RANsquawk European Morning Briefing - Stocks, Bonds, FX etc. – 26/08/11

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vast-dom's picture

And here this am is Roubini hedging his LONG SPAM positions in email to yours truly:


Observations From Nouriel Roubini

“Globally, a sharp slowdown of China’s growth would have a disinflationary effect via prices of traded goods. Commodity prices would plummet as Chinese demand would drop. Plus, China would dump excess supply of industrial and manufactured goods—steel, cement, aluminum, cars, apparel, consumer electronics, etc.—into global markets. Even today, with growth still above 9%, there is so much industrial overcapacity in China that the excess is already exported in global markets, hurting foreign producers of these traded goods. For example, in spite of the demand for steel for highways, railroads, airports, real estate, etc., there is so much overcapacity in China that a lot of its steel is exported abroad, hurting the market share and profitability of global steel producers. The rest of the world is already concerned about China’s exports; these trade tensions would escalate if China were to witness a plunge in domestic demand and dump the excess capacity in global markets. If China has a hard landing, either massive global deflation or severe trade wars will result.”

swiss chick's picture

Roubini's wishful thinking about China deflation!!!! LOL

DefiantSurf's picture

Sadly he believes his own bullshit, the reality is he couldn't find his way out of the closet with the door open

Irish66's picture

Better hold up the DAX until the speech

Snidley Whipsnae's picture

Something else to consider PAGE... Much bigger than Hugo's impact...

Pan Asia Gold Exchange...

"This exchange is offering a new international-facing allocated ‘Spot’ Gold and Silver contract, with an 8am Beijing-time ‘fix’. The fix will only involve Chinese Banks; indeed the owners and members of the exchange are in no way related to the western banks that dominate the existing Spot and Futures Precious Metals markets. PAGE is launching in Q4 2011 a new Spot Precious Metals contract to challenge the emaciated LBMA ‘loco London’ system. International investors will now be able to buy allocated and, crucially, Rmb-denominated ‘Spot’ Gold and Silver contracts. The importance of this cannot be overstated. The Renminbi will be accessible to international investors through this exchange, but in a controlled fashion - using Gold as a synthetic choke on demand for the currency. By buying an Rmb Gold contract on PAGE and selling the equivalent $ denominated contract elsewhere, investors will be left with Rmb exposure. One would imagine that the incentive to own Rmb in the present climate is by inference likely to lead to a whole lot of demand for Gold contracts through this new exchange. Add to that the real demand for allocated Gold that will migrate across from the existing Spot market and you are looking at something that looks sure to have major implications for the Precious Metals market."