China is slowing fast. It’s some combination of lockdowns and structural reform. The manufacturing PMI just expanded: But new orders contracted at home and abroad: The services PMI cratered on lockdowns: Again, new orders were hammered: Construction was still booming at 60 but new orders were flat for a second month. The steel PMI is
Even by China’s capital misallocation standards, this one is a doozy. In April, Evergrande’s EV division was worth $120bn. Today it is worth $10bn: Everything Evergrande is being annihilated as it moves to sell (that is, liquidate) assets to meet the Three Red Lines policy. This is going to weigh on property starts as a
The Grattan Institute has released a new report calling on Australian governments to act now to curb industrial emissions if they want to achieve net zero by 2050. Below is the Overview combined with key graphics: Governments around the world are moving to ‘net zero’, to limit the impacts of climate change. All Australian state
Sinocism with the note: The PBoC an CBIRC sent a huge signal today by calling in Evergrande executives for a chat and then issuing a statement on the meeting. 人民银行、银保监会约谈恒大集团 On August 19, 2021, responsible comrades of relevant departments of the People’s Bank of China and China Banking and Insurance Regulatory Commission interviewed senior executives
Markets are slowly coming around to the MB view that no rescue is imminent in China. There are no signals for it. On the contrary: At Tuesday’s meeting of the Communist Party’s Central Committee for Financial and Economic Affairs, the government detailed new strategies to target the upper echelons. Officials vowed to “strengthen the regulation
From the IPCC: A. The Current State of the Climate A.1 It is unequivocal that human influence has warmed the atmosphere, ocean and land. Widespread and rapid changes in the atmosphere, ocean, cryosphere and biosphere have occurred. A.2 The scale of recent changes across the climate system as a whole and the present state of
Has anybody else noticed how nobody is talking about a “commodity supercycle” anymore? There is a good reason for this. A commodity supercrash has begun instead. According to bulls for much of the past six months, an endless delight of commodity super prices was ahead. Everything from oil to iron ore was going stay higher
Excellent video from UBS: Spot on. What it means: CNY to tumble. EMs and commodities to tumble. AUD to tumble. All made worse if the Fed tapers…
TS Lombard with the note. I agree with this. But the risks rise as the Chinese economy goes ex-growth and CCP legitimacy slides: China’s growing military assertiveness towards Taiwan over the past 18 months has deepened concerns that it is preparing to invade. But the increasingly vocal minority who argue that rising tensions along the
This was always one serious Hail Mary: As China Evergrande Group mulls a special dividend to revive confidence in its tumbling stock, analysts are gaming out several scenarios that could have markedly different implications for equity and bond investors. Chairman Hui Ka Yan, who directly or indirectly controls three-quarters of outstanding Evergrande shares, will meet
Ever since China installed its “three red lines” policy early this year, there have been increasing signs of stress in China’s mega-development sector. Floor area starts have dropped sharply, equity markets have punished the sector and credit markets begun to tighten the noose on the more freewheeling names. That process continues today as Chin’s greatest
We know he can’t “read the room” owing to a personality disorder that inhibits empathy. But this is a whole new magnitude of expression for it. Welcome to Planet Morrison where it’s hot, entire countries sink from sight and we feed their drowning populations with scorn: PM Morrison told the Biden climate summit that Australia
Our Gaslighter-in-Chief is having his climate bluff called. After yesterday promising an absurdly low $500m in new carbon taxes, the Biden administration is having none of it: The Biden administration has demanded deeper carbon cuts from Australia. “Technology not taxes” is insufficient said a senior official. The US is expected to announce roughly double Australia
It is a full-court press against the climate spoiler Morrison Government today. Leading us off are former PMS Malcolm Turnbull and Kevin Rudd united in anger. They say: The Biden administration has dramatically reset the climate agenda. US, Japan, Korea and Canada will announce new and deeper 2030 targets. Australia is doing nothing. Its targets
Another day, another alarming scientific climate change report from a very authoritative source, The Climate Council: Climate change is accelerating with deadly consequences. The ecological systems that have sustained human life and societies for generations are being severely damaged by increasing heat and worsening extreme weather events. › There is no safe level of global
The Morrison Government’s “gas-led recovery” has been rubbish from the outset. It was a fix, not a policy process. Nobody is going to accuse me of being anti-gas. I’ve been campaigning for more of it for two decades. But, instead of undertaking consider economic process to extract more of it, the Morrison Government has butchered
Readers will know that the MB view of the uptake of battery power to supplant traditional baseload output reliant on fossil fuels is inevitable. Now, Labor has seen the light with an actual policy from Albo today: Labor will spend $200m on community batteries. Each is about the size of a four-wheel drive. They will be
Australian Academy of Science: Full report here. Everybody should read it.
Via Wood Mackenzie: We recommend the following action items for capital allocators: • With roughly US$800 billion in annual spend, it’s a growth story. Apply strict discipline when it comes to risk-return expectations. Be conservative on the terminal value assumptions. • Don’t ignore opportunities in the T&D sector. Returns could be better in T&D versus
The Coalition is a total energy imbecile. And I am being kind. It’s a damn miracle that Australia’s decarbonisation of the grid is going so swimmingly because the Morrison Government and its Coalition predecessors are completely lost. After yesterday’s excellent news that Yallourn coal-fired power station is going to close in 2028, with seven whole
It has been coming for a long time now. Since 2014, the Coalition Government has allowed an evil gas export cartel to corner Australian energy markets by occupying and shipping offshore all of our gas. This drove local gas prices wild, from $3Gj to $20Gj, and because gas-fired power sets the marginal cost of electricity
Ever since Xi Jinping came to power in China, its economic narrative has shifted. What was considered an endless miracle of growth before his rise, transformed afterward into an endless critique of unbalanced growth. Xi launched major reforms from 2012 to 2015 that aimed for structural transformation in the Chinese economy from investment to consumption.
The latest distraction thrown up by the struggling Morrison Government is a push for nuclear power. The Nats began it last week. Today we see more Coalition flunkies joining the push. The AFR has trolled the internet to find somebody else that supports the notion in Poland. At The Australian it’s Menzies Insitute doyen Nick
How will China hit 2060 net-zero emissions given it by far the world’s largest polluter? Goldman has a crack at it: China’s pledge to achieve net zero carbon by 2060 represents two-thirds of the c.48% of global emissions from countries that have pledged net zero… …as the country accounts for c.30% of global CO2 emissions
For many years, as Australia agonised over its climate change transition and carbon price, forward-looking economists warned that it would not be long before it was imposed by other countries anyway. That day has come in the European Parliament: To raise global climate ambition and prevent ‘carbon leakage’, the EU must place a carbon price
