Syz the moment

This marks the fourth consecutive year of population decline as policymakers grapple with a demographic crisis. Source: FT

China’s December trade data just leaked, and it’s a masterclass in contradiction: ✅ The Good News: Exports beat expectations by 2x. Imports are at a 3-month high. The annual trade surplus hit a record high (up 20%). ❌ The Bad News: Trade with the U.S. is in freefall. Exports to the U.S. are down 30%. Imports from the U.S. are down 29%. What does this mean for 2026? - Diversification is king. China is filling the "U.S. gap" elsewhere. - Tariffs are working (but maybe not as intended). They are reducing bilateral trade, but China’s total global footprint is still growing. - Supply chains are shifting. Expect "China + 1" to move from a buzzword to a survival requirement. Source: CNBC

Source: Barchart, Financial Times

China's economic performance in November fell short of expectations across key metrics, signaling a deepening slowdown as authorities grapple with weak demand, property sector decline, and supply-side constraints. Key data points: 🔴 Retail Sales: Rose 1.3% year-on-year (YoY), sharply missing the 2.8% forecast and slowing significantly from 2.9% in October. 🔴 Industrial Production: Climbed 4.8% YoY, missing the 5.0% forecast and marking its weakest growth since August 2024. 🔴 Fixed-Asset Investment (YTD): Contracted 2.6% over the January-November period (worse than the 2.3% forecast). This contraction deepened from the prior period (1.7% drop) and represents the sharpest slump since the 2020 pandemic outbreak. Source: CNBC

High Beta is making new all-time highs, AND it's making new all-time highs relative to Low Volatility. That's not weak breadth. That's not deterioration. That's called a raging bull market.

Here's the thing about that electricity: it's from burning fossil fuels like coal - see chart below courtesy of Robin Brooks. Note however that China has massive plans to progressively replace fossil fuels by renewables and nuclear.

Vanke, once viewed as China’s “safe” developer after Evergrande, just stunned markets. It’s asking for a 1-year delay on a ¥2B bond with zero upfront payment and even the interest pushed back a year. Creditors expected support. Instead, they got nothing. 📉 The fallout: ➡️ Bond crashed from near par to ¥27 ➡️USD notes collapsed to 20 cents ➡️Analysts warn this “shatters investor confidence” Vanke is now pledging core assets, being rejected for emergency loans, and facing warnings that its commitments are “unsustainable.” This isn’t one company’s problem — it’s the latest sign that China’s 5-year property downturn has no bottom. Home prices continue to fall, sales data is going missing, and global banks see years of decline ahead. And with China’s middle class holding most of its wealth in property, a deeper slump could be devastating. The crisis is no longer at the fringes. If Vanke is wobbling, the entire foundation is shaking. Source: zerohedge

Services weakened as the boost from earlier holidays faded, according to official data released Sunday. The manufacturing purchasing managers’ index rose to 49.2, up 0.2 points from October, the National Bureau of Statistics said. The figures were in line with economists’ expectations in a Reuters poll, but remained below the 50-point mark that separates expansion from contraction. The non-manufacturing business activity index fell to 49.5, down 0.6 points from October, while the composite PMI output index eased to 49.7, indicating a slight pullback in both manufacturing and services activities. Supply and demand in manufacturing improved modestly, said Huo Lihui, chief statistician at the bureau’s Service Industry Survey Center, with the production index reaching the 50 threshold and new orders rising to 49.2. Source: CNBC