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The Circular Logic And Prayer Tactics Of Draghi Queens, Sinomaniacs, And Other Orwellians

Tyler Durden's picture


We have desperately tried to explain the sheer idiocy of the circular argument of the Fed 'attemping' to stimulate fiscal policy by enacting an overly permissive monetary policy, having failed miserably time after time. Perhaps the 'simplistic' argumentation of Diapason's Sean Corrigan will succeed where we have failed (although we are not holding our breath).

"Companies in the steel sector should be prepared for a long-term depression," Zhang Changfu, secretary-general of the CISA, told media earlier.


Strange then, that the offificial data for July suggest that Chinese steel outout hit a new, all-time high of 61.7M tonnes during the month, the YoY increase making up no less than 99% of the entire global increment over the year. Why on earth would this be?


Chalk it up to moral hazard - specifically, the same zombifying belief shared by the whole motley crew of Sinomaniacs, Draghi queens, and QEasers everywhere; that bad news equals good; that, in true Orwellian fashion, 'Weakness Is Strength' - that any shortfall in voluntary demand will elicit a large enough crank of the priting press handle that the glut will soon be removed from the market and so obviate the need to undertake any painful restructuring, or to quit the business and release scarce resources for use by those with a genuinely viable busines plan.




Back in metal-bashing business, Wang Lei, the head of a Shandong ore trading company, bemoaned the current adversity, telling Caixin:


"If you had iron ore [last year], you could hold it for a couple months and then sell it and earn $20 to $30 per ton easily. We bought ore for about $135 per ton, but no one will take it, even if we try to sell it at a loss."


Wang and his friends apprear to have drawn a deangerous lesson from the events of 2008-9 though. As he told the magazine, Wang remembers watching the value of his company's inventories decline rapidly in 2008 until the price bottomed at US$60 per ton the following year.


When the ore prices fell, he reminisced, he and his fellow trades were not pessimistic because they correctly assumed that the Chinese government would step in with an economic stimulus to offset the crisis and so revive demand. Sure enough, as the boom progressed, prices soared, reaching close to $200 a tonne in 2010, a level they revisited some 18 months ago, before policy began to tighten and the long slide to sub-$100 began.


So, once bailed out, always bailed out seems to be the guiding inference. Meantime, close your eyes and pray.

Via Sean Corrigan of Diapason Commodities


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Sat, 08/25/2012 - 16:01 | Link to Comment blindman
blindman's picture

Clarence "Gatemouth" Brown - Dollar Got The Blues

Sat, 08/25/2012 - 16:03 | Link to Comment dolph9
dolph9's picture

The world now has 7 billion people all of whom think they will live forever and become millionaires.  And governments and central banks are doing everything in their power to make sure these delusions continue.

Sat, 08/25/2012 - 16:05 | Link to Comment Western
Western's picture

CBs will make us all millionaires.

Sat, 08/25/2012 - 16:17 | Link to Comment Pure Evil
Pure Evil's picture

Plenty of trillionaires in Zimbabwe.

Sun, 08/26/2012 - 08:24 | Link to Comment deez nutz
deez nutz's picture

The world now has 7 billion people all of whom think they will live forever and become millionaires.

The world now has 6.65 billion people who think they are all getting "american outsource jobs" while americans think they will sup on EZ CREDIT forever. 

Sat, 08/25/2012 - 16:05 | Link to Comment Spastica Rex
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Another ZH article promoted by a big hooters picture. Pathetic.

Sat, 08/25/2012 - 20:52 | Link to Comment James_Cole
James_Cole's picture

The ads are google adsense, so they target to whatever else you've been looking at. I get airplanes, cars and engineering software ads. Never seen hooters on here. 

Sun, 08/26/2012 - 03:52 | Link to Comment object_orient
object_orient's picture

He probably means the big sumo wrestler under the headline. Spastica Rex is a funny guy, you should give him the benefit of the doubt.

Sun, 08/26/2012 - 03:59 | Link to Comment Dead Canary
Dead Canary's picture

Mister Cole, you have the brain of either a small child or a large cow.

Sat, 08/25/2012 - 16:09 | Link to Comment Xibalba
Xibalba's picture

You know what would be great for iron ore?  WAR.  Expect that shit soon. 

Sat, 08/25/2012 - 16:14 | Link to Comment Hulk
Hulk's picture

I lost 5000 tons of iron ore in a very bad canoeing accident on Lake Superior in 75...

Sat, 08/25/2012 - 17:06 | Link to Comment francis_sawyer
francis_sawyer's picture

Rehypothecated by Gitchee Gumee... But what happened to the other 21,000?

Sat, 08/25/2012 - 17:21 | Link to Comment yabyum
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Wreck of the Ella Fitsgerald?

Sat, 08/25/2012 - 18:39 | Link to Comment blindman
blindman's picture

Gordon Lightfoot - The Wreck of the Edmund Fitzgerald
Funny Catherine O Hara and Fred Willard scene from "Waiting For Guffman"
On the Edge with Professor Steve Keen
Posted on August 25, 2012 by stacyherbert
"Something's Gotta Give" Ella Fitzgerald

Sat, 08/25/2012 - 21:32 | Link to Comment yabyum
yabyum's picture

Blindman: Thanks for the Ella F! + 1000

Sat, 08/25/2012 - 18:03 | Link to Comment Hulk
Hulk's picture

It was a frickin canoe Francis, no way that thing could hold 26,000 tons of iron ore !!!

Sat, 08/25/2012 - 23:42 | Link to Comment hoos bin pharteen
hoos bin pharteen's picture

It would also explain the rising oceans... 

Sat, 08/25/2012 - 16:24 | Link to Comment kevinearick
kevinearick's picture

Library of Congress

Govt is nothing more than misdirection between passive aggressive male and female robots, posing as humans, with pent up emotions looking for an anonymous outlet, preferably with a label for the purpose, fighting for supremacy over the past, doomed to repeat it, as gravity for the next generation to deploy, imploding beyond control.

It is always the end of times for those awaiting consensus, and the beginning of times for those seeking to build a real life with real materials in the environment. Govt can only regulate your effort to the extent you compete for an equal opportunity to participate in capital’s so-scarce lottery, rather than building your own bridge. Law codifies behavior. But what fun would there be if there were no evil make-work empire around, for Ivan the Terrible to slash and slaughter once in a while?

What you require is an elastic legal system, with a negative feedback circuit to nature, which means you must learn from your children, to do the impossible. Self-governance is always the answer, though it may be implemented in any number of ways. Family is all about self-governance, in an empire landscape, as an example. Ask any librarian, if you can find one, beyond the mental age of 2.

Sat, 08/25/2012 - 16:28 | Link to Comment Cult_of_Reason
Cult_of_Reason's picture

"Companies in the steel sector should be prepared for a long-term depression," Zhang Changfu, secretary-general of the CISA, told media earlier.

"Most private steel mills are short of capital now, as prices of steel products keep declining and sales keep shrinking," said a Tangshan-based steel mill owner surnamed Guan.

"The current situation is even worse than the economic crisis in 2008, and many private steel mills will go bankrupt in half a year if the industry gloom continues," said Guan.


Steel Prices Fall to Lowest Level in Three Years (China)

Domestic steel prices fell to 3,670 yuan ($583) a metric ton on Aug 21, the lowest level in three years, according to a report in the Economic Daily.

Major Chinese steel producers lowered their steel prices in September based on the falling prices in August. The steel industry is still registering losses and investors lack confidence...

Sat, 08/25/2012 - 16:43 | Link to Comment resurger
resurger's picture

I was looking at AAPL chart from 1984 to 2012, am just amazed! Is it Normal or am just ....

Sat, 08/25/2012 - 16:32 | Link to Comment LongSoupLine
LongSoupLine's picture

logic has nothing to do with the plans and actions of CB's. It is purely the intentional transfer of wealth. The less time we spend trying to analyze it in the context of honesty, and accept it ad it is, purely criminal, the quicker we can get on with revolution.

Sat, 08/25/2012 - 17:07 | Link to Comment Atomizer
Atomizer's picture


Sat, 08/25/2012 - 17:43 | Link to Comment Winston Churchill
Winston Churchill's picture

Same price as 1971.

Looks like most things (not PM's)are going to revert to that,if we're lucky.

Deflation bitchez.

Sat, 08/25/2012 - 18:10 | Link to Comment JR
JR's picture

If you give cocaine to a user who’s addicted, he doesn’t have to buy it, which is what Bernanke and Draghi are doing. Rather than curing the users in the equity markets of their stimulus habit, it just gets worse and worse while the volatile and compulsive pattern of the addicted gets more dangerous. And the more the users binge and crash the more the QE pushers give out and the more the pushers cut the purity and the more the QE addicts need…until all the value of QE is gone and it’s just so much worthless paper.

Sat, 08/25/2012 - 18:39 | Link to Comment q99x2
q99x2's picture

How are you feeling? Good.

Sat, 08/25/2012 - 19:40 | Link to Comment Waterfallsparkles
Waterfallsparkles's picture

Does seem like everything has failed, EXCEPT THE STOCK MARKET.

Interesting to say the least.  Housing has declined in some markets by 75%.  Especially, the lower end of the Market and the higher end of the Market.

Yet, you have skyrocketing Food and Oil prices.  Wages are falling, that is if you HAVE a job.

All economic growth by the Corporations (especially those who do not pay taxes) are being transferred overseas.  To enrich other Governments and Foreign Countries.

Globalism is said to be good but until American workers are willing to work for Chinese wages we will be unable to compete and Corporations will continue to ship jobs overseas.  America needs to take control otherwise we are doomed to live like the people in impoverished Countries.

Sat, 08/25/2012 - 21:14 | Link to Comment honestann
honestann's picture

Nope.  The solution is to leave the USSA.  Why?  Because the predators-DBA-government and predators-DBA-corporations in the USSA will not stop consuming everything good until everything good is gone.

Sat, 08/25/2012 - 21:32 | Link to Comment Totentänzerlied
Totentänzerlied's picture

There are still plenty of places not at wage parity with China, i.e. labor markets ready to be developed and exploited. Globalism does not begin and end with America. It is a parasite, eventually it must move on because the host has either been made unfit or is dead. IF this somehow were to continue, say, 20 years (purely hypothetical), the Chinese would be in our shoes - screaming about outsourcing and wage arbitrage and corporate greed as their manufacturing base is dissembled and sent to Country X. This is what happened with Britain and the US, their economy tanked while ours exploded part-way through the Industrial Revolution. If I remember correctly, much of Britain's success was based on what amounts to theft of industrial, agricultural, and manufacturing technology whether as real or intellectual property. America then did the same to Britain, and now China has done it to America. There are many, many other examples.

Sat, 08/25/2012 - 21:27 | Link to Comment Confundido
Confundido's picture

This guy wrote about this already a month ago:

Sun, 08/26/2012 - 02:01 | Link to Comment AnAnonymous
AnAnonymous's picture

'Americans' are revolutionaries: they are fond of circular logics.

Sun, 08/26/2012 - 03:20 | Link to Comment TheFourthStooge-ing
TheFourthStooge-ing's picture

AnAnonymousitizens are excretionaries: they are fond of roundabout roadside crapping.

Sun, 08/26/2012 - 12:44 | Link to Comment akak
akak's picture

The ragingly bigoted and otherwise meaningless babbling of the demonstrated troll above are unworthy of response.
Please do not reply to it, or to him, in any way.

Sun, 08/26/2012 - 05:49 | Link to Comment slewie the pi-rat
slewie the pi-rat's picture

all orwellians are not created equal

in slewienomics :>  equal means =

if somebody fuks you, you got fuked!

Sun, 08/26/2012 - 20:23 | Link to Comment radicall
radicall's picture

Isn't the increased Steel production logic same as Regan's supply side economics? aka "if you build it, they will come"

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