China Housing Bubble Bursts: Q3 Land Sales Crater 50%

China may be doing everything in its power to divert attention from the simple fact that its housing bubble, the largest in the world in terms of both assets comprising it as well as divergence from fair value, has burst. But while there is no clear threshold of what constitutes a bursting bubble when it comes to housing, the latest data out of Soufun, China’s largest real-estate website, which said that land sales have dropped a massive 22% to 1.7 trillion Yuan in 2014 so far, is likely as clear an indication as any that Beijing is about to panic.

This post was published at Zero Hedge on 09/29/2014.

Hong Kong Stocks Tumble Erase 2014 Gains, Volatility Soars As Protests Freeze City: Full Summary

The Hong Kong protests, which we covered over the weekend, and which took a dramatic turn for the worse overnight when thousands of students camped out and demand universal suffrage on the city streets and were in turn tear-gassed and arresteden masse by the local riot police demanding students disperse or else, and where the leader of the student protest, Joshua Wong – who had been previously arrested and was released on Sunday night – has openly called for the resignation of Hong Kong Chief Executive Leung Chun-ying in an interview with Hong Kong Cable TV, have done the unthinkable: they have impacted financial markets and the “wealth effect” transmission mechanism of the local billionaires.
Here as a summary of the latest market activity via Bloomberg:
Hang Seng Index declines 2.25% after falling as much as 2.5%, most since Feb. 4; erases YTD gains MSCI Hong Kong Index drops as much as 3.2%, most since Nov. 2011 HSI Volatility Index surges as much as 27%, most since Aug. 2011 HKD weakens as much as 0.09% against USD to HK$7.7648, most since Dec. 2011 Hong Kong 1-yr rate swap rises 3 bps, most since June 2013 Chinese Yuan falls 0.24%, most since March 20, to 6.1415 per dollar. Yuan 12-mo. forwards drop 0.25% to 6.2596 per dollar after falling by as much as 0.34%, most since March 12 Fitch says events in past 24 hrs won’t significantly affect ratings; says unlikely that protests will be on wide enough scale and last long enough to have material effect on H. K.’s economy and financial stability: Fitch’s Colquhoun

This post was published at Zero Hedge on 09/29/2014.

I speak, therefore, I think, therefore I am

I don’t always write from my expertise on this blog, but usually, I write from the heart, sharing experiences, questioning my own beliefs, and proposing solutions that I apply to my own life. This is one of those days, mostly. I conduct this public introspection because I know that many of you are grappling with similar issues. Many others have already found their way through and have much to share. We desperately need those perspectives here in our community.
Last Friday I was immersed in a busy day of university meetings and essay grading. I did not know we dropped down through key levels until I looked at the blog after the close. But the entire day I had a feeling that something was wrong. I attributed it to the Scots (my people) voting to stay in the commonwealth and especially the story about the British move away from US T-bills.
The dollar is being ushered off the international stage, kicking and screaming, threatening retaliation, war, and disaster for all. Now we read that Kenneth Austin, a Treasury Department economist [thank you Dan] called for the end of dollar reserve status, and China is parking a destroyer in an Iranian port, a stone’s throw from American protected ports across the gulf. As they build a petro-yuan system we see the world is changing! Perhaps the US is cooperating behind the curtain?

This post was published at TF Metals Report on September 23, 2014.

Gold Investors Weekly Review – September 19th

In his weekly market review, Frank Holmes of the nicely summarizes for gold investors this week’s strengths, weaknesses, opportunities and threats in the gold market. Gold closed the week at $1,216.98 down $12.76 per ounce (-1.04%). Gold stocks, as measured by the NYSE Arca Gold Miners Index, fell 5.44%. The U. S. Trade-Weighted Dollar Index rose 0.63% for the week.
Gold Market Strengths China officially opened the Shanghai Free Gold Exchange on Thursday. By giving foreign investors direct access to its gold market for the first time, China is seeking to obtain more influence over prices while simultaneously boosting the global use of its currency, the yuan. In addition to the deregulation of the gold market in Shanghai, Hong Kong’s Chinese Gold and Silver Exchange Society was given permission to set up a precious metals vault in Shenzhen this week. The continued deregulation of the gold market by the world’s largest consumer is a huge boost to the precious metal.
In the first eight months of this year, Shanghai imported $15.98 billion of gold, a staggering indicator of demand in China. Furthermore, last Thursday, two tonnes of gold was imported into Shanghai, indicating that gold imports into the city are not slowing down.
China is planning on boosting its gold reserves. The country’s reserves, a mere 1.1 percent of total reserves, have plenty of room to grow if when compared to nations such as the United States and Germany, which hold roughly 70 percent of their reserves as gold. The increase in gold demand from Chinese central bank purchases should place upward pressure on gold prices.

This post was published at GoldSilverWorlds on September 21, 2014.

People’s Bank of China pumping 500bn yuan through SLF to top 5 banks reports that the PBOC will use their Standard Lending Facility to add 500bn in liquidity.
Not sure what to make of this news on the face of it as they have been drawing liquidity out of the system, but nothing around this size.
Update: is citing a banking analysist Qui Guanhua whi says they will be providing 100bn yuan to each bank today and tomorrow with a 3 month duration.
It looks like a short term pump rather than anything more worrying but we’ll keep an eye on it.

This post was published at Forex Live

China to Launch Its International Gold Trading Platform This Thursday

On Sept. 17, the Shanghai Gold Exchange (SGE) announced they were accelerating their launch date for opening a new gold window, with the precious metal platform set to begin buying, selling, and trading gold in the Yuan currency on Sept. 18 instead of on their originally projected start date of Sept. 29.
What makes the SGE unique is that unlike the U. S. controlled Comex, the Chinese equivalent will reside in an international free trade zone and offer customers assurances of protected and secure transactions made without the threat of price manipulation, and with the guarantee of physical delivery.
Forty members of the Exchange including global banks UBS, Goldman Sachs, HSBC and Standard Chartered, will participate in gold trading on the SGE’s international board, trading 11 Yuan denominated physical gold contracts including the large 12.5 kg (400 oz) bar, the ever popular 1 kg bar and a 100 gram contract.

This post was published at Gold Broker on Sep 17, 2014.

Russia Central Bank Responds To Domestic Dollar Shortage, Starts Currency Swaps

With the Ruble hitting record lows once again today against the USDollar, it appears concerns over USD liquidity are growing in Russia. The Russian central bank has unveiled an FX swap operation, allowing firms to borrow dollars in exchange for Rubles for a duration of 1 day (at a cost of 7%p.a.). Of course, this squeeze on USD funding – driven by Western sanctions – will, instead of isolating Russia, force Russian companies (finding USD transactions prohibitively expensive) into the CNY-axis, thus further strengthening the Yuanification of world trade and the ultimate demise of the USD as reserve currency.

This post was published at Zero Hedge on 09/16/2014.

China Launches CNY500 Billion In “Stealth QE”

It has been a while since the PBOC engaged in some “targeted” QE. So clearly following the biggest drop in the Shanghai Composite in 6 months after some abysmal Chinese economic and flow data in the past several days, it’s time for some more. From Bloomberg:
CHINA’S PBOC STARTS 500B YUAN SLF TODAY, SINA. COM SAYS PBOC PROVIDES 500B YUAN LIQUIDITY TO CHINA’S TOP 5 BANKS: SINA Confused what the SLF is? Here is a reminder, from our February coverage of this “stealth QE” instrument.
* * *
The topic of China’s inevitable financial crisis, and the open question of how it will subsequently bail out its banks is quite pertinent in a world in which Moral Hazard is the only play left. Conveniently, in his latest letter to clients, 13D’s Kiril Sokoloff has this to say:
Will the PBOC’s Short-term Lending Facility (SLF) evolve into China’s version of QE?While investor attention has been fixated on China’s deteriorating PMI reports and fears of a widening credit crisis, China’s central bank is operating behind the scenes to prevent a wide-scale financial panic. On Monday, January 20th, 2014, when the Shanghai Composite Index (SHCOMP, CNY 2,033) fell below 2,000 on its way to a six-month low and interest rates jumped, the central bank intervened by adding over 255 billion yuan ($42 billion) to the financial system. In addition to a regular 75 billion yuan of 7-day reverse repos, the central bank provided supplemental liquidity amounting to 180 billion yuan of 21-day reverse repos, which was seen as an obvious attempt to alleviate liquidity shortages during the Chinese New Year. However, it is worth noting that this was the PBOC’s first use of 21-day contracts since 2005, according to Bloomberg. Small and medium-sized banks were major beneficiaries of this SLF, as the PBOC allowed such institutions in ten provinces to tap its SLF for the first time on a trial basis. A 120 billion yuan quota has been set aside for the trial SLF, according to two local traders.

This post was published at Zero Hedge on 09/16/2014.

The Collapse Of U.S. Silver Stocks As Public Debt Skyrockets

The U. S. Empire is in real trouble. This is due to its idiotic business model of selling quality assets while acquiring massive liabilities and debts. Of course, the U. S. Government realizes this is not a sustainable way to do business, but at least for now…. we continue to have our Bread & Circuses, McDonalds & NFL Football for a bit longer.
Furthermore, Americans have no clue that the U. S. Dollar’s world reserve currency status continues to disintegrate each passing day as more countries elect to by-pass the Dollar and trade in other currencies… especially the Chinese Yuan.
The Total Liquidation of U. S. Silver Stocks One such asset the U. S. Government totally liquidated is its massive stocks of silver. In 1940, the U. S. Treasury held 3,135,000,000 oz of silver. That’s correct, 3.1 billion ounces. That is nearly four times the current annual world mine supply of 820 million oz.
This figure is documented on page 64 in the USGS 1940 Gold-Silver Minerals Yearbook:

This post was published at SRSrocco Report on September 15, 2014.

UK And France Moving To The Next Reserve Currency The Chinese Yuan – Episode 467

The following video was published by X22Report on Sep 15, 2014
Retail sales are declining and many of the big retailers are in big trouble. The sub prime auto bubble is about to burst. Manufacturing is now declining. China announce a yuan clearing house with France and the UK will be issuing yuan denominated bonds in preparation for the yuan to be the world reserve currency. FBI facial recognition online. IMF in talks with West African nations to bail them out. Yemeni tribes cut off talks with government. Libyan tribes say they were hit but unidentified planes. Russia wants to help with the fight against terrorism. President Obama says if Syria strikes a US plane he will attack Syria. Reports the Yemen terrorist organizations are planning a terror attack on the US.

UK Hints At Next Reserve Currency, To Issue Chinese Yuan-Denominated Bond

Yuanification continues around the world. As The USA attempts to corral its allies in a ‘broad coalition’, an increasing number of people – including domestic economic policy advisors – are shifting away from the USD as primary reserve currency. However, the move by British Chancellor of the Exchequer George Osborne, announced Friday, is likely the most notable yet in the world’s de-dollarization. As Xinhua reports, the British government intend to be the first nation (ex-China) to issue Renminbi denominated bond and to use the proceeds to finance the government’s reserves of foreign currency. Osborne described this dialogue outcome as “a historic moment” and a statement of British confidence in the potential of the RMB to become “the main global reserves currency”.
As Xinhua reports,

This post was published at Zero Hedge on 09/15/2014.

Russia & China Looking To Conduct Half Of Their Trade In Yuans And Roubles – Episode 463

The following video was published by X22Report on Sep 9, 2014
McDonald’s sales have been declining since December 2013. World bank warns we are in a global job crisis. Scotland could ask for its share of gold from the UK. Russia and China are pushing the de-dollarization by conducting half of their trade in the yuan or rouble. MH17 report is out and it says the plane was hit with high energy projectiles, bullets. Who did it is not in the report. Wiki-leaks reports that the Ukraine crisis was scripted back in 2008. French are making the case to invade Libya. The US is getting 40 plus countries together to form a coalition to invade Syria. The Islamic State terror threat is being pushed for the next event. This will be an inside job and will cover up the economic collapse.

China Hits ‘Inflow’ Panic Button- Strengthens Yuan Fixing By Most In 4 Years

The PBOC strengthened the CNY fixing by over 0.3% today – its biggest fixing move since June 2010 as the Yuan strengthens to 6-month highs against the USD. This seeming ‘panic’ move comes on the heels of last night’s record trade surplus – which as Goldman notes – was likely dominated by FX inflows thanks to over-invoicing. It is unclear the reasoning for the move in the CNY fixing but one wonders if, with industrial commodities continuing to plunge (CCFD collateral value dropping) and now PMIs rolling over, if further over-invoicing is being anticipated as cover for a notable slowdown in growth. One thing is clear – after today’s surge in the USD and decoupling with US stocks, something is changing.

This post was published at Zero Hedge on 09/08/2014.

The Silent Death Of The U.S. Dollar

To begin, I would like put forth the observation that the U. S. Government has become particularly belligerent militarily toward the rest of the world. Anyone who thinks the U. S. is not provoking Russia and China all over the globe has their head in the sand or is incapable of looking at the facts outside of the tragically skewed propaganda coming from Washington, DC that is being funneled through the U. S. media pipeline.
The reason the U. S. is trying to stir up global military chaos is simple, the U. S. dollar is being systematically removed from its reserve status. The latest evidence of this is the news report yesterday that China and Argentina are going to begin trading in their respective currencies, with trade settlement in yuan – NOT dollars: News Link. Please note this news is not being reported by the U. S. mainstream financial media.

This post was published at Investment Research Dynamics on September 8, 2014.

De-Dollarization Continues: China-Argentina Agree Currency Swap, Will Trade In Yuan

It appears there is another nation on planet Earth that is becoming isolated. One by one, Russia and China appear to be finding allies willing to ‘de-dollarize’; and the latest to join this trend is serial-defaulter Argentina. As Reuters reports, China and Argentina’s central banks have agreed a multi-billion dollar currency swap operation “to bolster Argentina’s foreign reserves” or “pay for Chinese imports with Yuan,” as Argentina’s USD reserves dwindle. In addition, Argentina claims China supports the nation’s plans in the defaulted bondholder dispute.
Having met ‘on the sidelines’ in Basel, Switzerland in July, Argentine and Chinese central banks agreed to a currency swap equivalent to $11b that Cabinet Chief Jorge Capitanich said could be used to stabilize reserves.. (as Reuters reports)
Argentina, which defaulted on its debt in July, will receive the first tranche of a multi-billion dollar currency swap operation with China’s central bank before the end of this year, the South American country’s La Nacion newspaper reported on Sunday.

This post was published at Zero Hedge on 09/07/2014.

Financial system looking for a crisis to take the blame for global debt defaults

As time passes and the world becomes more chaotic — and poor, with the exception of the uber-wealthy, whose income and worth just keeps rising no matter what happens around the globe — more and more financial experts and economic analysts have become uber-pessimistic, especially about the financial future for the debt-ridden United States. You can add financial analyst and writer Bill Holter to that list. In a recent interview with Greg Hunter’s USA Watchdog, Holter says he believes that the elite power brokers in the U. S. and around the world are well aware of the fragile nature of the economic system and are set to play a major blame game when — and he says when – the coming crash hits.“I believe that they know the financial system is upside down and there is no bringing it back, so they do need to have something to point at,” he told Hunter. “It could be a war with Russia. We are trying as hard as we can to create a war, and it looks like Russia, and Mr. Putin, is trying as hard as he can [to not] have a war.”Holter continued: “There could be any number of things to point at. It could an Ebola virus outbreak. It could be the Saudi Arabians accepting euros, gold, rubles, yuan, what have you. It could be anything. There are dozens of topics.”

This post was published at Natural News on Saturday, September 06, 2014.

Eurobonds – the Coming Federalization of Europe

Europe will move to Eurobonds for now Brussels gets it – if the euro fails, they lose their jobs in Brussels. Individual government bond issues have prevented the Euro from becoming a major currency and it now trails even the Chinese Yuan in trade. Nonetheless, some are trying to argue such as the German bank co-chief Anshu Jain that he naively claims that maintaining separate debts for each country is strangely an important disciplining effect for debt reduction. The problem with his view – government do not pay back debt and that includes Germany as is the case with the USA. Where is the discipline?
The Eurobonds are coming when the ECM turns down from 2015.75 and this will be seen as the great solution…

This post was published at Armstrong Economics on September 3, 2014.

The Sky Is Falling on Chinese Corporations

The four largest banks in China, the banks that have to officially show big profits and profit growth no matter what because they’re an integral part not only of the government but also of China’s miraculous debt-driven expansion, are showing officially tolerated signs of increasing stress. For perspective, in 2009, following the Lehman moment, as other banks were collapsing and were bailed out, the profits of these four banks grew even then, if only by a combined 2.9%.
These four mastodons – Industrial & Commercial Bank of China, China Construction Bank, Agricultural Bank of China, and Bank of China – admitted to 384.7 billion yuan ($62.6 billion) of bad loans on their book at the end of June, a 13.2% jump from just six months earlier. The jump in bad loans ranged from 11% at Agricultural Bank of China to 17% at Bank of China.
If we suspend our disbelief in Chinese numbers, bank numbers in general, and Chinese bank numbers in particular, for a very brief moment and accept them temporarily as if these bad-loan numbers were actually something close to reality, rather than something ludicrously beautified, they would amount to about 1% of total lending by these banks. And it’s gnawing at their profits: their relentless state-mandated rise slowed to 9.6% over prior year.

This post was published at Wolf Street by Wolf Richter ‘ September 2, 2014.

USDJPY (And Nikkei) Surge Higher as Japanese Car Sales Collapse To 3-Year Lows

And for tonight’s menu of disastrous Japanese economic data, we have (drum roll please)… Auto sales. Overall auto sales fell 9.1% YoY to 333,471 – the lowest in 3 years. Minicars dropped a stunning 15.1% YoY according to the Japanese auto dealers association. The response – rather obvious by now – to this terrible news… a 35 pip vertial ramp in USDJPY which can mean only one thing – the Nikkei 225 rallied 150 points… On a side note, following disappointing PMIs, China fixed the Yuan at 4-month lows.

This post was published at Zero Hedge on 09/01/2014.