stimulus

China Throws More ‘Stimulus’ At The Wall

By |2019-08-27T12:31:19-04:00August 27th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this year, Chinese authorities reduced the VAT tax the government charges auto manufacturers. Intended to boost consumption, the levy was reduced from 16% to 13% in the hope automakers would pass along the savings to consumers. Many if not most manufacturers did. The results were immediate, and fleeting. In the month of March 2019, [...]

Germany’s Superstimulus; Or, The Familiar (Dollar) Disorder of Bumbling Failure

By |2019-08-21T11:37:16-04:00August 21st, 2019|Bonds, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Economics textbook says that when faced with a downturn, the central bank turns to easing and the central government starts borrowing and spending. This combined “stimulus” approach will fill in the troughs without shaving off the peaks; at least according to neo-Keynesian doctrine. The point is to raise what these Economists call aggregate demand. [...]

Dimmed Hopes In China Cars, Too

By |2019-06-12T17:40:03-04:00June 12th, 2019|Markets|

As noted earlier this week, the world’s two big hopes for the global economy in the second half are pinned on the US labor market continuing to exert its purported strength and Chinese authorities stimulating out of every possible (monetary) opening. Incoming data, however, continues to point to the fallacies embedded within each. The US [...]

Commodities And The Future Of China’s Stall

By |2019-06-10T18:49:51-04:00June 10th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Commodity prices continued to fall last month. According to the World Bank’s Pink Sheet catalog, non-energy commodity prices accelerated to the downside. Falling 9.4% on average in May 2019 when compared to average prices in May 2018, it was the largest decline since the depths of Euro$ #3 in February 2016. Base metal prices (excluding [...]

Copper And Oil Walked Out On The Last Puppet Show

By |2019-06-05T16:07:26-04:00June 5th, 2019|Bonds, Commodities, Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Where have you gone, green shoots? The Fed turned dovish, a bunch of transitory factors, and, above all, so much Chinese stimulus. That’s what got everyone through the winter. Markets were truly harsh to end 2018, a sharp slap in the face after all year the unemployment rate. One of the big ones that seemed [...]

China’s Big Stimulus

By |2019-05-22T11:26:25-04:00May 22nd, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

Earlier this month, the People’s Bank of China (PBOC) reduced the percentage of liquid reserves some banks are required to hold. Effective May 15, the Chinese central bank estimated that the policy change would release about RMB 280 billion into the system. This RRR discount, however, was only applied to small and medium-sized banks. The [...]

Global Doves Expire: China’s Big 3 Stats Put To Rest RRR Myths

By |2019-05-15T12:55:50-04:00May 15th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

The Fed has its pause. The ECB is going to conduct another T-LTRO. But of all the central bank responses to the “unexpected” global weakness of late 2018, the Chinese’s was supposed to be the leader. The most forceful pushback against a worldwide downturn was reported to have been the PBOC’s “powerful” RRR cuts. China’s [...]

China’s Blowout IP, Frugal Stimulus, and Sinking Capex

By |2019-04-17T11:48:52-04:00April 17th, 2019|Currencies, Economy, Federal Reserve/Monetary Policy, Markets|

It had been 55 months, nearly five years since China’s vast and troubled industrial sector had seen growth better than 8%. Not since the first sparks of the rising dollar, Euro$ #3’s worst, had Industrial Production been better than that mark. What used to be a floor had seemingly become an unbreakable ceiling over this [...]