From ZeroHedge:
By Philip Marey, Senior US Strategist at Rabobank
Battleground Preparation
Yesterday, battleground preparation in Ukraine took a new turn with the destruction of the Kakhovka dam. In addition to the flooding, this will restrict the water supply and Ukraine’s agricultural output, pushing up global prices of grains and other produce. The Zaporizhzhia nuclear power plant is also dependent on water supply from the dam reservoir, but is said to have sufficient reserves and could be supplied by other means. Both sides, Ukraine and Russia, are denying responsibility, but Western intelligence agencies are leaning toward Russia. The flooding definitely reduces Ukraine’s options for its long-awaited counteroffensive.
This morning, the 7.5% decline (year-on-year) in China’s exports beat [?] the Bloomberg consensus of a more modest 1.8% decrease. This adds to concerns about global demand as higher interest rates and persistent inflation are eroding purchasing power. The decline in China’s imports by 4.5% was smaller than the 8.0% consensus expectation, but still points to domestic economic problems. As our Teeuwe Mevissen summarizes, there are multiple reasons why China’s economy is struggling and most of them are factors that have been plaguing China’s economy for quite some time. On top of the ongoing weakness in the real estate sector and high levels of debt, regulatory uncertainty and geopolitical tensions are increasingly weighing on China’s weakening recovery.....
....MUCH MORE
This is exactly what we've been babbling about for the last seven months. Here's the outro from a May 8 post:
...If you saw the Chinese export numbers an hour ago you know there is no Chinese cavalry riding to the rescue of the Western economies. Chinese imports were flat. No uptick in demand for anything the west produces. Exports increased 8.5%, showing just how dependent China remains on the West staying out of recession., CNBC:
China’s exports rose 8.5%, continuing its growth streak at a slower pace
The underlying fact set was the point of the intro to and outro from January 31's "What If China Had A Reopening And Nobody Cared?":
China isn't reopening, it has reopened. This is it. And despite the record savings the population has accumulated over the last three years we are not seeing a wave of demand in the domestic economy. Using one of the most basic proxies for what is actually going on, the price of pork, the grand reopening, is, to say the least, muted. This is especially true considering the country just celebrated the largest, most festive holiday on the calendar.*****One data point does not make a trend but it does raise the possibility that the facile expectation of a boom in Chinese consumption is wrong.What if, and I'm just spitballing here, what if the giant ball of savings is being targeted by the rapidly aging population as a retirement cushion, i.e. future consumption, not current?
That would leave China's export economy to carry the weight.
And that is not looking very promising at the moment:....
December 14, 2022 "Dear China, Thanks For All The Stuff But I Think We're Good For Now (U.S. imports plummet)"
December 4:"Chinese factories are shutting down two weeks earlier than usual ahead of Chinese New Year"
It really is starting to appear that China could see a recession* caused by slowdowns in their Western customers' economies.
It's only recently that we've started thinking the previously unthinkable...
