I live in Oregon, but I pay attention to what's going on in China because, well, because it seems like a good idea.
Here are three little Oregon tidbits in the last week or so.
1. Citing inability to obtain construction financing, the developer of a 32 story downtown Portland office building abruptly halted construction on the project last Friday. Right now the building-to-be is a hole in the ground with the foundation poured behind Nordstrom's and next to the Fox Tower (primo location). I'm sure there is more to the story than has been made public, and the blather about redesign and resumption of construction in 2010 is just that.
2. The Oregon unemployment rate shot up to over 12% in March, probably the highest in the nation, according to the state official making the announcement. The increase in unemployment was attributed to previously non-working people entering the job market, rather than job losses. In other words, there is some movement between U-6 and U-3. That movement is probably the most important aspect of the factoid.
3. When it adjourned several months ago the State Legislature announced with great fanfare a program to create 3000 new jobs immediately. Last week the state agency responsible for tracking such things reported that 16 new jobs had been created. Congrats to the 16 lucky winners!
Meanwhile, across the Pacific pond--
1. China has become the world's largest domestic auto market, selling more than a million cars a month. This is probably temporary because the U.S. auto market runs a good deal higher than that before it crashed, and should again assuming we get back to something resuming 'normal', but China's new status is a comment on the effectiveness of their stimulus efforts.
2. Chinese banks are attaining the lending objectives established by the central authorities--in other words, credit creation has resumed in China. They are probably making a lot of bad loans, but the stimulative purpose of the credit creation is being achieved with a speed that the developed world is having trouble matching. This is a bit of a head scratcher, because it calls into question some of the premises of how our own financial sector is organized and why it is coddled.
3. The Chinese central government is busily telling its public that their economic fate is dependent on what happens in China, not elsewhere in the world. They appear to be making a concerted effort to get that message out as broadly and persuasively as possible. This is important for a couple of reasons--it suggests they expecting further export deterioration, they want to prepare their public for massive forex losses and for the time being they are eschewing the strategy of blaming their country's problems on the foreign demons. The first is a no-brainer, the second is simply prudent, and we should all be grateful for the last.
Okay, annetdotal evidence is a lousy substitute for reasoning and analysis. But, sometimes it's worth paying attention to what's going on around you. Otherwise you get blindsided, drift off into irrelevance, and miss out on a great deal of life's daily entertainment.
Schedule for Week of May 28, 2017
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