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Spotlight China: Margin Debt, Trading Accounts, Construction Equipment

  • Written by Syndicated Publisher No Comments Comments
    April 15, 2015

    In response to my April 1, post China Margin Debt Soars to Record 1 Trillion Yuan; Another Central Bank Sponsored Bubble I received an email from reader Nicolas.

    He writes …

    Hello Mish

    Happy Monday. I find your output excellent an I hope that you are flattered that you are followed by private banks is Switzerland.

    Quick question on your last note; please can you tell me what (Bloomberg/Reuters) code you use for Chinese Margin debt? i.e. where can I cross-reference the Trillion Yuan figure you quote?

    Best regards and many thanks,

    Nicolas

    I certainly was unaware I was followed by banks in Switzerland. Thanks!

    The Bloomberg data is from SSE Margin, in Chinese. I asked my friend Chris Puplava at Financial Sense if he was aware of a Bloomberg tracking symbol. We do not believe there is such a symbol for margin.

    However, Chris did locate this interesting chart of the Shanghai stock market vs. new accounts that is available on Bloomberg.

    Shanghai Stock Index vs. New Accounts

    image: http://1.bp.blogspot.com/-K-qS6nmjfLw/VSzEwtWSMgI/AAAAAAAAdak/Or_2lE-w_o4/s400/shanghai%2Bnew%2Baccounts.png

    click on chart for sharper image

    I get lots of data from readers, and I appreciate it! In regards to China, reader Norman writes …

    Hello Mish,

    Thanks for your “straight talk” on important issues impacting our financial lives. You recently sent information concerning China’s GDP. A good indicator of growth is found in sales of construction equipment. Construction equipment manufacturer Komatsu lists its equipment orders by location. The numbers speak for themselves concerning growth and China. Keep up the good work!

    Norman

    Komatsu Orders

    image: http://3.bp.blogspot.com/-_lmPat8UD_o/VSzNYwwOxGI/AAAAAAAAdbA/oHvbIIsr49w/s400/China%2BConstruction%2BEquipment.png

    click on chart for sharper image

    Komatsu is just a single manufacturer. It may not be representative of all such activity and orders. But given the collapse in commodity prices such as iron ore, I suspect it is. If so, this segment of the Chinese economy looks like a disaster.

    Those expecting a rebound in Chinese housing or construction are likely mistaken. The new game in town is clearly stock market speculation.

    Chinese Growth

    My post Reality Check: How Fast is China Growing? Global Recession at Hand is also consistent with the China rapid slowdown thesis.

    Images: Flickr (licence attribution)

    About The Author

    Mike Shedlock / Mish is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction.  Visit Sitka Pacific’s Account Management Page to learn more about wealth management and capital preservation strategies of Sitka Pacific.

    You are currently viewing my global economics blog which typically has commentary every day of the week. I am also a contributing “professor” on Minyanville, a community site focused on economic and financial education.  Every Thursday I do a podcast on HoweStreet and on an ad hoc basis contribute to many other sites.

    When not writing about stocks or the economy I spend a great deal of time on photography and in the garden. I have over 80 magazine and book cover credits. Some of my Wisconsin and gardening images can be seen at MichaelShedlock.com.
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