Sunday, January 10, 2016

Turmoiling Markets Pump-n-Dump After PBOC Holds Yuan Flat For 2nd Day, Says Crisis Is "Psychological Panic", Not Fundamental

As Asian markets opened (ahead of the Yuan fix), they were in turmoil with FX markets crashing (JPY rallying as carry trades unwound), equity markets tumbling (Dow, Nikkei, and China A50), commodity carnage (crude and copper carnage) as Gold and bonds were bid. With offshore Yuan sliding ahead of the fix (and Onshore Yuan 3 handles cheap to Friday's fix), CFETS RMB Index dropping below 100 for the first time, and following Friday's 'token' stability, The PBOC decided to hold Yuan Fix practically unchanged for the second day. USDJPY and equity markets jumped on the news, then quickly faded. China ripples may be turning into tsunamis. Somebody do something!!!

Germany Erupts Into Chaos As Protesters Declare "Rapefugees Not Welcome"

Germany is rapidly descending into chaos on the heels of a wave of attacks allegedly perpetrated by refugees in Cologne on New Year's Eve. A PEGIDA protest had to be broken up by water cannon-wielding riot police on Saturday and in an eerie twist of fate, the seven decade ban on publication of "Mein Kampf" expired this month.

Fed's Williams: "We Got It Wrong"

"The Fed got it wrong when it predicted a drop in oil prices would be a big boon for the economy. It turned out the world had changed; the US has a lot of jobs connected to the oil industry."
- SF Fed President John Williams

The EU Bail-In Directive: Dark Clouds Are Gathering

In principle, the BRRD, or “bail-in directive” as it is also known, is quite a good idea. The fact that lending money to fractionally reserved banks or even merely depositing it with them, involves risks needed to be firmly reestablished. One simply cannot expect that banks and their creditors will be bailed out by taxpayers at every opportunity. Besides, the admission that there are risks in banking that have hitherto been glossed over or have even been lied about was long overdue. However, Europe’s governments are now likely to find out that the current monetary system with its fractionally reserved banks is actually incompatible with this admission, so to speak.

Shared Sacrifice? 1 In 3 Americans Slash Staples Spending To 'Afford' Obamacare

Health insurers are in panic mode as the Obama administration, ever eager maximize coverage optics for Obamacare, has, as The NY Times reports, allowed large numbers of people to sign up for insurance after the deadlines in the last two years, destabilizing insurance markets and driving up premiums. This surge in costs, from unintended consequences, has left 1 in 5 Americans with health insurance is having problems paying medical bills; and, as a new poll finds, more than one in three Americans, or 35 percent, said they were unable to pay for basic necessities such as food, heat, and housing because of medical bill problems...

MacroStrategy Explains Why Most Stocks Have Already "Crossed The Rubicon"

"As more companies cross the Rubicon out of the buyback zone, the bid for their equity shrivels.  For the 2013 financial year, 60% of stocks in my sample were in good shape to gear-up for buybacks. By the end of 2015, just 35% of the sample were in good shape to do buybacks."

This Is What Gold Does In A Currency Crisis, China Edition

As China’s leaders figure out that pegging the yuan to the dollar while quintupling their debt in five years was a colossal mistake, they are, apparently, concluding that the only way out is a sudden, sharp currency devaluation...

The Other (More Worrisome) "H" Bomb

Presented with no comment...

The Biggest (And Possibly Most Terrifying) Company You've Never Heard Of

Chances are you’ve never heard of the company. If you have heard of the company, chances are you misunderstand the shear enormity of the global company and their contracts. From transport to air traffic control, getting your license in Canada, to running all 7 immigration detention centers in Australia, private prisons in the UK, military base presence, running nuclear arsenals, and running all state schools in Bradford, Serco, somewhere, has played a part in moving, educating, or detaining people.

Meanwhile In Shanghai Residents Form Lines To Sell Yuan, Buy Dollars

Ming Pao, the most influential Chinese newspaper in Hong Kong, reports that Shanghai residents are lining up at local banks to sell Yuan for Dollars over fears of even more Yuan devaluation.

ISIS Attacks On Libyan Oil Facilities Visible from Space

Libya is "crying for help" as its oil infrastructure is under attack by Islamic State. The fires burning at Es Sider and Ras Lanuf are so large, NASA spotted them from space.

It Begins: FXCM Doubles Yuan Margins, Warns Of Market "Disruption And Highly Illiquid Conditions"

Dear Client,
We believe there is a chance of disruption and highly illiquid conditions in the forex market during the coming weeks (and/or months). Please be aware that market gaps tend to occur over the weekend – that is, currencies trade at prices considerably distant from previous levels.

If The High-Yield Bond Market Is "Fixed", Explain This...?

Remember a week ago when every TV anchor, pundit, asset-gatherer, and commission-taker stormed onto mainstream media and proclaimed the credit market collapse "fixed" because prices had 'stabilized' over the holiday period "proving that 3rd Avenue was a one off" and this dip was a buying opportunity? Yeah, well that was all complete crap... as Investment-Grade cost of funding hits a 3-year high, HY bond spreads blew out to cycle wides, 'triple-hooks' soared to their worst levels in almost 7 years, and credit protection costs rose by the most in years.

Broad Stock Market Index At "Must Hold" Level

The NYSE Composite’s bull market is on very thin ice.

"Catalonia Needs Its Own Central Bank": Spain's Black Swan Lives As New Catalan President Sworn In

“Are they really going to create their own tax authority and other state structures? Ignore the rhetoric and declarations, follow the actions.”

Juncker: "Dutch 'NO' Vote Will Lead To A Big Continental Crisis"

In April the Dutch people will vote on the European-Ukraine association treaty.  In an interview with the NRC, a Dutch leading newspaper, Juncker warned the Dutch voters a “NO” will lead to a big continental crisis. “Russia and anti European movements will profit from a Dutch No, the Dutch has to vote yes for reasons not related to the treaty, the Dutch should act like an European strategist” according to Mr Juncker.

Mid-East Massacre: Equity Markets Plunge From Bahrain To Kuwait

With all eyes focused on tonight's China open (and the "oops, China matters after all" meme), the Middle-East has fallen off the front (or back) pages of mainstream media. However, the last few days have been a bloodbath (analogistically as opposed to literally) across the Middle-East with Saudi stocks plunging 2.5% overnight (down almost 13% in the last 5 days) and every market from Bahrain to UAE all tumbling below August lows.

"Trump Could Win It All": 20% Of Democrats Say They'd Vote For Trump Over Hillary

"The challenge to Hillary, if Trump is the nominee and pivots to the center in the general election as a problem-solving, independent-minded, successful 'get it done' businessman is that Democrats will no longer be able to count on his personality and outrageous sound bites to disqualify him in the voters' minds."

"One For The Nasdaq Haters" From Citi

"One for the NASDAQ haters: Silver double bubble chart along with NASDAQ chart. Similar feel." - Citi's Brent Donnelly

Bull Market "Genius" Increasingly Exposed As Gross Incompetence

It was an ominous beginning to what is poised to be a most tumultuous year. Market participants are quickly coming to appreciate that China does in fact matter. Few understand why. Most – from billionaires to fund managers to retail investors – will “Do Nothing.” This has worked just fine in the past – repeatedly. Not understanding and not doing anything will be detriments going forward.

China's Plunge Protection Team Bought ¥1.8 Trillion In Stocks In 2015

how many billions (or trillions) did China's so-called "national team" spend to prop up stocks in recent months? According to Goldman not less than CNY1.8 trillion in the June-November period.

Obama’s Secret Post-Presidency Plan Reportedly Uncovered- Netanyahu Plots Immediate Sabotage

from Western Journalism:

Barack Obama is reportedly already lobbying for his post presidency position: Secretary General of the United Nations.
According to the Kuwaiti newspaper Al-Jarida, Obama has discussed the topic with Republican, Democrat, and Jewish officials in the United States.
The Jerusalem Post is reporting Israeli Prime Minister Benjamin Netanyahu is working behind the scenes with moderate Arab governments in order to thwart the president’s potential succession plans.
Read More

Why We’d Welcome a Depression

by Bill Bonner, The Burning Platform:

Dow down 252 on Wednesday – or 1.5%. Chevron, Apple, and Goldman Sachs leading the retreat. The press blamed China, North Korea, oil, and “geopolitical concerns.”
So far this year, the Dow has lost 3% of its value [ed. note: as of Thursday’s close it has lost a little over 5%]. Let’s see… We believe it is headed for a 50% loss. So, at this rate… we’ll be there by June!
A less than joyous start to the new year: the DJIA has so far delivered its worst first trading week since at least 1900. That’s the year 1900 in case you were wondering – click to enlarge.
Read More

32 Years Ago, KGB Propagandist Explained How America Would Turn Marxist

from The Sleuth Journal:

In 1970, former KGB informant and RIA Novosti propagandist Yuri Bezmenov, managed to defect to the West. Up until his death in 1993, he dedicated himself to exposing the true nature of communist and socialist ideologies. In this interview with G. Edward Griffin from 1984, Yuri explains how the Soviets would, in a sense, infect a nation with communism through propaganda and misinformation.
He reveals that the seeds of communism had been planted in America long ago, and he lays out step by step, how this program is being executed over the course of several generations. 32 years later, his words are shockingly prescient. Even though the Soviet system is dead, it appears that their ideology is still rotting away at the foundations of our government and society.
Read More

Update to BLS December Payroll Jobs Report: It is even worse than I reported

from Paul Craig Roberts:

In my column on Friday I reported the unreported facts in the payroll jobs report; click here to read. If we choose to believe the report, it is really very bad news. Good middle class jobs are continuing to decline. The new jobs are jobs that pay considerably less and often are part-time jobs devoid of benefits. Moreover, the new jobs are going to people outside the prime working age. The unavoidable conclusion is that for the majority of Americans, economic prospects are declining.
There is more bad news to be added to this dismal picture. The payroll jobs report provides both the actual numbers of jobs from the survey and the seasonally adjusted number. The news release is always the seasonally adjusted number, which is the number that my column examines. However, the seasonally adjusted number is concocted.
Read More

David Haggith: We’re In A Global Economic Collapse

from The Daily Coin:

I believe we can all agree that if you are inside looking out the world looks different than if you are outside looking in. On December 16, 2015 mid afternoon our world changed. Janet Yellen stood before the world and announced the Federal Reserve would raise interest rates by the slightest of margins to 0.25%. I have to admit that I have said for a long time this would never happen. Well it did. I was wrong. Everyone in the world will now have the privilege of paying for the mistake made by the Federal Reserve. The mistake began in 2008 and was set back on course on December 16, 2015.
For the past several years the Federal Reserve has instituted a program called Quantative Easing (QE). This program, basically, printed currency at the Federal Reserve and then gave it to the “too big to jail” banks.
Read More

“Future Economic Historians” Will Probably Call the Period That Began In 2007 “the LONGEST DEPRESSION”

from Washington’s Blog:

Sure, last year was the first pre-election year stock market loss since the Great Depression.  And admittedly, this week was the worst opening week of any year … EVER.
But that’s not the big news.
The big news is that a prominent economist – University of California economics prof Brad DeLong – wrote today:
Economist Joe Stiglitz warned back in 2010 that the world risked sliding into a “Great Malaise.” This week, he followed up on that grim prediction, saying, “We didn’t do what was needed, and we have ended up precisely where I feared we would.”
Read More


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