In light of tonight’s Chinese PMI reports (official, HSBC), the weak South Korean PMI report, the weak Taiwanese PMI report, and so on, it’s worth hitting on an important meme of the day…The BRICS slowdown (which represents a broader emerging market slowdown is here).
At The Atlantic, Matthew O’Brien wrote a great piece marshaling 5 datapoints in favour of the Chinese hard landing scenario. Among them: The collapse in loan growth, electricity usage, and rail cargo. All are falling sharply. What’s more, he notes, the stimulus chatter is starting to get very loud.
Josh Brown has a good followup take on this.
So does Ben Walsh at Reuters, who notes that it goes way beyond China…
India’s GDP registered a HUGE miss on Thursday. It’s economy is an emerging basket case.
Or check out the Russian Ruble.
It’s been collapsing against the dollar in recent days (as shown in this chart of the dollar surging via ADVFN).
And since we’re doing the whole tour of BRICs, here’s Brazil’s BOVESPA stock market index.
This three-month chart, via Bloomberg, is ugly.
And we could go on. It’s not just the BRICs.
Here, check out a chart showing how well the US dollar has done against the Indonesia Rupiah, especially over the last few weeks. Again, via Bloomberg.
And as long as we’re talking about currency, check out how much the dollar has surged against the Indian Rupee:
We’ve been talking about the big Euro-led slowdown for a while, but now there’s another one: The economy is cracking all over the world in places that were assumed to be great growth engines, and right now the US economy (which isn’t growing like gangbusters, but which is kind of hanging in there) is looking like the strongest of the lot, and the Fed appears to have the least pressure on it to ease, which helps explain why currencies around the world are collapsing against the dollar.