Business

In the aftermath of China's gargantuan, record new loan injection in Q1, which saw a whopping $1 trillion in new bank and shadow loans created in the first three months of the year, many were wondering where much of this newly created cash was ending up.

We now know where most of it went: soaring imports of crude oil.

We know this because as the chart below shows, Chinese crude imports via Qingdao port in Shandong province surged to record 9.86 million metric tons last month based on data from General Administration of Customs.

Now that everyone has finally figured out that the only way to not get steamrolled in this "market" is to frontrun central banks - something we have been pounding the table on since mid-2009 when we said that the only two financial statements that matter are the Fed's H.4.1 and H.3 - and not just central banks, but central banks who are now so intimately intertwined in capital markets that the moments they adjust one variable, they unleash a torrent of "reflexive" actions which promptly leads to a cascading effect across the markets and promptly undoes whatever it is that they want

One of the recurring themes as we cross Q1 earnings season, is that virtually every sellside strategist has been repeating ad nauseam how as a result of the shaprly lowered earnings expectations...

... companies will have no problems beating consensus estimates. And then we got something like last week's week's barrage of tech company misses.

For many pundits this apparently did not register and just today BofA said that "1Q EPS expectations have likely bottomed as companies have begun to beat across the board." This is how it explained this observation:

Well that escalated quickly. While Nasdaq had already given up its gains, this morning's economic weakness, Yen strength, and unimpressed oil market has driven the S&P and Dow back into the red from pre-Doha levels...

Following the death of Philly Fed's dead-cat-bounce, Dallas Fed did the same with a disappointing thud back to -13.9 (missing expectations of a rise to -10.0). This is the 16th consecutive month in contraction (below 0) and respondents are increasingly depressed, "it is a bad time for manufacturing, agriculture and mining - the only sectors that actually create wealth." What kind of fiction are these real average joes peddling? Have they not seen the jobs data?

A recession by any other name should smell so bad...