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.
Following the examples of Canada, Finland, New Zealand and the Netherlands, Japan is considering giving free money in the form of ‘vouchers’ to poor young people. Surveys showed that under-34s in Japan have cut their spending and the government could stimulate economic activity by injecting free money into the system which will pay for itself in time by expanding the economy while maintaining social cohesion among the classes.
While the US manufacturing sector has been in a clear recession for the past year as a result of the collapsing commodity complex, so far the stable growth in low-paying service jobs - at least according to the BLS' statistical assumptions - such as those of waiters and bartenders have kept the broader service economy out of contraction (even though recent Service PMI data has been downright scary).
This is now changing: as we showed a month ago, according to the lagged effect of the collapse of the Restaurant Performance Index, that party is over:
USDJPY just had its best week in 2 months, funding bullish momentum and carry trades around the world in the midst of dismal economic data everywhere and tumbling earnings expectations. This "bullish" Yen strength, however, amid China's biggest weekly devaluation in almost 3 months, was ironically driven by drastic investment outflows - record sales of Japanese stocks by foreigners (sell JPY), and record purchases of foreign bonds by Japanese investors (sell JPY).
Submitted by Lance Roberts via RealInvestmentAdvice.com,
At the beginning of this month, I discussed the monthly statistics for March. To wit:
“It is often the case that the month following a negative return month will post a positive return as markets bounce from oversold conditions. However, as shown below, this is not always the case.