Aug 01

Red-Flag

11 Red Flag Events That Just Happened As We Enter The Pivotal Month Of August 2015 (Economic Collapse, Aug 1, 2015):

Are you ready for what is coming in August?  All over America, economic, political and social tensions are building, and the next 30 days could turn out to be pivotal.  In July, we saw things start to turn.  As you will read about below, a major six year trendline for the S&P 500 was finally broken this month, Chinese stocks crashed, commodities crashed, and debt problems started erupting all over the planet.  I fully expect that this next month (August) will be a month of transition as we enter an extremely chaotic time in the fall and winter. 

Things are unfolding in textbook fashion for another major global financial crisis in the months ahead, and yet most people refuse to see what is happening.  In their blind optimism, they want to believe that things will somehow be different this time.  Well, the coming months will definitely reveal who was right and who was wrong.

The following are 11 red flag events that just happened as we enter the pivotal month of August 2015… Continue reading »

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Jul 28

Wall Street Still Didn’t Get The Memo—–China’s Done, Tops In! (David Stockamn’s Contra Cormner, July 28, 2015):

Bubblevision’s Scott Wapner nearly split a neck vessel today denouncing the US stock market sell-off. It was completely unwarranted, he thundered, because China don’t have nothin’ to do with anything.

The collapse of red capitalism in China is exporting gale force deflation to the global economy, meaning that the already evident rollover of world trade is just beginning its descent.

So S&P profits are not immune, not by a longshot. One of these days, perhaps soon, even Scott Wapner will get the memo.

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Jul 28

How A Chinese Farmer Lost More Than Everything Trading Stocks (ZeroHedge, July 28, 2015):

Last night, just six weeks after one Chinese farmer Liu Jianguo invested his life savings in the Chinese market, proclaiming “it’s a lot easier making money from stocks than farm work,” we wondered if it was time for a sequel:

A few hours later we find out that it was because as CNBC reported in its sequel, another farmer has lost it all… and more. As CNBC’s Eunice Yoon reports, just a few weeks after his glorious gamble in China’s manipulated market, the farmer “trader “now owes – thanks to wonders of margin calls and leverage – as much as he originally invested.

From the hope-filled exuberance of early June to Yang Cheng’s utter hopelessness, “I have lost everything,” after he followed the government’s ‘grand plan’ to open the economy and encourage stock market speculation. Continue reading »

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Jul 27


Chinese Stocks Suffer Second Biggest Crash In History, 1,500 Companies Halted Limit Down (ZeroHedge, July 27, 2015):

This was not supposed to happen.

After pledging, investing and otherwise guaranteeing the Chinese stock market to the tune of 10% of GDP, and intervening on at least 40 different occasions in the past month ever since China’s stock bubble burst in late June, with the subsequent crash nearly taking the Shanghai Composite red for the year, overnight China officially lost control for the second time, when after a weak start to the Monday trading session, things turned very ugly in the last hour, when the Shanghai Composite plunged by 8.48%, closing nearly at the lows, and tumbling some 345 points for its biggest one-day drop since February 2007 and its second biggest crash in history!

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The selling was steady throughout the day, but spiked in the last hour on concerns China would rein in its market-supporting programs following IMF demands to normalize its relentless market intervention. According to Bloomberg’s Richard Breslow: “fear that the extraordinary support measures employed to hold up the market may be scaled back caused heavy afternoon selling resulting in a down 8.5% day.” Of course, one can come up with any number of theories to explain the plunge: for example the PBOC did not buy enough to offset the relentless selling. Continue reading »

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Jul 27

20150727_EOD

“Uncontained” Shanghai Shafting Slams Global Stocks & Commodities Silly (ZeroHedge, July 27, 2015)

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Jul 27

witch hunt

What Loss Of Control Looks Like: Chinese Regulator Urges Traders To Rat Out “Malicious Sellers” (ZeroHedge, July 27, 2015):

After pledging a whopping 10% of China’s GDP, or just about $1 trillion, to its various (at last check over 40) discrete measures to prop up its collapsing market, among which such threats as arresting shorters of stock and “malicious sellers”, China has finally reverted to what the communist regime does best to preserve “order” – implement witch hunts in which the population rats out any criminals who dare to go against the protocols of the communist party. In this case, the targets are “malicious sellers” with the regulator adding that those found guilty of shorting will be “dealt with severely.”

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Jul 27

The Complete Guide To China’s CNY 4 Trillion Margin Doomsday Machine (ZeroHedge, July 27, 2015):

On the heels of a veritable bloodbath in Chinese equities overnight which saw the SHCOMP slide a harrowing 8.5%, the entire world is now beginning to take a hard look at the notion that dramatic bouts of selling pressure are aggravated and perhaps triggered by an unwind in the multiple backdoor margin lending channels that allowed investors to skirt official restrictions on leverage and helped to drive the market’s world-beating rally. Here is the complete guide to China’s CNY4 trillion shadow margin edifice.

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Jul 27

– It’s Not Just Margin Debt: Presenting The Complete Chinese Stock Market Ponzi Schematic (ZeroHedge, July 26, 2015):

Late last month, we suggested that the pressure on Chinese equities – which at that point had only begun to build – was at least partially attributable to an unwind in the country’s CNY1 trillion backdoor margin lending edifice. Precisely measuring the amount of shadow financing that helped drive Chinese stocks to nosebleed levels is virtually impossible, as is determining how much of that leverage has been unwound and how much remains or has been restored, but BofAML is out with a valiant attempt to not only identify each shadow lending channel, but to quantify just how much leverage may be built into the Chinese market. The figures will shock you.

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Jul 26

– Europe’s New Colonialism: ECB Rejects Greek Request To Reopen Stock Market (ZeroHedge, July 26, 2015):

It has been one month since Greek capital controls were imposed, and as we explained earlier, Greece is nowhere closer to having its deposit limits lifted. In fact, with several more months of capital controls at least, the Greek banks are likely to suffer ongoing balance sheet impairments which will ultimately result in depositor bail-ins, with Germany already pushing for haircuts on deposits over €100,000.

However, when it comes to banks there is at least still the illusion that Greece has some residual sovereignty. The reality is that it does not, as Greece is no longer an independent nation, and as of July 15, the Greek “In Dependence” day, every Greek decision needs to get pre-approval from both the ECB, Brussels and, naturally, Berlin. Continue reading »

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Jul 25

– Venezuela’s Hyperinflation Crack-Up Boom On Its Way To Outer Space (Acting Man, July 25, 2015):

Why Stock Markets Are Not an Indicator of the Economy

In a free unhampered market economy based on a sound monetary system – this is to say a market-chosen monetary system with a free banking industry and no central planning institution that is manipulating interest rates and determining the size of the money supply – the gains and losses of shares prices in the stock market will simply be a reflection of entrepreneurial profits achieved in the past, plus embedded expectations of profits likely to be achieved in the future.

Maduro
Nicolas Maduro, the hapless president of socialist Venezuela, here seen hung with all sorts of bling supposed to testify to his achievements.
Photo credit: Prensa Presidencial

Under the assumption that such a free market money system would be largely non-inflationary, this mixture of “historical record” and expectations would primarily be expressed by the relative prices of shares. The bulk of the returns achieved by investors would come from dividend payments, as a general inflation of “the market” would be nigh impossible. Continue reading »

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Jul 24

Grid-Stock-Exchange-Economy-Finance

Commodities Collapsed Just Before The Last Stock Market Crash – So Guess What Is Happening Right Now? (Economic Collapse, July 22, 2015):

If we were going to see a stock market crash in the United States in the fall of 2015 (to use a hypothetical example), we would expect to see commodity prices begin to crash a few months ahead of time.  This is precisely what happened just before the great financial crisis of 2008, and we are watching the exact same thing happen again right now.  On Wednesday, commodities got absolutely pummeled, and at this point the Bloomberg Commodity Index is down a whopping 26 percent over the past twelve months.  When global economic activity slows down, demand for raw materials sinks and prices drop.  So important global commodities such as copper, iron ore, aluminum, zinc, nickel, lead, tin and lumber are all considered to be key “leading indicators” that can tell us a lot about where things are heading next.  And what they are telling us right now is that we are rapidly approaching a global economic meltdown.

If the global economy was actually healthy and expanding, the demand for commodities would be increasing and that would tend to drive prices up.  But instead, prices continue to go down. Continue reading »

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Jul 23

Flashback:

GAO Audit Of The Federal Reserve Reveals $16 TRILLION In Secret Bailouts

The Federal Reserve And The $16 Trillion Bankster Bailout

Audit: Federal Reserve Gave $16 TRILLION In Emergency Loans To The Banksters


China- Toast-To-Market-Manipulation

China Spends 10% Of GDP On “All Bark, No Bite” Stock Bailout (ZeroHedge, July 23, 2015):

“With so many retail investors in China’s stock market, a collapse of share prices affects people’s savings, incomes and welfare. Many no doubt invested because they were confident in the government’s capacity to rescue the market. This may explain, in part, why Beijing intervened so quickly when the market plummeted. Still, while Beijing’s instinct to protect investors is understandable, the best way of doing so is to create a modern capital market.”

The quote featured above is from an FT op-ed penned by none other than everyone’s favorite bazooka-wielding, ex-Goldmanite Hank Paulson and as you might have gathered, there’s something particularly amusing about the former Treasury Secretary’s message to China. Continue reading »

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Jul 22

Chinese Stocks Slide Into Red After Business Sentiment Crashes To 6-Year Lows (ZeroHedge, July 21, 2015):

After a modesly positive open, Chinese stocks have pushed back into the red after Chinese business sentiment collapsed in July. The MNI China Business Indicator fell a straggering 8.8pts to 48.8 in July (below 50 signifying pessimism) – the lowest since January 2009. It appears the encouraging bounce after the massive creduit injections into June has been eviscerated and future expectations also dropped 6.4 to 54.1 in July (below the long-run average). While bad news is good news for much of the rest of the world, for China, as it continues to try to project a strong underlying economy to sustain its still extremely rich stock market, bad news is bad news.

Weakest business sentiment since Jan 2009…

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and stocks are not getting a bounce from the need for moar stimulus that this implies… Continue reading »

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Jul 21

July 21 cumulative flows by client _0

– The “Smartest Money” Used Last Week’s Surge To Dump Even More Stock (ZeroHedge, July 21, 2015):

Moments ago we got the latest BofA client flow update in which we were expecting to find that the “smart money”, flush with cash, and taking advantage of the Greek “deal” would jump in on last week’s biggest weekly market surge since October 2014 when Bullard hinted at QE4 and unleashed a buying surge. To our surprise we find that not only did “smart” money continue selling, but they were joined by the “smartest” money of all, hedge funds.  And who did they sell to? Why retail investors of course… and corporate buybacks but that should go without saying.

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Jul 20

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If Everything Is Fine, Why Are 20% Of All Chinese Shares Still Halted? (ZeroHedge, July 20, 2015):

On Monday, Beijing gave the unofficial all clear for Chinese stocks, when the following headline crossed the wires just prior to the open in Shanghai:

  • CHINA’S ZHU SAYS STK MKT ROUT CEASED BY TIMELY MEASURES: DAILY

Yes, “timely measures” or, as the emergency plunge protection deployed by the PBoC is called outside of China: “unprecedented government intervention,” or perhaps more appropriately “outright manipulation.” Continue reading »

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Jul 19

JustHangingOut

China Stock Rout “Rocks” Property Market: “Massive” Cancellations Expected (ZeroHedge, July 18, 2015):

To be sure, we’ve had our fair share of laughs at the expense of China’s newly-minted day traders.

Back in March, Bloomberg highlighted a study which suggested that some 31% of new investors in China’s equity markets had an elementary school education or less. Shortly thereafter, we began to look at data from the China Securities Depository and Clearing Co which showed that millions of new stock trading accounts were being created in China every single month. Once reports began to come in from the front lines of China’s inexorable equity rally, it became clear that (to say the least) not everyone pouring money into the SHCOMP and The Shenzhen was what you might call a “seasoned” investor. Continue reading »

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Jul 17

The Value Of Google Just Increased By More Than The Market Cap Of 415 S&P500 Companies (ZeroHedge, July 17, 2015):

Just today, the value of Google has increased by more than the market cap of 415 S&P 500 companies!

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Jul 15

Manipulation

“Rigged” – The Most Absurd Global Financial Situation Ever (The Cobden Centre, July 15, 2015):

One woman, who declined to give her name but said she is almost 80, invested RMB 20,000 ($3,200) when the market was at 5,000 points. “I’ve lost two thirds of my money,” she said, her voice cracking. “I really want it back and when I get it, I will never invest in the stock market again.”

“..These elderly investors were entering the back half of their lives at the moment when China began to embrace reform. “Old people often don’t understand economics,” says Nie Riming, a pensions expert at the Shanghai Institute of Finance and Law. “They are easily duped.”

– From ‘A bull market with Chinese characteristics’ in The Financial Times, by Tom Mitchell, Gabriel Wildau and Josh Noble, 11 July 2015.

A man may be extremely intelligent, but mankind, as a whole, is pig-ignorant. We are all fools. To put it another way, we can, as individuals, gain much knowledge and perhaps even wisdom during a lifetime, but the likelihood of that knowledge and wisdom persisting through generations may well be vanishingly small. Continue reading »

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Jul 12

Similarities Between Chinas Stock Market Crash And 1929 Are Eerie


Similarities Between China’s Stock Market Crash and 1929 Are Eerie (David Stockman’S Contra Corner, July 10, 2015):

By David Zeiler at Money Morning

For students of history, the China stock market crash looks eerily familiar.

It’s playing out much like the Wall Street stock market crash of 1929.

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In case you’ve been distracted by such things as the Greek debt crisis and a bizarre glitch that shut down the New York Stock Exchange for more than three hours Wednesday, the Chinese stock market has been in a free fall lately.

Continue reading »

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Jul 10

china no selling

The Latest Thing In China: Brokers Refusing Sell Orders (ZeroHedge, July 10, 2015):

Just think of it as brokers doing you a favor: do you really want to be arrested for “malicious” selling?

So why even bother with the pretense of “markets”, and not only in China, but in Japan, Europe, Switzerland, the US and everywhere else where central banks have directly injected $22 trillion in artificial liquidity in the past 7 years to keep the illusion afloat? Continue reading »

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