China's Extraordinary Stimulus Package
China has decided that what its economy needs is an extraordinary stimulus package. As its growth in gross domestic product drops toward what is likely to be 7% and its PMI data shows contraction within that sector, experts have questioned whether bank policy alone can right problems that are caused mostly by the wider economic world. The National Development and Reform Commission reported that it will give financial support to dozens of infrastructure programs. While these will not make up for export shortfalls, they will improve spending within China, and that may make up for what is likely to be a pullback in consumer spending caused, ironically, by worry about the overall economy of the People's Republic.
According to CNBC, analysts project the estimated total of the actions will be more than 1 trillion yuan ($157 billion), or 2.1% of China's economy. And:
The plans to build highways, ports and airport runways are among the most ambitious in China this year and signal growing intent to bolster economic growth as the country approaches a once-a-decade leadership transition
Delta Air Seeks North Dakota Crude
Delta Air Lines Inc. (NYSE: DAL) will move further into the oil refinery business as a means to keep its fuel costs low. While other airlines have not followed into the business, the play could give Delta an edge if what it pays for jet fuel drops considerably because it has its own source. According to the Washington Post:
Delta Air Lines is looking into buying cheaper North Dakota crude oil to feed its new refinery near Philadelphia, instead of the more expensive overseas crude that has fed the refinery in the past.
Delta bought the idled refinery at Trainer, Pa., in June.
Greek Economy Slumps Further
Greece's official government data firm Elstat reported that the nation's economy contracted at a rate of 6.3% per annum based on second-quarter figures. The numbers were a revision of previous preliminary forecasts, and they reinforce the notion that Greece has fallen into an economic depression that could last for years. According to the Wall Street Journal:
Figures from Elstat, meanwhile, showed that total consumption slumped 7.2% on the year in the second quarter after a 7.1% drop in the first quarter, with the fall in consumer spending particularly sharp.
Douglas A. McIntyre
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