It was exactly one week ago today when we reported that Guo Guangchang, a self-styled Chinese Warren Buffett worth some $7 billion, had disappeared.
For those who follow developments in China’s capital markets, it was obvious what had happened. Guo was swept up in Xi’s campaign to root out misconduct tied to the country’s equity market meltdown and subsequent government-engineered rescue effort.
The main purpose of this article is to bring to USA government's attention that " Pivot to Asia" policy is far more dangerous than they expected, because China may use this policy reversely to trigger U.S.'s crisis.
On Tuesday, we brought you Bloomberg’s top 10 “worst case scenarios” for 2016. The list, compiled by polling "dozens of former and current diplomats, geopolitical strategists, security consultants, and economists" included everything from devastating cyber attacks by Iranian and Russian hackers to a military coup in China.
They even threw in a Trump victory in the national elections for good measure.
Well, liftoff has officially begun.
Assuming 25 bps doesn't tip EM into crisis and/or trigger some kind of dramatic, unforeseen meltdown elsewhere, the Fed is about to embark on the first rate hike cycle in over a decade.
Of course the hike itself isn't what's interesting - virtually no one thought the Fed would fold again, even as China did its best to create a bit of pre-Yellen drama by stirring up the deval fears with a nod to a new trade-weighted index for the yuan.
Submitted by Ben Hunt via Salient Partners' Epsilon Theory blog,
Can everyone saying “a 25 bps rate hike doesn’t change anything” or “manufacturing is a small part of the US economy today, so the ISM number doesn’t mean much” or “trade with China is only a few percent of US GDP, so their currency devaluation isn’t important” just stop?
Seriously. Can you just stop?