Submitted by Tyler Durden on 08/25/2015 - 20:16 ... in the past two weeks alone China has sold a gargantuan $106 (and over) billion in US paper just as a result of the change in the currency regime!
Dear CIGAs,
When planning to write this piece, the Dow was up 250 points or so with 45 minutes of trading left. The anticipated bounce (if China cut rates) arrived this morning with a 442 point upward thrust. This on a report card could be categorized as a “C-” or even a “D+”, very poor in my estimation. As I sat down to write the Dow was up 24 points and turned negative before I wrote the first word! This is HORRIBLE ACTION and outright scary if you are a Bull! The PPT (plunge protection team) got their butts kicked for the third or fourth day running. To let the market give up 500 points in just one hour shows their weakness or lack of capitalization. Many will look at today’s close and say “UH OH”!
What will this mean for tomorrow? We first have to see what happens tonight in the Asian markets and in particular China …which I suspect the big money brokers have already done. Somehow, my guess is they already sense a rout in Asia and this is the reason for the abrupt turnaround to front run another big dump tomorrow. The bounce was weak, it turned negative and closed at the worst levels of the day …NOT exactly that warm fuzzy feeling! “Look out below” seems to now be a continuing theme.
To reiterate what I’ve written over the last few days, this is all about the Great Credit Unwinding. It is my belief the players are beginning to sense this. Lower rates did nothing to fix Japan’s economy for 25 years, it has done less than nothing in aiding the U.S. economy for the last 8 years …why will it do anything for China? So far China has used versions of the Western playbook to thwart the rout. They have outlawed short selling, made it illegal for many institutions to sell and the PBOC has overtly come in to support the markets… to no avail!
This is really scary folks, even the most bearish expected a better bounce than we got today. What happens tomorrow if Asia/China get no bounce at all? The Fed has no room to lower rates, neither does the ECB. To be a central bank(er) and to get no “respect” from the markets is the most terrifying event one could think of.
Digging deeper, what do you suppose has happened over the last few days in the derivatives arena? There have been HUGE gains and losses in the $trillions or even $10′s of trillions! Notice I wrote “gains and losses”? How would you like to be an institution with a losing position of some sort …hedged so there would be no loss …only to find out your counterparty cannot pay? Do you suppose this might have already happened? I can almost guarantee it already has and in many different markets, we just haven’t heard about it nor “who” died. In reality, it doesn’t matter “who died”. Just as someone drowning hangs on to their rescuer, the derivatives chain is connected from start to finish and loops back where the “start connects with the end”. In other words, when losers cannot pay, the gleeful winners get the bad news they are also losers. If one drowns, they all drown!
I also mentioned yesterday it would be good to monitor interest rates. The 10 year yield was as low as 1.9% yesterday and as high as 2.13% today. I believe the panic number will be 2.4%. Should this yield level give way (and you will hear it spun as “good” on CNBC), it will signal major central bank selling (led by China) overwhelming the Fed’s ability to sop up the selling. Time will tell but this is something I will continue to monitor.
The overleveraged world is experiencing deflation. “Beggar thy neighbor” by central banks to increase trade at the expense of other nations is the game. The “game” by the way is a static or shrinking (global GDP)! This is a no win strategy on a global basis because someone has to lose …and then you have the same scenario as in derivatives. Sovereign nations will default! The point is this, “losses” which have been hidden so far will need to be booked and realized. There are NO BALANCE SHEETS left, strong enough to absorb the losses! The Fed commencing another round of QE is now a lock. Outright monetization will be sniffed out and the current outsized demand for gold and silver may double or more …just as inventories and vaults in the West are running out.
Lastly let’s look at the dollar. Commodities including oil are being sold …for dollars. Demand for product is down and so is “price”. The petro dollar cannot function with 60% haircuts in dollar usage. This acts to also lessen velocity of dollars. A very bad combination for any Ponzi scheme, less demand and lower velocity. The previous “good” leverage reverses and comes down on itself. In this instance, the world’s reserve currency loses acceptance for the very reason “safety capital” should flock to it, deflation! Can you see this? The dollar cannot survive with deflation because not enough new money comes in to prop it up. The dollar MUST have inflation, without it, it dies. Today’s dollar is not the 1930′s dollar, pegged to gold that was deflation proof. The foundation then was gold. Today the dollar’s foundation is nothing more than debt, TOO MUCH DEBT! In fact, dollars are only promises …to pay you more dollars! The perfect financial storm? Yes. There is still time (probably very little) to get your affairs and positions in order. I pray anyone reading this does so!
Standing watch,
Bill Holter
Holter-Sinclair collaboration
Comments welcome! bholter@hotmail.com
Denver Police Arrest "Jury Nullification" Activist For Passing Out Informational Pamphlets
Submitted by Tyler Durden on 08/25/2015 - 22:50 Most of you will be familiar with the concept of jury nullification. Unfortunately, the vast majority of Americans are not. This is precisely why Mark Iannicelli set up a “Jury Info” booth outside the Lindsay-Flanigan Courthouse in Denver. When you recognize the vast power that such a concept holds, you recognize why it would be so hated by statists and authoritarians across the land. That is precisely why Mr. Iannicelli was arrested and charged with handing out information.
FORT BRAGG, N.C. (WTVD) — The notice came overnight: Get ready to respond to a nuclear disaster situation in Southwest Florida. Be ready to deploy for a week.So early Friday morning, more than 300 20th Engineer Brigade soldiers prepped convoys. Over the next five days they will join more than 400 additional troops in an Emergency Deployment Readiness Exercise. The 18th Airborne Corps soldiers have a focus.
“We’re specially trained and equipped for chemical, biological, radiological, and nuclear hazards,” said Colonel Jayson C. Gilberti, the Brigade’s commander.
Read More @ abc11.com
Is Asia Set For Another Financial Crisis? Here's Goldman's Take
Submitted by Tyler Durden on 08/25/2015 - 22:20 "Given the size of foreign holdings of Asian equity and debt, should foreigners reduce their portfolio holdings by 2-3% over the course of a month, it would broadly offset the region’s current account surpluses, leaving their external balances in a shakier position. During the 'taper tantrum' period, foreigners sold markedly more than 3% of their portfolio holdings through June and July 2013, highlighting the risk that portfolio outflows could cause further Asian currency weakness.""Biggest Rally Of 2015" Crashes Into Biggest Reversal Since Lehman
Submitted by Tyler Durden on 08/25/2015 - 16:06
Appearing on Fox News with Bill O’Reilly, the Republican presidential
frontrunner explained why the Chinese were deliberately devaluing the
yuan.“They’re cheapening their currency and making it very inexpensive. They’ll be able to make goods for far less than our goods. We make great product but it’s impossible to compete when the product is so much more expensive. But what they’re doing, Bill, leads to depression eventually,” said Trump.
“Markets are crashing – all caused by poor planning and allowing China and Asia to dictate the agenda. This could get very messy!” Trump tweeted yesterday. Beijing moved to further devalue the yuan earlier today with the Bank of China making its fifth interest rate cut in nine months.
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f someone has had the good fortune not to encounter the world of U.S.
police and prisons, and the misfortune to learn about the world from
U.S. schools, entertainment, and “news” media, a great place to start
understanding one of the worst self-inflicted tragedies of our era would
be with James Kilgore’s short new book, Understanding Mass
Incarceration: A People’s Guide to the Key Civil Rights Struggle of Our
Time, followed up by Radley Balko’s longer Rise of the Warrior Cop: The
Militarization of America’s Police Forces.Both books tell a story of gradual change over the past half-century that has resulted in the police going to war against people they were supposed to serve (call it a war on crime, a war on drugs, a war on terror, it’s always in fact a war on people). And what do you do with people captured alive during a war? You lock them away as prisoners of war until the war ends. And if the war never ends?
Read More
Saudi Arabia Paying American Lobbyists To Spread Anti-Iran Propaganda
Submitted by Tyler Durden on 08/25/2015 - 21:50 Though the Saudi Arabian government publicly declared its tentative support for the widely-praised Iran nuclear deal last month, new reports reveal it is secretly funding propaganda efforts to undermine it. A new group called the American Security Initiative has spent over $6 million on advertisements criticizing the deal — using money supplied by the Saudi monarchy.
Chinese Stocks Tumble Despite Rate Cut; PBOC Devalues Yuan To Fresh 4-Year Lows, Restricts Futures Trading
Submitted by Tyler Durden on 08/25/2015 - 22:17 Update: *SHANGHAI COMPOSITE INDEX SLIDES 3.3% The Asia morning begins mixed in stock markets, The PBOC explains itself "this is not a shift in monetary policy," - except it is the first such set of measures since 2008, further deleveraging as China margin debt drops CNY1 Trillion from June peak to lowest since March, Regulators begin probing securities firms (and their malicious short sellers), Index futures trading fees will be raised and trading positions restricted. Stocks are limping only modestly higher (after the rate cuts) as Yuan is fixed at 6.4043 - the lowest since August 2011.
China Devalues Yuan To Fresh 4-Year Lows, Probes Securities Firms, Restricts Futures Trading As Margin Debt Drops CNY1 Trillion From Peak
Submitted by Tyler Durden on 08/25/2015 - 21:21 The Asia morning begins mixed in stock markets, The PBOC explains itself "this is not a shift in monetary policy," - except it is the first such set of measures since 2008, further deleveraging as China margin debt drops CNY1 Trillion from June peak to lowest since March, Regulators begin probing securities firms (and their malicious short sellers), Index futures trading fees will be raised and trading positions restricted. Stocks are limping only modestly higher (after the rate cuts) as Yuan is fixed at 6.4043 - the lowest since August 2011.
CNBC: No Need For A Fork - It’s Done
Submitted by Tyler Durden on 08/25/2015 - 21:00 Whether it’s intentional or accidental. The more Mom and Pop tunes out – the less to feed on for the HFT’s till eventually there’s no one left to feed on except for themselves – and I believe you are witnessing in real-time this exact phenom which will be brought on not only quicker, but with more ferocity moving forward. For Mom and Pop are not coming back to either the “markets” or CNBC. They’re done.
The Latest Currency War Entrant: India Warns May Retaliate To Chinese Devaluation
Submitted by Tyler Durden on 08/25/2015 - 20:30 Although we've talked plenty about the impact of the yuan deval on Asia-Pac and LatAm, we haven’t yet mentioned India where yesterday, in the midst of the turmoil, central bank governor Raghuram Rajan sought to calm nervous markets by reassuring the world that India is not, for now anyway, in any danger thanks to ample FX reserves and a low CA.Be that as it may, economic realities are economic realities and a currency war is a currency war, which is why, we suppose, the Indian government’s chief economic advisor Arvind Subramanian thinks the country might just have to hit back.
"It's Not The US Economy, It's Just Stocks Stupid!!"
Submitted by Tyler Durden on 08/25/2015 - 19:57 Well... Maybe it was the US economy all along?
New UN Privacy Chief Proclaims – UK Digital Surveillance Is "Worse Than Orwell"
Submitted by Tyler Durden on 08/25/2015 - 19:30 UN Privacy Chief Joseph Cannataci says we are dealing with a world even worse that anything Orwell could have foreseen..."there are many parts of the English countryside where there are more cameras than George Orwell could ever have imagined. So the situation in some cases is far worse already"
Is China Quietly Targeting A 20% Devaluation?
Submitted by Tyler Durden on 08/25/2015 - 19:08 "Some Chinese agencies involved in economic affairs have begun to assume in their research that the yuan will weaken to 7 to the dollar by the end of the year, said people familiar with the matter. [Their] projections suggest a depreciation of more than 8 percent by Dec. 31 and about 20 percent by the end of 2016."
America’s largest bank, JPMorgan Chase, has lost 10.87 percent of its market capitalization in the past three trading sessions. That’s $27.18 billion in three days, raising serious questions about the Federal Reserve’s theory that beefed up equity capital would buffer the mega banks in a market downturn.
While the Dow Jones Industrial Average lost 3.57 percent yesterday, JPMorgan lost 5.27 percent, despite its rich dividend yield of 2.92 percent.
The indefatigable Eric Hunsader, owner of the market data firm Nanex, was Tweeting the abominations occurring in the stock market yesterday as the opening bell set off a bungee dive to a loss of 1,089 points in the Dow Jones Industrial Average (DJIA). The Dow ended the day down 588 points to close at 15,871.35, a three day loss of 1,477 points.
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from Bullish Money:
Dow Jones futures before the opening bell of August 25, 2015 suggested a strong rebound, confirming mainstream advice such as Yahoo Finance’s “5 Reasons to Stay Calm as the Stock Market Quakes.” However, this is really just the beginning of a very ugly paradigm shift in the markets and the global economy.
Dow Jones futures before the opening bell of August 25, 2015 suggested a strong rebound, confirming mainstream advice such as Yahoo Finance’s “5 Reasons to Stay Calm as the Stock Market Quakes.” However, this is really just the beginning of a very ugly paradigm shift in the markets and the global economy.
by Michael Snyder, End of the American Dream:
If you have not been preparing for what is coming, you need to get off your sofa and you need to start prepping right now.
Just remember what happened back in 2008. That crisis took most people
totally by surprise. Millions of Americans lost their jobs, and
because most of them were living paycheck to paycheck, all of a sudden
most of them couldn’t pay the rent or the mortgage either. Large
numbers of families that were once living a comfortable middle class
lifestyle suddenly found themselves destitute. Well, this coming crisis
is going to be even worse by the time it is all said and done, and it
is not just going to be economic in nature. Over the past two trading
days, the Dow has gone down more than a thousand points.
The shaking that so many have warned about has begun. As this shaking
plays out, you and your family will need cash, food, supplies and a
whole bunch of other things. If you do not already have everything
prepared, then you need to kick your prepping into overdrive because we
are on a very compressed time frame now.
Read More…
If you have not been preparing for what is coming, you need to get off your sofa and you need to start prepping right now.
Just remember what happened back in 2008. That crisis took most people
totally by surprise. Millions of Americans lost their jobs, and
because most of them were living paycheck to paycheck, all of a sudden
most of them couldn’t pay the rent or the mortgage either. Large
numbers of families that were once living a comfortable middle class
lifestyle suddenly found themselves destitute. Well, this coming crisis
is going to be even worse by the time it is all said and done, and it
is not just going to be economic in nature. Over the past two trading
days, the Dow has gone down more than a thousand points.
The shaking that so many have warned about has begun. As this shaking
plays out, you and your family will need cash, food, supplies and a
whole bunch of other things. If you do not already have everything
prepared, then you need to kick your prepping into overdrive because we
are on a very compressed time frame now.Read More…
Watch how trash pollutes over the years
by Christina Sarich, Natural Society:
Our oceans not only provide ample food for us when they are in peak condition, but they sustain life on this planet. In
a visual representation experiment of the garbage patches around the
world’s oceans, we can see just how seriously we’ve affected our oceans through
Big Ag practices, littering, corporate disregard, and additional
environmentally unfriendly practices which affect Mother Nature’s
‘womb.’Some are already aware that there is a garbage patch off the coast of California that is thought to be roughly the size of a small state. Called the Great Garbage Patch, it spans from the US West Coast all the way to Japan. There are two other areas in the world that have been collecting enough debris to be given a garbage patch signification of their own though, in both the Atlantic and Indian Oceans.
Read More
from The Money GPS:
by Gary Christenson, Deviant Investor:
Gold was valuable 3,000 years ago and will be valuable 3,000 years from
now. But can you say the same for dollars, euros, yen, or pounds?
Gold maintains its value (on average) over centuries. Can you expect similar longevity for debt based fiat currencies that are managed by politicians and created with printing presses or computers in central banks?
If “printing money” truly created wealth individuals and countries would be much wealthier since most central banks have been “printing” rapidly. The Fed has “printed” about $4 Trillion since the 2008 crisis to bailout banks and “stimulate” the economy. In today’s prices that would be about 3 billion ounces of gold, or approximately 30 years of global gold production. Central banks want to manage economies by using paper and digits instead of real physical gold.
Read More…
Gold was valuable 3,000 years ago and will be valuable 3,000 years from
now. But can you say the same for dollars, euros, yen, or pounds?Gold maintains its value (on average) over centuries. Can you expect similar longevity for debt based fiat currencies that are managed by politicians and created with printing presses or computers in central banks?
If “printing money” truly created wealth individuals and countries would be much wealthier since most central banks have been “printing” rapidly. The Fed has “printed” about $4 Trillion since the 2008 crisis to bailout banks and “stimulate” the economy. In today’s prices that would be about 3 billion ounces of gold, or approximately 30 years of global gold production. Central banks want to manage economies by using paper and digits instead of real physical gold.
Read More…
from Bill Still:
by John Whitehead, Rutherford:
“Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed.”—Martin Luther King Jr.
There’s an ill will blowing across the country. The economy is tanking. The people are directionless, and politics provides no answer. And like former regimes, the militarized police have stepped up to provide a façade of law and order manifested by an overt violence against the citizenry.
Despite the revelations of the past several years, nothing has changed to push back against the American police state. Our freedoms—especially the Fourth Amendment—continue to be choked out by a prevailing view among government bureaucrats that they have the right to search, seize, strip, scan, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation.
Read More
“Freedom is never voluntarily given by the oppressor; it must be demanded by the oppressed.”—Martin Luther King Jr.
There’s an ill will blowing across the country. The economy is tanking. The people are directionless, and politics provides no answer. And like former regimes, the militarized police have stepped up to provide a façade of law and order manifested by an overt violence against the citizenry.
Despite the revelations of the past several years, nothing has changed to push back against the American police state. Our freedoms—especially the Fourth Amendment—continue to be choked out by a prevailing view among government bureaucrats that they have the right to search, seize, strip, scan, spy on, probe, pat down, taser, and arrest any individual at any time and for the slightest provocation.
Read More
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