Air Ball: China Manufactured PMI

Join our Larry McDonald on CNBC’s Trading Nation, Wednesday June 1st, at 2pm.

Pick up our latest Bear Traps Report here.

Breaking News: They call it China Manufacturing PMI, but it’s just manufactured.

Manufacturing PMI at 50.1 vs expected 50.0 vs prior 50.1. ( the range was 49.7-50.2; 27 economists, or lost persons searching in the dark).

Non-manufacturing 53.1 vs prior 53.5.

One would have hoped a $1T stimulus program, coming on the back of a massively re-leveraged banking system, a less pathetic result would have come forth. They’re running out of gas.

China PMI

China’s capital outflows will ONLY accelerate as yuan depreciates in response to a stronger dollar (sharpest surge since 2014) in response to the Fed’s beloved rate hike plans.

State Owned Enterprises represent 50% of ALL the loans of the Chinese banking system, and these SOE loans are the most troubled loans. The total claim of Chinese banks on the non financial Chinese corporations reached 175% of GDP by end Q1.

If 25% of SOEs become NPL (non-performing), they wipe away the ENTIRE capital base of the Chinese banking system. For our full report, click below.

Pick up our latest Bear Traps Report here.