BIS warns again about China’s serious and growing debt problem

Today’s warning from the Bank for International Settlements was the most dire yet. What’s called the credit-t0-GDP gap climbed to 30.1%. This measure, which compares the current credit-to-GDP ratio and its long term trend is now the highest for China in the data series that stretches back to 1995. The Bank for International Settlements says that any gap above 10% signals elevated strains in a country’s banking system

Why next week’s Bank of Japan meeting is roiling the markets

Next week it’s actually the Bank of Japan meeting rather than the Federal Reserve’s that has the most power to move financial markets in the short run. Partly that’s because the Federal Reserve’s isn’t likely to do anything at its September 21 meeting. But partly its because there is real uncertainty about what the Bank of Japan might do at its September 21 meeting. The worry is that the bank will decide to cut back on purchases of long-term bonds and at the same time reduce short-term interest rates further

Markets stage another big move–downwards this time–on today’s bad news on oil surplus

Volatility is back. Although there’s been a “reason” for each move of the past three sessions, I think what we’re seeing is a return of nervousness on a realization that bonds and stocks are expensive right now and therefore risky since traders and investors really don’t know which way news is going to break on key factors such as economic growth, central bank stimulus, and Federal Reserve interest rates.