China Markets PBoC yuan

No More Saving For A Rainy Day, China ‘Has To Resume Headline Easing Soon’, SocGen Warns

"Targeted measures are clearly insufficient to stabilize even credit growth, never mind the real economy".

"Targeted measures are clearly insufficient to stabilize even credit growth, never mind the real economy".
This content has been archived. Log in or Subscribe for full access to thousands of archived articles.

4 comments on “No More Saving For A Rainy Day, China ‘Has To Resume Headline Easing Soon’, SocGen Warns

  1. Anonymous

    I wonder what will happen if China’s economy actually contracts and shows negative growth? Will bonds have a negative yield of 600 bps?? That’s how insane this bond market has become, if the Fed and Treasury don’t take advantage of this and unwind their holding they have themselves to blame when it reverses and the market realizes none of this debt will ever get repaid…..

    • China is not going to allow the numbers to get overtly bad. The thing that is really difficult for China bears (e.g., Kyle Bass, etc.) to come to terms with, is that Beijing has an extraordinary amount of control over economic outcomes, not to mention the mainland equity market and the currency. sure, they can lose control, but they are incredibly adept at juggling, and the bottom line is, if stocks fall too much, they buy them and/or halt the market and/or arrest anyone who sells. if capital flight starts up amid a steep devaluation, they’ll just crack down on it until it stops. what makes this so maddening for China bears is that this only works because of China’s size. they can basically do whatever they want and everybody just kind of has to live with it. obviously, there are limits, but people have been waiting on China to implode for a long time, and it never does

  2. I agree with Kevin Muir. Monetary stimulus has gone Nuts! Although China has room to cut rates, they are better of with Fiscal stimulus.

    • yeah, Kevin is exactly right on where the world is eventually headed — or at least he better be right, otherwise this whole thing is going to dead end. Stephanie Kelton is correct: we’re going to have to marry monetary and fiscal policy, only when we do, we have to make sure that the executive isn’t a lunatic like Erdogan or Trump

Speak On It

Skip to toolbar