via Macro Man

This couples with an observation by James Chanos of Kynikos that China’s GDP reports smack of 1990s earnings management. He thinks hedge fund deleveraging is overbought as an explanation for why the market is performing so poorly, and that the real reason is simply that there’s too much uneconomic activity going on.

via Todd Sullivan

The original article linked to above says that Chinese GDP is still expected to register 9%. It might register 9%, but is it actually 9%? The data suggests that China’s strength is an illusion, although they still do have substantial savings to fall back on.

Even the spreads on high yield debt have come down lately.

The AAA-rated tranche of commercial mortgage-backeds that many were buzzing about fell precipitously from its high, only to rebound slightly. It is still off more than 150 bps from the high of 847.5, down to 679. The action in spreads is similar across lower rated tranches as well.