Despite double-digit inflation and Russia’s invasion of Ukraine, the Eurozone looks set to avoid recession as GDP grew 0.1% in the final quarter (against expectations of a 0.1% decline).

Only a few months ago, economists had forecast a deep recession and energy shortages.

But a less cold winter than feared, falling gas prices and generous government support have all helped avoid that scenario, helping the region to grow in each quarter of 2022 and by 3.5% over the course of the year.

While German and Italian output shrank, France and Spain recorded expansion. There was also stronger-than-anticipated data on Monday from Ireland.

“The Irish economy, propelled by the presence of multinational corporations, expanded by 3.5% contributing 0.1 percentage points to the euro-area figure and tipping the balance such that the bloc expanded overall,” said Jamie Rush, chief European economist at Bloomberg Economics.

Bert Colijn, senior economist at ING, the bank, said the region’s economy was showing “incredible resilience” in the face of the energy crisis triggered by Russia’s invasion of Ukraine.

“The worst scenarios for this winter have been avoided,” Colijn said.

“But the economy remains sluggish.”

While Lagarde and he lackeys can celebrate for now, the bloc isn’t out of the woods yet, as economists continue to predict output will dip in the first quarter.

The euro spiked lower early in the EU session, but has recovered most of that drop since…

The economy holding up better than feared means the ECB can stay focused on tackling high and persistent inflation.

With The Fed huddling in The Eccles Building and traders hyper-focused on any signs of ‘peak inflation’ (because that means ‘peak Fed tightness’), this morning’s Q4 US employment costs index rose 1.0% QoQ (slightly cooler than the +1.1% expected and down from the +1.2% QoQ in Q3)…

Source: Bloomberg

Labor costs have risen at least 1% for six straight quarters, extending what was already a record streak in data back to 1996.

As a reminder, Fed Chair Powell explicitly mentioned this signal, and while the quarterly changes are trending in the right direction, we note that the YoY rate of change rose to a new record 5.07%.

The ECI is notable in part because other recent wage data (the average hourly earnings data in the monthly payroll report) have pointed to a deceleration in wage growth.

The ECI could provide confirmatory or contradictory evidence of this recent trend for the wage story.

— Nick Timiraos (@NickTimiraos) January 31, 2023

Given the record rise in ECI YoY, we are not sure this is what The Fed wants to see…

Ukrainian Armed Forces are preparing battle plans along the frontline as a Russian spring offensive could be ahead. Western countries are sending main battle tanks and other vehicles to thwart the coming escalation in fighting.

Last week, President Biden announced 31 M1 Abrams main battle tanks (without secret armor) would be sent to Ukraine. Germany, Norway, Poland, and other NATO countries will send other tanks, including the Leopard 2. Even Morocco will send older T-72 series tanks, currently in use in the war-torn country. 

All of these ‘donated’ tanks sound great, but if they don’t make it to Europe and race across the battlefield by spring, then the Ukranians might have trouble repelling the Russians. 

A press release via the US Transportation Command (USTRANSCOM), a segment of the US military responsible for transporting equipment worldwide, detailed last week that a large roll-on/roll-off vessel named “ARC Integrity” loaded 60 Bradley Fighting Vehicles destined for Ukraine. 

https://t.co/6Be9DY1HI8 pic.twitter.com/JjQPUomPdP

— OSINTtechnical (@Osinttechnical) January 30, 2023

As of Monday, and according to USTRANSCOM’s press release noting the vessel’s name, data via MarineTraffic shows ARC Integrity is full steam ahead in the Atlantic Ocean and will arrive at the Port in Southampton, England, on Feb. 7. 

USTRANSCOM uses large ro-ro carriers to transport all sorts of military equipment worldwide. These fighting vehicles are being loaded at ports along East Coast and Gulf Coast states. 

By Tom Kool of OilPrice.com,

Saudi Aramco has signed more than 100 agreements and memoranda of understanding (MoUs) worth $7.2 billion to support the local industrial and manufacturing sectors, the Saudi oil giant said on Monday as the Kingdom looks to have more local content in the industrial supply chains.

The signing of the deals took place during the 7th edition of the In-Kingdom Total Value Add (iktva) Forum and Exhibition, a program to boost local content in supply chains. The program achieved 63% local content in 2022, up from 35% in 2015 when it was launched, Saudi Aramco said in a statement.

The event was attended by Saudi Arabia’s Minister of Energy, Prince Abdulaziz bin Salman.

During the event, Aramco launched its wholly owned subsidiary Aramco Digital Company, which aims to accelerate digital transformation within Saudi Arabia and the Middle East and Africa (MENA) region.

The forum also awarded winners in several categories for in-house value added, including major oilfield services operators. SLB, formerly Schlumberger, won the best in overall iktva services award, Halliburton won in training and development, Baker Hughes in supplier development, and Siemens Energy best overall iktva for manufacturing.

The iktva program encourages the establishment of regional headquarters in the Kingdom, Saudi Aramco said.

In 2021, Saudi Arabia’s authorities said that companies willing to do business with Saudi government firms or such owned by the state should have their regional headquarters in Saudi Arabia by the end of 2023. Earlier this month, Saudi Arabia eased some of those rules about regional headquarters and allowed companies with small foreign operations to continue working with customers affiliated with or owned by the Kingdom.

The move to boost local content and strengthen manufacturing and industry is part of Saudi Arabia’s Vision 2030 to diversify its economy, which depends a lot on oil production and exports.

Back in August 2022, repo plumbing guru Zoltan Pozsar published a fascinating chart showing how “$2 Trillion Of German Value Depends On $20 Billion Of Russian Gas” or specifically, how Germany had applied some 100x leverage – much more than Lehman – on cheap commodities, and mostly Russian gas, to cheaply run its export-driven economic miracle for decades.

And with Russia’s cheap gas now gone for the foreseeable future, so is Germany’s tremendous operating leverage.  Which means profit margins will be hammered for years to come.

As proof look no further than a study published Monday by Allianz Trade which cited contract expiries and delayed wholesale pricing effects, and which according to Reuters found that German industry is set to pay about 40% more for energy in 2023 than in 2021, before the energy crisis triggered by Russia’s invasion of Ukraine.

“The large energy-price shock still lies ahead for European corporates,” said Allianz Trade, the credit insurer that changed its name from Euler Hermes last year.

As a reminder, in 2022, higher corporate utility bills were contained as long pass-through times from wholesale markets and government interventions mitigated the immediate hit from surging prices as Russia curbed fuel exports to the West. The resulting budget deficits were promptly funded by the ECB, which meant that for all the posturing, Christine Lagarde was directly funding Putin’s cash build up.

But the pass-throughs are ending, which means that price increases will soon hit corporate profits across Europe by 1-1.5% and lead to lower investment, which in Germany’s case would amount to 25 billion euros ($27 billion), Allianz Trade estimated.

The silver lining is that German companies’ finances are robust, while a state-imposed gas price cap would help (unless it makes things much worse).

At the same time, fears the crisis could lead to de-industrialisation and a loss of competitiveness against the United States were overdone, because labor costs and exchange rates have a bigger impact on manufacturing than energy prices, the study said. Also, while exporters were losing market shares in areas such as agrifood, machinery, electrical equipment, metals and transport, the relative beneficiaries tended to be Asian, Middle Eastern and African, not American, it added.

Meanwhile, the economic ministry said on Saturday that the German government’s one-off payment to help private households and small businesses with gas prices – the first stage of a package that will be complemented with retroactive price caps kicking in in March – has cost 4.3 billion euros so far.

Berlin has earmarked 12 billion euros for the payment, but the ministry said 4.3 billion euros was not the final cost as many eligible firms had not yet applied for the aid. They have until the end of February to apply; and judging by the huge losses they still face, they will.

Authored by Paul Joseph Watson via Summit News,

The Metropolitan Police in London is recruiting officers who are illiterate, can barely write English, and may have a criminal record in order to meet diversity quotas, it has been revealed.

Yes, really.

A 2014 promise to have 40% of the force be represented by ethnic minorities by 2023 has fallen well short, with just 17% of officers being from ‘diverse’ backgrounds.

Matt Parr, the head of the organization responsible for inspecting British police forces, told the Telegraph that London, “which will likely be a minority white city in the next decade or so, should not be policed by an overwhelmingly white police force.”

In addition to the optics of a largely white police force being wrong, Parr said it was also, “operationally wrong, because it means that the Met does not get insight into some of the communities it polices and that has caused problems in the past. So we completely support the drive to make the Met much more representative of the community it serves than it is at the moment.”

That drive has however led to officers being hired who struggle to even write up basic crime reports.

“Applicants to the police who can barely write in English are being accepted by the Met in an attempt to improve diversity, one of His Majesty’s Inspectorate of Constabulary has warned.”https://t.co/5RJETVG7nh

— Tony Dowson (@TonyDowson5) January 27, 2023

“They are taking in significant numbers of people who are, on paper at least, functionally illiterate in English,” said Parr, adding that the Met was “recruiting the wrong people” and that the diversity push had “lowered standards.”

However, Parr also noted that it was a good thing that the Met was “taking a risk” by hiring young black men who may have criminal records.

David Spencer, the head of the think tank Policy Exchange and a former Metropolitan Police officer, said that the diversity drive had lowered standards.

“There is a tension between volume, quality and diversity and something has to give,” Spencer explained. “Someone has to ask what is the most important of those three things and you have to be really careful because once you have recruited someone they are possibly going to be there for the next 30 years.”

As we previously highlighted, police resources in London are so stretched that major department stores have given up on calling them to catch shoplifters.

Car theft in London has effectively been decriminalized, with just 277 out of 55,000 offences being solved by Scotland Yard, a 0.5% success rate.

However, there still appears to be plenty of resources available to interrogate people for posting offensive social media posts.

“I’d like to report a burglary.”pic.twitter.com/4arXP1WDdK

— Paul Joseph Watson (@PrisonPlanet) January 26, 2023

*  *  *

Brand new merch now available! Get it at https://www.pjwshop.com/

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Within days of the US and Germany approving heavy main battle tanks for Ukraine, including future deliveries of the advanced Abrams M1 and Leopard tanks, one Russian company has issued a bounty for their destruction. 

“A Russian company has offered a cash bounty of up to 5 million rubles ($71,648) for the destruction or capture of Western-made tanks recently promised to Ukraine by its European and American allies,” according to regional media reports.

Apparently the race will be on for Russian troops (or mercenaries, in the case of Wagner Group) to be the “first” – given the Yekaterinburg-based company Fores stipulated the $70,000+ reward for whoever destroys or captures the initial western tank, with a pay out of 500,000 rubles ($7,164) for each subsequent tank.

Fores said it is motivated by a patriotic desire to support the national army: 

“The decision to transfer western tanks to Kyiv indicates that NATO is no longer supplying Ukraine with defensive weapons only and means that we need to consolidate and support our army,” Fores said in a statement.

It comes after the Kremlin said that tanks provided by Washington will “burn” – and that ultimately they will make no different for Ukraine’s chances on the battlefield.

“I am certain that many experts understand the absurdity of this idea. The plan is disastrous in terms of technology,” Putin spokesman Dmitry Peskov said last Wednesday. “But above all, it overestimates the potential it will add to the Ukrainian army. These tanks burn just like all the others.”

Given that already the Ukrainian government is claiming to be involved in ‘fast-track’ talks with Western backers to receive fighter jets like the US F-16, we wonder how big a ‘bounty’ Russian companies will offer for airplanes.

Authored by Victor Davis Hanson via AmGreatness.com,

Anarchy, American-Style

The Left runs Oceania, and we work for their various bureaus…

The 1960s revolution was both anarchic and nihilist. But it was waged against—not from—the establishment. Hippies and the Left either attacked institutions or, in Timothy Leary fashion, chose to “turn on, tune in, drop out” from them.

The current revolution is much different—and far more dangerous—for at least three reasons.

The Establishment Is the Revolution

The current Left has no intention of “dropping out.” Why would it? 

It now controls the very institutions of America that it once mocked and attacked—corporate boardrooms, Wall Street, state and local prosecuting attorneys, most big-city governments, the media, the Pentagon, network and most of cable news, professional sports, Hollywood, music, television, K-12 education, and academia. 

In other words, the greatest levers of influence and power—money, education, entertainment, government, the news, and popular culture—are in the hands of the Left. They have transformed legitimate debate over gay marriage into a hate crime. Transgenderism went from a modern manifestation of ancient transvestism or gender dysphoria to a veritable litmus test of whether one was good or evil.

Students have no need to jam administrators’ offices because the latter, themselves, are as radical as the protestors and often lead them on in a top-down fashion. Had they not long ago demonstrated they were perfectly willing to subvert meritocracy, free expression, and equality under the law, they would not be occupying their present positions.

Apple, Google, Facebook, and other tech companies are not 1980s and 1990s “alternative” media geeks and hipsters creating neat gadgets for the people. They are not Steve Jobs and his pugnacious Apple battling the evil Microsoft or IBM, or the Macintosh commercial of 1984 depicting a maverick throwing a hammer into Big Brother’s screen. They are the Orwellian screen.

The current generation of techies is effectively Stalinist. Big Tech now colludes with the FBI, the Democratic Party, and the bureaucratic state to suppress free expression, warp balloting, and serve as contractors of government surveillance. Currently, the most totalitarian people in America are likely to wear flip flops, have a nose ring or pink hair, and disguise their fascism with ’60s-retread costumes.

There are no “armies of the night” marching on the Pentagon. Would-be demonstrators see no need, since radical identity politics, and gay, woke, and transgendered agendas are fast-tracked by the Department of Defense. 

There are no protests against the Immigration and Customs Enforcement bureau or the “La Migra” anymore by advocates of illegal immigration, because the Left owns the border. And it has utterly destroyed it. There is no border, no border enforcement, and no meaningful immigration law. As many as 6 million illegal entries during the first two years of the Biden Administration are proof enough of that. 

There are no cutting-edge Lenny Bruces or Mort Sahls fighting state censorship because entertainers accept that 1) there are no impediments to vulgarity or pornographic expression, but 2) no comic or commentator dares to take on the diversity, equity, and inclusion woke industry because he assumes he would be crushed, and his career ruined. 

Question the woke status quo, and one is not canonized in Vanity Fair or Rolling Stone as a fighter against the “uptight establishment” or “the man” as in the past, but now demonized as a racist purveyor of “hate speech” and enemy of the people.

The Left does not despise the FBI. It lauds it. And the bureau is no longer consumed with tracking down violent criminals and terrorists. Instead, it has become an enemy of parents worried about school indoctrination, or a retrieval service for lost first-family classified papers, laptops and diaries, or a Washington, D.C., cadre knee-deep in big money politics. 

FBI agents are praised on left–wing media—given they have been activist conspirators who sought to destroy conservative candidates, deleted subpoenaed data, lied to federal investigators or committees while under oath, colluded with Russian oligarchs, doctored court evidence, and paid foreign nationals to compile campaign dirt on American citizens.

There are no longer calls for a “three strikes” solution to violent crime as in the past, or talk of adopting the successful, time-tried “broken windows” theories of law enforcement, because there is no enforcement to modulate. The debate is no longer over enforcing the law, because de facto there is no law.

The new legal establishment has replaced the old by simply nuking centuries of jurisprudence. Violent repeat criminal offenders injure and maim innocents in the morning and are released by noon to prey again—themselves baffled that the state is even crazier than they are.

Note in the 2020-2021 riots, almost no one temporarily arrested was tried, despite $2 billion in damages, upwards of 40 violent deaths, the 1,500 injured law enforcement officers, and the torching of a courthouse, police precinct, and historic Washington, D.C., church. Instead, they were lauded by a mayor as participants in a “summer of love.” Seattle and Washington simply ceded city property to the violent protestors as if they occupied it by right of their superior morality.

The summation of the entire sordid summer was the CNN chyron assuring America that the protests on their screens were “mostly peaceful” as flames shot up to the sky in the background. In the 1960s, rioters forced social welfare concessions—or else!—on the establishment. Today the establishment welcomes urban unrest as an excuse to implement agendas that in normal times would be unpalatable.

In sum, we are living in anarchy, as institutions themselves have become nihilistic and weapons of the revolution. The Left, in viral fashion, took over the DNA of America’s institutions, and used them to help destroy their creators.

If we are bewildered why Harvard law-graduate prosecutors let out violent criminals just hours after their arrests; or why hyper-rich, pampered athletes who live in near-apartheid enclaves  insult the flag, ignore the National Anthem, and sloganeer woke platitudes, it is because they were taught to undermine the status quo by fundamentally becoming it. 

In our present anarchy, $7 a dozen eggs are affordable. Unaffordable gas prices become merely necessary “transitions” to fossil fuels. A “secure” border means there is none. Natural gas must be banned because it supposedly causes asthma. Tens of thousands of homeless defecate, urinate, inject, and fornicate in the increasingly vacant downtowns of Los Angeles and San Francisco, as the Golden Bear state, California, discusses reintroducing Grizzly bears. 

Cars and yards are evil, elevators, high-rises, and buses sacred. There are 81 genders (and counting), with even more names for them. “Racist” is our exclamation point, fillip, a mere add-on emphatic. Everything from SAT tests to obesity to working out is racist. When little is racist, then everything must become racist.

Batter someone to a pulp and you are out of jail in six hours; claim an election was suspicious and you can be in there for six months or more. Proven merit is a pejorative. Grades are deemed useless by those who could never earn As. Boilerplate equity oaths are the best guide to hiring, retention, and admission. The ACLU or the Anti-Defamation League exist only to spot the incorrect kind of censorship and the wrong kind of antisemitism.

Macintosh Becomes MacBeth

The second contribution to the present anarchy is big tech, which speeds up the revolution and spreads it broadly. Orwell’s Nineteen Eighty-Four was predicated not just on the Sovietization of the state, but the electronically ubiquitous and near instantaneous means by which the apparat ensures its dominance. One of the strangest things about the Left is that it no longer warns of 1984 but emulates it.

How the Left became synonymous with the Internet, social media, mobile phones, pads, and laptops is a long story. But let it be said the Left, and not conservatives, have mastered them all. It has manipulated high tech to change the way we vote, access information, communicate, consume the news, buy, and sell, and express ourselves. In sum, they run Oceania and we work for their various bureaus.

Our tech complex has combined the ethos of the 19th-century monopoly with the Chinese Communist system of mass ideological manipulation. The result is that the old Twitter or Facebook mob can ruin a career in a nanosecond. Google can manipulate the order of search results to render you a clueless Winston Smith bewildered by the alternate “reality” that pops up on your computer screen. 

Wikipedia is pseudo-official falsification. Trotskization relied on scissors and paste; cancel culture can end you by a split-second use of the delete button—and erase you to 7 billion on the planet.

Big Money, Big Woke 

Globalization hollowed out the red-state interior and enriched the blue bicoastal elite. Wealth in mining, farming, construction, manufacturing, and assembly became dwarfed by riches of investment, high tech, social media, law, insurance, and real estate. The former were the up-by-the boot straps conservatives, the latter one day rich and the next moment through hype, investment, and venture capital, richer than anyone in the history of civilization.

The wealthiest ZIP codes and congressional districts are blue, not red. Most of the Fortune 400 billionaires are left-wing. So, there is no ’60s-style talk about the evils of corporations and the supposedly idle rich, none of the old conspiracy theories about Anaconda Copper, ITT, or the Rockefellers. 

The corporations are the Left and in service to it. Disney, American Airlines, and Nike are revolutionary icons, always ready to divest, cancel, fire, hire, and propagandize in service to woke commissars. That they are terrified by tiny bullies who have no constituencies is true, but then a Robespierre, Lenin, and Mao had initially no broad support either—at least before each mastered the use of terror and fright.

In our anarchy, “dark money” like Mark Zuckerberg’s $419 million cash infusion into the 2020 balloting processes is now suddenly good, given it is almost all leftwing. Democrats outraise Republicans in campaign contributions by anywhere from three- to five-to-one. Bundling is noble.

Netflix can buy the brand name of the Obamas for $100 million; George Soros can spend his pocket change of $40 million to elect district attorneys to destroy the law and empower criminals. Jimmy Carter used to be the poor-man idol of the old Democratic Party. Today, there is hardly a Democratic president, ex-president, or presidential candidate who is not a multi-multimillionaire—most by leveraging their heightened political profile.

What anarchy we live in when the richest among us are the most radical and wish to destroy for all others what they enjoy. 

John Kerry lectures us on climate change from his private jet. Your leaf blower, not his Gulfstream GIV-SP, is the global threat. Al Gore screams about the evils of carbon emissions—after pocketing $100 million by selling his failed and worthless cable station to smoky and sooty Qatar, fronting for the antisemitic Al Jazeera. 

The Clintons feel the pain of the poor all the way to their $100 million fortune from shakedown lectures, Wall Street, “consulting,” and “foundation” contributions. Van Jones, CNN expert, the object of Valerie Jarrett’s oohing and awing, famous for his “whitelash” exegeses, and recipient of a $100 million Bezos award, now lectures us that the five rogue black policemen in Memphis, who beat to death a black suspect, are still proof of white racism that accounts for blacks belittling the lives of blacks. 

In our present anarchy, we take seriously the lectures on microaggressions from the Duchess of Montecito. The Obamas weigh in on the dangers of climate change and rising seas from their seaside, multimillion-dollar Martha’s Vineyard estate, or Hawaii beachfront mansion that apparently has an invisible climate-change barrier on its beach. Kamala Harris is our border czar who assures us it is “secure,” defined by 5 million illegal entries since she took office.

Nancy Pelosi works for the “children” and, after a life in politics, that selflessness ends up worth $100 million from her husband’s insider real estate deals and stock tips. It is almost as if socialist Bernie Sanders owned three homes, or anti-capitalist Elizabeth Warren was once a house flipper.

So, the current revolution is anarchy, utter confusion, pure chaos. 

Every time one turns on a computer, there will be someone or something somewhere ideologically warping its use. Your vote means nothing when California cannot account for 10 million automatically, computer-guided mailed-out ballots. That state is still in a drought, defined by releasing most of the water to the ocean that the wettest winter in memory produced. 

Stanford students talk revolution, Antifa, and Black Lives Matter, and want to forbid the use of “American.” But from the look of their parking lots, they cannot decide whether Lexus, BMW, or Mercedes should be the most preferred campus car. Oprah and Whoopi suffer terribly from white supremacy. Jussie the foot soldier heroically took on one MAGA thug for each of his foot kicks.  

“Don’t take off your mask” at a California McDonald’s means the man who ordered that edict is maskless at the French Laundry. “Don’t get your hair done during the lockdown” means the architect of that fiat sneaks around her salon, which she has all to herself.

The common denominator to the anarchy? The hardcore Left is your FBI, CIA, and Justice Department all in one. It is Nineteen Eighty-Four. It is our era’s J. P. Morgan. 

No wonder we are confused by the establishment anarchists and the anarchy they produce.

China is done with Covid Zero and wants the world to know it.

Two weeks after Beijing’s amazing goalseek-o-tron reported blowout economic data, including beats across the board in retail sales, GDP, industrial production and fixed investment, moments ago the National Bureau of Statistics (which in recent years has been competing with the US BLS who can come up with the most outrageously manipulated “data”), reported that in January (which is still not over but who cares) manufacturing PMI roared back (just barely) into expansion, printing 50.1 from a contractionary 47.0 in December and matching estimates, on resumption of production and ongoing recovery in demand (in the manufacturing PMI survey, both the output sub-index and the new orders sub-index rose by more than 5 points). Even more remarkable, the non-manufacturing PMI exploded to 54.4 in January from 41.6 in December, smashing expectations of a 52.0 print and showing improvements in both the construction and services sectors.

Putting the non-Mfg PMI move in context, this was the second biggest increase on record, trailing only the March 2020 post-covid record when China shock-therapied its economy into kickstarting with the help of trillions in new debt.

Some additional commentary courtesy of Goldman:

The China NBS purchasing managers’ indexes (PMIs) survey suggested manufacturing activity increased in January on resumption of production and ongoing recovery in demand. The NBS manufacturing PMI headline index rose significantly to 50.1 in January from 47.0 in December. The improvements are broad-based among all five major sub-indexes: the output sub-index rose to 49.8 from 44.6, the new orders sub-index increased to 50.9 from 43.9 and the employment sub-index rebounded to 47.7 from 44.8.

What is of biggest interest here may be the suppliers’ delivery times sub-index, which rose notably to 47.6 in January from 40.1 in December, implying faster supplier deliveries as NBS indicated that the labor shortage issues (due to large number of workers falling sick in December during the Covid “exit wave”) were eased. NBS commented that the improvement of manufacturing activity was mainly linked to acceleration in both demand and production and the LNY holiday impacted the production to some degree. The sharp improvement in supplier delivery times will serve to further alleviate any residual inflationary bottlenecks, a legacy of China’s lockdown days, as traffic to the US – inasmuch as anyone ordered inventory amid this reverse bullwhip period – arrives faster than expected.

On the trade-related sub-indexes, the new export order sub-index increased to 46.1 in January (vs. 44.2 in December) but remained below 50, pointing to still weak external demand. The import sub-index rose to 46.7 in January (vs.43.7 in December). The raw material inventories sub-index rose to 49.6 from 47.1, and the finished goods inventories sub-index rose to 47.2 from 46.6.

By enterprise size, the PMIs of large/medium/small enterprises increased to 52.3/48.6/47.2 in January (vs. 48.3/46.4/44.7 in December). Price indicators in the NBS manufacturing survey suggest inflationary pressure for producer and consumer diverged in January. The input cost sub-index increased to 52.2 (vs. 51.6 in December) while the output prices sub-index declined slightly to 48.7 (vs. 49.0 in December).

The official non-manufacturing PMI (comprised of the services and construction sectors) soared to 54.4 in January (vs. 41.6 in December), thanks to a sharp acceleration in both construction and services sectors. The services PMI rebounded sharply to 54.0 (vs. 39.4 in December). According to the survey, the PMIs of transport service industries such as postal, airline and road transport services were above 60 in January. Meanwhile, the PMIs of close-contact service industries such as retail sales, hotel and catering services rose more than 24 points from December. That said, NBS indicated that the PMIs of property related sectors were still below 50. The construction PMI rose in January to 56.4 (vs.54.4 in December). NBS noted that the expansionary pace of the construction sector (presumably infrastructure-related) remained fast.

Looking at the market’s response, Bloomberg’s Mark Cranfield writes that “the CSI 300 index is ending January slightly below recent highs but its upward momentum is set to extend into February, looking past a report of the US considering cutting off Huawei from suppliers… which won’t be much of a surprise to traders, especially after the US agreed with the Netherlands and Japan to restrict exports of some advanced chipmaking machinery to China.”

That said, while the China PMI data is encouraging for equity bulls, notably the 54.4 print for services, and adds to the positive impulse from high frequency data over the Lunar New Year break, it took won’t be much of a surprise following the mid-January data dump which beat expectations in every category. However, the pristine data – fake as it may be – will certainly encourage continued foreign inflows into China’s stock market, which in January exceeded the whole of 2022!

Bottom line, while the CSI 300 – which recently tipped into a bull market – may need a little bit longer to consolidate after the steep advance this month, BBG concludes that “the outlook for the rest of the first quarter is bright.”

Authored by Bill Scher via RealClear Wire,

A lot of Republicans are reportedly interested in running for president, yet no one besides Donald Trump has been brave enough to start running. According to Politico, the hesitation is mainly because everyone wants “someone else” to be the “early Trump foil.” An adviser to a potential candidate has even shopped the idea of “multiple candidates announcing around the same time.” One anonymous Republican told Politico, “I think they think a group launch … provides them protection from Trump.”

Every one of these candidates should be embarrassed. At the risk of being cliché, if these wannabe presidents can’t stand up to Donald Trump, how can you expect them to stand up to – well, insert your preferred boogeyman here.

By the first day of February 2019, Democrats Cory Booker, Julian Castro, John Delaney, Tulsi Gabbard, Kamala Harris, Elizabeth Warren, Marriane Williamson, and Andrew Yang had either formally announced their 2020 bids or formed exploratory committees. In January 2015, Republicans Jeb Bush and Scott Walker established political action committees that were precursors to their campaign launches, and Mike Huckabee quit his Fox News show in preparation for his bid.

Granted, none of those people won their primaries; after all, most presidential candidates lose. But if someone starts with minimal national support and mostly regional name recognition – and that describes most of the potential Republican presidential field – every day not in the race is a lost day. Precisely because the battle is decidedly uphill, second-tier candidates should be eager to get in the race and create opportunities for themselves so they can climb into the first tier (which in the 2020 Democratic primary, Warren was able to do, even though she was unable to stay there for long.)

I’ll cut some slack for the sitting governors who might run – including Greg Abbott, Brian Kemp, Kristi Noem, Chris Sununu, and Glenn Youngkin – and even Ron DeSantis, who may be in a position to choose his timing. They may want to notch some wins in their 2023 legislative sessions and avoid any humiliating defeats before hitting the campaign trail later in the spring or summer.

Members of Congress believed considering a run are Ted Cruz and Marco Rubio, both of whom have run before, and probably Tim Scott. So what are they waiting for? With House and Senate control divided between the two parties, little legislation of significance is expected to pass. In other words, they are not bogged down with heavy responsibilities at the moment.

Everyone else supposedly in the mix – John Bolton, Liz Cheney, Chris Christie, Nikki Haley, Larry Hogan, Asa Hutchinson, Mike Pence, and Mike Pompeo – is a “former” officeholder with plenty of free time, and no time to lose.

Scattered throughout the Politico story are weird rationalizations for the proto-candidates’ collective fear. “Trump’s best when he’s got an opponent, so don’t give him one,” said one anonymous operative. How does this plan work? Trump doesn’t do his best without an opponent, so he withdraws, and then all the other candidates announce? “As soon as someone pops their head up,” said Abbott adviser Dave Carney, “Trump will be whacking on them.” So? That’s a great way for second-tier candidates to get into the first-tier, by getting into a public scrap with the frontrunner and proving their mettle.

No Republican seems to have learned any lessons from the 2016 primary. You can’t beat Trump unless you take the fight to Trump, forcefully and consistently – and early. The 2016 field can at least plead they were caught off-guard by Trump’s willingness to savage fellow Republicans, and his ability to do so without being penalized by Republican voters. Today, there are no excuses. Everyone knows who they are up against, and they have had years to formulate a strategy to deal with him. Will it be hard? Of course. But so is being president of the United States.

At a November address to the Republican Jewish Coalition, Christie said, “It is time to stop being afraid of any one person. It is time to stand up for the principles and the beliefs that we have founded this party on and this country on.” He’s right. Let’s see if he, or anyone else, can live up to those words.