We have not followed pro-employment policies in the USA for decades, and we are about to see the long term consequence.

If our ideology had not been so extremely right wing, free market, in regulation, we would not have this crisis.

If our ideology had not been so extremely right wing, free market, in jobs and labor/industrial policy, we would not have this crisis.

If only!

China’s export growth fell to -2.8% yoy and import growth fell to -21.8% yoy in Dec with trade surplus at usd39 bn, lower than in Nov.

As you stated that unemployment worldwide is at record highs.

Do you know how many jobs in China are export direct and indirect related?

If US actually gets to 9-10% unemployment and with EU at record high as well, what would China’s unemployment rate be? 25-30%?

I was speaking to someone from the Chinese labour dept, and was told that unemployment rate among new graduates in 2008 was as high as 30%.

Tyaresun, I am also pretty pessimistic about US and Chinese policymakers getting together. We’ll see.

CLN, yes if there are significant dollar outflows the amount that needs to be sterilized (assuming we accept that sterilization is meaningful) will certainly go down. The problem is that we seem to have gone from explosive credit growth to contracting credit, and we need monetary expansion not contraction. If net capital outflows exceed the trade surplus, we will be on the wrong side of monetary policy (again). By the way the PBoC and other agencies keep good records of open market operations. I usually rely on my friend Logan Wright, who keeps close tabs on these numbers.

“We will accelerate and bring forward the parts of the 600 billion yuan ($88 billion) of planned investments on 16 major projects, under our mid- and long-term development plan for science and technology, that are closely linked to the economy now,” Mr. Wen said in Sunday’s radio report.”

Anyone have a link to which 16 projects they are??? specifics? thx.

2)Is there any source that has the data or has attempted to approximate the amount of dollars sterilized (by buying treasuries) and the corresponding amount of yuan sterilization in yuan issued bonds?… (This assuming the dollar sterilization process takes place as described in the 2008 REPORT TO CONGRESS of the U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION)
http://www.marketobservation.com/blogs/media/blogs/Statistics/CurrencySterilizationChina.jpg

(With respect to the “abnormal” dollar outflows I’ve red a similar story from Xinghua:)
http://news.xinhuanet.com/english/2009-01/06/content_10614803.htm

What are the chances that the Chinese will follow the Pettis prescription? I would put the chances at less than 50% in a timely manner. Also, I would not be surprised if protectionist legislation as well as WTO complaints are filed by the Obama admin. in the first 100 days.

http://news.xinhuanet.com/english/2009-01/06/content_10614803.htm

While I read tons of reports (many, sadly for me, are crap), one of the key resources I check-out is this blog and its ‘thoughts’ / contributor comments. Why? The answer is – feel you are ahead of the curve. Although, have to say you econs are a little lofty at times – still – hats off to you chappies. On the other hand, and don’t take it the wrong way … but we’re actually on the Kangshung Face – you just see more of the mountain than us from your balconies (at times). Seriously though, excellent blog.

To us, as traders, it is becoming more and more obvious that there is an unprecedented calamity building just over the rise. The question (for us) is: how high we climb before we strap on our skis? (or run out of oxygen)

We are, no doubt, looking at similar data – but also speaking to those that run organisations down in the valleys and crevasses. They are NOT having a good time. Owner/managers of small, medium and large export manufacturing entities in China are telling us that the ‘usual’ orders have not transpired. Some are experiencing debtor difficulties as a result of what has happened with exchange rates e.g. unhedged orders by customers with retail margins way thinner than exchange rate movements (opps, where’s that treasurer gone…). Others are manufacturers closing their operations for far more than normal extended periods over CNY, and agreeing with workers – we’ll call you back when needed. (Apparently the train stations have been filled with people going home for CNY – already! And, we’ve been told many factory workers simply cannot even afford to make it home this year, having been let go early and with less pay.) These owner/managers are not unaware – they’re readying themselves for an unprecedented trial, renegotiating financial arrangements, rapidly streamlining and cost cutting, liquidating assets and building up their cash reserves.

The corporate profits are definitely shrinking and the probability of civil unrest is rising fast. The view from the valley … we’ll be strapping on our skis around CNY.

Tally-ho!