First, China. The pleasant charade that recent currency intervention was nothing more than an effort to reverse the “one-way bet” of speculators and to “increase volatility” as part of China’s accession to some brotherhood of liberal nations is starting to crumble. Let me put it this way … you know that your preferred Narrative is in trouble when even the WSJ runs a piece titled “Yuan’s Decline Raises Concerns Over Currency War”. This is something I’ve written a lot about recently, here and here, and the political repercussions of slowing growth in China continue to make my risk antennae quiver. Politically speaking, weak real economic growth can be papered over by Fed-engineered financial asset price inflation in the US and by la dolce vita social policies in Europe.