After three decades of spectacular growth, China passed Japan in the second quarter to become the world’s second-largest economy behind the United States, according to government figures released early Monday.
The milestone, though anticipated for some time, is the most striking evidence yet that China’s ascendance is for real and that the rest of the world will have to reckon with a new economic superpower.
The recognition came early Monday, when Tokyo said that Japan’s economy was valued at about $1.28 trillion in the second quarter, slightly below China’s $1.33 trillion. Japan’s economy grew 0.4 percent in the quarter, Tokyo said, substantially less than forecast. That weakness suggests that China’s economy will race past Japan’s for the full year.
Former chief economist for the International Monetary Fund and filthy Group of 30 operative Kenneth Rogoff is convinced there’s a bubble: “You’re starting to see that collapse in property and it’s going to hit the banking system,” said Rogoff, 57, who also serves on the Group of 30, a panel of central bankers, finance officials and academics led by former Federal Reserve Chairman Paul Volcker. “They have a lot of tools and some very competent management, but it’s not easy.”
As opposed to #1 with no tools and completely incompetent management, right? I’m not naming names, I need not.
“The market is telling you that something is not quite right,” Faber, the publisher of the Gloom, Boom & Doom report, said in a Bloomberg Television interview in Hong Kong today. “The Chinese economy is going to slow down regardless. It is more likely that we will even have a crash sometime in the next nine to 12 months.”
I doubt Tim Geithner actually feels China’s hot breath on his neck because last time I checked, our Zimbabwe Ben printing press was still in full working order and recognized by the global economy as all-powerful mover of the cheap money-hungry monster.
China’s Shanghai Composite Index may drop as much as 6 percent after breaching the 250-day moving average for the first time in a year, Shenyin & Wanguo Securities Co. said.
The benchmark gauge plunged 4.8 percent to 2,980.3 yesterday, the most in eight months, on concern government measures to curb real estate speculation will slow economic growth. The index may extend losses until reaching the next support level of 2,803…
Yesterday, Calculated Risk noted that the Shanghai composite is continuing down:
Keep an eye on the Shanghai index (in red). It appears China’s economy is slowing.
This graph shows the Shanghai SSE Composite Index and the S&P 500 (in blue).
The SSE Composite Index is at 2,622.67 mid-day – down about 300 points from 2 weeks ago.
China’s economy is teetering on the edge of a major slowdown … according to a noted China strategist.
David Roche, an economic and political analyst who manages the Hong Kong-based hedge fund Independent Strategy, says the world’s third-largest economy is now on the brink, faced with the inevitable reckoning that follows an extended bank-lending binge.
"We’ve got the beginnings of a credit-bubble collapse in China," said Roche, predicting the economy will likely cool from its stellar double-digit growth rate to a 6% annual expansion as a result.
While that may not sound bad, Roche believes the collateral damage from the cooling will be anything but mild, as the banking sector comes under pressure from cumulative
Prudent Bear’s Doug Noland was a must-read in the years leading up to the bursting of the housing bubble. Almost alone out there, he got not just the fact that we were heading off a cliff, but the exact mechanism of our demise: “Wall Street alchemy” was creating unlimited amounts of artificial securities that the marketplace was treating like money, which sent the effective global money supply through the roof and fueled a series of ever-bigger bubbles.
Once the crash came, Noland reined it in a bit and his articles fell off my automatic “Best of the Web” list. But now the bubble is back and so is Noland. His latest post dissects the current “recovery” and explains why we’re headed back into interesting times:
Deficits and Private Sector Credit
The bullish contingent is these days increasingly confident that there is much more to the recovery than a mere stimulus-induced “sugar high.” The marketplace now comfortably disregards bearish developments – and becomes further emboldened by “market resiliency”. The market this week brushed aside issues with Greece, China, Goldman and financial reform.
Complacency abounds, in true Bubble fashion. The U.S. stock market dismisses that there could be meaningful ramifications from the unfolding Greek debt crisis. Chinese authorities’ recent determination to restrict mortgage Credit barely garners a headline. And while the Goldman allegations generate great interest and discussion, few believe they will have much general market impact. Financial reform, well, it’s an afterthought when the market is open. Market participants are enamored with the notion that the securities markets and real economy are now conjoined in the initial phase of a big bull cycle.
Count me a subscriber of the “sugar high” thesis. The combination of double-digit (to GDP) deficits, protracted near-zero rates, and the Fed’s unprecedented Trillion-plus monetization has worked wonders. Government stimulus stabilized the Credit system, asset prices, system incomes and economic output. The bulls today believe that a new expansionary cycle has commenced, and fundamentals and prospects couldn’t be much more encouraging from their point of view. Surging stock prices have the optimists disregarding the possibility of a systemic addiction to massive government spending, ultra-low rates, and overabundant marketplace liquidity. Potential issues in the area of risk intermediation are not on the radar screen.
Yet, the sustainability of this recovery will be determined by private
Those who think a collapsing currency are a sure-fire way to increase exports need to rethink their beliefs.
Despite a falling Yen, Japan Posts Largest-Ever Trade Deficit. The gap between the value of Japan’s exports and that of its imports grew by more than two-thirds in the 12 months through March, to Y13.7tn ($134bn), according to government data released on Monday. It was the third consecutive fiscal year of deficits, the longest streak since comparable records began in the 1970s.
Toyota, Hitachi and other large Japanese companies have enjoyed soaring profits as a result of the weaker yen, which has fallen by a fifth against other major currencies since November 2012.
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Apache Corporation (NYSE, Nasdaq: APA) and its subsidiaries today announced an agreement to sell producing oil and gas assets in the Deep Basin area of western Alberta and British Columbia, Canada, for $374 million.
Incremental to Apache's earlier $2 billion share re-purchase announcement, the company plans to use the proceeds of this transaction to buy back Apache common shares under the 30-million-share repurchase program that was authorized by Apache's Board of Directors in 2013.
Apache is selling primarily dry gas-producing properties comprising 622,600 gross acres (328,400 net acres) in the Ojay, Noel and Wapiti areas in Alberta and British Columbia. In the Wapiti area, Apache will retain 100 percent of its working interest in horizons below the Cre...
As I suspected it might, the stock market bounced strongly last week. Weakness the prior week was due in part to traders exiting positions for vacation during the holiday-shortened week, protecting big capital gains, cashing out to pay taxes on capital gains, and “delta hedging” on put options. However, I’m not convinced that the pullback was sufficient to create the great buying opportunity -- but it was sure a tradable bounce.
Among the ten U.S. business sectors, the big winner last week was Energy, which was up about +4.5%. Also, Financial and Industrial were each up about +3%. Defensive sector Utilities still stands alone as the year-to-date leader, up about +11%, while Energy’s strong performance last week has it in second place, up about +5% YTD. Healthcare has been the big loser as i...
“However, both indexes are at or near MAJOR support levels. That means that we are ‘in the zone’ for a bounce of some sort in the next couple of days.” And a bounce is exactly what we got: But as you can see even with last week’s bounce, we are still locked in a downtrend. As we look ahead to next week, should we break out of the downtrend to the upside, we’ll want to take advantage of buying stocks doing the same. And should we remain in a downtrend, we want to short stocks that are also locked in downtrends. As we’ve said before: Success in the market comes from trading stocks in tandem with the indexes. Should the markets break higher, then FF is an excellent long side candidate: Here we have a leading stock that like the Nasdaq is in a min...
Brave souls who write about stocks always subject themselves to potential embarrassment if they take a stand on the future movement of their selected company. Including both a price target and a time horizon makes you accountable if things don’t go as predicted.
For that reason many media pundits much prefer to explain what’s already happened rather than sticking their necks out. They would rather justify the (supposed) reason...
In the days before the Geneva "de-escalation" conference (and coincidentally, days after the secret visit of CIA director Brennan to Kiev), the top story across western media was the "undisputed" proof that east-Ukraine, populated by "terrorist separatists", is preparing to unleash a neo-nazi wave against local jews, when a leaflet was unveiled, beckoning the Jewish population to register and declare their assets.
Shares in Chipotle Mexican Grill Inc. (Ticker: CMG) opened higher on Thursday morning, rising more than 6.0% to $589.00, after the restaurant operator reported better than expected first-quarter sales ahead of the opening bell. But, the stock began to falter just before lunchtime on concerns the burrito-maker will increase menu prices for the first time in three years. The price of Chipotle’s shares have since fallen into negative territory and currently trade down 3.5% on the session at $532.89 as of 1:50 p.m. ET.
[Facebook] The social network is only weeks away from obtaining regulatory approval in Ireland for a service that would allow its users to store money on Facebook and use it to pay and exchange money with others, according to several people involved in the process.
The authorisation from Ireland’s central bank to become an “e-money” institution would allow ...
I just wanted to be sure you saw this. There’s a ‘live’ training webinar this Thursday, March 27th at Noon or 9:00 pm ET.
If GOOGLE, the NSA, and Steve Jobs all got together in a room with the task of building a tremendously accurate trading algorithm… it wouldn’t just be any ordinary system… it’d be the greatest trading algorithm in the world.
Well, I hate to break it to you though… they never got around to building it, but my friends at Market Tamer did.
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Ladies and Gentlemen, hobos and tramps,
Cross-eyed mosquitoes, and Bow-legged ants,
I come before you, To stand behind you,
To tell you something, I know nothing about.
And so the circus begins in Union Square, San Francisco for this weeks JP Morgan Healthcare Conference. Will the momentum from 2013, which carried the S&P Spider Biotech ETF to all time highs, carry on in 2014? The Biotech ETF beat the S&P by better than 3 points.
As I noted in my previous post, Biotechs Galore - IPOs and More, biotechs were rushing to IPOs so that venture capitalists could unwind their holdings (funds are usually 5-7 years), as well as take advantage of the opportune moment...
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