All the leaves are brown, in China's garden

September I’ll remember. A recovery once new has now grown old, to paraphrase a Simon and Garfunkel song.

Shocked that China’s moving into a manufacturing recession, global equity markets sell off.

Why do you think China devalued their currency two weeks ago? The bogus economic numbers coming out of Beijing are showing a slight contraction in manufacturing as Chinese firms cannot find buyers in Europe or the US. I would suggest that the 49.7 reading is much worse, but “seasonally adjusted” would be the manipulated footnote.

I’ve been saying this for three months. We are entering a global recession based on diminished wages and bleak job growth, which manifests itself in reduced consumption.

The great unwashed masses have not benefited from the explosion of central bank cash going into propping up banks’ balance sheets and entering the economy.

Remember the latest numbers coming out of Chinese manufacturing — showing a contraction — are for goods made for the US, South American and European holiday shopping season.

So that says that US and global retailers are cutting inventory in the belief the consumer will be cash-strapped this holiday season.

 

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