I am focused on the ramifications of the Chinese devaluation. There is a lot of misinformation about this move but the reality and the point of the exercise is a product of the ongoing race to the bottom as far as currencies. All of this is a result of unprecedented worldwide quantitative easing and liquidity.
Central planners feel bold because there have been not yet been any major consequences other than roaring stock markets. The dollar is still the reserve currency of the world. However, many currencies are locked to it and those countries are having difficulties. Therefore, they are resorting to these devaluations in order to protect their economies.
Submitted by Tyler Durden on 08/31/2015 - 09:00 While we have all seen how equity markets had decoupled from the 'reality' occurring in commodities, FX, and credit markets (as well as macro fundamentals), trading desks are anxiously eying the following 'decoupling' as this week's "pair trade."
Submitted by Tyler Durden on 08/31/2015 - 08:55 A glitch in the Matrix (if you will) that affected pricing for 1,200 mutual funds and ETFs still wasn't wholly resolved as of Sunday evening after executives worked through the weekend in a frantic attempt to resolve the issue ahead of Monday's open. Remember, if anyone asks, none of this has anything to do with flash-crashing, broken markets.
Submitted by Tyler Durden on 08/30/2015 - 22:30 Following Monday’s historic stock market downturn, many politicians and so-called economic experts rushed to the microphones to explain why the market crashed and to propose "solutions” to our economic woes. Not surprisingly, most of those commenting not only failed to give the right answers, they failed to ask the right questions.
Over the past few days, it’s quite evident that alot has changed on the global financial landscape. However, there have recently been a few developments in China, which further signal that everything we know is about to change.
Several weeks ago, I made the case that China had been taking certain measures to put pressure on DC to give them more hefty weighting in the IMF, particularly regarding SDR inclusion. Now that it has been confirmed that SDR inclusion “will be put off for at least a year”, China has decided to take matters into its own hands…by burying two twin fangs into the US Dollar standard.
The Affordable Care Act that isn’t affordable and has raised health insurance rates and the cost of healthcare.
The Safe and Accurate Food Labeling Act, designed to improve food labeling but which actually bans states from enacting their own GMO labeling requirements, thus keeping food labels inaccurate.
The USA Patriot Act, a major post-9/11 bill that redefined “patriotism” as massive unconstitutional government surveillance and intrusion.
One of THE most respected military reporters in D.C. — Bill Gertz – yesterday reported in the “Washington Free Beacon” that the Pentagon is NOT bombing an estimated 60 ISIS training camps that are pumping out thousands of new ISIS fighters each month. The camps are spread across Syria and Iraq – and the Pentagon knows exactly where they are located, but they are being protected by the White House.
If there was ever any doubt that the majority of buying by the hedge fund category in the gold market over the past 3-4 weeks has been of the nature of short covering, this week’s COT should put that theory to rest.
Since the third week of July, the hedge fund category alone has covered or lifted 40,000 short positions. That against the addition of only 16,000 or so new long positions over the same time span. By a better than 2:1 margin, hedge funds have been covering shorts, not instituting fresh purchases of gold.
We are believed to be at an excellent juncture right now to short the broad stockmarket (or buy bear ETFs and Puts). As we know, we did just that before the dramatic plunge early last week, and are now “sitting pretty”. Now is the time to add to positions, or if you haven’t any and are looking for the right shorting opportunity, this is it.
To see just why now is an excellent time to enter short positions or build on existing short positions (inverse ETFs / Puts) we will now look at the latest 1-year chart for the S&P500 index. All those who bought in the large rectangular pattern drawn on the chart, labeled the “Mug Pen” are like sheep huddled in a corral waiting to be fleeced. Even after the sharp rally late last week they are nursing significant losses, and if they get the chance to “get out even” or nearly so, they are going to take it. What is likely to happen is that they will almost get the chance, but not quite, because the market will turn down again soon, or immediately, and they will have to make a run for it if they want to avoid a severe fleecing. This means that as soon as the market starts to drop away again, they will stampede to unload stocks while they still can at reasonable prices, exacerbating the rate of decline. This is a big reason that another severe downleg is expected.
Gun control false flag crisis actors be warned: Facial recognition search software is going to bust you. Funny, the technology is easy enough to use on Facebook, one has to wonder why the mainstream media and police don’t use it for these alleged mass shooter events.
Actually, this is an even bigger warning to the billionaire “philanthropists” who back aggressive gun control initiatives and are likely backing these staged “events.” You’ve hired horrible actors. You’re going to get busted unless you back off. But, alas, we know your allegiance to the UN Small Arms Treaty requires you to push forward despite a growing number who know your game.
The latest reporter shooting hoax in Virginia is getting so easily torn apart by the conspiracy research community that the media’s emotional staging of actors is becoming absurd.
With 30% of Venzuelans eating two or fewer meals per day, social unrest is mounting rapidly in President Nicolas Maduro’s socialist utopia. As WSJ reports, soldiers have now been deployed to stem rampant food smugglingand price speculation, which Maduro blames for triple-digit inflation and scarcity. “Due to the shortage of food… the desperation is enormous,” local opposition politician Andres Camejo said, and nowhere is that more evident than the trampling death of an 80-year-old woman outside a state-subsidized supermarket.
[pictured: Venezuelans protest the hyperinflation & starvatiion with signs reading ‘HUNGER’…]
Submitted by Tyler Durden on 08/31/2015 - 08:13 Amid the Ukraine government's vote for constitutional changes to give its eastern regions a special status (that it hopes will blunt their separatist drive) protests have turned deadly as RT reports 50 Ukrainian nation guards have been injured in a greande blast near parliament in Kiev.
Submitted by Tyler Durden on 08/31/2015 - 09:21 With 'truths' like this, is it really surprising that he’s close to catching Wall Street-handler Hillary Clinton?
Gartman Goes From "Stock Prices Have A Long Way To Fall" To "I'm Confused But Still Buying Stocks" In 7 DaysSubmitted by Tyler Durden on 08/31/2015 - 08:27 "I'm confused, but still buying stocks. I trade only from my own account, I'm slightly long - a little discouraged when I see the action we've seen overnight in China. But, I think I'll stay that way and my propensity shall be to a quiet modest buyer of more on today's weakness.
JPM Storms Out In Defense Of The Sunny Hedge Fund Hotel: Initiates SunEdison With An "Overweight" And $24 TargetSubmitted by Tyler Durden on 08/31/2015 - 07:06 Sometimes you have to work really hard for those "soft dollars."
Submitted by Tyler Durden on 08/31/2015 - 06:49 Yesterday, the FT triumphantly proclaimed: "Beijing abandons large-scale share purchases", and that instead of manipulating stocks directly as China did last week on Thursday and Friday, China would instead focus on punishing sellers, shorters, and various other entities. We snickered, especially after the Shanghai Composite opened down 2% and dropped as low as 4% overnight. Just a few hours later we found out that our cynical skepticism was again spot on: the moment the afternoon trading session opened, the "National Team's" favorite plunge protection trade, the SSE 50 index of biggest companies, went super-bid and ramped from a low of 2071 to close 140 points higher, ending trading with a last minute government-facilitated surge, and pushing the Composite just 0.8% lower after trading down as much as -4.0%.