China |

The precipitous decline in the price of copper over the last three days has dramatically increased the “pucker factor” for global financial markets as an increasing number of traders are taking copper’s price plunge as a cue to sell other assets.

Recall that copper is the metal with a PhD in economics since its use is so widespread and, as a result, its price provides important signals not just about the supply and demand of copper but of the health of both local economies and the global economy. Right now, it’s not saying anything positive about China or the world.

This CNBC report says the plunging price may be “acting as a fire alarm for the global economy” and fire alarms going off are never good. Even if it’s a false alarm, it’s highly disruptive over the short-term and, right now, it’s keeping people from buying stocks.

Bloomberg says iron-ore prices are also tumbling and that steel companies are teetering.

The real problem here is not the metal or the economy – it’s credit – and both copper and iron-ore have been widely used as collateral for sometimes dodgy loans from China’s enormous shadow-banking system that also appears to be teetering.

None of this sounds good…

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All the Home Prices in China

Reuters reports that efforts to slow credit growth and other measures taken by the Chinese government have finally succeeded in slowing the rate of growth in property values as new home prices in 70 major cities rose 9.6 percent in January from a year ago, down from 9.9 percent the month prior and the slowest rate of appreciation since late-2012.

There’s a much bigger chart here showing all 70 cities for anyone who knows the difference between Xining and Tianjin. They still have a bit of a bubble on their hands, but, as Canada has proven in recent years, bubbly real estate markets can stay bubbly for a very long time.

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At Least They’re Trying in China

From this China Daily commentary on bubbly home prices comes the cartoon below that depict the results of the Chinese government’s efforts so far to cool the property markets that, along with their shadow banking system, has much of the rest of the world worried.

Author Zhu Ning, deputy director of the Shanghai Advanced Institute of Finance at Jiaotong University, dismisses some of the concerns of Yale economist and Nobel Prize Winner Robert Shiller when it comes to housing bubbles in general and the one in China in particular.

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2,000 Tonne Gold Vault Opens In Shanghai

Many once had high hopes for emerging Asia, but count this development as one more piece of evidence that they’re as backward as ever over there, spending time and money foolishly building a vault to store upwards of 2,000 tonnes of gold bullion as detailed in this report at Bloomberg when they could be buying shares of U.S. stocks and making a fortune.

The vault can store over $80 billion worth of gold bars at today’s prices, much of that metal transferred from vaults in London and New York as part of the ongoing flow from West to East, what Warren Buffett would no doubt deem a colossal waste.

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