The Chinese recession maybe already upon us, sans sticky inflation. NASDAQ futures are down 1.00%, as UPS share price collapses to over 12% and luxury group LVMH falls 5% on slowing Chinese demand.

The China slowdown is more evident the ever, as not only did the Peoples Bank of China cut its repo rate (what it lends to commercial banks) from 1.8% to 1.7% which is an extremely low rate as it stands, the Chinese economy is swimming in debt that has been refinanced, mostly property loans to major developers, many times over, is about to go completely bust.  Yes, a call that has be made by a many China bears, but this time it could be for real.   A Chinese recession will show up everywhere in the world.   But, will a Chinese crash, crash the global economy.  Maybe.  But it won't be a recession or depression, rather a nasty bout of stagflation.  Which has lurked beneath the surface of the Western economies for over Two years.  As major Central Banks are dying to cut rates on inflation falling, this maybe in dire of sticky and inflated energy/food prices (removed from the CPI and PCE measures).   And a lot of these academic economists are still stuck in pre-Climate Changing world, which has not be factored into their inflation measures per se.  

So, there is a quandary of economic policy by both government and Central Banks on how to handle stuck inflation with a dramatically slowing China.

The above chart as the NASDAQ that is beyond overstretched with its extreme valuations ala speculative stock buying, which should take a major hit if Chinese consumers do indeed tighten up.  Trading above its 18680 support in vain hope that the Federal Reserve will keep growth stocks alive by cutting rates in September of this year, may have the opposite effect (since it was already priced in):  a major sell off on profit taking from hell.   Below panes are the United Parcel Service (UPS) and below the LVMH luxury group, both missed earning targets, more so UPS with its share price collapsing to over 12% and LVMH falling 5%, indicative of slowing Chinese demand for international mail/courier services and luxury items. 

Brace for impact.

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