Holiday Weekend Reassurances from Your Friends at China's Central Bank
A fellow named Zhu Jun, identified as Director-General in the People’s Bank of China’s international department, reassured us all that China's stock market was just fine thank you. And so Bloomberg dutifully plastered this lovely headline on Sunday:
Well now, that should settle things down to start this week after Labor Day, shouldn't it? After all, it seemed to be Chin's stock market tumble that triggered sell-offs around the world the days before Labor Day, so why shouldn't the reverse take hold now that China's market's all comfy and cozy after its bout with the flu?
Then again, these remarks remind us of another weekend story planted by the Chinese Central Bank back in April, when the first serious concerns hit the press about China's economy, despite the bubble blowing up (at that time) in China's stock market.
The very next day, they reduced reserve requirements for banks. So much for the casual facade.
And so we take this weekend's comments by Mr. Jun in the same light. It's all intended to mask the turmoil of an economy coming undone. And Bloomberg dutifully plays its role to assuage our natural desire for good news in the face of troubling developments be printing these remarks without comment, bolstered by a prominent headline over the weekend.
Nice try Mr. Jun. Just doing your job, of course.
Meanwhile, markets are closed today in the States for Labor Day. Enjoy!
China Market Volatility Nearing End, Says Central Bank Official
Then again, these remarks remind us of another weekend story planted by the Chinese Central Bank back in April, when the first serious concerns hit the press about China's economy, despite the bubble blowing up (at that time) in China's stock market.
China’s central bank Governor Zhou Xiaochuan said the world’s second-largest economy has scope compared with other nations to ease its monetary policies though won’t necessarily take advantage of it.On that Saturday last spring, the central bank head spoke in a casual manner, intended to communicate the sense that any issues that might exist with China's economy were "no bid deal" (our words, not his) but if needed at some point in the future the Bank of China could pull out an arrow from brimming quiver and set things right - although they "won't necessarily take advantage of it."
The very next day, they reduced reserve requirements for banks. So much for the casual facade.
And so we take this weekend's comments by Mr. Jun in the same light. It's all intended to mask the turmoil of an economy coming undone. And Bloomberg dutifully plays its role to assuage our natural desire for good news in the face of troubling developments be printing these remarks without comment, bolstered by a prominent headline over the weekend.
Nice try Mr. Jun. Just doing your job, of course.
Meanwhile, markets are closed today in the States for Labor Day. Enjoy!
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