Chinese Stocks Slump After “Arrest-Fest”, Yuan Strengthens Most In 9 Months, Goldman Cuts Outlook

Update: So much for the “no more intervention” Since the government bailout fund has run dry of money, the brokerages have to step up – CHINA SAID TO ORDER BROKERAGES TO BOOST STOCK MARKET SUPPORT
A busy weekend in Asia was dominated by mayhem in Malaysia, and witch-huntery in China. Chinese authorities began a wide-scale crackdown on rumor-mongerers, arrested journalists, and evendetained a regulator for insider trading, as they lifted loan caps on the banking system at the same aswithdrawing (verbally) support for the stock market. China strengthen the Yuan fix by 0.15% to 6.3893 – this is the biggest 2-day strengthening of the Yuan fix since Nov 2014. Then just to rub some more salt in the wounds, Goldman cut China growth expectations to 6.4% and 6.1% respectively for the next 2 years. Chinese stocks are opening modestly lower (SHCOMP -3.3%).
*CHINA’S CSI 300 INDEX FALLS 2.8% TO 3,247.39 AT BREAK *CHINA’S SHANGHAI COMPOSITE FALLS 2.6% TO 3,148.08 AT BREAK

This post was published at Zero Hedge on 08/30/2015.

Something Is Percolating In The Gold Market

A longtime friend/colleague of mine sent me a note tonight in which he said he thought something significant might be coming to light about gold in the next week or two. There’s certainly some unusual behavior on the Comex, with Goldman taking delivery of 98,300 ounces last week (2.8 tonnes), the amount of gold cleared on the LBMA at the a.m. fix spiked up from an average of about 100,000 ozs per day to over 150,000 ounces, the Shanghai Gold Exchange saw the 4th largest withdrawal of gold in its history and the premiums on both physical gold and silver rose considerably.
It’s anyone’s guess what might be going on, but China is certainly accumulating an increasing amount of the Wall Street Journal’s ‘Pet Rock.’ And the Chinese seem to be unloading a massive amount of dollars/Treasuries.

This post was published at Investment Research Dynamics on August 31, 2015.

Greek Snap Election Confusion; Tsipras’ Questionable Gamble; Unwieldy Coalition Coming Up?

Questionable Gamble
In the wake of reneging on major election promises, Greek prime minister Alexis Tsipras resigned and called for snap elections. He did so out of fear of losing a vote of confidence that would have forced the same result down the road.
In addition, Tsipras wanted the vote out of the way before further rounds of pension cuts and tax hikes took their toll on the economy.
His gamble now appears questionable.
Please consider Alexis Tsipras Rallies Supporters as Syriza Takes Knock in Polls.
Alexis Tsipras tried to rally Syriza party members behind him at the weekend in advance of a snap election, as opinion polls reflected deepening disappointment among voters with his government’s record.

This post was published at Global Economic Analysis on Sunday, August 30, 2015.

80 Year Old Woman Trampled To Death In Venezuela Supermarket Stampede

With 30% of Venzuelans eating two or fewer meals per day, social unrest is mounting rapidly in President Nicolas Maduro’s socialist utopia. As WSJ reports, soldiers have now been deployed to stem rampant food smuggling and price speculation, which Maduro blames for triple-digit inflation and scarcity. “Due to the shortage of food… the desperation is enormous,” local opposition politician Andres Camejo said, and nowhere is that more evident than the trampling death of an 80-year-old woman outside a state-subsidized supermarket.
As Reuters reports,
An 80-year-old Venezuelan woman died, possibly from trampling, in a scrum outside a state supermarket selling subsidized goods, the opposition and media said on Friday. The melee at the store in Sabaneta, the birthplace of former Venezuelan leader Hugo Chavez, was the latest such incident in the South American nation where economic hardship and food shortages are creating long queues and scuffles.

This post was published at Zero Hedge on 08/30/2015.

It Gets Even Uglier In Canada

The Province of Alberta, the epicenter of the Canadian oil bust, may be sliding into something much worse than a plain-vanilla recession. And it’s not exactly perking up the rest of Canada.
Layoffs are already cascading through the oil patch, as companies are retrenching and adjusting to the new reality. New vehicle sales are plummeting. And home sales are taking a broadside.
In August so far, total home sales in Calgary plunged 28% from a year ago, on flat prices. Condo sales collapsed 39%, with the median price down 8%, according to theCalgary Real Estate Board. Year-to-date, total home sales in Calgary are down 25%; condo sales 30%. And those condos that did sell spent 30% longer on the market than condos did a year ago, as sellers hang on by their fingernails to the illusion of wealth, and sales are stalling.
And the Business Barometer Index for all of Canada, which measures the optimism among small businesses, dropped again in August for the third month in a row. An index level between 65 and 70 indicates that the economy is growing at its potential. But now it hit 56.7, the lowest level since April 2009.

This post was published at Wolf Street by Wolf Richter ‘ August 30, 2015.

China Starts Witch Hunt for Those Obstructing Government Efforts to Prop Up Stocks

In China, a massive witch hunt is underway.
Beijing regulators now seek individuals who have destabilized the markets and spread rumors.
Official want someone to blame after their Large-Scale Share Purchases failed to halt a huge stock market slide.
China’s government has decided to abandon attempts to boost the stock market through large-scale share purchases, and will instead intensify efforts to find and punish those suspected of ‘destabilising the market’, according to senior officials.
For two months, a ‘national team’ of state-owned investment funds and institutions has collectively spent about $200bn trying to prop up a market that is still down 37 per cent since its mid-June peak.

This post was published at Global Economic Analysis on Monday, August 31, 2015.

JPMorgan: “Nothing Appears To Be Breaking” But “Something Happened”

If you thought you were merely on the fence about being confused on the topic of the global economy, and how the Fed may be on the verge of a rate hike when on both previous occasions when financial conditions were here the Fed was launching QE1 and QE2, here is JPM’s chief economist Bruce Kasman to make sure of that.
Something happened The August turbulence in global markets has produced significant shifts, including a 6.6% fall in equity prices. The currencies of emerging market countries have depreciated substantially against the G-4, while emerging market borrowing rates for sovereigns and corporates have moved higher. Global oil prices have been whipsawed as have G-4 bond yields.
The speed and magnitude of these movements is reminiscent of past episodes in which financial crises emerged or the global economy slipped into recession. However, nothing appears to be breaking. Global activity indicators have, on balance, disappointed but remain consistent with a modest pickup in the pace of growth. Additionally, despite the turbulence in financial markets, there is no sign of unusual stress in short-term funding markets or of a credit crisis in any large EM economy.

This post was published at Zero Hedge on 08/30/2015.

Donald Trump Versus Bernie Sanders?? The Political Bubble Is Bursting

Now it’s not just Europe where formerly-fringe candidates are suddenly vying for power. The US presidential primaries, which were supposed to be coronations for the latest Bush/Clinton snoozfest, have turned interesting and in some cases surreal, as Donald Trump, who a few short months ago was viewed as a kind of circus clown by most Republicans, and Bernie Sanders, an honest, straight-shooting avowed socialist, are drawing the biggest crowds and creating the most excitement.
But far from being a surprise, this is exactly the kind of thing an over-indebted and therefore ungovernable society should expect. From Chapter 14 of The Money Bubble: What To Do Before It Pops (January 2014):
THE POLITICAL BUBBLE BURSTS Just based on the numbers, the global financial system should have collapsed long ago. That it hasn’t has less to do with economics than with politics. The people in charge have arranged things so that they can keep borrowing, spending and printing into the indefinite future – as long as they can agree on ‘compromises’ that give each faction most of what it wants. That’s how US military spending can soar (thus keeping the right happy) while entitlement programs can simultaneously spread to every corner of American life (keeping the left happy). As long as the resulting deficits can be financed and the bond, currency and precious metals markets tamed with repeated government interventions and newly-printed currency, then the game can continue.

This post was published at DollarCollapse on August 30, 2015.

Did The Fed Intentionally Spark A Commodity Sell-off?

Submitted by Leonard Brecken via OilPrice.com,
The intention here is the bring facts to light so the public can decide.
I’m not quite sure what to believe on how and why oil prices remain more than 50 percent below free cash flow break even for most independent E&P companies. I know for sure it’s not just one reason and is more likely a confluence of events.
Part of the reason oil prices broke new six-year lows is tied to hedge funds shorting equities and pressuring equity pricing through shorting oil. Another reason is the desire of private equity firms to buy assets on cheap and some banks seeking M&A fees. Obviously OPEC policy has a part to play. There is also no doubt that EIA statistics mistakenly leave the impression that production has remained resilient throughout the summer. But the spark that set the ball in motion was the dollar strength as every major money center bank in the U. S. recommended going long EU equities and long the dollar because of further monetary easing in Europe.
The inverse correlation between the U. S. dollar and oil prices in June was virtually 100 percent, but that has changed more recently, as I have noted previously. At that time, investors here in the U. S. plowed into biotechnology and technology and went short oil as if they knew what assets central banks were going to buy and not buy based on all the free money from Europe and Japan.

This post was published at Zero Hedge on 08/30/2015.

A Very Unexpected Statement From A Central Banker: “We Are Merely Reacting To A Situation We Did Not Create”

The ECB’s Vitor Constancio, while largely a silent puppet operating quietly in the shadow of his boss, former Goldmanite Mario Draghi, is best known for his tragicomic statement from October 2014 that the ECB will not stress test Europe’s banks for deflationary scenario because it simply won’t happen…
My question would be on how credible these tests are. Looking at the adverse scenario, you haven’t even included deflation. You have not included an interruption in gas imports to Europe. You have not included full-on sanctions on Russia. So please elaborate and convince us. Constncio: The scenario for the stress test was published earlier in the year, so some of the things you mentioned would not have been considered. But indeed, what was considered is a severe shock being the growth of other countries. If you look to the scenario, you see that for the US, there is also a big deceleration of growth which is part of the scenario and also for other countries that are the markets of the euro area. So that is embedded in those assumptions of indeed a big drop in external demand directed to the euro area. That’s the first point. The scenario of deflation is not there because indeed we don’t consider that deflation is going to happen.

This post was published at Zero Hedge on 08/30/2015.

Blame the Federal Reserve, Not China, for Stock Market Crash

Following Monday’s historic stock market downturn, many politicians and so-called economic experts rushed to the microphones to explain why the market crashed and to propose “solutions’ to our economic woes. Not surprisingly, most of those commenting not only failed to give the right answers, they failed to ask the right questions.
Many blamed the crash on China’s recent currency devaluation. It is true that the crash was caused by a flawed monetary policy. However, the fault lies not with China’s central bank but with the US Federal Reserve. The Federal Reserve’s inflationary policies distort the economy, creating bubbles, which in turn create a booming stock market and the illusion of widespread prosperity. Inevitably, the bubble bursts, the market crashes, and the economy sinks into a recession.
An increasing number of politicians have acknowledged the flaws in our monetary system. Unfortunately, some members of Congress think the solution is to force the Fed to follow a ‘rules-based’ monetary policy. Forcing the Fed to ‘follow a rule’ does not change the fact that giving a secretive central bank the power to set interest rates is a recipe for economic chaos. Interest rates are the price of money, and, like all prices, they should be set by the market, not by a central bank and certainly not by Congress.
Instead of trying to ‘fix’ the Federal Reserve, Congress should start restoring a free-market monetary system. The first step is to pass the Audit the Fed legislation so the people can finally learn the full truth about the Fed. Congress should also pass legislation ensuring individuals can use alternative currencies free of government harassment.

This post was published at GoldSeek on Sunday, 30 August 2015.

Jackson Hole Post-Mortem: “Door Still Fully Open To September Lift Off”

Curious why the S&P futures have opened down some 0.6%, wiping out the entire late-Friday ramp? The reason is that as SocGen summarizes it best, following the Jackson Hole weekend, we now know that despite Bill Dudley’ platitudes “the door is still fully open to Fed liftoff in September.”
Here is how SocGen describes a Fed whose posture still hints at a September rate hike:
Jackson Hole vs Market Consensus Analysing the speeches and papers from Jackson Hole, we note several ‘gaps’ to the market consensus. Top of the list, Vice-chair Fischer struck a slightly less dovish tone suggesting that all options remain open with respect to a September liftoff. New research presented, moreover, showed that US inflation is less influenced by FX rates than some in markets fear. BoE Governor, for his part, played down the China slowdown noting this did not yet warrant a change to BoE strategy. Vice President Constancio also sounded confident in the ECB’s ability to close the output gap and raise inflation. More worrying, RBI Governor Rajan warned that central banks should not be overburdened and noted mispricing of certain assets. Also notable was the apparent lack of discussion on what tools central banks have left to fight new downside risks; and this at a time when one of the more effective QE channels of emerging economies’ leverage expansion has lost its punch. A topic perhaps for the 4-5 September G20 in Ankara.

This post was published at Zero Hedge on 08/30/2015 –.

Confirmation Bias in Markets

As markets churn in volatile fashion, investors see what they want in each move. In a sense, trading or investing, as much of life, is like a Rorschach test. You see what you want to see or what fits your experience. This tendency is known as confirmation bias. It is useful under ordinary conditions but dangerous when major changes and important turning points occur.
If markets went up last week most people believe they will go up this week. When this pattern has been reinforced over five years, the upside confirmation bias can be strong. When ‘buy the dips’ always rewards, you always buy the next dip. Similarly, most of the generation that went through the Great Depression never again had favorable views of the stock market.

This post was published at Economic Noise on August 30, 2015.

Black(er) Monday Looms: Dow Futures Down 220 After J-Hole Speeches & China Fold

It appears a combination of Stan Fischer’s ‘September is still on the table’ hawkishness (among others at Jackson Hole) and the “promise” once again that China will not intervene in the stock market anymore has taken all the exuberance out of last week’s epic short squeeze in US stocks. Dow futures have given all of Friday’s manipulation back and are trading back near Thursday’s JPM panic lows – down 220 from Friday’s close.

This post was published at Zero Hedge on 08/30/2015 –.

Did the Fed Trigger Another Stock Market Crash on Monday August 31?

As of this past Friday, August 28th, the Federal Reserve, the Plunger Protection Team (PPT for short), and the financial infomercial media had been screaming ‘Mission Accomplished’ as they helped to goose the Monday and Tuesday disaster into a gain for the week.
Unfortunately for the financial media and more of the cheerleaders, futures are down again as this article is being published.

This post was published at John Galt Fla on August 30, 2015.

What You Must Know About Fed Minutes And Emanations From Jackson’s Hole

This post is an excerpt from the Pro Trader and Monthly Investor MacroLiquidity report. Subscriber links are below the text.
The Fed’s FOMC meeting minutes are a key instrument of official propaganda on how the Fed wants you to view policy. I won’t waste your time with what the Fed staff and FOMC members reportedly said about the economy and markets as represented in the July meeting minutes. Events have a way of superseding whatever they wanted you to think 6 weeks before the release.
I guess they need the 6 weeks to continue the debate over what they want you to think they were thinking so that they can tinker with the language. If the Fed wanted to, it could release a transcript the next day. But that would be messy. It wouldn’t be proper propaganda at all. They need to massage the words so that the come out ‘just so.’ The minutes are designed to soothe you into thinking there’s no need to panic. All is well. The omnipotent Fed has everything under control. As the world goes crazy around you, you merely need to stay focused on the soothing words. ‘All is well. We know exactly what we are doing.’
It’s all so silly.

This post was published at Wall Street Examiner by Lee Adler ‘ August 30, 2015.

Policy Confusion Reigns As China Caps Muni Debt, Uncaps Bank Debt, And Bad Loans Soar

Last week, China moved to increase the quota for issuance under the country’s local government debt swap program to CNY3.2 trillion. The program, designed to help the country’s local governments crawl out from under a debt burden that amounts to more than 30% of GDP, allows provincial governments to issue bonds with yields that approximate the yield on central government debt and swap the new bonds for outstanding LGFV loans which generally carry higher interest rates. Generally speaking, the debt swap will save local governments somewhere in the neighborhood of 300 to 400 bps.
Of course, as we’ve detailed exhaustively, these types of deleveraging initiatives come at a cost for China. That is, with the economy slowing, there’s a certain degree to which China needs to re-leverage by attempting to boost credit growth and juice aggregate demand. That reality, plus the fact that the banks which made the initial loans to local governments weren’t keen to swap those high yielding assets for the new, lower yielding bonds, prompted the PBoC to implement what amounts to Chinese LTROs which allow the banks to pledge the new local government bonds for central bank cash which can then be re-lent to the real economy. So, in a nutshell, local governments issue new bonds, the bank swaps existing loans for those bonds, then the PBoC allows the bonds to be pledged as collateral for new cash. Ideally, this would be a win-win; that is, local government save billions in debt servicing costs and banks have fresh cash to make new loans.
The only problem is this: what happens when local governments need to borrow more money to finance things like infrastructure projects? That question prompted the PBoC to relax rules on LGVF financing, a move which hilariously negated the entire refi effort by encouraging local governments to turn to the very same high interest loans that got them into trouble and necessitated the debt swap program in the first place.

This post was published at Zero Hedge on 08/30/2015.

30/8/15: Migration & Changes in Irish Population: Working Age Population

In two previous posts, I looked at Irish migration and population changes data from the point of: – Top level analysis of migration and natural changes in population; and – Migration trends by nationality.
Continuing with analysis of population data from CSO released earlier this week, let’s take a look at the age composition of population.
In what follows, I define two key categories within our population:
Working age group – population aged 20 years through 64 years. This is an approximate definition, and I prefer it to including 15-20 year olds into it, primarily because it allows for more accurate reflection of numbers in full time education. There are many caveats applicable here, so take the approximation for what it is – indicative, rather than definitive. Non-working age population (rest of population). Again, that is not to say that younger students do not work (at least part-time) or that people beyond 65 years of age do not work. Some do. Majority do not. When many do work, they work less hours than is required to sustain independent living, so they still rely on either pensions or social transfers or family transfers or any permutations of the three to sustain themselves.

This post was published at True Economics on Sunday, August 30, 2015.

Markets Bottommed, Gold Wants Lower

Markets and stocks were turbulent the first half of the week seeing major overnight gaps so subscribers and I remained in cash waiting until Wednesday when I saw behaviour change.
I did a lot of buying Wednesday later in the day and even went into margin a bit, by accident.
So many buy alerts were being hit that I didn’t really notice quite how heavy I was but it is all working out so far.
It looks like the bottom is in but stops are in place in case not.
Gold backed off resistance as I talked about here last weekend and now is chopping around and forming a sharp little head and shoulders pattern which should take it lower.

This post was published at GoldSeek on Sunday, 30 August 2015.

Since 2014 Foreign Central Banks Have Withdrawn 246 Tons Of Gold From The NY Fed

First it was Germany who redeemed 120 tons of physical gold in 2014; then it was the Netherlands who “secretly” redomiciled 122 tons of gold; then this past May, we learned that Austria would be the third “core” European nation to repatriate most of its offshore gold, held primarily in the Bank of England, redepositing it in Vienna and Switzerland.
In short, beginning in 2014 and continuing through today, the gold “bleeding “from the vault located 90 feet below street level at 33 Liberty Street (and which may or may not be connected by a tunnel to the JPM gold vault located just across the street at 1 Chase Manhattan Plaza) has continued. As the chart below shows, while central banks assure the population that there is nothing to worry about when it comes to paper money, and in fact it is the evil ISIS terrorists who plot and scheme to crush the benevolent Fed with their terroristy “gold dinars” and if not that then their made in Hollywood propaganda movies, they have been quietly pulling gold from the biggest centralized depository of global gold in the world: the New York Federal Reserve.
According to the latest just released monthly update of foreign official assets held in custody at the NY Fed, in July the total holdings of foreign earmarked, i.e., physical, gold declined to just over $8 billion when evaluated at the legacy “price” of $42.22 per ounce. In ton terms, this means that after declining below 6000 tons in January, for the first time since FDR’s infamous gold confiscation spree, the total physical gold held at the NY Fed dropped another 9.6 tons in July, down to 5,950 tons.
This is the lowest amount of gold held by the NY Fed in custody in decades, is the 18th consecutive month of flat or declining gold, and when added to previous outflows, amounts to 192 tons of gold withdrawn in the past 12 months, and a whopping 246 tons pulled since the start of 2014.

This post was published at Zero Hedge on 08/30/2015.