USD-PHP Hits Eleven Year High! The Government’s Ambitious Infrastructure Projects Should Aggravate on the Peso’s Predicaments

The USD-Php beat the Phisix to a new record.

Up .5%, the USD-Php soared to 50.47 a level last reached in September 2006, or an ELEVEN year high!

Among Asian contemporaries, the USD-Php was the strongest again this week (peso weakest)

The domestic currency’s weakness has been more than the USD. It has been weak against a broad spectrum of currencies.

 

Among the currency majors, with the exception of the Japanese yen, the Philippine peso has attenuated against the euro, pound and the yuan over the past year (upper charts). The yen has risen against the pesoin January but has traded rangebound since May. (But the yen-php remains up on a year-to-date basis)

Including all the components of the Bloomberg Dollar index (BBDXY), the Philippine peso has diminished against the Mexican peso, the Australian dollar, and the Swiss franc. The Canadian dollar has only recently spiked against the peso. Though the Brazilian real rose against the peso in the first two months of the year, such gains have dissipated. Or the peso has gained only against the real year-to-date. The real’s weakness has largely been due to corruption scandal that has surfaced to plague Brazil’s new administration.

The peso has condescended even against the ASEAN neighbors, namely the ringgit, baht and rupiah (lower window).

Despite the much ballyhooed G-R-O-W-T-H mantra, the broad spectrum of the peso’s weakness has been amazing.

Contrary to the public wisdom, the sustained softening of the peso entails that the demand for the peso (and peso related assets) continues to wane.

Moreover, while there has been a surfeit of domestic liquidity, there appears to be increasing scarcity in the context of USD liquidity in the domestic financial system.

And while local experts fixate on the FED’s “hawkishness” the international counterparts have raised the issue of USD flows in terms of remittances and of trade deficits. Hardly has there been any meaningful discussion on relative supply side factors.

On remittances. Unless much of the domestic population will be sent overseas, the law of diminishing returns will continue to dominate remittance dynamics predicated on the sheer scale of OFWs and overseas migrant workers.

Additionally, incomes of OFWs and immigrants depend or are leveraged on the global economy. With global debt at a staggering US $217 trillion or 325% of GDP in 2016(!), the burden of debt servicing will hardly generate enough room for investments and therefore provide the necessary fulcrum for growth dynamics. Furthermore, since much of these debts had been used to finance overcapacity, the latter will also serve as obstacles to real economic growth. Both these factors parlay into constricted demand.

Moreover, increased risks of protectionism and political aversion to migrants will likely serve as added hurdles to increased overseas deployment. Given these factors, remittance growth should be expected to grow incrementally, stagnate or even decline.

This brings us to trade deficits.  The government proposes an aggressive infrastructure spending program to the tune of Php 8 to 8.4 trillion over the tenure of the incumbent administration (2017-2022).

To put in perspective the scale of the proposed spending, 2016’s NGDP was at Php 14.5 trillion. The personal savings as of May was Php 4.09 trillion. Total resources of the financial system as of April totaled Php 17.4 trillion with banking system’s resources at Php 14.142 trillion. This means that that the proposed infrastructure spending program would equal 55% of NGDP, 195% of personal savings and 46% of the financial system’s resources. And that’s just infrastructure alone.

Since the government’s massive infrastructure spending alone will compete and eventually “crowd out” the private sector on resources and on financing, these most likely will lead to even bigger trade deficits (greater imports than exports). With insufficient dollar flows from remittances and from foreign investments (as consequence of “crowding out”), the government’s current dollar liquidity predicament will likely intensify. The government will most likely finance such liquidity shortages with more borrowing from both local and international sources of USDs, the BSP will probably increase its usage of derivatives “forward cover” and possibly resort to access of currency swaps with other central banks.

So the government will not just be borrowing to finance its ambitious spending programs, it will also expand its leverage on the USD for liquidity purposes. At the end of the day, increasing dollar indebtedness would redound to magnified “US dollar shorts”.  

And while popular politics remain fixated on free lunch funded pipe dreams, raging global asset markets may have been forcing global central banks to have second thoughts on the continued provision of easy money.

Fed officials as Ms. Janet Yellen warned last week of expensive price valuations. San Francisco Fed John Williams said the stock market "seems to be running very much on fumes" and that he was "somewhat concerned about the complacency in the market." (Bloomberg)

Ms. Yellen’s vice chair, Stanley Fisher “pointed to higher asset prices as well as increased vulnerabilities for both household and corporate borrowers in warning against complacency when gauging the safety of the global financial system.” (Bloomberg)

The Bank of England “ordered banks to hold more capital as consumer debt surges” (The Guardian) while its governor Mark Carney gave the case of raising interest rates (Marketwatch)

European Central Bank’s Mario Draghi hinted that tapering of QE may be in the offing by saying “deflationary forces had been replaced by reflationary ones”.

Mr. Draghi’s statement sparked massive selloffs in bonds, and a huge spike in the euro!

ECB officials tried to downplay Mr. Draghi’s statement to no avail.

The Swedish Central Bank is widely expected to ditch its easing bias next week.

Last weekend, prior to the spate of hints by central banks, the Bank for International Settlements, the central bank of central banks, urged major central banks to press ahead with interest rate increases (Reuters)

And with major central banks signaling a concerted tightening, it’s a wonder how the Philippine government can be able to finance their proposed grandiose project.  

Aside from domestic USD liquidity issues, if the BSP continues to maintain current historic subsidies in the face of global tightening, the peso will depreciate further. Monetary subsidies include the RECORD lowest interest rate and the RECORD monetization of National government debt which went up by 8.9% in May 2017 from April’s 4.3%.

But if the BSP raises its rates to align with actions of the other major central banks, then just what happens to the much touted aggressive infrastructure spending projects?

Oh by the way, I noted in early June that the BSP has imposed a tacit tightening through a pullback in the monetization of national government’s debt. (Oh My, Has the BSP Commenced on Tightening??? June 4, 2017).

Apparently, the slowing domestic liquidity growth (11.3% in May) has percolated to impact consumer (+23.6%) and industry loan (+17.6%) growth too (lower window).

Nevertheless, the BSP seemed to have used QE (Php 31.783 billion) anew this May to finance the National Government May’s fiscal deficit (Php 33.421 billion). The doubling of growth rate has similarly reflected on M3.

Getting hooked to debt monetization translates to a policy of devaluation.

Oh, before I close, here is a SHOCKING quote of the day from Ms. Yellen (Reuters, June 27, 2017)

U.S. Federal Reserve Chair Janet Yellen said on Tuesday that she does not believe that there will be another financial crisis for at least as long as she lives, thanks largely to reforms of the banking system since the 2007-09 crash.

"Would I say there will never, ever be another financial crisis?" Yellen said at a question-and-answer event in London.

"You know probably that would be going too far but I do think we're much safer and I hope that it will not be in our lifetimes and I don't believe it will be," she said.

Writing on the wall?

PBoC Tapers: China’s Interest Rate Markets Under Pressure

The consensus has basically downplayed almost all forms of risks in the face of a US inspired global stock market melt UP.

Yet the resurfacing turmoil in the interest rates markets in the Chinese economy suggests otherwise.

Newswires say that the Chinese central bank, the PBoC, has re-initiated a tightening of the monetary noose following the recent reports of a rise in ‘inflation’ [euphemism for the runaway credit fueled property bubble].

From yesterday’s Bloomberg:

China’s benchmark money-market rate jumped the most since July as the central bank refrained from adding funds to markets and corporate tax payments drained cash.

The seven-day repurchase rate, a gauge of funding availability in the banking system, surged 47 basis points, or 0.47 percentage point, to 4.05 percent as of 4:21 p.m. in Shanghai, according to a weighted average compiled by the National Interbank Funding Center. That was the biggest advance since July 29. The overnight repo rate jumped 72 basis points, the most since June 20, to 3.80 percent.

The People’s Bank of China has suspended selling reverse-repurchase contracts since Oct. 17, leading to a net withdrawal of 44.5 billion yuan ($7.3 billion) from the financial system last week. The authority asked commercial banks to submit orders today for 28-day repurchase contracts, 91-day bills, and 14-day reverse repos planned for tomorrow, according to a trader at a primary dealer required to bid at the auctions…

The PBOC may lean toward tightening should there be an acceleration in consumer-price gains, Song Guoqing, a central bank academic adviser, said over the weekend. Inflation was 3.1 percent in September, the fastest pace since February.

Today China’s repo rates opened at 4.8% from yesterday’s 4.79%

The interest rate squeeze in the repo markets have likewise put pressure on the yields of China’s 10 year sovereign bonds (investing.com). Yields have reached 4.23% as of this writing from 4.2%.

According to a fresh Wall Street Journal report.

The yield on the benchmark 10-year bond hit 4.20% Thursday, the highest since it reached 4.60% in November 2007.

"Rising inflationary pressures, a rebound in economic growth and the central bank's shift toward a slightly more hawkish monetary policy have led to tighter liquidity conditions," said Chen Long, an analyst at Bank of Dongguan. "These have made bonds less attractive to investors."

The article blames ‘inflation’ partly to the recent surge in capital flows.

The PBOC's move also reflects an intention to offset the inflationary pressures created by surging capital flows into China, said Peng Wensheng, chief economist at China International Capital Corp.

China's central bank and financial institutions bought a net 126.4 billion yuan of foreign currency in September, compared with 27.32 billion yuan in August, according to calculations by The Wall Street Journal based on central bank data issued Monday. These figures are viewed by most analysts as a proxy for inflows and outflows of foreign capital, as foreign currency entering the country is generally sold to the central bank. September is the second straight month of net purchase—after two months of net sales—suggesting continuing capital inflows.

Consumer Price ‘Inflation’, which are symptoms of credit fueled asset bubbles, essentially signifies a domestic dynamic as explained here. Existing bubble conditions have only lured foreign money or local money based overseas to piggyback on yield chasing activities.

Notice too that since the liquidity crunch last June, yields of Chinese bonds has been steadily rising.

Yet this comes in the face soaring debt levels and runaway property bubbles. In short, the Chinese economy looks very vulnerable.

And my guess is that the Chinese political leadership have been aware of this and could be trying to put a brake on her homegrown bubbles since they have already accomplished attaining their statistical growth targets. (chart from FT Alphaville).

The June liquidity crunch has also been ventilated on China’s equity benchmark, the Shanghai Index.

Since the PBoC’s action during the last few days, the Shanghai index has once again manifested signs of renewed weakening.

Japan’s equity benchmark, the Nikkei 225’s sharp decline last June has also coincided with the China interest rate spike. We can note of a seeming resemblance today as the Nikkei has demonstrated signs of weakness. 

As of this writing the Nikkei has been down by more than 2% while China’s stock markets are also in deep red (table from Bloomberg).

Bottom line: Underneath many complacent markets are many potential flashpoints (or booby traps) for a black swan event.

Also policymakers hold global financial markets by their necks. One moment policymakers decide to inject money to the system which incites a boom, the next moment the same policymakers withdraw money from the system that prompts for a selloff.

In other words, financial market’s mini-boom bust cycles reveal how they have been hostaged to the whims of political agents.

Phisix: Will Domestic Fundamentals Outweigh External Factors?

The Philippine central bank, the Bangko ng Pilipinas (BSP) released its 2^nd quarter inflation report last week. 

And as expected, the BSP, which interprets the same statistical data as I do, sees them with rose colored glasses. On the other hand, I have consistently been pointing out that beneath the statistical boom based on credit inflation, has been a stealth dramatic buildup of systemic imbalances

BSP Predicament: Strong Macro or Fed Policies?

In a special segment of the report, the BSP recognizes of the tight correlation between US Federal Reserve policies and the price action of the local stock market (as noted above)

The BSP implicitly infers of the influence or the transmission mechanism of the actions of the US Federal Reserve (FED) on foreign portfolio flows to emerging markets, such as the Philippines, by stating that Fed policies “followed generally by upward trends in portfolio investment inflows”. 

The BSP also sees portfolio flows as having contributed to the recent stock market boom, “A similar trend was observed with the Philippine stock exchange index; that is, QE announcements were followed generally by an increasing trend in prices, with varying lags.”[1]

And when the jitters from the FED “taper” surfaced on the global markets late May, the BSP admits that foreign funds made a dash for the exit door, “In May 2013, portfolio investment flows registered a net outflow of US$640.8 million, a reversal from the previous month’s inflow of US$1.1 billion. Net capital flows for the period 3-14 June 2013 have recovered somewhat to US$65.13 million”

The BSP also noted that the sudden reversal of sentiment affected other Philippine markets, particularly

a) Philippine credit outlook represented by credit default swap (CDS), “The credit default swap (CDS) index exhibited a widening trend to 157 bps on 24 June after trading below 100 bps in the past month, as the market increased its premium in holding emerging market bonds. The country’s CDS narrowed to 145 bps as of 25 June 2013, improving further to 139 bps by 27 June 2013” and

b) The currency market, “the peso weakened significantly by 6.36 percent year-to-date against the US dollar, closing at a low of P43.84/US$ on 24 June 2013. Subsequently, the peso began to recover, closing the quarter at P43.20/US$ on 28 June 2013.”

The BSP dismissed the domestic market’s convulsion as having “overreacted to some extent”, and put a spin on a recovery “are now beginning to bounce back”.

But curiously the BSP justifies the selloff as having a beneficial effect of “reducing the build-up of stretched asset valuations and in making the growth process more durable in long run”, this predicated on the “inherent strength of Philippine macroeconomic fundamentals”.

See the contradictions?

If the BSP thinks that the domestic market’s reactions to external forces reduced the “build-up of stretched asset valuations”, which essentially represents an admission of overpriced domestic markets, then what justifies significantly higher markets from current levels?

And in my reading of the BSP’s tea leaves, domestic markets should rise but at a gradual pace to reflect on the “growth process” over the “long run”.

But this hasn’t been anywhere true in the recent past where mania has dominated sentiment.

The BSP doesn’t explain why markets reached levels that “stretched asset valuations” except to point at foreign portfolio flows (which they say has been influenced by the external or US policies).

And similarly in the opposite spectrum, the BSP doesn’t enlighten us why markets “overreacted to some extent” except to sidestep the issue by defending the ‘stretched’ markets with “strong macroeconomic fundamentals”.

Basically the BSP connects FED policies to rising markets, but ironically, sees a relational disconnect from a threat of a reversal of such external factors, banking on so-called strong “macroeconomic fundamentals”.

The BSP, thus, substitutes the causality flow from the FED to domestic macroeconomic fundamentals whenever such factors seemed convenient for them.

Notice that the May selloff hasn’t been limited to the stock market, but across a broad range of Philippine asset markets, which the BSP acknowledges, specifically, domestic treasuries, local currency (Peso) and CDS. Yet if ‘macroeconomic fundamentals” were indeed strong as claimed, then there won’t be ‘overreactions’ on all these markets.

And it would be presumptuous to deem actions of foreign money as irrational, impulsive, finical and ignorant of “macroeconomic fundamentals”, while on the contrary, latently extolling the optimists or the bulls as having the ‘righteous’ or ‘correct’ view.

The BSP also misses that the point that the impact by FED policies, and more importantly, their DOMESTIC policies, has not only influenced the stock market, but other asset prices and the real economy, as well, via credit fueled asset bubbles.

Central banks have become the proverbial 800 lb. gorilla in the room for the interconnected or entwined global financial markets. 

Take the Peso-Euro relationship. The balance sheet of the European Central Bank (ECB) began to contract in mid-2012 (right window[2]), which has extended until last week[3].

On the other hand the balance sheet of the BSP continues to expand over the same period[4]. The result a declining trend of the Peso vis-à-vis the euro (left window[5]).

The Peso-Euro trend essentially validates the wisdom of the great Austrian economist Ludwig von Mises who wrote of how exchange rates are valued[6],

the valuation of a monetary unit depends not on the wealth of a country, but rather on the relationship between the quantity of, and demand for, money

The BSP seem to ignore all these.

And because today’s artificial boom has been depicted as a product of their policies, the BSP thinks that the market’s politically correct direction can only be up up up and away!

Cheering on Unsustainable Growth Models

The BSP cheers on data whose sustainability has been highly questionable.

On the aggregate demand side, the BSP admits that household spending growth has been at a ‘slower pace’.

With slowing household, the biggest weight of the much ballyhooed statistical growth of domestic demand has been in capital formation. This has been attributed to the massive expansion in construction (33.7%) and durable (9.4%) equipment, and in public (45.6%) and private (30.7%) construction[7]

As pointed out in the past, construction and construction related spending has all been financed by a bank deposit financed or credit fueled asset bubbles.

The other factor driving demand has been government demand or public spending.

As I have been pointing out, this supposed growth in demand via government deficit spending means more debt and higher taxes over the future. Frontloading of growth via debt based spending signify as constraints to future growth.

Pardon my appeal to authority, but surprisingly even a local mainstream economist, the former Secretary of Budget and Management under the Estrada administration and current professor at University of the Philippines[8], Benjamin Diokno, acknowledges this.

In a 2010 speech Mr Diokno noted that[9]

Deficit financing leads to lower investment and, in the long run, to lower output and consumption. By borrowing, the government places the burden of lower consumption on future generations. It does this in two ways: future output is lowered as a result of lower investment, and higher deficits now means higher debt servicing thus higher taxes or lower levels of government services in the future.

The above debunks the populist myth which views the Philippine economy as having been driven by a household consumption boom[10].

The aggregate supply side dynamics mirrors almost the same as the above—bank deposit financed credit fueled asset bubbles.

While agriculture has pulled down or weighed on the growth statistics, production side expansion has been largely led by construction (32.5%) and manufacturing (9.7%).

On the service sector side, financial intermediation (13.9%) led the growth, followed by real estate and renting (6.3%) and other services (7.6%)[11].

In short, except for manufacturing, most of the supply side growth has centered on the asset markets (real estate and financial assets).

These booming sectors, which has benefited a concentrated few who has access to the banking system and or on the capital markets, have mostly been financed by a massive growth in credit. Yet this credit boom has fundamentally been anchored on zero bound interest rates policies.

The reemergence of the global bond vigilantes have been threatening to undermine the easy money conditions that undergirds the present growth dynamic, a factor which ironically, the BSP seems to have overlooked, and intuitively or mechanically, apply the cognitive substitution over objections or over concerns on the risks of bubbles with the constant reiteration of: “strong macroeconomic fundamentals”—like an incantation. If I am not mistaken the report noted of this theme 4 times.

And yet the recent market spasms appear to have been a drag on credit growth of these sectors (although they remain elevated).

And as noted last week, the rate of credit growth on financial intermediation, so far the biggest contributor of the services sector, has shriveled to a near standstill (1.45% June 2013)[12]. Financial intermediation represents 9.73% share of the total supply side banking loans last June.

This should translate to a meaningful slowdown for the growth rate of this sector over the next quarter or two.

It remains unclear if the growth in the other sectors will be enough to offset this. But given the declining pace of credit expansion in the general banking sector lending activities, particularly in sectors supporting the asset boom, growth will likely be pared down over the coming quarters.

So far the exception to the current credit inflation slowdown as per June data, has been in mining and quarrying (85.66%), electricity gas and water (13.84%), wholesale and retail trade (15.74%) and government services—administration and defense (17.11%) and social work (47.21%)—however these sectors only comprise 31% of the production side banking loan activities. Half of the 31% share is due to wholesale and retail trade; will growth in trade counterbalance the decline in the rate of growth of financial intermediation?

Interestingly, the BSP does not provide comprehensive data on bank lending except to deal with generalities. And puzzlingly, the BSP report has been absent of charts on the bank loans and money supply aggregates such as M3, which like the banking loans, the latter has been treated superficially. Why?

So far market actions in the Phisix and the Peso appear to be disproving the BSP’s Pollyannaish views.

Asia’s Credit Trap

The financial markets of Asia including the Philippines appear to be ‘decoupling’ from the Western counterparts, particularly the US S&P (SPX) and Germany (DAX) where the latter two has been drifting at near record highs.

Has the nasty side effects of “ultralow rates” where Southeast Asian economies, as Bloomberg’s Asia analyst William Pesek noted[13], “didn’t use the rapid growth of recent years to retool economies” been making them vulnerable to the recent bond market rout?

The appearance of current account surplus, relatively low external debt, and large foreign reserves, doesn’t make the Philippines invulnerable or impervious to bubbles as mainstream experts including local authorities have been peddling.

Japan had all three plus big savings and net foreign investment position[14] or positive Net international investment position (NIIP) or the difference between a country's external financial assets and liabilities[15], yet the Japanese economy suffered from the implosion of the stock market and property bubble in 1990 (red ellipse). 

As legacy of bailouts, pump priming and money printing to contain the bust, Japan’s political economy presently suffers from a Japanese Government Bond (JGB) bubble.

And given the reluctance to reform, the negative demographic trends, and the popular preference of relying on the same failed policies, the incumbent Japan’s government increasingly depends on surviving her political economic system via a Ponzi financing dynamic of borrowing to finance previously borrowed money (interest and principal) where debt continues to mount on previous debt. Japan’s public debt levels has now reached a milestone the quadrillion yen mark[16], which has been enabled and facilitated again by zero bound rates.

And this strong external façade has not just been a Japan dynamic.

China has currently all of the supposed external strength too, including over $3 trillion of foreign currency reserves, NIIP of US $1.79 trillion (March 2012[17]).

But a recession, if not a full blown crisis from a bursting bubble, presently threatens to engulf the Chinese economy.

As growth of “new” credit sank to a 21 month low where new loans grew by ‘only’ 9% in July and ‘only’ 29.44% y-o-y[18], the Chinese government via her central bank the People’s Bank of China (PBOC) continues to infuse or pump ‘money from thin air’ into the banking system[19]. 

Such actions can be seen as bailouts by the new administration on a heavily leverage system.

Incidentally, debt of China’s listed corporate sector stands at over 3x (EBITDA) earnings before interest, taxes, depreciation and amortization[20]. Notice too that listed companies from major Southeast economies (TH-Thailand, ID-Indonesia, and MY-Malaysia) have likewise built up huge corporate debt/ebitda.

State Owned Enterprises (SoE), their local government contemporaries and their private vehicle offsprings plays a big role in China’s complex political economy. Hence, latent bailouts targeted at these companies have allowed for the ‘kicked the can down the road’ dynamic. China recently announced a railroad stimulus[21], again benefiting politically connected enterprises.

I cast a doubt on the recent reported 5.1% surge in in export growth[22] considering her recent propensity to hide, delete or censor data[23]. These claims would have to be matched by declared activities of their trading partners. Nonetheless, eventually markets will sort out the truth from propaganda.

The point is that Asian economies have become increasingly entrenched in debt dynamics in the same way the debt has plagued their western contemporaries.

And the deepening dependence on debt as economic growth paradigm puts the Asian region on a more fragile position.

Asia is in a ‘credit trap’ according to HSBC’s economist Frederic Neumann[24]. Asian economies have traded off productivity growth for the credit driven growth paradigm, where Asian economies have “become increasingly desensitized to credit”. Yet lower productivity growth will mean increasing real debt burdens.

And if the bond vigilantes will continue to assert their presence on the global bond markets, then ‘strong macroeconomic fundamentals” will be put to a severe reality based stress test.

And the validity of strong macroeconomic fundamentals will also be revealed on charts.

Risk remains high.

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[1] Bangko Sentral ng Pilipinas Inflation Report, Second Quarter 2013, BSP.gov.ph p. 37-41

[2] JP Morgan Asset Management Weekly strategy report – 28 January 2013

[3] Reuters.com ECB balance sheet shrinks to 2.391 trillion euros, August 6, 2013

[4] see Phisix: BSP’s Tetangco Catches Taper Talk Fever July 29, 2013

[5] Yahoo Finance PHP/EUR (PHPEUR=X)

[6] Ludwig von Mises Trend of Depreciation STABILIZATION OF THE MONETARY UNIT—FROM THE VIEWPOINT OF THEORY On the Manipulation of Money and Credit p 25 Mises.org

[7] BSP op. cit., p.9-10

[8] Wikipedia.org Benjamin Diokno

[9] Benjamin Diokno Deficits, financing, and public debt UP School of Economics.

[10] see Phisix: The Myth of the Consumer ‘Dream’ Economy July 22, 2013

[11] BSP op. cit., p.19

[12] see Phisix: The Impact of Slowing Banking Loans August 5, 2013

[13] William Pesek Specter of Another Bond Crash Spooks Asia, June 7, 2013

[14] Bank of Japan Japan's International Investment Position at Year-End 2012, May 31, 2013

[15] Wikipedia.org Net international investment position

[16] see Japan’s Ponzi Finance: Public Debt Tops Quadrillion Yen Mark! August 10, 2013

[17] China Daily China's intl investment position reaches $1.8t July 14, 2012

[18] Bloomberg.com China’s Credit Expansion Slows as Li Curbs Shadow Banking August 10, 2013

[19] China Daily China central bank continues liquidity injection August 6, 2013

[20] Businessinsider.com 17 Reasons Why Experts Are Convinced China's Economy Is Doomed, July 15, 2013

[21] see China’s Railroad Stimulus is now Official: It’s an $85 billion boondoggle July 25, 2013

[22] Bloomberg.com China Trade Rebounds in Further Sign Economy Stabilizing August 8, 2013

[23] see China’s Government Hides, Deletes and Censors Economic Data, July 5, 2013

[24] AsianInvestor.net Asia in a credit trap, warns HSBC's Neumann August 8, 2013