Morgan Stanley analyst says cut should be reason for concern
Xi Jinping looks happy, but he's not happy
Ruchir Sharma is no lightweight. He's the head of emerging market equity and global macro at Morgan Stanley.
And he doesn't mince words on China.
"It tells you all about how weak the Chinese economy is, the economy is nowhere close to its reported number of 6.9%," he said today on Bloomberg TV. "If the economy was growing so close to the target, there would be no need for stimulus, the Chinese government is obviously really worried by what they see and they feel compelled to act."
He warns that capital outflows are critical for China and that lower rates risk chasing money out of the country.
I wrote about the two ways to see the Chinese rate cut. There's a battle ongoing on markets and right now the fear side is beginning to win with commodities and commodity FX falling. The stock market hasn't got the memo yet but it might be on the way.
