MASSIVE Stimulus Checks sent to Chinese | Economic Collapse

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중국이 빈곤층·고아 대상 생활보조금(약 220억 달러 규모)을 긴급 발표했지만 시장은 충분치 않다고 회의적. 디플레이션 악순환이 구조적이며 중국 경기 둔화가 심화되고 있다고 진단. 금은 사상 최고치 근처로 상승. 미국은 3분기 GDP 견조(애틀랜타 연은 2.99%), 11월 50bp 인하 확률 약 59%. 실업수당 청구 등 고용지표가 향후 경기침체 신호를 가늠할 핵심 변수라고 봄.

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01. stimulus checks are back this is not something I thought I would be covering for China yes stimulus checks have just been announced for quote the poor before their National Day ministries of finance and civil Affairs are apparently going to offer living subsidies to dis disadvantaged groups including very poor people and orphans local authorities are trying to get this money out before October 1st this is very very rare you usually you only see stimulus from the top down in China and this sort of exacerbates the deflationary Spiral that you've been facing in China we'll get into some more details on these checks in just a moment bu right now in China are the expectations of further policy support uh analysts and experts on China say that right now this sort of stimulus bazooka we got over the last 24 hours from The People's Bank of China is not enough to change market dynamics just yet in fact if you just take a look at the hangsang index this is sort of your uh yeah I think it's a 52 or 58 uh constituents uh that make up somewhere around 80% of the Chinese market cap any if you take a look at them yesterday morning well I mean their version of today when their Market opened they were going to be up somewhere around 4% but take a look at this the market already sold that 4% off down to just 68 basis points of gains which don't get me wrong it's still positive but you could see you went straight down Futures were the rest of the difference here but anyway look at the niay over here the Nay also ran initially fell ran into lunch fell ran fell just couldn't keep it up uh you did have the docks over in Germany start rotating at least towards the positive direction it did rotate up yesterday on the news of this Chinese stimulus their Market's obviously still open at this uh point in time but uh only uh uh well sitting at 32 basis points so you're not even up you had oil rally yesterday uh oil rallied a about 2% now it's down almost 2% again oil and the international blend Brent right here so it's almost like markets are really skeptical of this Chinese stimulus that is this actually going to be enough uh to keep the Chinese economy out of a recession if you look at gold the answer is probably no I mean you just hit another record high look at this 2682 right now we're almost at $2,700 an ounce for gold it's been an incredible mover now some other facts to look at and uh and details to understand regarding the stimulus is that deflation is is just unfortunately for China very structural now I see in the comments a lot of people are hoping that we'll have deflation in the United States but deflation is self-perpetuating self-fulfilling and it's usually associated with a recession it's usually associated with you losing your job so you know we look at this as like oh but prices will be lower great but you won't be able to afford anything because you won't have work this deceleration is is very bad that you're seeing in China and frankly it's Gathering momentum it's not slowing down it's basically getting worse faster so yes hopefully this latest stimulus bazooka that we've seen can help China get ahead uh but so far the more China stimulates to build out capex the more you create a deflationary spiral of more Manufacturing more potential manufacturing jobs and more deflation as you now have created more competition even though the Market's not asking for that that's why now you're getting a fiscal policy response of okay well let's give poor people checks that's great and could be a good chunk of money for some I don't think it'll be this High I think they'll really broaden out how many people receive these but there are currently 4.74 million uh extremely poor uh in China and uh they're allocating right now about four uh oops let's see it here there we go a little oopsy doopy 22 billion so if we take $22 billion and we divide it by 4.74 one two 3 million people that could be as much as about $4,600 per each of those people now given that China has a population of over about 1.5 billion people I would suspect that more than just 4.7 million are going to be eligible for these checks and so therefore the checks will probably be closer to something we saw during covid which in China was closer to about $500 uh in the United States we had stimulus of somewhere around $6,000 per person on average uh anyway national day is a major holiday it's usually a holiday that sees a lot of travel and consumption so they're hoping that'll sort of offset the property slump and sort of the pretty gloomy stock market you've had out there you do you are starting to see Central Bankers are actually sort of appreciating this idea of like okay cool yeah maybe if we could just pump the stock market to alltime highs we can kind of like keep the economy out of recession and frankly so far it's working I mean look at the United States for example uh Atlanta fed now real GDP data uh showing us at a 2.99% estimate for Q3 GDP we do get uh a GDP report tomorrow so pay attention to that and wow we're pricing in 59% chance right now of getting a 50 basis point cut in November already that's pretty remarkable but uh tomorrow September 26th at 5:30 in the morning we'll be getting a GDP annualized quarter over quarter now keep in mind that's just the third read for Q2 so it's kind of old data it's not really going to help us a lot same thing for the GDP price data for Q2 I think what's going to be a little bit more useful and probably more likely to move the market is at that same time we're going to get unemployment claims and continuing claims which we're expecting to be 224,000 1.82 6 million so we'll see we will get durable orders and cap Goods but I don't think those are going to be as uh pressing as those unemployment claim numbers this all comes at the same time as now China has apparently launched the first ICBM into International Water since like the 80s which is kind of crazy to see uh it's also a little bit scary because it's kind of like wait a minute why are you doing this China it's like they're trying to show us uh that they too can be a boss uh not great great uh but then you've also got uh some more expectations obviously that this is just the beginning of more easing for example they cut their um medium loan facility rates down to 2% from 2.3 it's a 30 Bas basis point cut that might not mean a lot to you so I'm just going to put it this way it's the largest cut since 2016 uh then uh you know the yuan is obviously strengthening on this because the United States is is you know cutting rates and their concerns potentially over recession or not uh where you know they are stimulating now actively on both actually now a fiscal and uh economic side uh and uh there's some talk that they might end up moving to uh ending like reducing rates that people get on their deposits uh and not just people but also corporations they haven't done that yet but there's some talk that they might end up doing that uh and if they do that you could then really see uh maybe some inflows into spending is a theory or it'll just people make people even more nervous because that's what happens during deflationary times people get even more nervous and they purposefully stop spending so we'll see but anyway some more info there uh markets continue to look for any kind of signs that they can regarding recession in unemployment claimed numbers I personally have said it before I'll say it again I think it's kind of nonsensical to look at unemployment claim numbers mostly because you generally don't see a large wave of unemployment until you're already in a recession you don't see those unemployment claims until it's already too late uh so we'll see but what would be good is seeing the opposite right let's see those 27 weeks unemployed and longer start declining again let's start seeing these unemployment claim numbers come in even lower those are all things that could potentially reiterate that hey you know maybe things are getting better not worse right now if we look at the 27 weeks unemployed we can see you know pretty solid uptake over here on the right and if you zoom out you always get an uptake like that in recession you generally don't see the uptakes absent recession so again I mean you had a little uptick over here in like 63 but uh it looks like our magnitude is a little larger over here but we'll see the where the trajectory of these numbers goes now will determine how much markets try to price in recession do keep in mind that very few people actually think we're with certainty going to have a recession here which is actually exactly what I would expect going into into a recession is most people aren't going to think we're in a recession yet uh let's go find out it was the conference board that did a reading on this uh take a look at this uh okay expectations index based on consumer short-term Outlook declined to 81.7 but remains above 80 a reading below 80 is usually the threshold of a recession ahead okay perfect the proportion of consumers anticipating a recession over the next 12 months remained low so not quite in recession category yet at least regarding the sentiment data but certainly going to be data that we're going to watch and this is exactly what they're trying to U-turn in China where they're trying to get ahead of this miserable sentiment let's see what happens as time goes on