China

Submitted by Terence Doherty, guest author (via Phil's Stock World)

Here’s some recent news about the real estate markets in China. I think it is fascinating watching how these things unfold. This proves once again that the lesson of history is that we don’t learn the lessons of history.

Just released, a new and highly relevant Weekly Strategy report out from Albert Edwards of Societe Generale. Not only does Edwards, who was previously vilified then praised for calling the 1997 Asian Bubble, see a significant drop in equities before the end of the year, his main concern is every optimist's greatest green shoot: China.

Just released, a new and highly relevant Weekly Strategy report out from Albert Edwards of Societe Generale. Not only does Edwards, who was previously vilified then praised for calling the 1997 Asian Bubble, see a significant drop in equities before the end of the year, his main concern is every optimist's greatest green shoot: China.

Just released, a new and highly relevant Weekly Strategy report out from Albert Edwards of Societe Generale. Not only does Edwards, who was previously vilified then praised for calling the 1997 Asian Bubble, see a significant drop in equities before the end of the year, his main concern is every optimist's greatest green shoot: China.

In another surprisingly unmoderated interview on CNBC, UC Irvine professor Peter Navarro brings some relevant insight on why the Chinese problem is much more than the simplified question of whether or not they will keep buying Treasuries. Also, the commentary on Chinese students laughing in Geithner's face is always refreshing, and shockingly uncensored for a CNBC audience.

Ran across this article posted in Jumping In Pools. Not sure how credible it is, but allegedly Barack Obama will provide the blueprints for the B-2 stealth bomber to China in exchange for $50 billion in debt relief. According to author Richard Hogarty:

In a continued trend of low short rates, Bloomberg reports that not much has changed since late last year. This time around, they are ascribing it to central banks snapping up bills in anticipation of Fed QE, specifically China, rather than reduced risk sentiment on the part of investors.

In a continued trend of low short rates, Bloomberg reports that not much has changed since late last year. This time around, they are ascribing it to central banks snapping up bills in anticipation of Fed QE, specifically China, rather than reduced risk sentiment on the part of investors.

In a continued trend of low short rates, Bloomberg reports that not much has changed since late last year. This time around, they are ascribing it to central banks snapping up bills in anticipation of Fed QE, specifically China, rather than reduced risk sentiment on the part of investors.

Submitted by Ranjan Roy of Shadow Bankers

The topic of whether China has decided it has had enough of U.S. Treasuries, or is just posturing, has gained significant traction recently. The latest development comes from Luo Ping, an official at the China Banking Regulatory Commission, who said holding U.S. government bonds "is not the only option for investing reserves." According to Bloomberg:

In a day when the schizophrenic market's antipsychotics finally kicked in, the scariest piece of news did not come out until very late, and this one has the potential to really throw the Treasury a curveball. Yo Yongding (cruel, cruel parents), former advisor to China's Central Bank is agitating China to seek guarantees on its $682 billion of U.S. Treasury Holdings, so that these do not get eroded by "reckless policies."

Bloomberg has the following to say:

The Council on Foreign Relations has done a great independent analysis of who has been buying U.S. Treasuries in 2008. In a nutshell, the US managed to place $1.3 trillion of USTs with non-Chinese investors.

The Council on Foreign Relations has done a great independent analysis of who has been buying U.S. Treasuries in 2008. In a nutshell, the US managed to place $1.3 trillion of USTs with non-Chinese investors.

GDP at 6.8% was not a surprise: it was Right on top of expectations. This is compared to 9.0% for the same period last year.
PPI came out at -1.1%, a whole 100 bps lower than consensus, and much lower from the 2% last year.
CPI was 1.2% versus an expectation of 1.6%. The decline in CPI indicates deflation is picking up; the more notable decline in the PPI is more troubling as it is a leading indicator for much lower CPI numbers down the line.