Tag Archives: China

In-depth analysis on Credit Writedowns Pro. You are here: Political Economy » The Importance of China’s New VAT By Marc Chandler Yesterday, China announced one of the most important tax reforms of the past twenty years.  It is replacing a business tax on gross revenue for non-manufacturing companies with a VAT.   Manufacturing companies have been subject to a VAT approach for a few years.  The reform extends it from manufacturing and a few services in a pilot...

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Revised up but for the worst reasons possible- unsold inventories were higher. Also, consumption expenditures were a bit lower, and note the deceleration of GDP growth on the chart. And in all likelihood Q1 GDP is now being reduced by inventory liquidation substituting for production: GDPHighlightsAn upward revision to inventory growth made for an upward revision to the second estimate of fourth-quarter GDP, to an annualized plus 1.0 percent rate for a 3 tenths increase from the initial...

A lot worse than expected and still deep in contraction: Empire State Mfg SurveyHighlightsFor the seventh straight month, the Empire State report is signaling significant contraction for the manufacturing sector. The general business conditions index for February came in below low-end expectations, at minus 16.64 vs even deeper contraction of minus 19.37 in January. New orders, at minus 11.63, are in contraction for a ninth month in a row while employment, though improving to minus 0.99...

Seems it’s always a central bank story. Goes up when they buy, down when they sell. Furthermore gold buying is supported by how it’s accounted for. That is, it doesn’t count as deficit spending or part of the pubic debt, even though the ‘taxpayer’ has to pay interest on the funds spent, just like any other deficit spending. Gold purchases are accounted for not as an ‘expense’ as ‘normal’ govt spending, but as purchases of an asset that remains on the balance sheet at ‘cost’. And yes, the...

In-depth analysis on Credit Writedowns Pro. By Frances Coppola originally posted at Coppola Comment Japan has just introduced negative rates on reserves, following the example of the Riksbank, the Danish National Bank, the ECB and the Swiss National Bank. The Bank of Japan has of course been doing QE in very large amounts for quite some time now, and interest rates have been close to zero for a long time. But this is its first experiment with negative rates. The new negative rate...

Japan has just introduced negative rates on reserves, following the example of the Riksbank, the Danish National Bank, the ECB and the Swiss National Bank. The Bank of Japan has of course been doing QE in very large amounts for quite some time now, and interest rates have been close to zero for a long time. But this is its first experiment with negative rates. The new negative rate framework is complicated, to say the least. The Bank of Japan has helpfully produced a pretty picture to...

The Conference Board argues that Chinese official data should be taken with some skepticism. Nothing new there. They have adopted a new measure, which implies "Chinese economic growth at a more realistic 3.7 percent" for the recent past. In this scenario, interestingly enough, "it’s likely that the bulk of China’s slowdown has already taken place since 2011, even if unapparent in official statistics." So the picture is probably worse than the official one (as shown below, from The...

Lots of up and down right now. The chart indicates purchase apps may be up a bit but still depressed historically. MBA Mortgage ApplicationsHighlightsThe new year is seeing a surge in mortgage activity reflecting a strong jobs market and low rates, according to the Mortgage Bankers Association’s weekly report. Purchase applications surged 18 percent in the January 8 week with refinancing applications up 24 percent. These gains, however, also reflect volatility in weekly measures and largely...

Anyone notice that the annual growth rate of employment continues the deterioration that began with the collapse in oil capex?Or that, once again, it looks like most all the new jobs were taken by people previously considered out of the labor force?And the anemic wage growth also contributes to the narrative of a continuously deteriorating plight for people trying to work for a living: Employment SituationHighlightsThe labor market is stronger than most assessments with December results...