2015-09-08

China, Slowing Economy, Global Concerns (video)

UPDATE: China Just Killed the World's Biggest Stock-Index Futures Market to Stop a $5 trillion equity rout.

China: What are the Global Concerns? (video above, September 4, 2015)

China has sought to ease concerns that its slowing economy could drag down global growth and has also signaled it won’t get dragged into tit-for-tat currency valuations. Emerging markets from China to Brazil have slid amid declining trade, mounting debt, falling commodity prices and a rising U.S. dollar.

SHCOMP - Shanghai Stock Exchange Composite Index - Bloomberg Markets:
SHCOMP:IND 3,080.420 DOWN -79.747 -2.52% (September 7, 2015)

A dissection of the slowdown of the world’s second-largest economy and talk about the equity rout which erased $5 trillion of value was a focal point at the meeting of global policy makers [G-20] in Ankara. That wasn’t enough for Aso, who said that the discussions hadn’t been constructive... “It’s clear there are problems in the Chinese market, and at today’s G-20 meeting, many people other than myself also expressed that opinion,” Aso said after a meeting of finance chiefs and central bank governors. The PBOC [China's Central Bank] shocked global markets by allowing the biggest yuan depreciation in two decades on Aug. 11 ... “ (source: Washington Post/Bloomberg)

China's Currency Stash Drops by $94 Billion After Devaluation - Bloomberg Business: "“The central bank won’t be so stupid to let its foreign-exchange reserves shrink by $100 billion every month,” said Li Jie, head of the foreign-exchange reserve research center at the Central University of Finance and Economics in Beijing. “If the market really wants the yuan to weaken, the PBOC may say ‘ok, let it be’ and reduce its intervention.”"

"The high costs associated with maintaining the yuan’s peg to the U.S. dollar amid weakening economic data prompted a startling currency devaluation by China on Aug 11. Since then, the move has come to be viewed as the proximate cause for the upheaval in financial markets over the past month, and led to devaluations from other nations with fixed exchange rates. Capital outflows have been Chinese policymakers’ biggest headache. These waves of money leaving the world’s second-largest economy are a source of downward pressure on the yuan and have a deleterious effect on domestic liquidity – the last thing a nation that’s enjoyed an extended run of buoyant, credit-fueled growth needs." --Bloomberg Business

Is This the China Hard Landing Investors Fear? - video below:
Auerbach Grayson (agco.com) Head of Asian Equities Simon Male discusses the China slowdown. Bloomberg's Michael Regan also speaks on "Bloomberg Markets" September 1st.




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