China's economic data release yesterday was weak, and the consensus claimed it was “below expectations.” However, our leading indicator published for my research subscribers has been foretelling the slowdown for a while. If we see a slowdown is coming, then it’s not a “disappointment”. Consensus didn't think hard enough. Not surprisingly, the market took yesterday’s weak data in stride. The slowdown has some further to run. New lending has turned negative, and consumption is weak. At this juncture, the traditional RRR or interest rate cut won't do, as bond yields are at record lows but few are borrowing. Direct stimulus, such as tax cuts and cash subsidies, would work much better. The Politburo Meeting in July acknowledged the external challenges and uncertainties but didn't elaborate on new policies. If conventional domestic policies are less effective and external demand (exports) is not influenced by domestic policies, then a new kind of stimulus is needed, and fast.