by Bill | Mar 10, 2017 | China
PPI in China has swung from deflation to relatively high inflation over the last 6 months. Wholesale prices are rising fast, import prices are also rising due to the lagged effects from a weaker yuan are moving sharply higher. (CPI, especially core CPI, had been...
by Bill | Dec 31, 2016 | China
A pivotal theme for 2017 will be capital outflows from China leading to contraction of domestic liquidity. Policymakers in China managed boost domestic liquidity earlier this year by state-directed lending, but there are signs capital is leaking out at an accelerating...
by Bill | Jan 27, 2016 | China
China is in the midst of a debt-deflationary bust. It is an ongoing process that has gathered pace recently. Capital outflows are a symptom of this, and a weaker yuan is an integral part of the attempted cure. We expect more of this to come. We wrote back in the...
by Bill | Feb 26, 2014 | China, Emerging Markets, Featured, Global Economy
Many emerging markets were in recession last year and are only slowly emerging. Tight financial conditions and flat to inverted yield curves will make the recovery slow and fraught with risks. Global growth will be lower as a result. Flattening and inverted yield...
by Bill | Feb 14, 2014 | China, Emerging Markets, Featured, Global Economy
The debate on EM economies (and equities) is heating up. Initially this week, we had the financial world equivalent of the pillory with the widely reported closing of a high profile US hedge fund’s EM fund due to heavy losses in 2013. Solemn nodding followed by...
by Bill | Jan 16, 2014 | China, Featured
Investors welcomed the vow made last year by the new Chinese government to reform the economy through a clamp-down on shadow banking and excess liquidity as well as to commit to a strategy of re-balancing the economy. Still, it seems difficult for China to break out...
by Bill | Aug 26, 2013 | China
In this report we discuss the outlook of the Chinese economy across a number of key parameters: re-balancing the economy, the current account/exchange rate and the risks stemming from rapid credit expansion. The central thrust of our argument is that China will not...
by Bill | Apr 23, 2013 | China, European Economy, Featured, Global Economy, US Economy
Germany remains the proverbial strong man of Europe, but we are skeptical that this is a fitting moniker. Looking at exports, it is now clear that Germany and thus Europe continues to see weakness. The total value of German exports has now clearly rolled over from its...
by Bill | Apr 5, 2013 | Asia, China, Featured
Our leading indicator for China has turned down further which adds to the impression of an overall weak turn in Chinese growth. We would still term the turning point as intact, but all components of our leading indicator recently came in with negative readings. This...
