Daily commentary: the Fragile State of China’s FX Reserves redux

I highly recommend the FT article on China’s 1% in the links below. They bring up the capital flight problem that a Chinese hard landing might mean. I noted last April that Victor Shih gave a talk at INET on the Fragile State of China’s FX Reserves. His thesis was that capital flight would be an issue in the event of a hard landing. What’s more is that Marshall Auerback noted that "If you had huge capital flight as Shih suggests, the implication is that the yuan gets much weaker, as presumably these yuan are exchanged for other assets or currencies." We are seeing that. I also mentioned the commodities speculative trade unwinding. We are seeing that too.

As I said last year, just because we are thinking about this doesn’t mean we have it all figured out. There are still a lot of unknowns. But, this is a potentially much bigger issue than people realise. With Europe, Facebook and JPMorgan dominating headlines, we need to realise there are other issues out there.

Facebook market makers’ losses total at least $100 million | Reuters

Treasury Sale Sets 2nd Record Low Yield on Europe Debt – Bloomberg

Sadly Barack Obama, like Mitt Romney, is an apologist for the 1% | Mehdi Hasan | Comment is free | The Guardian

Britain’s borrowing costs hit record low – Telegraph

SEC Staff Said to End Lehman Probe Without Seeking Action – Bloomberg

JPMorgan Joins MF Global in Lobbying Wins That Backfire – Bloomberg

Gemeinsame Staatsanleihen: Eurobonds sind nach EU-Recht verboten – Wirtschaftspolitik – FAZ

U.S. banking industry posts highest quarterly profit since 2007 – latimes.com

«El Gobierno de Cristina Fernández de Kirchner nunca va a pagar a Repsol» – ABC.es

El dólar negro llegó a $ 6,15, un 37% más que el oficial

Real continúa cayendo y cerró en 2,07 por dólar, mínimo en tres años – lanacion.com

Euro-Wirtschaft schrumpft weiter – Konjunktur – derStandard.at › Wirtschaft

Euro-Zone Economic Contraction Deepens – WSJ.com

BBVA estudia vender parte de sus negocios en Chile, Colombia y Perú y México – ABC.es

Ireland will require second bailout says Buiter – The Sunday Business Post

Eurozone economy contracts sharply – FT.com

Hey, Germany: You Got a Bailout, Too – Bloomberg

French Data Regulators to Google: How About Making Your Answers to Our Questions Universally Accessible and Useful? – John Paczkowski – News – AllThingsD

Muhammad Ali vs. Oscar Bonavena, 1970 | Retronaut

U.K. Economy Shrinks More Than Estimated on Building Slump – Bloomberg

Facebook IPO Post Mortem – Killer – but not for the reasons you think ! « blog maverick

Jury deals blow to Oracle in case vs. Google | Reuters

Moody’s Raises Ford to Investment Grade | Crossing Wall Street

EXCLUSIVE: Here’s The Inside Story Of What Happened On The Facebook IPO – Business Insider

Spain struggles to meet regions’ 36 billion euros debts | Reuters

Celebrities portraits found in cupboard, 1970s | Retronaut

Spain to inject at least $11.3 billion euros in Bankia: De Guindos | Reuters

FT Alphaville » China’s ‘1 per cent’ risk

Facebook’s IPO debacle: greed, hubris, incompetence … | Heidi Moore | Comment is free | guardian.co.uk

Widow sues Wells Fargo over wrongful foreclosure that took devastating toll | Business | guardian.co.uk

Greece debt creating healthcare crisis, warn chemists | World news | guardian.co.uk

Cassandra Does Tokyo: OMG! They Killed Zucky…!!

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