China's velocity of money is now the lowest in the entire world, a world in which China provided 40% of the entire credit impulse since 2008: "In the last seven years, China has accounted for around ~40% of entire global incremental debt creation. Such a rapid accumulation of debt in less than a decade, when combined with the capital-intensive nature of the economy and a less sophisticated financial sector, drove China’s velocity of money to one of the lowest levels globally (~0.5x, i.e. below that of Japan)."
As we wrote early yesterday when we summarized the outcome of the first day of China's People's Congress, China failed to deliver any of the major stimulus programs the market was expecting. So what exactly did China announce on its first day of the National People's Congress. Read on to find out...
There were hopes that China would announce a raft of fscal stimulus measures at the much ballyhooed NPC aimed boosting growth and taking some of the pressure off of montary policy. No such luck. The budget deficit came in at just 3%, an expansion from last year's 2.3%, but well below the 4% some analyasts were hoping for.
“What if the banks stop loaning you money to make your payments on your loans? What happens then?”
“I guess I’m assuming that won’t happen.”
While Asian stocks continued their longest rally since August overnight, led higher for the third consecutive day on the back of Japan (+1.3%), Australia (+1.2%) and China (+0.4%) strength, European stocks have as of this moment halted their longest rally since October (Stoxx -0.1%) and U.S. index futures are little changed. Oil slipped from an eight-week high despite yesterday's massive rise in US oil inventories on hopes Saudi Arabia may be forced to cut production as its budget strains grow actue and the kingdom is forced to seek a $10 billion loan, its first material borrowing in a decade.
"It’s not a crisis, but it is tightening"
Saudi Arabia's vast store of UST reserves fell by some $14.3 billion this month, as the kingdom struggles to support the riyal peg, fund the war in Yemen, and pay for generous governemnet subsidies.
Today, another country exposed just how troubled its energy sector has become when Mexico's largest, state-owned company, Petroleos Mexicanos also known as Pemex, announced not only its 13th consecutive quarterly loss amounting to $9.3 billion, 44% bigger than the previous year, as revenue tumbled by 28% to $15.8 billion, but also a gargantuan $32 billion annual loss and at the same time announced it would slash capex spending to preserve cash and optionality for a future which suddenly looks very bleak.
Russia wants to sell $3 billion in international bonds and Washington isn't happy about it. In response to the prospect that Wall Street could underwrite Moscow's first international issuance since the imposition of sanctions, the State Department is warning banks of "reputational risk."
When a leading nominee for President gets something exactly right, we should applaud them for it. In this case, Donald Trump’s call to audit the Federal Reserve is dead on correct. Most Americans don’t realize this, but the Federal Reserve has far more power over the economy than anyone else does – including Barack Obama. The funny thing is that the Federal Reserve is not even part of the federal government. It is an independent private central bank that was designed by very powerful Wall Street interests a little over 100 years ago. It is at the heart of the debt-based financial system which is eating away at America like cancer, and it has no direct accountability to the American people whatsoever.
Nowhere are the stakes higher than in Iraq, and selling oil at half the price it would take to just break even could break this giant’s back. It certainly isn’t enough to stave off the unrest in Basra, not to mention the ISIS threat.
Europeans don't trust financial institutions...
"...the economic patient is riddled with cancer - central banks are applying a defibrillator, but there's only so much electricity the patient can take before it becomes a burnt-out corpse."
Why Tomorrow's "Secret" Meeting Between Russian, Saudi Oil Ministers Will Not Lead To A Cut In ProductionSubmitted by Tyler Durden on 02/15/2016 19:13 -0400
Tomorrow the endless "headline hockey" will come to an end, following what is now a confirmed "secret" meeting between the two oil superpowers when, as Bloomberg reports, Saudi Arabia’s oil minister will meet with his Russian counterpart in Doha on Tuesday "to discuss the oil market."