That’s what Asianomics’ chief economist Jim Walker told Bloomberg. Walker was voted the best regional economist in an Asiamoney magazine brokers’ poll for 11 years through 2004. Here is what he told Bloomberg:

“The timing is a surprise but I suspect it demonstrates just how weak the Chinese economy really is. We believe that it is pretty close to recession.”

The central bank’s move may backfire if it “further dissuades people from putting money into savings and time deposits,” Walker said. “If anything, banks will need to raise their lending rates because their cost of funds is going up.”

In another piece of note, The Atlantic writes how today’s China is starting to look “scarily” like the U.S. in 2006. The last thing the world economy needs is for its biggest engine to break down too. Let’s hope this is just a hiccup.

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3 Responses to Asianomics says China’s rate cut is a “sign of panic”

  1. KB says:

    Usually the first rate cut is a sign that the bottom is lower. If you look back in history we can see that Bernanke cut the interest rate in September 2008 and the bear market emerged soon after.

  2. KB says:

    Sept 2007 instead of Sept 2008.

  3. Brazilian Bubble says:

    Good point!

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