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Daily Digest 8/12 - China Devalues Yuan, Russia Could Revise 2015 Outlook

Wednesday, August 12, 2015, 8:32 AM


Chinese Financial Institutions Issue More Loans in July

China's broadest measure of money supply, M2, was up 13.3% at the end of July compared with a year earlier, higher than the 11.8% rise at the end of June. The figure was also above the median 11.6% increase forecast by the poll of economists.

Mexico central bank sells $107 mln to support peso

Mexico's central bank on Tuesday said it sold $107 million of $200 million offered in an auction to support the peso currency at an average price of 16.3274 pesos per dollar. (Reporting by Mexico Newsroom)

Bulgarian central bank expects slower growth in second half 2015

Bulgaria's economy looks set to slow in the second half of the year after growing by 0.9 percent on a quarterly basis in the first three months of 2015, the central bank said on Tuesday.

Russian firms, banks shrink as they face fresh peak debt payment

Russian state companies and banks are cutting staff and scrapping projects as they prepare for another surge of foreign debt repayments of at least $35 billion before the end of the year amid falling energy export revenues and a weaker rouble.

Analysts sharply cut Japan growth forecasts, cloud BOJ optimism

apanese analysts are sharply cutting their economic growth forecasts for the year amid expectations that activity shrank in the second quarter, a survey showed, piling pressure on the central bank to trim its own rosy projections.

Nigeria’s debt service set to exceed 25% of revenue

With $49 billion in domestic debt and $10.8 billion in external debts, Nigeria is now committing 23 percent of fiscal revenue to debt service, which is set to exceed the 25 percent benchmark by year end. The lack of a face in the new Nigerian President Muhammadu Buhari’s government to talk up the economy and calm investors is the main source of concern.

State Bank of India’s Shares Slump as Bad Loans Gather Pace

The Mumbai-based lender, led by Chairman Arundhati Bhattacharya, joined rival Bank of Baroda in reporting a larger ratio of soured credit. Policy makers’ efforts to boost the economy have yet to ignite credit growth at Indian banks, which is sputtering near the slowest pace since 1994.

China Local Governments Have Issued CNY1.41 Trillion in Bonds This Year

China's local governments have issued a total of 1.41 trillion yuan ($227 billion) of bonds this year, reaching 70% of the amount under Beijing's program to swap older debt with for fresh financing, the central bank said Tuesday.

Japan’s government debt hits record high ¥1.057 quadrillion

The central government’s debt hit a record high of ¥1.057 quadrillion at the end of June, up by some ¥3.87 trillion from the end of March, according to the Finance Ministry. The national debts, or the combined balance of outstanding Japanese government bonds, financing bills to cover temporary funding shortfalls and borrowings, increased due to rising social security costs, including on medical care and pensions, amid the aging of society.

Japan Should Plan for Fresh Stimulus, Says Abe Adviser

Etsuro Honda says a more than $24 billion package needed if growth weakens as expected

Malaysia Islamic Yield Seen Rising to Record as Bond Funds Flee

Malaysia’s economy has come under pressure as Brent crude prices that have more than halved from their 2014 peak to around $50 a barrel weigh on earnings for Asia’s only major net oil exporter. A government report on Thursday may show second-quarter growth slowed to 4.5 percent, the least since the first three months of 2013, according to the median estimate in a Bloomberg survey.

Greek bail-out targets branded 'fantasy' as policymakers strike deal

Greece reaches an agreement "in principle" with lenders for a third bail-out, but economists say fiscal targets are "utterly unachievable"

Saudi riyal falls in forwards market as bond issue hits liquidity

Bankers expect it to sell many more bonds - perhaps 20 billion riyals a month - by the end of this year and possibly next year to cover the deficit created by cheap oil, which analysts estimate could total $130-150 billion this year.

Central banks hold nerve after China devaluation

A weaker yuan makes Chinese exports cheaper and competing exports more expensive. Countries that see themselves at a competitive disadvantage might be tempted to devalue their own currencies in retaliation. But so far policymakers from South Korea, India, Indonesia and Japan see no reason for tit-for-tat trade-war policies.

Russia could revise 2015 economic outlook

Russia could revise its 2015 economic outlook after the economy contracted more than expected in the second quarter, the economy minister said Tuesday.

Surprise China devaluation marks escalation of currency war

According to conventional wisdom, wars are easy to start and difficult to end. Similarly Beijing’s devaluation, the biggest one-day currency move since 1993, represents the latest skirmish in an emerging battle which, analysts warn, may be hard to reverse.

Yuan Slide Slams Emerging Nations as Stocks Head for Bear Market

The selloff took the MSCI Emerging Markets Index’s decline from a peak last September to 20 percent, the threshold for a bear market on a closing basis. Shares in Indonesia slumped to a 17-month low. Russia’s ruble weakened 2 percent against the dollar while currencies from Brazil to Chile fell at least 1.1 percent.

Africa’s throwing away dollars it can’t afford in currency

With foreign-exchange reserves equal to less than a 10th of the emerging-market average, nations from Ghana to Zambia are finding they’re powerless to stop their currencies from tumbling amid a rout in commodities and the prospect of higher interest rates in the US.

Latam currencies slide as China devalues yuan

Latin American currencies fell on Tuesday after China's decision to devalue the yuan by nearly 2 percent fueled a sharp drop in commodities prices as well as concerns about the competitiveness of emerging market exporters.

Latin America's most traded currencies - including those of Mexico, Brazil, Chile, and Colombia - all dropped about 1 percent following the Chinese move,

Ruble Leads Currency Slide as Yuan Risks Denting Russian Exports

The ruble slid the most in emerging markets as the biggest drop in China’s yuan in two decades drove down oil prices and sparked concern Russia’s exports to its largest trading partner will be curtailed.

Bonds Rise Around World as China’s Yuan Move Dims Rates Outlook

Odds the Federal Reserve will raise interest rates next month slipped to 48 percent, from 54 percent at the end of last week, as investors weighed how the U.S. central bank will react to China’s devaluation.

Gold & Silver

Click to read the PM Daily Market Commentary: 8/11/15

Provided daily by the Peak Prosperity Gold & Silver Group

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thc0655's picture
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Police chief fires probationary officer


Called to the scene of a suspected burglary last week, officer Brad Miller pursued 19-year-old Christian Taylor into the showroom without telling his supervising officer, Arlington Police Chief Will Johnson said Tuesday as he described the encounter.

Johnson said Miller, 49, has been fired for causing a deadly confrontation that put him and other officers in danger.

Inside the showroom, Miller ordered Taylor to get to the ground. Instead, Taylor cursed at the officer and advanced toward him. When Taylor was about 10 feet away, the officer fired, Johnson said.

Miller then fired three more times. At least two bullets struck Taylor, killing him, according to the chief, who said the interaction early Friday morning lasted only seconds. Taylor and Miller never made physical contact, he said...

There is no video of the shooting itself, though security camera footage from Classic Buick GMC dealership's parking lots shows Taylor walking around and damaging some vehicles.

Police on Tuesday released audio of a 911 call made by the company manning the exterior cameras. In the audio, the caller tells the operator that a "thin black man with a blond Mohawk" could be seen jumping on the windshield of a gray Ford Mustang.

Before his final confrontation with Miller, Taylor held up a set of car keys and told another officer that he intended to steal a car, Johnson said. He had already driven a vehicle through the glass front doors of the showroom, the chief said.

"It is clear from the facts obtained that Mr. Taylor was noncompliant with police demands," Johnson said.

But, the chief said, Miller's mistakes required his firing. While he said he had "serious concerns" about Miller's use of deadly force, Johnson said it would be up to a grand jury to decide whether Miller's actions were criminal.

"This is an extraordinarily difficult case," Johnson said. "Decisions were made that created an environment of cascading consequences and an unrecoverable outcome."

Miller joined the police department in September and graduated from the city police academy earlier this year. Police said Miller cannot appeal his firing because he was a probationary employee.


1. Suspect Taylor was clearly "out of his mind," probably on drugs/alcohol.  Taylor was a 19 year old college football player (presumably an impressive physical presence).

2. When confronted by probationary Officer Miller (probably at gunpoint) and told to get on the ground, suspect Taylor instead cursed Miller and continued to approach him (menacingly?).  Who does that?   (Could be anyone high on drugs/alcohol.) Isn't that extremely risky and self-destructive?  Isn't suspect Taylor "asking for an ass whupping?"   Officer Miller is a 49 year old rookie police officer.  I imagine this is his first instance of being physically challenged by a male clearly likely to win any hands-on fight that develops.  Officer Miller would naturally be intimidated by suspect Taylor.

3. Regardless of all that in #2, this is clearly NOT an appropriate use of deadly force, even acknowledging the physical disparity between the suspect and the officer.  Why? A) Suspect Taylor is clearly unarmed and probably just as clearly highly intoxicated. B) Despite the likelihood Taylor would beat 49 year old Officer Miller in a hands on struggle (and possibly kill him), Officer Miller has at least one officer for back up on location with him (his supervising field training officer) and more officers enroute.  Where I work, officers who are confronted with an aggressive but unarmed suspect who is likely to overcome the officer are trained to do one of more of the following after calling for back up: stall for time, fend the superior suspect off with non-lethal means, disengage and let the suspect start to get away while staying close enough to apprehend him when backup arrives. If an academy recruit or officer on the street can't do that s/he has no reason to be a cop: situations like that pop-up all the time.

4.  What were Officer Miller's options? If he had a Taser, he could've used that instead of his firearm.  Miller's field training officer who was at his side did have a Taser and could've waited for him to use it on the suspect before firing (realize though that suspect Taylor took one shot from the pistol and one attempted Tasering and still kept coming at Miller before Miller shot him a couple of more times - see the whole article).  Miller should've been carrying a metal or wooden baton and pepper spray, both of which would've been appropriate here.  Miller should've attempted all those methods in addition to the hands on fighting/controlling skills he just learned in the academy.  

5.  On a side note, imagine the inflammatory video the news media would've shown if two or more officers (all white?) had to fight with the determined, physically fit black suspect for two or three minutes, striking him numerous times, before they could get him under control (remember Rodney King?).  Whatever the public outcry over that alternative and preferred ending, that's what should've happened.  Maybe someday the media and public will learn that some people are extremely difficult to get under control and will require a lot of force to do so, and that that is far better than the suspect being killed.  Suspect Taylor, being "out of his mind" and very physically fit, was exactly the kind of suspect who gets into that kind of beating by police.  However, in today's world any time police are seen "ganging up" on a suspect and inflicting repeated blows, the automatic assumption by many is that the police are being excessive and the suspect is a good boy who loves his mother and is never violent.

6. In the law, if you (an officer or a civilian) have reasons for thinking you were justified in using deadly force and the police/prosecutor/judge/jury decide you were NOT actually legally justified, the appropriate charge is manslaughter which typically carries a sentence of 3-7 years depending on the jurisdiction.

MarkM's picture
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Tom, As always, your insight


As always, your insight is appreciated. This incident occurred close to my home and the story now is that the two officers had withdrawn from the building or at least the immediate area of the suspect to wait for backup and officer Milller re-entered the area on his own. Apparently, the training officer followed him back in (imagine what is going through this poor guys mind at warp speed). Miller chased the suspect down a hall which had a locked door at the end, causing the suspect to turn around. Miller fired before the supervisor could get there and deploy his taser. Then Miller fired additional shots.

We have a young chief and he, in my mind, has done a very good job of handling a disastrous and avoidable situation. We will see what fallout develops.

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thc0655's picture
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That makes it even worse


Your additional facts make Officer Miller's mistakes look even worse.  If Miller had been alone handling this job, it would've been more understandable that in his excessive enthusiasm and lack of experience, he rushed in where he shouldn't have and created an unneccessary deadly situation.  It sounds like the training officer was doing exactly the kinds of things I was describing, but Miller recklessly rushed in where he shouldn't have, contrary to his instructions to stand pat until more backup arrived.  

Here's what most rookies look like in their enthusiasm to get out there and fight crime:

Here's what most older, more experienced and wiser officers look like:

Hopefully, on-the-job training quickly molds the eager rookies into wise and effective officers who have a proper sense of perspective and restraint (without losing any enthusiasm), BEFORE they get themselves into trouble.  Too late for former Officer Miller (and a foolish, reckless young man is dead before he himself had a chance to mature).

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China currency devaluation could spark 'tidal wave of deflation'

"Official figures show GDP growth in line with Beijing’s 7% target; but Fathom’s analysts, who study other measures, such as electricity usage and freight volumes, say it appears to be closer to 4%. Britton describes the depreciation as “China, doubling-down on its bet,” and warned: “If we are right about the hardness of the landing they’re facing, you ain’t seen nothing yet.”"

"Banks are under pressure as low oil prices and Western sanctions over the Ukraine crisis have caused a sharp economic contraction, leading to a deterioration in banks' assets.

"The financial crisis of the last year has definitely accelerated and increased the need to reduce the number of banks, because banks are facing a new round of bad loans," said Alfa Bank economist Natalia Orlova."

"The Chicago Public Schools says it will quit picking up pension payments for more than 2,000 central office and other nonunion support staff, a move the cash-strapped district says will net $11.1 million a year in savings once fully implemented.
Chicago Public Schools pulls 1-year offer to teachers, seeks multiyear deal

The district, which says it is facing a budget gap exceeding $1.1 billion, currently pays 7 of the 9 percent pension payments for its central office, regional and nonunion support staff.

Beginning the end of this month, the affected employees will pick up an additional 2 percent of their pension costs. The next year, the staff will pay an additional 2 percent and, the following year, another 3 percent."

"Brazilian senator Gleisi Hoffman on Wednesday said she would seek to pass legislation requiring financial institutions to pay higher income taxes, arguing that their high profits justify the need for them to contribute more.

Hoffman said in an interview that she will propose increasing the so-called "social contribution of net income" tax rate to 22.5-23 percent from the current 15 percent."

westcoastjan's picture
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don't forget where you hid your gold....


Way better than finding fishing lures while snorkeling! LOL  And you can be sure I will not turn it in!! cheeky


ezlxq1949's picture
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Fans of a more open China should welcome the devalued yuan
Here's the viewpoint of a Senior Lecturer in International Law; Asian Business Law at Monash University:
So while US Republicans and much of the media are yet again declaiming against the undervaluation of the yuan – a nasty Chinese strategy to sell its goods at artificially cheap rates on the world market – in fact the yuan’s midpoint has now become much more market based. In other words, the PBC has done what longtime critics of China’s currency policy have long been clamouring for – let the market play a bigger role in deciding the yuan’s value.
Make of this what you will.
BTW, I would recommend PP readers regularly peruse The Conversation which offers "Academic Rigour, Journalistic Flair." It has Australian, British and now US editions. To contribute one must be a practising academic. Anybody may read! I am not always favourably impressed by what I find there, but it's useful to have opponents in a debate to counter groupthink.
Time2help's picture
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Tianjin City
Now just imagine that it's Ras Tanura instead.
Lots of moving pieces in the world.
Edit: Quick question: Did a shooting war with China just start?
Time2help's picture
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China's first floating LNG terminal to receive gas in December (Reuters, Nov 2013)

China’s first floating terminal fortifies Tianjin gas supply (Interfax, Feb 2014)

Deadly Explosions Hit China’s Port of Tianjin (New York Times, Today)

NYT wrote:

"The police in Tianjin said the explosion took place at a warehouse owned by Rui Hai International Logistics, a private company that was licensed to handle potentially hazardous cargo."

"Earlier reports on state news media said the blast appeared to emanate from either a gas station or storage terminal of hazardous chemicals."

So, was this just a warehouse that went boom, or did China just loose a decent chunk of it's winter LNG supply?

VeganDB12's picture
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Off topic-if you need a good cry

sorry if duplicate. 63 mil views so far...wonder why?  feeding the good heart. I am sorry I don't knowhow to post the actual video.


saxplayer00o1's picture
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China guides the yuan lower for a third day

China guides the yuan lower for a third day

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