Friday, August 9, 2019

Albert Edwards on What Could Trigger the Next Chinese Currency Move

Is Albert still at SocGen? Haven't seen much out of him at that platform.
Just a reminder, despite his notoriety as a permabear on equities e.g. 2018's:
Société Générale's Albert Edwards Says "My Reputation For Calling Stocks Is In Tatters"
Well duh. He's been stubbornly fighting the central banks for a decade, a trait he shared with fellow bear David Rosenberg until Rosie flipped a few years ago and caught the last 35% or so of the up move.
But it isn't for the equity calls that Albert gets paid, and they're not why pros still listen to him:...
He's been a rather cheerful permabull on bonds for at least 20 years which has been the right call with remarkably muted variance/semi-variance:

He's pretty good at this stuff.

Which brings us to the yuan.

When the Chinese central bank set the midpoint of the trading range at 7.0039 a couple days ago there were huzzahs all around because, despite being set above 7 it wasn't as weak as many had feared.
Even the super-astute and hyper-realistic Marc Chandler had a sanguine take on the pricing:
Capital Markets: "PBOC Helps Stabilize CNY, while US Equity Recovery Lifts Sentiment" 
Mr. Chandler has a more benign view of what China's central bank did than I do.

And now, two days later, trading at: 7.0581.

So here's Albert on the next size 12 Oxford men's dress shoe poised to drop:
Korea, not just a leading indicator of the world economy but now the butterfly's wings to move the price of soybeans in Illinois.
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