Posts Tagged ‘Kenneth Rogoff’

China Now Second Largest Economy After the United States

China Now Second Largest Economy After the United States

Courtesy of Jr. Deputy Accountant 

Bubble? What bubble?

NYT:

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.

Marc Faber called a Chinese collapse in 9 to twelve months back in May, giving us a few more months to stock up on buttered popcorn and duck feet:

“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. 


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When Will China’s Bubble Burst?

When Will China’s Bubble Burst?

A sales agent waits for customer in front of the model of a property development at the 5th China (Shenzhen) Real Estate Fair, in the southern Chinese city of Shenzhen

Courtesy of Washington’s Blog

As Bloomberg notes, Marc Faber thinks China may crash in 9 to 12 months, and hedge fund manager Jim Chanos and Harvard University’s Kenneth Rogoff are also warning of a crash.

Nouriel Roubini told Bloomberg:

In China, where property prices rose at a record pace in April and consumer prices climbed at the fastest rate in 18 months, the economy faces the risk of a “significant slowdown,” Roubini said.

“China should be tightening monetary policy, increasing interest rates and let its currency appreciate over time,” he said. “They are too slow, they are not doing it fast enough.”

On April 20th, BusinessWeek wrote:

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. 

[Click here for full chart]

Vincent Fernando notes that Beijing property prices are starting to fall rapidly (and that Shanghai is next), as China clamps down on the property bubble.

As MarketWatch notes:

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


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Roubini Says The Problems of Greece and the Euro Area Are a Sign of Things to Come: Sovereign Risks To Spread to U.S., U.K., and Japan

Roubini Says The Problems of Greece and the Euro Area Are a Sign of Things to Come: Sovereign Risks To Spread to U.S., U.K., and Japan

Courtesy of Shocked Investor  

Panel & Premiere Of "American Casino" At The 2009 Tribeca Film Festival

In a teleconference with investors, Nouriel Roubini, professor at the University of New York, says he sees a new wave of losses. He was adamant: "The problems of Greece and the euro area are a sign of things to come." This was reported today by Brazilian newspaper O Estado de Sao Paulo.

Perhaps on a media offensive lately, Roubini adds:

"There was a socialization of the losses of the financial system and housing market, and now there are huge budget deficits and public debt almost doubled, so we see sovereign risk serious not only in Greece but also in Portugal and Spain, and spreading in the future to the United States, Britain and Japan."

The article mentions that, as we know, Roubini is not alone. Kenneth Rogoff, Harvard professor and former chief economist of the International Monetary Fund (IMF) issued a warning as well stating that Greece is just the beginning of a second wave of bankruptcies. After the financial turmoil of 2008, now it is the excessive indebtedness of the governments of advanced countries that will undermine the economy. Rogoff examined 800 years of financial crisis to write his book, This Time is Different: Eight Centuries of Financial Folly, with Carmen Reinhart. "There are several other countries on the radar: Ireland, Portugal, Spain." Outside the euro zone, Romania, Hungary and the Baltic countries would be other nations that are quite fragile.

He concludes that the pattern is repeated throughout history: after banking crises like the one in the world in 2008, after Lehman Brothers, there is always a wave of sovereign debt crises. To save the financial systems, governments enter into debt. A few years later, there is a wave of crises and sovereign debt defaults. That is, after a crisis in the financial system, there comes a crisis of sovereign debt.

Niall Ferguson, writing in the Financial Times last week, swelled the chorus of pessimists. "It started in Athens. It is spreading to Lisbon and Madrid. But it would be a grave mistake to


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Kimble Charting Solutions

Financial Crisis Deja Vu: Home Construction Index Double Top?

Courtesy of Chris Kimble

Most of us remember the 2007-2009 financial crisis because of the collapse in home prices and its effect on the economy.

One key sector that tipped off that crisis was the home builders.

The home builders are an integral piece to our economy and often signal “all clears” or “short-term warnings” to investors based on their economic health and how the index trades.

In today’s chart, we highlight the Dow Jones Home Construction Index. It has climbed all the way back to its pre-crisis highs… BUT it immediately reversed lower from there.

This raises concerns about a double top.

This pr...



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Insider Scoop

A Peek Into The Markets: US Stock Futures Plunge Amid Coronavirus Fears

Courtesy of Benzinga

Pre-open movers

U.S. stock futures traded lower in early pre-market trade. South Korea confirmed 256 new coronavirus cases on Thursday, while China reported an additional 327 new cases. Data on U.S. international trade in goods for January, wholesale inventories for January and consumer spending for January will be released at 8:30 a.m. ET. The Chicago PMI for February is scheduled for release at 9:45 a.m. ET, while the University of Michigan's consumer sentime...



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Zero Hedge

Coronavirus Paralyzes Global Credit Market As New Issuance Crashes To Zero

Courtesy of ZeroHedge View original post here.

In the early days, when virtually nobody paid attention to the coronavirus pandemic which China was doing everything in its power to cover up, markets were not only predictably ignoring the potential global plague - after all central banks can always print more money, or is that antibodies - but until last week, were hitting all time highs. All that changed when it became apparent that for all its data manipulation, China was simply unable to reboot its economy as hundreds of millions of workers refused to believe the government had the viral plague under control, starting...



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Phil's Favorites

The PhilStockWorld.com Weekly Webinar - 02-26-2020

 

For LIVE access on Wednesday afternoons, join us at Phil's Stock World – click here.

Major Topics:

00:02:13 - Indices | S&P 500
00:10:09 - COVID-19 & The Market
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00:17:00 - DJIA
00:18:22 - INQ | Futures
00:19:23 - STP
00:20:06 - LTP
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Biotech & Health

Could coronavirus really trigger a recession?

 

Could coronavirus really trigger a recession?

Coronavirus seems to be on a collision course with the US economy and its 12-year bull market. AP Photo/Ng Han Guan

Courtesy of Michael Walden, North Carolina State University

Fears are growing that the new coronavirus will infect the U.S. economy.

A major U.S. stock market index posted its biggest two-day drop on record, erasing all the gains from the previous two months; ...



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The Technical Traders

SPY Breaks Below Fibonacci Bearish Trigger Level

Courtesy of Technical Traders

Our research team wanted to share this chart with our friends and followers.  This dramatic breakdown in price over the past 4+ days has resulted in a very clear bearish trigger which was confirmed by our Adaptive Fibonacci Price Modeling system.  We believe this downside move will target the $251 level on the SPY over the next few weeks and months.

Some recent headline articles worth reading:

On January 23, 2020, we ...



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Chart School

Oil cycle leads the stock cycle

Courtesy of Read the Ticker

Sure correlation is not causation, but this chart should be known by you.

We all know the world economy was waiting for a pin to prick the 'everything bubble', but no one had any idea of what the pin would look like.

Hence this is why the story of the black swan is so relevant.






There is massive debt behind the record high stock markets, there so much debt the political will required to allow central banks to print trillions to cover losses will likely effect elections. The point is printing money to cover billions is unlikely to upset anyone, however printing trillions will. In 2007 it was billions, in 202X it ...

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Members' Corner

Threats to democracy: oligarchy, feudalism, dictatorship

 

Threats to democracy: oligarchy, feudalism, dictatorship

Courtesy of David Brin, Contrary Brin Blog 

Fascinating and important to consider, since it is probably one of the reasons why the world aristocracy is pulling its all-out putsch right now… “Trillions will be inherited over the coming decades, further widening the wealth gap,” reports the Los Angeles Times. The beneficiaries aren’t all that young themselves. From 1989 to 2016, U.S. households inherited more than $8.5 trillion. Over that time, the average age of recipients rose by a decade to 51. More ...



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Digital Currencies

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

 

Altcoin season 2.0: why bitcoin has been outgunned by crypto rivals since new year

‘We have you surrounded!’ Wit Olszewski

Courtesy of Gavin Brown, Manchester Metropolitan University and Richard Whittle, Manchester Metropolitan University

When bitcoin was trading at the dizzying heights of almost US$2...



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ValueWalk

What US companies are saying about coronavirus impact

By Aman Jain. Originally published at ValueWalk.

With the coronavirus outbreak coinciding with the U.S. earnings seasons, it is only normal to expect companies to talk about this deadly virus in their earnings conference calls. In fact, many major U.S. companies not only talked about coronavirus, but also warned about its potential impact on their financial numbers.

Q4 2019 hedge fund letters, conferences and more

Coronavirus impact: many US companies unclear

According to ...



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Lee's Free Thinking

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

 

Why Blaming the Repo Market is Like Blaming the Australian Bush Fires

Courtesy of  

The repo market problem isn’t the problem. It’s a sideshow, a diversion, and a joke. It’s a symptom of the problem.

Today, I got a note from Liquidity Trader subscriber David, a professional investor, and it got me to thinking. Here’s what David wrote:

Lee,

The ‘experts’ I hear from keep saying that once 300B more in reserves have ...



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Mapping The Market

How IPOs Are Priced

Via Jean Luc 

Funny but probably true:

...

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Philip R. Davis is a founder Phil's Stock World, a stock and options trading site that teaches the art of options trading to newcomers and devises advanced strategies for expert traders...

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