Archive - Jun 24, 2013 - Story

From Caijing, google translated. We hope the gist of the narrative in Mandarin is far less scary, because if the translation is even remotely accurate, then all hell may be about to break loose in China: "This morning, the Bank of China Bank moratorium on transfers, online banking, counters are inoperable... Customer service said, now silver futures transfer service has been fully suspended, online banking, the counter can not be handled, and now has the background system response, recovery time is not yet known."

Uncle Warren appears unhappy with the humiliating can of whoop-ass Hong Kong unleashed on his favorite crony banana republic. So he has retaliated in the only way he knows: Moody's.

• HONG KONG BANKING SYSTEM OUTLOOK REVISED TO NEGATIVE BY MOODY'S
• MOODY'S CITES CONCERNS ON PERSISTENT NEG REAL INTEREST RATES
• MOODY'S CITES POTENTIAL HK 'PROPERTY BUBBLES' - this one is really good.

But the best reason is:

• MOODY'S CITES HK BANKS' GROWING EXPOSURES TO MAINLAND CHINA

Yup. Moody's just figured out Hong Kong has exposure to... China. Of course, Hong Kong's downgrade of US foreign policy to laughably pathetic, outlook hilarious on Sunday, was a complete coincidence.

Is headed for the moon... in yield terms that is. Because if Bernanke's hope was that the handoff from buyers to sellers would be a smooth one, he may want to conference in Kuroda and get some advice on what happens when the bond market is halted limit down.Good thing Bernanke is not a real hedge fund, or else the $35 billion intraday P&L crash (so far), and $250 billion in the past two months, may raise a few eyebrows.

To all the dozens of journos who bought tickets on Aeroflot's flight from Moscow to Havana just so they can instagram Snowden sitting in 17A using countless creative photofilters, we hope said purchase was refundable, because the plane took off and the famous NSA whistleblower was not on it.

• Stocks Fall With China in Bear Market as Bonds Decline (BBG)
• Russia defiant as U.S. raises pressure over Snowden (Reuters) ...
• and sure enough: Kerry Warns Hong Kong and Russia on Snowden  (WSJ)
• Slow-Motion U.S. Recovery Searches for Second Gear (WSJ)
• PBOC Sees ‘Reasonable’ Liquidity in China’s Financial System (BBG)
• Italy's Berlusconi faces verdict in underage sex trial (Reuters)
• Fed Monetary Course Difficult for a Bernanke Successor to Alter (BBG)
• Another China central bank worry; companies push into lending (Reuters)
• Gold Miner Writedowns at $17 Billion After Newcrest Fallout (BBG)
• Snowden Faces Often-Posed U.S. Fugitive Question: Where to Run? (BBG)

Lots of sellside squeals this morning following the epic bloodbath in China, where in addition to what we already covered hours ago, has seen at least five companies  (China Development Bank, Shanghai ShenTong Metro, China Three Gorges Corp., Doosan Infracore China Co. and Chongqing Shipping Construction Development) delay or cancel bond offerings as the PBOC's admission of capital "misallocation" is slowly but surely freezing both bond and stock markets. And while the plunge was contained first to China, then to Asia, then to Europe (where the Spanish 10 Year once again surpassed 5% as expected following the carry trade unwind), with the arrival of bleary-eyed US traders the contagion is finally coming home. In a redux of last week, 10 Year yields are shooting up, hitting as high as 2.63% a few hours ago, while equity futures are now at the lows of the session. It could turn very ugly, very fast, especially if the Hamptons crowd were to actually read the stunning BIS annual report released on Sunday, which not even Hilsenrath explaining "what the BIS really meant" will do much to change the fact that the days of monetary Koolaid are ending.

In keeping with its firm Christian values, after Hong Kong slapped the US on one cheek yesterday when it allowed a passportless Snowden to leave the country for Moscow, the US has now turned the other cheek. And RUssia's Vladimir Putin was happy to oblige with a perfectly placed uppercut. As the WSJ reports, the Kremlin said Monday that it won't intervene in the case of former U.S. government contractor Edward Snowden and that Russia had no advance knowledge of his arrival from Hong Kong on Sunday. President Vladimir Putin's spokesman Dmitry Peskov said that a decision about holding Mr. Snowden and sending him back to the U.S. to face charges wasn't a matter for the Kremlin."Snowden did nothing illegal in Russia. There are also no orders for his arrest through Interpol to Russian law enforcement agencies," an unnamed security official told the RIA-Novosti news agency." Of course, the NSA which is actively intercepting every Russian (and global) form of communication, knew all about this long ago...

The Shanghai Composite, which had largely been able to weather the recent dramatic shocks to both liquidity and the economy, finally threw in the towel and crashed. Moments ago the Shanghai Composite fell 5.5%, the biggest intraday slide since August 2009, and dropping below 2,000 for first time since December.