Aug 24

Chinese Stocks Are Crashing; Yuan Devalues, Deposit Rate Spikes To Record High, Japan Denies “G7 Response” Planned (ZeroHedge, Aug 24, 2015):

Following yesterday’s bloodbath (and the continued carnage around the world), AsiaPac stocks are lower with Japan unable to mount any sustained bounce despite every effort to lift JPY. The propaganda-fest is in full swing as Amari claims JPY is safe-haven asset and Aso denies any coordinated G7 response is being planned (which means they are all feverishly trying to figure out how to ‘save’ the world again from a 4-day stock drop). China is ugly with stocks down hard in the pre-open (CSI-300 -4.3%) as offshore Yuan depo rates spike to 22.9% – a record high – as liquidity outflows must be accelerating (as PBOC adds another CBNY150bn liquidity). China devalues Yuan 0.2% – most in 11 days.

Carnage –

  • *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 6.4% TO 3,004.13
  • *CHINA’S CSI 300 INDEX SET TO OPEN DOWN 6.3% TO 3,070.01

This is the 5th day of crashing Chinese stocks in a row…

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Chinese Stocks are down 14% since Friday!!

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Year-to-date, Shangahi is now down 6.2% and CSI-300 (China’s S&P) is down a stunning 15%!

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Where China will stop (or atleast aim for) – when QE-Lite (PSL) was unleashed…

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The Japanese are in full propaganda mode…

  • *SUGA: WATCHING MARKET MOVES ATTENTIVELY
  • *ASO: FX MOVES HAVE BEEN ROUGH (“rough” – well that’s one word for complete and utter carnage)
  • *ASO: CONTINUING TO CLOSELY WATCH MARKET MOVES
  • *ASO: I HAVEN’T CONTACTED U.S. TREASURY (which means he has!)
  • *ASO: NOT AT STAGE FOR G-7, G-20 RESPONSE (which means there is)
  • *AMARI: UP TO BOJ TO DECIDE ON ADDL EASING (how’s that last QQE2 working out?)
  • *AMARI: YEN IS BEING BOUGHT AS SAFE ASSET (nope it’s a forced carry unwind sorry!)
  • *AMARI:YEN SEEN AS SAFE ASSET SHOWS VALUATION OF JAPAN ECONOMY (what utter crap!)

So we await the coordinated response to the global vicious circle of carry unwinds and forced liquidations… but remember, RRR cuts so far have done absolutely nothing to hold back wave after wave of frenzied malicious Chinese sellers just wanting out of the ponzi.

The talk is not working as Chinese stocks are weak in the pre-open…

  • *FTSE CHINA A50 SEPT. FUTURES DROP 3.4% IN SINGAPORE
  • *CHINA CSI 300 STOCK-INDEX FUTURES FALL 4.3%

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Some good news… China is deleveraging…

  • *SHANGHAI MARGIN DEBT DECLINES TO LOWEST IN FIVE MONTHS

As China devalues Yuan by most in 11 days..

  • *PBOC WEAKENS YUAN FIXING BY 0.2%, MOST SINCE AUG. 13
  • *CHINA SETS YUAN REFERENCE RATE AT 6.3987 AGAINST U.S. DOLLAR

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And China adds yet more liquidity…

  • *PBOC TO INJECT 150B YUAN WITH 7-DAY REVERSE REPOS: TRADER

The desperation to keep liquidity from flooding out is very evident:

  • *ONE-WEEK OFFSHORE YUAN DEPOSIT RATE JUMPS 840 BPS TO 22.9%
  • *YUAN DEPOSIT RATE HEADED FOR RECORD CLOSE IN HONG KONG

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“Some are converting yuan back into USD or HKD amid the devaluation,’’ says Lawrence Kung, head of deposits department at Wing Lung Bank in Hong Kong

*  *  *

Hope continues for a huge broad-based RRR cut but The PBOC – just as it said – remains fixed on small targeted liquidity injections. This will not please the ‘people’ or Jim Cramer… “they know nothing.”

*  *  *

And finally, we could not have put it better than The Onion as they explain how the “Shoddy Chinese-Made Stock Market Collapses”…

Proving to be just as flimsy and precarious as many observers had previously warned, the Chinese-made Shanghai Composite index completely collapsed Monday, sources confirmed.

“Sure, it looked fine from the outside, but anybody who saw it up close knew that it was of such poor quality that it wasn’t built to last,” said Allen Sigman of the London School of Economics, adding that the stock market, which he described as a crude knockoff of Western versions, was practically slapped together overnight and featured countless obvious structural weak points.

“They pretty much ignored regulations, and inspections were a joke. The only surprise is that it didn’t fall apart sooner.” Sigman added that he just hopes there weren’t too many people who were hurt in the disaster.

*  *  *

We assume that is satire… though it does seem a little too real.

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15 Responses to “Chinese Stocks Are Crashing; Yuan Devalues, Deposit Rate Spikes To Record High, Japan Denies “G7 Response” Planned”

  1. Marilyn Gjerdrum Says:

    The Chinese ignored regulations? What about the US?
    Chinese are using state pension funds to shore up their markets & MFG more Yuan to inject into the markets……………….I wonder how the state workers feel about it?
    This is such a house of cards.
    This morning, the DOW is being kept resolutely at 300+, the talking heads talking feverishly about what benefits can be had by investing now……………….

    This is global, and the central banks pumping worthless currencies into the markets are running out of credibility………The market since 2008 has shed millions of jobs, millions have lost homes, saving, everything as a result. The greedy guts have made billions at the cost of everyone else. In America, true unemployment is close to 50%.

    The US has a population of 312 million people according to the census bureau. Of that number, slightly over 200 million are of working age (18-65). 93.8 million working age Americans struggle with long term unemployment, a far greater number than the 5.3% the propaganda blares from every TV in the nation……

    Even worse, commerce has stopped around the world. Japan’s debt level has gone up radically since March 11, 2011. Before then, they were the worlds largest lending and saving nation…..After Fukushima, radioactive products from Japan started being rejected by nations who care about such things, and their debt & savings have been affected radically.

    How do I know? I have been watching, it was soon very apparent that nuclear fallout in such a small area was death to Japan. I am an economics geek.

    China has built cities that none of their people can afford to live in, they were not even intelligent enough to put their own people to work…..3-5 major government contractors got all the jobs. The cities could have been great capital investments; instead, they set there, empty ghost towns. The funds all went to a few, nobody else benefited.

    The same story with the world’s biggest building, complete with artificial seashore. It is beautiful, but nobody can afford to live or work there……built by the same government contractors. They had a huge influx of cash from all the greedy corporations who signed up for slave labor & this is how they wasted it.
    They are so corrupt, they allowed Chinese people to put up their mortgaged houses as collateral to buy more stock on margin……..

    The jobs are gone, their market is crashing, and there is nothing left but Chinese currency and a corrupt central banking system.
    .
    Marc Faber is correct in calling the bankers criminals.

    The US is no longer the center of this crash, it is global, and the US banks don’t have enough to keep the truth, the implacable truth, at bay for much longer. Does anyone remember what happened to the Deutch Marc after WW I? They printed money nonstop, too, and finally, the currency became worthless.

    It can’t happen here? Look again. We have nothing left, our MFG has been off shored, along with our R & D. All the wonderful products we built are now done overseas. Even though some MFG is coming back, we need much more. Our economy has been gutted, our financial credibility is gone………this is bigger than anything the US is equipped to handle……

    This is very serious, this site has covered the growing problems for some time….

  2. Marilyn Gjerdrum Says:

    China cutting interest rates helps who besides a few greedy guts?
    It is more money games with nothing behind it, there are no integral reforms………

    http://www.theguardian.com/business/live/2015/aug/25/asian-stock-markets-braced-for-steep-falls-after-wall-street-slump-live

  3. Marilyn Gjerdrum Says:

    Also, besides cutting interest rates, Chinese banks are now required to have less cash on hand……………….Their market dropped 24% in the last week. It is totally corrupt, there is nothing behind any of it but debt.

  4. Marilyn Gjerdrum Says:

    Even US spin with a few individuals controlling much of the stock market could stop the inevitable…DOW down over 200 points, and too many people watching for them to amend the numbers after hours as they were doing a couple of weeks ago.

    The US is no longer the financial center of the world.
    We have lost credibility
    We have lost trust
    We are no longer the world reserve currency; technology has rendered the need for any world reserve currency obsolete. This removed a huge amount of financial power from the US.
    The US has been gutted of industry, and we no longer can fix the world markets.
    Even though the few people who control the US stock market kept it resolutely over 300 points, the truth is too bitter.

    Bloomberg website covers it better than I can.
    Best,
    Marilyn

  5. squodgy Says:

    Desperate waffle…..it’s all going to be fine….move along now….nothing to see…

    http://www.independent.co.uk/news/business/news/china-black-monday-stock-market-crash-blip-or-bloodbath-five-charts-that-show-whether-this-was-the-start-of-the-next-financial-crisis-10471402.html

  6. squodgy Says:

    We shall see….but it fits your overall view T.

    http://www.whatdoesitmean.com/index1905.htm

  7. squodgy Says:

    Hope….

    https://www.youtube.com/watch?t=15&v=yVQymr2ztdM

  8. squodgy Says:

    http://nodisinfo.com/train-attack-in-france-by-crazed-muslim-gunman-is-a-ridiculous-arch-zionist-hoax/

  9. squodgy Says:

    X22

    https://www.youtube.com/watch?t=32&v=XcRklpQ_CO4

  10. squodgy Says:

    Jeez….what a country….

    http://www.shtfplan.com/headline-news/graphic-content-shooter-posts-first-person-video-of-live-television-murder-via-gopro-camera_08262015#comment-3437417

  11. squodgy Says:

    The USA spends twice the combined military expenditure of Russia & China, and still can’t win a war.

    They can sure start them though…..

    http://www.washingtonsblog.com/2015/08/visual-of-global-military-expenditures.html

  12. squodgy Says:

    Have I missed the point……we’ve had a 15-25% crash with a follow up dead cat rebound and nobody seems interested in telling us what’s next.

    The debts haven’t changed, world trade hasn’t improved, the BDI shipping bookings is still dragging the bottom, derivatives & futures are still astronomical, unemployment is still at record levels, the Banks are still technically insolvent, every Nation but Russia , China & India is insolvent,.

    In other words, this last week is but a hiccup en route to the seismic shift.

  13. Marilyn Gjerdrum Says:

    Stanley, what is BDI?
    I agree 100% with your post.
    The annual global economy (before 2008 crash and China’s reality check) averaged $16 trillion. We lost $5 trillion in less than a week……that looks more like 33% of the world economy…….
    I doubt the true world economy is generating $16 trillion…….it is probably closer to $12T…….Take away $5T…….you can count.

  14. Marilyn Gjerdrum Says:

    Here is a voice of sanity in the midst of the happy horseshit about the great revival of the markets:

    http://www.theguardian.com/business/2015/aug/26/china-economy-woes-extend-stock-market

  15. Marilyn Gjerdrum Says:

    If this isn’t a recipe for disaster, I don’t know what is…..from the UK Guardian.
    http://www.theguardian.com/business/2015/aug/25/six-ways-china-has-tried-to-remedy-economic-slowdown-shares-slide#comment-58330179

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