The Big Picture - Macro Perspective on the Capital Markets, Economy, Technology, and Digital Media

After an amazing 100% run from the early Nov ’08 lows, the Shanghai index took its biggest one day hit since the rally began, by 5%. There is talk that the Chinese may raise bank reserve requirements and the stamp duty tax on stock executions to prevent overheating in the economy. To quantify, new Yuan loans totaled 7.36T Yuan in the first 6 months of ’09 compared to 4.9T Yuan for all of 2008 and highlights the peddle to the meddle stimulus plan that has lifted China off the mat. Since China has been the main catalyst in the global stabilization in equities and commodity prices over the past 8 months, where Chinese stocks go from here will have implications for many other markets. For at least today, European markets didn’t shrug and are at and about rally highs after some good earnings reports. With mortgage rates at 1 month highs, the MBA said refi’s fell 10.9% while purchases were flat. ABC confidence rose 3 points to -47, a 7 week high.