China

Below are some excerpts from our latest macro note, "Front Loaded: China, Volatility, and Debt Deflation." The full report with the charts and footnotes is on www.kbra.com.  The key question raised by the comment is this: Do Chair Yellen and the other members of the Federal Open Market Committee actually believe that there is a positive trade-off between the "benefits" of QE and zero rates and the carnage now unfolding in the global capital markets?  

We have seen this pattern before, and it did not end well. While the most mainstream indications of China's "stability" are droned on about as indicating some level of control (i.e. Yuan volatility suppression), the fact is that no matter how hard China tries to centrally plan the entire world, segments of the credit market are screaming "uncontained."

First, China was forced to inject the most liquidity in three years... and it's still not helping support risk...

Documents released by Edward Snowden allege to show that the design of China’s Shenyang J-31 fighter jet was stolen by hackers from the Pentagon. Chinese hackers stole “many terabytes” of data about America’s F-35 stealth fighter jet and other programs, according to newly released documents by former NSA contractor and whistle-blower Edward Snowden. New York Daily News reports: The stolen materials, taken from the Pentagon and contractor Lockheed Martin Corp., included radar designs and engine schematics used in the crown jewel of American military aircraft.

There’s been no shortage of commentary from market heavyweights this week thanks to the World Economic Forum in Davos, but for anyone who hasn’t yet gotten their fill of billionaire talking heads, George Soros gave a sweeping interview to Bloomberg TV on Thursday, touching on everything from China to Fed policy to Vladimir Putin to Europe’s worsening refugee crisis.

http://www.bloomberg.com/api/embed/iframe

Give me that!!

It belongs to the Chinese now!

h/t @FedPorn

As we previously detailed,  two topics we’ve deemed critically important to a thorough understanding of both global finance and the shifting geopolitical landscape are the death of the petrodollar and the idea of yuan hegemony. 

In November 2014, in “How The Petrodollar Quietly Died And No One Noticed,” we said the following about the slow motion demise of the system that has served to perpetuate decades of dollar dominance: