SUNDAY 3/1/15; China PMI; Russia Angst; Venezuela Turmoil

China PMI is 49.9 beating the 49.7 expectations and a tick above last month’s 49.8 but remains sub-50 indicating that the economy remains in contraction. The PBOC will need to provide stronger stimulus and has started down this road with the November surprise rate cut and yesterday with another rate cut. Investment in Chinese companies is slowing. Exports are shaky. The slowing economy lessens the need for raw materials which is verified by the BDI (Baltic Dry Index) at multi-decade lows. China Services PMI is 53.9 up two ticks from last month’s 53.7 remaining on the expansion side of 50. China’s growth rate is expected to drop from +7.5% annually to +7% or lower as deflation rears its ugly head in the communist nation.

Russia is in turmoil over the assassination of opposition politician Boris Nemtsov in cold blood; four bullet holes in his back one for each of his four children. Russia is descending into a dark period intended to breed fear into the masses; control is achieved through fear. Russia will remain in recession this year. The ruble currency is collapsing requiring continued central bank intervention to prop it up. Now pile on political and social unrest. The Nemtsov murder may be a critical turning point in Russia’s history as tens of thousands take to the streets in a mourning march. Protestors display signs honoring Nemtsov; one reads, “He Was Fighting for a Free Russia.”

Pope Francis says
















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 popular investigative news television program “60 Minutes” airs a negative story on LL concerning formaldehyde contamination in their flooring. Lumber Liquidators sells Chinese-made floor laminates. People are becoming sick in houses where the flooring is installed. LL tanked on the initial news last week about the hit piece but the dire news story will likely slap the stock silly tomorrow morning. The problem is serious and may lead to bankruptcy if the company is ever required to remove and replace the floors. Testing and investigations continue. Lumber Liquidators may be in violation of California emission laws. LL dropped from 70 to 48 last Wednesday and Thursday, a loss of -31%. LL begins tomorrow at 51.86.