China cut interest rates and reserve ratio requirements late yesterday and markets have rebounded handsomely. Was it all just a bad dream? Were those wall-to-wall calls to buy in the MSM right after all?
No, the convulsion was a warning that the global business cycle has entered its denouement and you should heed that siren. Note that the rally is not so spectacular as to recapture all losses. Not by some distance.
China’s own monetary easing is the problem, not the solution. Here’s Goldman’s take:
