Mish's Global Economic Trend Analysis

---

China's Exports "Surprisingly" Drop Posted: 12 Oct 2013 03:20 PM PDT Economists expected a 6% rise in Chinese exports. Instead, exports fell 0.3%. Please consider China's September export growth in surprise slide. China's export growth fizzled in September to post a surprise fall as sales to Southeast Asia tumbled, data showed, a disappointing break to a recent run of indicators that had signaled its economy gaining strength. China's exports dropped 0.3 percent in September from a year earlier, the Customs Administration said on Saturday, sharply confounding market expectations for a rise of 6 percent, and marking the worst performance in three months. Imports fared better, rising 7.4 percent in September from a year ago, better than forecasts for a 7 percent increase, shrinking China's monthly trade surplus to $15.2 billion. Analysts said weak exports underscored worries about flagging global demand, which may crumble further in coming months - especially in emerging markets - when tighter U.S. monetary policy pushes investors away from developing economies. Indeed, the data showed Chinese exports to Southeast Asia, China's fastest-growing export market in the past year, dived to a 17-month low in September. Capital outflows from the region on bets that the U.S. central bank will cut its bond purchases had hit demand, said Louis Kuijs, an economist at RBS in Hong Kong. "Looking ahead, export data may be quite weak in the coming months," Kuijs said, adding that financial turmoil in several emerging markets had dragged on global demand. Hardly Surprising For reasons discussed many times on this blog, the news is hardly surprising. Moreover, with exports down and imports up, China's GDP is going to "surprise" economists on the downside as well. For the real story on Chinese growth and why it will not be as strong as most analysts expect, here is some additional reading. Bulls and Bears Debate China: Property Bubble Expands Again; GDP Growth Picks Up; Economic Recovery Underway? No Says Michael Pettis "China Urbanization Growth Fallacy"; Trouble with Ponzi Schemes; Stopped Clock Syndrome; Wrong vs. Early Michael Pettis on the China Liquidity Crunch; China Bulls Beware China, Europe, Japan: Bad News for Those Looking for Growth The Dating Game: Michael Pettis Challenges The Economist to a Bet on China Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

Silliness From Boehner Rejected by Obama; Cut Losses, End the Madness Posted: 12 Oct 2013 09:46 AM PDT Bloomberg reports Boehner Said Obama Rejected Fiscal Offer. House Speaker John Boehner told fellow Republicans today that President Barack Obama rejected his latest fiscal offer, said Representative Raul Labrador, an Idaho Republican. "The president rejected our deal," Labrador told reporters after leaving Republicans' closed-door meeting in Washington. House Republican leaders' plan would extend U.S. borrowing authority to Nov. 22 from Oct. 17 and would make some changes to Obama's health-care law, structured in a way that could meet the political needs of each side to claim success. The Deal Boehner wants to end a tax on medical devices Extend the debt ceiling limit to November 22 Why bother? Does anyone think an agreement of substance can be hammered out by November 22. Amusingly, Boehner's proposal increases the deficit by $32 billion. So much for fiscal prudence. I still expect six Senate Republicans to pass a clean measure and send it to the House where it would pass if Boehner allowed a vote. Cut Losses, End the Madness Republicans should just concede and allow a vote to end the shutdown without conditions, Representative Peter King, a New York Republican, said in an interview yesterday. "We should cut our losses and get it over with," he said. "It's madness to keep the government closed any longer." As I mentioned before, the risk to Boehner, is House members use a discharge petition to force a vote. There are close to 30 Republicans willing to extend the debt ceiling, and the measure only needs about 17 to pass. As it stands, Republicans do not want to overrule Boehner via discharge petition to force the vote. If the Senate passes a clean bill, pressure on Boehner will be intense. I strongly support a balanced budget, reduced spending, and other things Republicans want, but the battle is not going to be won this way. In case you missed it, please consider Pragmatic Look at the Debt Ceiling Debate; Who Broke Washington? Mike "Mish" Shedlock http://globaleconomicanalysis.blogspot.com Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

You are subscribed to email updates from Mish's Global Economic Trend Analysis To stop receiving these emails, you may unsubscribe now.	Email delivery powered by Google
Google Inc., 20 West Kinzie, Chicago IL USA 60610