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‘Binary Risks’ And Melt-Up Catalysts.
China is a key driver of the global economic cycle, and monetary and fiscal policy in China are likely to determine this cycle (more so than the Fed).
Either the Chinese economy will have a positive inflection and any kind of Brexit will not derail the global cycle, or if China rolls over, no kind of Brexit will save the global cycle.
Both of those quotes are from JPMorgan's Marko Kolanovic. The first is from his March 26 note on the yield curve and the second from his March 21 market update d
Very good post, especially because “everyone” (50 trillion in long equity) has been counting on another Chinese elixir.
Think about all those 22 million residences in China sitting empty.
Think about all those trillions in world wide corporate bond debt that will be downgraded from Investment grade.
The Fed panicked….the only thing keeping this whole mess afloat …..ability to slowly roll over debt…..a sudden shock….whammo….end game.
to quote J.K. Galbraith… “all crises have involved debt that, in one fashion or another, has become dangerously out of scale in relation to the underlying means of payment.” ….A short history of Financial Euphoria.
So the fate of the entire global economy rests upon China?? Well, China may succeed, or China may fail.
But the good news for America and the rest of the world is that at least they have smart people working on it.
If the fate of the global economy depended upon Mnuchin, Kudlow and Moore, we all know how it would turn out.
Not a problem, the fix is already in. You have to love how they can create whatever news they want, from Bloomberg
“Premier Li Keqiang told business people last week that March economic indicators would show “signs of visible improvement”
Maybe it’s about China in the sense that, in an interconnected world, everything is about everything else but the input presently having the biggest impact on everything else, via the currently dominant transmission mechanism of liquidity is actually Euro and all things stemming from Euro….