***Please note our disclosures and terms of use here. >>>>
Good morning! A few items of interest on our paddle through the news this morning:
China critic of the U.S. bubble machine. Bloomberg reports on comments from Liu Mingkang, chairman of the China Banking Regulatory Commission, cautioning against continued interest rate suppression in the U.S., resulting carry trades, and inflated global asset prices.
APEC concedes that upcoming Copenhagen climate talks will accomplish little in the way of a binding accord as differences amongst key countries remain significant. (Bloomberg)
China’s supply glut. The Telegraph’s Evans-Pritchard on China’s under-analyzed capacity bubble and the risk it poses to global economies.
The world economy is still skating on thin ice. The West is sated with debt, the East with plant. The crisis has been contained (or masked) by zero rates and a fiscal blast, trashing sovereign balance sheets. But the core problem remains. The Anglo-sphere and Club Med are tightening belts, yet Asia is not adding enough demand to compensate. It is adding supply.
My view is that markets are still in denial about the structural wreckage of the credit bubble. There are two more boils to lance: China’s investment bubble; and Europe’s banking cover-up. I fear that only then can we clear the rubble and, very slowly, start a fresh cycle.
No comments:
Post a Comment