Our friend Andy Rothman from research firm CLSA sent out an interesting chart last week following the release of Chinarsquo;s macroeconomic data for the month of September. As you can see from the chart, private investment (Non State-Owned Enterprises) growth accelerated to 37 percent on a year-over-year basis, a more rapid rate than that of state-owned enterprises. This is the first time wersquo;ve seen this happen since October of last year and it is the fastest rate of growth since November 2007. A more confident private sector should not only make Chinarsquo;s ongoing recovery more sustainable in a time of diminishing government-mandated stimulus, but also facilitate the structural transition of the Chinese economy toward private consumption. The private investment revival is largely driven by the real estate sector, which has seen inventory levels drop in major cities like Beijing and Shanghai. CLSArsquo;s on the ground survey revealed that 50 percent of middle-class families ...

In this three-part interview, Andy Rothman China macro strategist of CLSA, discusses a number of China-related issues with Ben McLannahan, Asia Lex writer of the Financial Times.

Part 1: Rothman on why there’s no China bubble

Click here or on the image below to view the video.

Part 2: Rothman on the renminbi and the health of Chinese consumer spending

Click here or on the image below to view the video.

Part 3: Rothman on risks that may derail China rebound

Click here or on the image below to view the video.

Source: Ben McLannahan Financial Times (

...

U.S. banks are going bad as quickly as a bunch of over-ripe peaches in the summer heat. On the heels of the Colonial Bank failure comes another sizable bank failure.

Guaranty Bank in Texas became the 81st U.S. bank to fail this year. It was the 11th largest bank failure in U.S. history. This kind of thing is becoming so regular it is hardly news when it happens.

But what’s interesting to point out about this one is that the FDIC sold Guaranty to Banco Bilbao Vizcaya Argentaria of Spain. This is the first time regulators have sold a failed bank to a foreign lender. Such a turn of events would have been unthinkable only a decade ago.

So the world turns. When it comes to the question of who has the money, it’s often a non-U.S. buyer these days.

Speaking of foreign buyers, there is probably no group of buyers more watched and

...

Chris Wood, street smart Global Equity Strategist of CLSA, yesterday said in an interview on CNBC-TC18 that the US markets remained in a bear market rally while Asia and India were in a secular bull market.

He said the Indian and Asian rally was started by local money, which according to him was a big long-term positive. He added that Asia and emerging markets (EMs) would be the biggest beneficiary of the Fed’s monetary easing. He also said liquidity could lead to massive asset bubbles in Asia and EMs.

Click the image below to view the interview. The video clip is followed by a verbatim transcript.

Q: What have you made of the markets’ move in the past few weeks?

A: I was expecting what I call a counter-trend rally, driven by a counter-trend rally in

...

by Edward Hugh: Barcelonabr /br /The global manufacturing recession continued in April, with rates of contraction for output, new orders and employment all showing what are effectively sharp contractions by historical standards. The rates of contraction however moderated almost universally, and this is now the fourth month where this moderation has been evident. Thus, while the contraction is far from over, it is reasonable to say the it has stabilised, and the big issue is at what rate it will hold in the months to come. The initial shock has now been absorbed, but that is a far cry from saying that we already have the worst behind us. The general deterioration in employment conditions raises the concern that as the impact of the government stimulus "shocks" in their turn wane, and as national banking systems come under the impact of the additional loan defaults the growing unemployment and falling ...

China’s manufacturing shrank by the most on record and export orders plunged, providing more evidence that recessions in the U.S., Europe and Japan are sharply slowing what was previously the world’s fastest-growing major economy. The Purchasing Managers’ Index fell to a seasonally adjusted 38.8 in November from 44.6 in October, according to the China Federation of Logistics and Purchasing. The output index fell to 35.5 from 44.3, while the index of new orders dropped to 32.3 from 41.7. On these indexes any reading below 50 means contraction, and as can be seen in the chart below, China's manufacturing industry has now been contracting (month on month) in four of the last five months. The November reading stands out though, since the magnitude of the contraction has accelerated sharply.br /br /br /br /a href="http://1.bp.blogspot.com/_ngczZkrw340/STPmXoANkEI/AAAAAAAALmM/yVbTMtTuh7M/s1600-h/china+PMI.png"img id="BLOGGER_PHOTO_ID_5274812882130669634" style="DISPLAY: block; MARGIN: 0px auto 10px; WIDTH: 320px; CURSOR: hand; HEIGHT: 190px; TEXT-ALIGN: center" alt="" ...

Hungarian manufacturing continued to contract in October following a shocking performance in September, while exports drop sharply in the midst of a looming global manufacturing recession. All of which indicates that the real economy impacts of the recent financial turbulence is now about to make its presence felt. I think we are in for a real shocker in Hungary. October PMI Down Hungary's manufacturing industry contracted sharply in October, according to the latest PMI reading, which fell 5.2 points to hit 44.7 in October - a historic low, and 0.8 points below the previous worst reading registered in October 1998, according to the latest data from the Hungarian Association of Logistics, Purchasing and Inventory Management (HALPIM). Sharp Industrial Output Contraction In September Hungarian industrial production dropped the most in more than 16 years in September as the global financial crisis hit the economy and slowing growth in western Europe curbed demand for exports. Production ...

by Edward Hugh: BarcelonaSpain's manufacturing sector continued to shrink at a record pace in October, with both output and new orders contracting and employers shedding jobs at a near record pace, according to the latest Markit Economics Purchasing Managers Index published yesterday (Monday). The Markit PMI for Spain dropped to 34.6 in October, the lowest reading registered by any eurozone economy since the series began in February 1998 and down from the already rapid 38.3 point contraction in September. On the PMI system any figure below 50.0 shows contraction while figures over 50.0 show growth. As we can see, according to this indicator Spanish manufacturing has now been weakening steadily since the start of 2006.Manufacturers reduced their workforce as production requirements fell, with staffing levels declining at the steepest pace in the survey's history. The ...

The French manufacturing purchasing managers index was revised down to a series low 40.6 in October, down from both the 'flash' estimate of 40.8 and September's 43.0 figure, Markit Economics said in a press release issued on Monday.Disaggregating the figures, the output component fell to an all-time low of 37.8 from September's 41.7 level, while new orders slipped all the way to a series low of 34.9 for the month, down 2.6 points from September's 37.5 level. Purchase quantities and new export orders also saw some new record lows in October, falling to 33.7 and 38.5 respectively.Panelists widely reported that a weak economic climate, poor business confidence and slowing consumer spending had taken their toll on demand, with incoming new orders falling at the fastest pace registered by the survey to date in October. Weakness was ...

Germany's manufacturing sector contracted in October at the fastest pace in seven years as incoming orders and output experienced their sharpest declines in more than 12 years. The headline index in the Markit Purchasing Managers Index (PMI) for Europe's biggest economy fell in October to 42.9 from 47.4 the previous month, well below the 50 mark that separates growth from contraction.

The latest figure was the worst since the month following the Sept. 11, 2001 attacks in the United States, and also below the flash PMI reading for October of 43.3.

"The data underlined the considerable extent to which the global financial crisis has affected German manufacturing, with output and new orders both falling at the steepest rates since the survey began in April 1996," Markit said. "The investment goods sector was particularly hard hit in October, as difficult

...