2015 was the year of considerable FX drawdown as desperate EM central banks attempted to rescue themselves from reality.
As Barry Eichengreen noted,
"Intervening to support an exchange rate that’s fundamentally overvalued is a fool’s game and a no-win situation, akin to a sovereign attempting to sustain an unsustainable debt burden rather than yielding to inevitable restructuring."
The Kremlin have announced that China are to send 5,000 of its most elite military forces into the Levant War Zone to help Russia in the fight against ISIS, which has left the Obama administration and the Pentagon “horrified”. The “Siberian Tiger” Special Forces and “Night Tiger” Special Forces Units were given authorization to be deployed by China’s People’s Congress (NPC) on Sunday, after China passed its first anti-terrorism law allowing their army to take part in anti-terror missions abroad.
Via Finanz und Wirtschaft's Christoph Gisiger,
Howard Marks, Chairman and founder of Oaktree Capital, warns that investor behavior has entered the zone of imprudence and thinks that China is the biggest threat for the US economy.
We and others have long wondered how long it would be before China looks to flex its military muscle in the Mid-East under the “war on terror” banner.
Xi has been especially keen on demonstrating the PLA’s growing influence in 2015 especially as it relates to Beijing’s maritime might. Anyone who follows geopolitics is likely well acquainted with China’s land reclamation efforts in the Spratlys, where dredgers have been busy constructing some 3,000 acres of new sovereign territory on which Xi is building a number of things including runways and ports.
The last trading week of 2015 begins on a historic precipice for stocks: as reported over the weekend, the U.S. stock market has not been lower for any year ending in a “5? since 1875.