On the Margin: China Sees the Cliff

Having refused to negotiate while the US holds "a knife to its throat," Chinese officials now admit "China and the US are currently in contact." As Q3 GDP is reported at the second lowest in the history of the data, the yuan weakens further, and stocks make new lows, authorities have had to step in to prevent forced selling of shares pledged against loans. Officials claim "the outlook is very bright" and say, of US tariffs, "the psychological impact is greater than the actual impact." It is a very positive development that China seems to be starting to come to grips with reality, rather than blindly stumbling off a cliff into recession.