China to the rescue today as the preliminary Aug HSBC mfr’g figure rose to 49.8 from 49.3. Although still below 50, there were fears for worse and Chinese stocks rallied in response and spurred a bounce in the entire region that spilled over into Europe and the US. Some are citing the speculation that Bernanke will do more on Friday as a boost to the market but that is based on nothing other than what he did last year and the dependency culture that the Fed has created. I think many believe he announces no new initiatives, me included. Also keeping markets higher was the Euro zone Aug mfr’g and services composite index which was unchanged from July vs an expected fall. Investor confidence in the German economy collapsed as the 6 month outlook fell to -37.6 from -15 and current conditions fell to 53.5 from 90.6. The ECB completely sterilized their bond purchases again with another 7 day facility. Greek 2 yr note yields are rising to another closing high, 80 bps from an intraday high notwithstanding all the attempts to save them.
