zero
Stuck on Zero's picture

Why to be bullish in public: If you are right you are a lone genius.  If you are wrong it's because everyone failed to forsee what happened.

Why to be bearish in private: If you are right you are well positioned and better off.  If you are wrong everything is all right.

 

Sun, 01/20/2013 - 18:01 | 3171070 Griffin
Griffin's picture

I think that the reason why all empires always eventually crash is a psychological one, and its to some degree our fault.

The elites have always been credited for building empires in the past, i do not agree with that.

The way i see it, we build the empires, we trust the elites to run those empires and it often goes quite well initially, but then, after being idolized by us sheeple for number of years the elites start to believe the bullshit and think they are gods, superior beings that are not bound to the laws and rules of mere mortals.

This goes on until a certain breaking point, where we tear it all down.

This song sums it up quite well   https://www.youtube.com/watch?v=dxytyRy-O1k

 

In the old Norse sagas, Loki goes to the world of Black elves and brings back a ship called Skidbladnir.

Skidbladnir can take huge amounts of people and weapons and always has wind in its sails no matter where it wants to go by way of Black elves magic.

This ship can also when not in use be folded like tarp and put into a small pouch.

Sort of like the Icelandic banking system, it was tiny, when sold to private investors for almost nothing, then it grew to 10 fold Iceland GDP in no time, sailing the world oceans where ever it wanted to go, and there was always wind in its sails.

when it folded it became what it was originally, almost nothing.

 

There are many Skidbladnirs still at sea. The EU is one of them, the problem is that they no longer decide when and where the wind blows and the waves are getting bigger.

There are all kinds of wizards in the bridge and none of them seem likely to steer clear off the rocks.

 

Black elves are a species of elves, they are black elves because of their nature, not black in color.

 

 

 

 

 

 

Sun, 01/20/2013 - 16:36 | 3171082 ricky2
ricky2's picture

CHARTZ, BITCHEZ!!!!!!!

Sun, 01/20/2013 - 20:31 | 3171463 orangegeek
orangegeek's picture

3 Month T Bill rate - which the Fed follows, has been sitting near zip for a very long time.

 

http://bullandbearmash.com/chart/3-month-tbill-weekly-marginally/

 

Heaven help us if this rate jumps.

Mon, 01/21/2013 - 13:57 | 3173201 sbfeibish
sbfeibish's picture

When everything blows up.  They'll still be left with all those new cities, new roads, new railways, water infrastructure, nuclear power plants, windmills, solar panels, ...   They'll be OK.

Sun, 02/17/2013 - 01:49 | 3250848 deewoo
deewoo's picture

“Moreover, when we look at liquidity, matters become even more pressing. In 2011, the system was already pyramiding Y5.50 on top of every new Y1 of actual new money created (2.54:1 for the shadow component). Last year the overall ratio was 8.22:1 and the shadow one stretched to 3.87:1.”

above paragraph is very hard to understand. Could anyone elaborate it a bit?

Thanks!

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