JS Global Macro Notes

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Oil-Tanker Charters 17-Month Low as China Demand Slides

http://www.bloomberg.com/news/2012-...arters-seen-falling-10-by-marex-on-china.html
 
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Housing starts highest since April 2010, pre-market futures DECLINE on the news.

Not good. More and more this smells like a hopium rally.

We are long some ferts (AGU, CF) and enjoying the drought pop, but increasingly skeptical this is anything more than a greater fool stimulus play / temporary pessimism clear.
 
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YUM sees an uncharacteristic profit miss on poor China results, partially offset by fat Americans, er, Taco Bell dorito shells:

http://hosted.ap.org/dynamic/storie...ME&TEMPLATE=DEFAULT&CTIME=2012-07-18-17-18-12

YUM aside, what does this say about China? Can anyone really doubt the hard landing thesis?

Further argument that the mandarins in Beijing can right China's hard landing trajectory via more stimulus is, at this point, probably just hope jag masturbation.

China apologists, including the biggest China groupie of them all, Jim Rogers, have been AMAZINGLY hypocritical in their professed love of free market principles, as contrasted against their cheerleading of a command-and-control economy plagued by gross over-investment excesses.

The USSR couldn't get it right, so why should Beijing? China's command-and-control version of capitalism may be closer to Japan Inc than the old Soviet Union, where state-directed resource allocation worked for a time, but the most redeeming aspect of a dynamic free market economy is its ability to flex and evolve as necessary, which simply doesn't happen under tight political reins.

Nor does economic history support the idea of an economy growing at +10% for decades on end, yet avoiding all instances of hard landing "turbulence" along the way... if anything, economic history supports the reality of a seriously bumpy ride for any and all long-term growth trajectories. Just look what America went through in the first half of the 20th century.

We may see some more dead cat bounce and delayed acceptance of reality, via beaten down emerging market indices, depressed commodity prices getting a bounce etc... but YUM's results reinforce the increasingly hard-to-refute truth that China's hard landing is real... and it's a matter of when, not if, forced acceptance of that reality is brought to bear (no pun intended) on markets...
 
Quote from darkhorse:

Attention Frustrated Chartists: It ain't HFT - it's the Macro!

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Roughly speaking, traders come in two classes: Those who use charts and those who don't.

Within the charting community -- especially among the practitioners of "pure" technical analysis, i.e. no fundamentals allowed -- there is a new meme going around.

That meme is as follows: High Frequency Trading (HFT) has ruined the markets.

Thanks to those damn robots and their wicked brutalization of support and resistance levels, this meme says, it's just hard for a chart trader to make a buck anymore.

It's a frustrated rallying cry -- and an effort to place blame. You can almost picture the laid off mill worker slumped heavily at the bar, muttering into his beer... the machines -- damn those machines...

Read full commentary here
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great article!:)
 
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Michelle Jenneke's pre-race routine is better than morning coffee...
 
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