BUDGET DAY: Beyond Planet Brussels, the world is grinding to a halt.


Despite frantic and at times headless actions by Beijing, at the end of the Wednesday session 1300 stocks on the Shanghai index were down an average of 10%. Just 3 (that’s three) were up.

The No-confidence vote has now spread to raw materials as well as stocks: Chinese iron ore futures fell 8% overnight, and this morning in the West spot iron ore prices were even more pessimistic at $50 a ton, the lowest since April.

With France’s deficit worsening month by month, Japan too is showing signs of catching China Syndrome. Stocks fell sharply in the morning session, with heavy China suppliers like Hitachi faring worst. Bizarrely, Reuters was attributing much of this to Greek crisis uncertainty: it clearly lives in the same mathematical world as George Osborne.

Hat-tip to Kevin for most of this data.

The Draper comes off all fours and onto his back legs later today. I wonder if these real-world events will feature in his Colombian marching analysis. I wonder if the Labour Party will catch on and ask how pudding and pies proposes to factor in a world slump. Probably not in both cases.

But I know what I’d ask him about: Chinese nuclear reactors.

Next stop Australia, and a correction in the Sydney housing bubble. Sell now while delusion lasts. Just don’t put the money in the Aussie Dollar.

Meanwhile in Brussels, the German attempt to bring Athens to its knees by pelting the Parliament building with sausages, doughnuts and Turks has ended in glorious failure. “Ve fought to ze last Wurst,” said putsch leader Wolfgang Wheelybin, “but in ze end, the lack of Greek proposals voss the tellink factor”.

35 thoughts on “BUDGET DAY: Beyond Planet Brussels, the world is grinding to a halt.

  1. Dada – have you ever dreamt that you were driving a car when suddenly you hit a bump and the car is sailing through the air and you just know that it isn’t going to end well? The engine’s still running – top revs too as your foot’s stomped hard on the pedal – brakes not doing a lot and neither is the steering … I usually wake up before the denouement!


  2. Feeling profoundly ashamed, I humbly express my sincere apologies on behalf of the rest of the Hellenic people for causing China’s stock market to plummet.


  3. Probably somebody already posted this interview in Die Zeit with Thomas Piketty, but it’s worth repeating anyway. Point is that the Germans are only calling the shots now because of debt forgiveness in the past. If Greece is kicked out of the EZ, however it is brought about, it will destroy the EU and it will be mainly seen to be the Germans’ fault. It won’t help the poor Greeks, though, they still get shafted.


    Difficult one for JW, something like: the enemy of my enemy is my friend?


  4. Some good analysis except for the spelling mistake in the second para:

    Neoclassical economics pretends that we search for an optimum solution that serves the economy as a whole…

    It appears to me that the word ‘optimum’ has too many consonants.


  5. In great form, as usual, HB!

    As for the scientific “validity” of neoclassical economics, what can one say? It amounts to nothing more than a (failed) attempt to apply the concepts and methodology of Newtonian Physics to the study of the workings of an economy. Philip Mirowski’s book “More Heat than Light: Economics as Social Physics, Physics as Nature’s Economics” is quite enlightening!


  6. Agreed, Phaedrus. It is at best a pseudo-science which dresses up the essentially axiomatic nature of financial value in the finery of high flown language which distracts rather than informs. The emperor’s old clothes were infinitely more suitable and attractive.


  7. There’s an eminently descriptive word beginning with ‘b’ which applies here, although, for the life of me, I don’t seem able to conjure it at this moment.. ;)


  8. Apologies for spamming but what really is distracting just now is the braying donkey who is polluting the UK airwaves as I write this. Chancer Robsone owes his ‘vision’ more to a South American plant alkaloid than financial reality, absolutely sickening and about as easy on the ear as a fire in a pet shop.


  9. So, what was all that about then…???

    Talk about snatching defeat from the jaws of victory.

    Usual outcome… Banksters win all, people mean f*ck all…


  10. The Sydney housing bubble is allegedly being fuelled by Chinese money fleeing to a safe haven. I can’t see this stopping unless the Federal Government starts seriously applying FIRB regulations. Given that the Federal Government doesn’t seem to mind the hot money flowing in, I can’t see this step being taken any time soon.
    The latest upset in China will only increase the desire to get cash out of China (and into places like Australia).


  11. to me the economists belong in a group with the astrologers and the weathermen .. but they are probably the least based on fact.


  12. Indeed Mr. H – and such is the respect the world markets have for this child that the £ has lost a cent against the euro since he clambered out of his playpen and started honking on and on about stuff which he plainly understands bugger all about. No doubt he will capering about and thumbing his nose to all and sundry before bedtime …


  13. @desmond. Given that most economists either willfully or out of ignorance have decieved the masses about the true nature of money creation and banking, maybe they belong in the seventh circle of hell with the usurers.


  14. You’re definitely on a roll today HB!
    It’s always a pleasure!

    One thing, however, does get into my nerves: Those b@st@rds have succeded in making every-day life here as gray as their bloody suits.
    What’s even worse is that there are quite a few Greek politicians, TV personas, celebrities and all kind of clowns with unlimited promotion by the privately owned media (TV, radio, newspapers, websites) that are actually happy with these developments and will be in seventh heaven if the “Left Parenthesis” comes to an end and things return to the past normality (even if that entails a national disaster).
    There is no way not to be shocked by how so many people blinded by “ideology”, greed, hatred, intolerance, death-denial or whatever else fail to realise a very simple fact: if the ship sinks we’ll ALL drown.
    Has it become so impossible to expect at least a minimum of common sense and common decency?


  15. The libertarian do no harm is off the same ilk,they see the harm but refuse to change their ideology,it’s another ideal to hide behind rather than actual deal with it


  16. NZ recently required all foreign buyers ( mostly Chinese) of NZ housing assets to obtain an IRD number and a NZ bank account.
    Things went very quiet very quickly.

    Of course the agreement that NZ signed with China some months ago, to provide cooperation in ” eliminating” corruption and fraud will also have been a deterring factor.


  17. I didn’t think JW was up to speed on the Aussie housing bubble???. The expert who recommends a 40% drop anytime soon.
    Better a Sydney housing bubble than someone who put his money and future into living in France and life into the crumbling Euro.
    Don’t like to get personal, but get some facts,


  18. So you should. The Greek economy is half that of New South Wales. The b*st*rds. Don’t buy a house in Sydney. Buy onein Greece and show them who is boss!!!


  19. Now there’s an economy that’s booming. No unemployment there. Trust those tricky Kiwis to sort it out. Why are there so many in Oz looking for work?


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