China

China

"The Saudi Population Are Growing Restless": A Deep Look Inside The "Black Box" That Is Saudi Arabia

"The Saudi population, especially the younger people, are growing restless because they see what is happening in the world through social media of which they are among the highest users - that’s the only means they have to communicate. So the situation inside the country is also very fragile and the foreign policy conducted by the current regime is very perilous. It is only a matter of time because the Gulf States are ruled by oligarchies who maintain control through bribery and the sword. So this is a challenging time for the Gulf States despite all the public commentary suggesting they are immune to the uprisings."

274 Days, 294 Mass Shootings - Welcome To America

Last week's community college disaster in Oregon, brought the number of mass shootings (4 or more people killed or injured) in America this year to 294. As WaPo notes, that is more than 1 per day...

When You Use A Smartphone In China, You Agree Not To...

  • Endangering national security, leaking state secrets, subverting the government, and undermining national unity;
  • Inciting ethnic hatred or ethnic discrimination, and undermining national unity;
  • Spreading rumor, disturbing social orders, undermining social stability;
  • Spreading obscenity, pornography, gambling, violence, murder, terrorism or instigating others to commit crimes;
  • Insulting or slandering others, infringing upon the legal rights and interest of others;

Faith In Central Banks Dwindles

There is little that is of greater importance to systemic confidence than faith in the abilities of central banks. Thus, when even the mainstream financial press begins to publish articles about a potential “loss of credibility” faced by these august institutions, one must begin to pay close attention.

Vitaliy Katsenelson's picture

Shadow Over Asia

Having government control over the levers of the economy can have advantages. For example, by taking prompt action, the Chinese government was able to pull the economy out of the recession remarkably fast, basically by fire-housing the stimulus package that was equivalent to 12% GDP. That’s the advantage. The only problem is that these kinds of short-term advantages come with long-term, painful consequences.

Is The Market Being Deceived About The Pace Of Capital Outflows From China?

The takeaway is that to the extent the overnight relief rally in the ringgit and then subsequently in other Asia EM "assets" was catalyzed by a "better" than expected read on the situation in China, the market may be making a mistake because just like Chinese GDP prints, the headline figure on the PBoC's store of FX reserves should be taken with a grain (or perhaps a whole shaker) of salt when it comes to drawing conclusions about the pace of outflows from the world's second most important economy.

Technically Speaking: The Real Correction Is Still Coming

What most investors do not realize currently is they could go to "cash" today and in five years will likely be better off. However, since making such a suggestion is strictly "taboo" because one might "miss some upside," it becomes extremely important for measures to be put into place to protect investment capital from the coming downturn.  Of course, since Wall Street does not make fees on investors holding cash, maybe there is another reason they are so adamant that you remain invested all the time.

Frontrunning: October 7

  • How Iranian general plotted out Syrian assault in Moscow (Reuters)
  • China FX reserves post record quarterly fall as cenbank steps up yuan support (Reuters)
  • MSF calls for independent inquiry into U.S. attack on Afghan hospital (Reuters)
  • Yen Advances as Bank of Japan Refrains From Adding to Stimulus (Reuters)
  • Abu Dhabi Said to Explore Asset Sales After Slump in Oil Price (BBG)
  • U.S. Oil Approaching $50 Boosts Stocks as Emerging Markets Surge (BBG)

Futures Jump Despite BOJ Disappointment, Weak Earnings Offset By Commodities Levitation

The big overnight story was certainly the BOJ's announcement at 11pm Eastern whether or not the Japanese central bank would boost QE. This is how we previewed it: "now all eyes to the BOJ when tonight around 11pm Eastern, Japan's central bank is expected do and say precisely... nothing." Sure enough, nothing is precisely what the BOJ delivered, leading to a big, if brief tumble in the USDJPY suggesting many were expecting at least a little tip from the BOJ.

Is Russia Plotting To Bring Down OPEC?

Russia can be seen as maneuvering to split OPEC into two blocs, with Russia, although not a member, persuading the “Russian bloc” to isolate Saudi Arabia and the Gulf Arab OPEC members within OPEC. This might persuade the Saudis to seek a compromise with the have nots.