China Surges, Japan Closes Green On Horrible Econ Data; Oil Tumbles To Fresh 5 Year Lows

Without doubt, the most memorable line from the latest quarterly report by the BIS, one which shows how shocked even the central banks’ central bank is with how perverted and broken the “market” has become is the following: “The highly abnormal is becoming uncomfortably normal…. There is something vaguely troubling when the unthinkable becomes routine.”
Overnight, “markets” did all in their (central banks’) power to justify the BIS’ amazement, when first the Nikkei closed green following another shocker of Japanese econ data, when it was revealed that the quadruple-dip recession was even worse than expected, and then the Shanghai composite soaring over 3000 or up 2.8% for the session, following news of the worst trade data – whether completely fabricated or not – out of China in over half a year. Perhaps the biggest surprise out of the broken, rigged market is that the massively overbought Dollar is actually listening to the BIS and as of this moment is at overnight lows, dragging European stocks (despite yet another miss of German industrial production printing at 0.2%, vs Exp. 0.4%, and the prior revised from 1.4% to 1.1%, something which normally would be super bullish) and US futures to session lows too: because it is truly shocking to see rationality in the “market” these days.
And speaking of China, it too is now caught in one of those New Normal infinite loops, with DB saying that the probability of a rate cut and liquidity flood by the PBOC – the primary driver for the recent market surge – has been slashed as a result of the market surge as China would be leery to fan the flames of the euphoric market any further. In other words, courtesy of the reflexive nature of central planning, the market has frontrun PBOC action so much it has effectively made such action impossible.
The Nikkei 225 closed slightly higher ( 0.08%) as upside was capped with continued weakness in the JPY against the greenback, despite the final reading of the Japanese GDP Q/Q number -0.5% vs. Exp. -0.1% (Prev. -0.4%) confirming that the Japanese economy contracted. The Hang Seng ( 0.5%) and Shanghai Comp ( 2.9%) whipsawed in yet another volatile session, the latter breaking above 3,000 for the first since 2011 as Chinese Trade Balance (USD) (Nov) M/M 54.47bln vs. Exp. 43.95bln (Prev. 45.41bln) printed a record surplus aided of by lower oil prices. However, the export and imports component was weak as speculation mounts on further PBoC stimulus.

This post was published at Zero Hedge on 12/08/2014.