Article originally appeared on www.zerohedge.com.
In order to govern, the question is not to follow out a more or less valid theory but to build with whatever materials are at hand. The inevitable must be accepted and turned to advantage – Napoleon Bonaparte
The People’s Bank of China cut the reserve requirement for Chinese banks by 50 bps on Tuesday, supposedly freeing up ¥1trillion in the banking system. The head of the central bank also promised to reduce mortgage rates by 50 bps on new loans and to push banks to reduce some existing mortgage rates by 50 bps.
They caught some short-sellers by surprise and sparked a bit of a rally in the yuan but not much else. They tried the same thing in February.
These rallies mean nothing in the longer term. Too many people were expecting China to roll-over and die (economically) in the short run when the decline is going to take some time. Think of China as a terminally ill patient that sometimes …
| View full article |
