China’s economy grew by 7.9% in the second quarter, exceeding most analysts’ expectations, and lending credence to Beijing’s goal of 8% annual growth. Now, with the nation awash in liquidity and the economy picking up steam, the only task ahead of the central government is deciding when to rein in lending and let the economy stand on its own two feet.

The cat let out of the bag last week — a frazzled, flaming, rabid, death-dealing cat — was the news that Goldman Sachs announced impressive second-quarter profits, and set aside $18 billion or so for employee bonuses averaging $600,000 per head (though, of course, not evenly distributed among them).

Goldman earned more than $1 billion a month in the second quarter – much of it from scavenging on fixed income, currency and commodities deals created by the credit crisis.

Did Goldman Sachs get too greedy this time? If so, the gravy train could be coming to an end…

Madrid, Spain

Two important headlines this morning, both of them fraudulent:

“Chinese economy bounces back,” says one headline in theInternational Herald Tribune.

“JPMorgan profit soars despite downturn,” says another.

It takes more than two to make a trend.  JPMorgan Chase & Co. (NYSE: JPM) yesterday (Thursday) became the second major U.S. investment bank – following Goldman Sachs Group Inc. (NYSE: GS) – to this week report windfall profits for the second-quarter. That’s helped fuel a four-day advance in U.S. stocks that’s seen the Dow Jones Industrial Average surge 7%.

The tragic story the media missed… the biggest deficit in the history of money… Dollar weakens, yet euro stands still… Bill Jenkins on the true valuation of these monies.. . Bill Bonner on Congress’ latest “eat the rich” legislation… Our tech adviser shows a powerful example of a coming computing breakthrough

Goldman posts a nice profit…  I smell a rat!  Euro nears the 1.41 mark… Again!  Gold manipulation? And Now… Today’s Pfennig!

The yen slipped on Tuesday in choppy trade while the dollar struggled against most currencies as earnings of Goldman Sachs and U.S. retail sales surpassed expectations, stoking modest hopes for an economic recovery