Rational Capitalist Speculator

Apr 14

China targets trust firms in shadow-bank crackdown: sources: Thomson Reuters -


Amid Warnings of Low Inflation, J.P. Morgan says Prices Set to Rise - Real Time Economics - WSJ -

China's ADIZ defends regional stability: Global Times -

China’s controversial air defense identification zone (ADIZ) in the East China Sea is an important strategic move to improve national defense and regional stability, according to a commentary published Monday in the Global Times, a tabloid under the auspices of the Communist Party mouthpiece People’s Daily…

…The nationalistic Global Times, however, has hit back at the criticism by claiming that the biggest threat to stability in the East China Sea is not the ADIZ, but rather the military bases the United States has been setting up all over the region and particularly in areas surrounding China.

The commentary says the US military has situated itself at the edges of China’s airspace and can use its AGM-86 subsonic air-launched cruise missile to strike China’s economic heartland, the part of the country stretching from northeast Heilongjiang province to southwest Yunnan province. This territory represents 36% of China’s land mass but accounts for 94% of the country’s population.

The Global Times commentary defended China’s new ADIZ on the basis that it is a tactic employed by more and more countries to improve their air defense position through extrapolating the range of enemy air raids and securing more valuable air defense warning time.

Further, the ADIZ also strengthen’s China’s ability to limit America and Japan’s aerial reconnaissance, Global Times said. Currently, US and Japanese drones have a radar imaging distance of about 200km and can conduct reconnaissance missions as far as China’s eastern inland provinces of Anhui and Jiangxi. But with the introduction of the ADIZ, China’s southeast coast is not within range for the drones.

The paper also accused US defense secretary Chuck Hagel of employing double standards when he slammed China for establishing the ADIZ with “no collaboration, no consultation” during his visit to Beijing last week. Japan had previously expanded its own ADIZ on two previous occasions, including as far as the vicinity of Taiwan’s territorial waters, but the US simply chose to remain silent, Global Times said.

Far from causing “misunderstandings” as Hagel had suggested, China’s ADIZ actually benefits the maintenance and promotion of national interests of countries in the East China Sea and improves regional stability, the commentary concluded. - (Want China Times)

'Phantom' protects marine resources -

Apr 09

Fed dropped jobless target in secret meeting - The Fed - MarketWatch

Apr 3rd Reports: Mixed Picture in Eurozone Services Sectors

Two largest economies:

Germany’s service sector grows at weakest pace in 5 months.

Meanwhile France’s service field went back into expansion territory.  

Overall a bullish shade to the data, since after all there is growth, but it remains choppy and uneven…though not in the usual scenario (Germany doing better / France struggling).

China services activity ticks up in March: HSBC PMI -

This data, in addition to firmer energy consumption numbers in February, imply that the China is not crashing and is cause for optimism.  

The Spider-Infested Mazdas Are Back -

This is pretty ridiculous and gave me a good laugh.

UPDATE 2-Brazil raises key interest rate to two-year high -

Brazil February Industry Output Rises Second Straight Month -

Neil Shearing’s comment sounds about right. 

US Auto Sales Accelerated on the Drive Thru March -

This was certainly a bullish print and gives solid footing to the bullish “weather induced crappy economic data” thesis.  

Apr 08

Euro zone unemployment rate stable in February| Reuters -

The tick down is certainly a step in the right direction but the journey out of the crisis remains fraught with risks. I remain pessimistic and see persistently high unemployment contributing to increasing political risk over the coming months.  May’s a coming and will be a flashpoint in elevated political risk in the region.  

ECB dismisses deflation fears, says ready to act - Boston.com -

Before the ECB was mentioning that the core CPI was remaining resilient and was a reason for not taking action.  A decrease from 1% to 0.8% in this measure takes out this leg of the stool.  As I covered in my macro commentary a couple of months back, Draghi’s playing a dangerous game here.

Europe’s Recovery Diverges as Italy Jobless at Record -