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Editor's Note: Below are a collection excerpts and charts from research put together by our Financials team. To read our institutional Financials research, email sales@hedgeye.com.

1. CHINA'S $28.7 TRILLION PROBLEM

The instability of China's credit-fueled, investment-focused growth strategy is, without doubt, one of the greatest systemic risks facing the global economy. Chinese credit outstanding amounts to CNY 181.2 trillion (or $28.7 trillion) as of February 28, 2018 (data released 3/8/2018), which is up CNY +18.1 trillion or +11.1% year over year. Month-over-month, credit is up CNY +1,135 billion or +0.6%. Note: this data is only updated monthly. 

4 Charts: China's $28 Trillion Problem... Toronto, You're in Trouble + More... - 2 22 2018 7 32 57 AM

2. Passive Investing Blindspot?

While the passive investing movement continues to trigger an exodus from domestic equity mutual funds, international products have exhibited a degree of immunity as investors continue to trust and place a premium on active manager expertise in less familiar, overseas markets.

4 Charts: China's $28 Trillion Problem... Toronto, You're in Trouble + More... - 4 9 2018 8 03 53 AM

3. Jobless Claims: The Latest on An Important Economic Indicator

The most recent unemployment claims release is consistent with the trend of a tight U.S. labor market as 4-week M.A. NSA claims continue to signal improvement on a Y/Y basis. Lower lows in rolling initial claims in March are obviously supportive of further labor market tightening and continue to suggest recession risk and big credit market dislocations (on the consumer side) are not imminent.  

4 Charts: China's $28 Trillion Problem... Toronto, You're in Trouble + More... - 4 6 2018 8 01 16 AM

4. Toronto, You're In Trouble

This morning, the Toronto Real Estate Board released its market statistics report for the month of March. Sales were down

  • -46% for detached homes
  • -33% for condos
  • -31% for semi-detached homes
  • and-36% for townhouses Y/Y, respectively

In sum, total sales were down -40% Y/Y, a sequential rate-of-change decline from the prior month. 

With OSFI's newly revised B-20 guidelines having come into effect at the beginning of the year, it appears that the short-term boost in housing demand observed from October to December of 2017 and attributed to late-entry buys looking to jump ahead of the policy change, has receded and the new tighter federal lending conditions have now begun to dampen sales in the Greater Toronto Area. 

Moreover, the number of active listings, on a Y/Y basis, continues to signal further worry. In March, existing "for-sale" inventories were up +103% Y/Y.

4 Charts: China's $28 Trillion Problem... Toronto, You're in Trouble + More... - 4 4 2018 8 03 32 AM

4 Charts: China's $28 Trillion Problem... Toronto, You're in Trouble + More... - etf pro