Commentary It is a study in confoundingly sharp contrasts. On the one side, last week the U.S. Bureau of Economic Analysis (BEA) “shocked” the media, anyway, by releasing its estimate for U.S. real GDP during 2022’s first three months. Disaster. Negative. A sickly economy already showing signs of the demand destruction markets have been pricing…
April Jobs Headline Is Good, But Deeper Dive Disconcerting
May 6, 2022
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AnalysisBusiness & EconomyBusiness ColumnistseconomyFederal Reserveinflationjobsjobs creationOpinionUncategorized
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April jobs printed at 428,000 new jobs, above the consensus estimate of 380,000. The unemployment rate was 3.6 percent. The Labor Participation Rate was just 62.2 percent, down 20 basis points (bps, or 1/100th of a percentage point) from last month. February and March jobs were revised downward by 39,000 net jobs. The U6, which…
Foreign Investment Into China Fell by More Than 60 Percent in Q1
May 1, 2022
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AnalysisAsia & PacificChinaChina Business & Economychina foreign investmentDidi ChuxingOpinionThe Securities and Exchange Commission (SEC)World
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News Analysis After the U.S. Securities and Exchange Commission (SEC) tightened its supervision of China concept stocks and U.S.-China relations worsened further following the outbreak of the Russian-Ukrainian war, foreign investment into China has plummeted by more than 60 percent in the first quarter of 2022 compared to the same period last year. According to…
Timing of the Next US Recession
Commentary The most threatening thing for the market and economy is no doubt the upcoming rate hike. A rate hike per se is not something scary, but a series of actions can ultimately lead to recession. True, the yield curve is still steep based on the most predictive tenors 30-year or 10-year minus 3-month. Yet…
Beijing’s ‘Zero-COVID’ Threatens China’s Economy
April 25, 2022
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AnalysisChinaChina Business & EconomyChinese Regimedynamic zero-COVIDGuangdongOpinionPMIShanghaizero-COVID
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News Analysis As the Omicron variant is causing a surge in COVID-19 infections across 30 provinces and municipalities in China, Beijing’s “zero-COVID” restrictions appear to be causing more harm than good. The strict measures are sapping the productivity of businesses, weakening the stock market’s performance, forcing about 400 million people to remain in lockdown, and…
China’s Deflationary Debt Crisis
Last week the People’s Bank of China (PBoC) cut the overall required reserve ratio (RRR) by 25 basis points (bps). PBoC claimed officially that an amount of 530 billion Yuan or equivalently 83 billion USD capital would be released. This sounds a huge amount. Imagine, without any interest rate cut or extra money printed, such…
What We Can Learn From Japan About the Real Economic Risks to the World
April 20, 2022
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AnalysisBusiness & EconomyBusiness Columnistseconomic policieseconomyinflationJapanOpinionViewpoints
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Commentary The economy is red-hot, at least according to most. After all, why else would the U.S. Federal Reserve publicly announce a near-historic rush to hike its benchmark rates? Consumer prices have been painfully rampaging for a year, and the stated purpose of hiking is to cool everything down in order to regain control over…
Government Support to Cushion High Gas Prices Could Add to Inflation Pressures
News Analysis Energy prices are soaring everywhere, prompting governments to consider support measures to mitigate the financial strain put on consumers’ wallets. But these costly policy tools could add to inflationary pressures and hinder central banks’ tightening efforts, says one market analyst. Federal and state governments are still exploring various mechanisms that could be employed…
The Fed Increased Rates—Now What?
March 27, 2022
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AnalysisBusiness & EconomyBusiness Columnistseconomic policiesFedFederal Reserveinflationinterest ratesOpinion
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News Analysis With inflation running well above the Fed’s stated target, earlier this month the Fed made its first steps in an attempt to quell inflation, raising the federal funds rate by 25 basis points. A 25 basis point interest rate increase on its own is unlikely to make a dent in inflation. But the…
Xi Jinping’s Close Aide Went to Plane Crash Site, Nearby Military Dispatched to Assist Emergency Processing
News Analysis After a China Eastern Airlines plane crashed in southern China, Chinese Vice Premier Liu He, who has never been involved in disaster handling before, went to the site overnight, and the Chinese military and armed police were quickly dispatched to assist in the rescue efforts. Analysts believe that all these are abnormal moves,…
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