Wall Street's Lemmings Have Almost Reached The Cliff
// Zero Hedge
I mistakenly took Squawk Box off mute Friday morning. It was just in time to hear one of the regular anchors - the one who makes Joe Kernen sound slightly insightful by comparison - forecast a pick-up in global growth on the grounds that "China is recovering".
Yes, the credit intoxicated land of the Red Ponzi just tied one on for the record books. During Q1 it generated new debt at a madcap annual rate of $4 trillion or nearly 40% of GDP.
And that incendiary deposit of more unpayable debt, which came on top of the $30 trillion already smothering history's greatest construction site and open air gambling den, did indeed goose China's real estate prices, state company CapEx, infrastructure building and steel production. Call it fiat growth because even pyramid building adds to stated GDP, at first.
Even then, the overwhelming share of this explosion of new credit went to pay interest on the existing mountain of IOUs. Charles Ponzi could never have imagined a scam so audacious.
Nor are the red suzerains of Beijing unique in the headlong dash toward the financial cliff. Except for the nicety that Japan's 30-year and 40-year bonds are trading at a microscopic fraction this side of zero (0.3%), Kuroda and his tiny band of mad men at the BOJ have driven the entirety of Japan's monumental public debt——which is now actually measured in the quadrillions of yen—–into the netherworld of negative yield.
Needless to say, the .....