Monday, October 17, 2011

Between A Rock And A Hard Landing: Chinese GDP Prints At 2 Year Low As Inflation Still Persists

Talk about being caught between a rock and a hard landing. China just reported (completely fabricated) Q3 GDP of 9.1%, which was the slowest GDP growth in the past 2 years and well below expectations of 9.3%, which has sent the Hang Seng index down to -3% on the news, and which confirmed that the Chinese economy is slowing... but not enough for the PBoC to release the spigots. Because just after the GDP data we learned that Industrial Production was chugging along at a relatively healthy 13.8% y/y vs Exp of 13.4% while new home prices gained in 69 out of 70 cities on the year. Unless China wants more spontaneous inflation "appreciation" days by its hundreds of millions of migrant workers, it will have to wait for its economy to cool even more before it does anything, meaning that even as it caught in a very unpleasant place, the aftereffects of Bernanke's inflationary exports are still keeping the economy hot. And those hoping that China will be the much needed growth catalyst (sure, we may get the occasional RRR cut but that will be all) will be disappointed. And because suddenly everyone is a China expert, yet doesn't realize that 9.1% is effectively the equivalent of 1.1% stall print in an economy where 8.0% growth is the minimum threshold for social order and stability, please read this.



Occupy Wall Street/Occupy Denver/ Occupy almost all major cities/ Fraudulent earnings report on Citibank

Good evening Ladies and Gentlemen: Before starting, I forgot to include on Saturday the fact that we had 4 banking failures on Friday night. Courtesy of Jim Sinclair, here are the newest entrants to the morgue: Bank Closing Information October 14, 2011 These links contain useful information for the customers and vendors of these closed banks.Country Bank, Aledo, IL First State Bank, Cranford,

Commemorating The 99th Anniversary Of The First Ever Vampire Mollusc, Or How William Banzai Met His Match

What is oddest about the below cartoon is how, in retrospect, it was absolutely spot on one 1 year ahead of the formation of the Federal Reserve, and shortly, about one century ahead of its destruction. We are happy to see that even William Banzai may have finally met his match, even if the temporal displacement is modestly skewed.

Another Quarter, Another Blatant Window Dressing By The Primary Dealer Banks To Make Their Balance Sheets Seem Strong

When back in 2010, Lehman examiner Anton Valukas exposed the bankrupt bank's Repo 105 practices (which subsequently we learned were also partaken into by most other banks, although the trail ends there and nobody was prosecuted for it, let alone went to jail -after all, everyone was doing it, and everyone knew about it), many were shocked and appalled that such a blatant window dressing practice was allowed to continue quarter after quarter. Which is why we suppose nobody will be surprised to learn that glaringly "in your face" window dressing continues to this very day quarter in and quarter out by the same Primary Dealers who already leech billions in free Fed (i.e., taxpayer) money courtesy of a collusive BWIC/OWIC spread-to-market in the Fed's daily POMOs. The quote-unquote shocking chart below is one we have demonstrated on numerous occasions in the past: it shows total primary dealer assets on a weekly basis as reported publicly by the New York Fed. We have made it clear time and again, that this chart demonstrates nothing short of the end of quarter window dressing, when PDs convert their asset holdings into cash to make their Tier 1 Capital much more robust than it truly is. After all, none other than JPM and Citi were praising just how prepared for Basel III they are with their "sterling" capitalization ratios... which were only sterling courtesy of precisely the highlighted window dressing which occurs each and every quarter. We expect nothing less from Bank of America and Morgan Stanley when they report their own numbers in the coming days. We also expect the regulators to do absolutely nothing to prevent this blatant abuse of fiduciary duty which has no other purpose than to hide the true sad state of America's banking system.

News That Matters
10/17/2011 - 15:43
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