Chinese Stimulus and the Snorting of the Bulls Arrive on Cue
Chinese government officials will do more of the same, and so will the bulls, according to this Bloomberg article. Of course, that's not how the article put it. Rather we find that - lo and behold - China's Ministry of Finance announced:
As for the bulls, who better than a key JP Morgan Asset Management figure to chide us regarding the supposedly overwrought theory that the slowing down of China's economy - the economy that has accounted for 50% of world economic growth in recent years - would accelerate a global economic slowdown. Silly mortal! Take comfort in these reassuring words of one of Wall Street's masters:
So, to sum up, 1) Chinese government officials have announced they will pursue those same policies that have had little to no effect on the building credit crisis and continuing deterioration in China's economy; 2) China's economic slowdown will not result in any slowing of the world's economy, despite China's economy accounting for 50% of the world's economic growth.
Oh, and let's not forget to get out and buy more stocks, for, after all:
...it would allocate more funds to support some infrastructure projects and implement tax cuts for small businesses. It also said it would accelerate the approval process for duty-free stores to boost construction.More of the same. And somehow with the expectation that the results will be different now. Makes perfect sense if you're a government official.
As for the bulls, who better than a key JP Morgan Asset Management figure to chide us regarding the supposedly overwrought theory that the slowing down of China's economy - the economy that has accounted for 50% of world economic growth in recent years - would accelerate a global economic slowdown. Silly mortal! Take comfort in these reassuring words of one of Wall Street's masters:
“The idea that China slowing should create a global recession was wide of the mark,” said John Bilton, global head of multiasset strategy at J.P. Morgan Asset Management, who added that reassuring comments from global policy makers should help markets stabilize after what was an “ugly month” for investors in August.To be clear here, China's economy represents approximately 15% of total world GDP, but it has accounted for 50% of world economic growth. We simpletons who perform rudimentary mathematical calculations might conclude that if the factor - China's economy - that accounts for 50% of world growth has been slowing roughly 2% each year for several years, and that such growth was further slowing, then that would logically imply that total growth would slow as well - number being what they are. However, we don't have the strategic vision and subtle mental acuity of the great Wall Street mavens who oversee hundreds of billions in investment assets. And so our logical conclusions need to be cast into the mud and trampled by the the likes of Mr. Bilton.
So, to sum up, 1) Chinese government officials have announced they will pursue those same policies that have had little to no effect on the building credit crisis and continuing deterioration in China's economy; 2) China's economic slowdown will not result in any slowing of the world's economy, despite China's economy accounting for 50% of the world's economic growth.
Oh, and let's not forget to get out and buy more stocks, for, after all:
Mr. Bilton said that there were good buying opportunity in markets currently, highlighting the recent falls in Japanese equities and that U.S. stocks remain in negative territory the year.And if Mr. Bilton says so, who am I - to paraphrase Pope Francis - to judge?
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