In what may be the biggest news of the day, and certainly with far greater implications than whatever Mario Draghi will announce in a few hours when we will again witness the ECB doing not "whatever it takes" but "whatever it can do", moments ago Reuters reported that China is preparing for an unprecedented overhaul in how it treats it trillions in non-performing loans.
Submitted by Brandon Smith via Alt-Market.com,
Many investors today are not very familiar with market history and tend to live only in the day-to-day mainstream narrative while watching little red and green graphs move up and down. This is not so much an issue in a relatively stable economic environment. The problem is, today we live in the most unstable economic conditions possible.
China's plunge protection team may be scrambling to prop up the Shanghai Composite for the duration of the People's Congress, but the moment the NPC is over, the stock "market" goes with it, and the people know it. But now that China has its favorite bubble back - housing - few care: after all the stock bubble was meant purely as a placeholder until houseflipping mania returns.
The European Central Bank promised in January to "review and reconsider" its monetary stance this week. The question, as BloombergBriefs notes, is not if policy makers will ease but how. Haruhiko Kuroda's humbling in FX markets shows what Mario Draghi is up against tomorrow: namely, that even the most forceful policy decisions can be overwhelmed by events, positioning, or sentiment.
For the 47th month in a row, China's Producer Prices have fallen year-over-year - a record deflationary streak. CPI rose 2.3% YoY - the fastest pace since May 2014 (against expectations of a 1.8% rise in consumer prices, and at the upper end of the +1.5% to +2.4% range). PPI printed as expected with a 4.9% YoY plunge in producer prices (-4.5% to -5.5% range). However, what is most disturbing - from both a social unrest and economic-stimulus-hope basis, is that Food prices exploded 7.3% YoY - the most in 4 years.