The Pentagon has announced plans to launch underwater drones near the Spratly archipelago in what is a clear indication that the US has no intention to back down in the South China Sea, Washington has been expressing outrage over the past year over a series of land reclamation projects by Beijing in the highly contested region…of which the US has no claims.
Several days ago, we explained how China's bizarro M&A scramble was nothing more than a rushed attempt to park as much capital in the US (and offshore) as possible before Beijing gets wise enough and cracks down on this latest loophole to evade Chinese capital controls, we had this to say about the farcical, and now pulled, $14 billion Anbang offer for Starwood, owner of the W Hotels, Sheraton and St Regis brands:
When last we checked in on Djibouti, the tiny east African nation of 900,000 people that shares a border with lawless Somalia to the south, and is separated from war-torn Yemen by just 13 miles of water across the Bab el-Mandeb Strait, China had just announced that the country would play host to Beijing’s first overseas military outpost.
Nearly 5,000 miles from the Chinese capital, Djibouti is situated in a highly strategic, if exceedingly dangerous part of the world.
Back in October when we first looked at ground zero of the commodity price collapse, we found something striking: as of the end of 2014, one half of China's commodity companies with corporate debt were totally insolvent - based on Macquarie data they were unable to cover even one interest payment (let along debt maturity) with existing cash creation.
On the heels of China’s move to devalue the yuan on August 11, the market’s attention abruptly shifted to something we’d been discussing for quite some time. Namely, China’s rapidly depleting FX reserves.