China data a good lead in ......
China Manufacturing PMI Misses 6th Month In A Row As Home Sales Collapse 47% YoY
For the 6th month in a row, China HSBC Manufacturing PMI missed expectations. With a 48.1 print for April (vs 48.3 flash) this is a very modest rise from March's 48.0 but is the 4th month in a row of contraction for the broader-based HSBC-version of the PMI (as opposed to the official more-SOE-biased version which remains in modest expansion). This is the longest streak of contraction since Oct 2012 (and the 3rd consecutive month of new order contraction) as employment drops for the 6th month in a row. Most worrying new export orders dropped further showing no signs of a US-driven pick-up post-weather. As if that was not enough to upset the 'recovery is around the corner' crew, home sales in China in the most recent (most frenetic typically) period, collapsed 47% year-over-year (and a stunning 65% in tier-2 cities). But apart from that - everything's great in the newly appointed largest economy on earth...
The gap between the official and HSBC/Markit PMI is at almost its widest in 2 years...
with the 6th miss in a row and 4th month of contraction...
- 1st-tier cities sales falls 40% y/y
- 2nd-tier cities sales drops 65% y/y
- 3rd-tier and 4th-tier cities sales declines 32% y/y
- • Mkt sentiment “not optimistic;” developers prioritizing on sales volume due to cash flow pressure, the report cites
Perhaps HSBC/Markit sums it up best:
"These indicate that the manufacturing sector, and the broader economy as a whole, continues to lose momentum."
Kyle Bass Sums It All Up: "Proceed With Caution"
From fears of Argentinian devaluations (and a 26-year-old running policy) to Japan's structural collapse; from Europe's false hope to China's bubbles; and from the Fed taper to the US hydrocarbon revolution, Hayman Capital's Kyle Bass provides a broad-based presentation of global risks and opportunities in the clip below. The Q&A is where Bass comes alive and is well worth the price of admission for a hedge fund manager unafraid to discuss the possibility that the status quo is unsustainable. Bass sums it all up perfectly succinctly, "proceed with caution."
Kyle Bass Presentation clip here (embed unavailable - click image for video) - make sure to watch through the Q&A...
As Bass recently noted, there is no safe-haven in Japan...
"The interesting thing in this selloff in the marketplace and in tech ... and this huge selloff in Japanese equities, is that the Japanese bond market hasn't gone anywhere," Bass said."Yields haven't collapsed, which is fascinating. So their bonds are acting pretty terribly in the environment of their equity market. So we'll see what happens."
Full Hayman Capital Presentation:
Good morning Fred, yes I am very glad you are keeping the important stories out there and up front, thank you. It's amazing how few people venture off the MSM path and actually realize any portion of the important stories out there. And I have no idea how any predictions can be made with all the fraudulent data, still what is unsustainable will stop at some point and our sure our economy is unsustainable.
ReplyDeleteWe had a warm sunny weekend and I got in a very nice bike ride, daughter's track meet and a little yard work.
Kyle Bass is usually pretty awesome, just skimmed so far, hopefully will have time this evening to read. PM's up, Kiev still acting like assholes, Russians still waiting.
Have a great day.
Morning Kev ! Sounds like you had a good weekend , now it's back to the grind !
ReplyDeleteThe Kyle Bass video was real good ( brief presentation and then Q&A session. You can listen to that while doing other things. ) He's one of the few voices out there worth taking the time to listen to ( IMHO. )
Restive Southeastern Ukraine simmers along today , the Referendums still set for this coming Sunday - so I would expect this week to be chaotic as time goes by . Russia seems to be documenting , proceeding by the rules and biding its time.
China's economy , especially manufacturing , seems to be steadily declining or perhaps stagnating might be a better choice of words ( if you believe HSBC PMI data as compared with the official data . ) And the state of their shadow banking system must cause the PBOC many sleepless nights - but they have a mountain of foreign reserves to help smooth things out. here in the US , no such mountain of reserves , just the reserve status of the USD keeps the US able to continue its zombie ponzi game going...... for now.
Enjoy your day !