Rabo: Michael Every Goes 'round the Bloody World

Pressing the point

Pressing the point

Market comments

By Michael Every, Global Strategist Rabobank

We just sat through a set of Chinese press conferences from the PBOC, the Ministry of Finance (on a Saturday, mind you!), then other departments, each of which had been sold in as ‘The Big One’ that would unleash the fiscal bazooka on markets so stocks and commodities -and global supply-side inflation- soar. Well, four stops into this sequence what we are being shown is still more peashooter. Today, it was again about trading in old appliances for new. Over the weekend, it was about offering new ways to mop up around 0.2% of the supply of unwanted and unfinished homes, and perhaps 1% of the underlying capital issues at Chinese banks. (This is all very back of an envelope: but then again, so are the press conferences, it seems.

Markets are still clinging to the belief that, in the end, China *has* to go large on fiscal stimulus for consumers -which the weak inflation data out over the weekend will have encouraged them in doing- despite Beijing’s clear ideological aversion to the idea of welfarism or consumerism. Indeed, the same people aren’t reading the recent headlines about China taking away passports from schoolteachers and other civil servants (“Bullish! More money to spend at home!”) and cracking down on anyone reading books with the wrong ideology or ideas. (“Just like being at a Western university.”)