Archive - Aug 12, 2015 - Story

Guess who was responsible for Wednesday's magical levitation that allowed U.S. stocks to stage the biggest turnaround in three years? 

The "one-off" adjustment has now reached its 3rd day as The PBOC has now devalued the Yuan fix by 4.65% back to July 2011 lows.

PBOC tries to reassure: *CHINA PBOC SAYS YUAN REMAINS STRONG CURRENCY IN LONG-TERM

You know it's bad when... Throughout the world, the U.S. prison system is often seen as inhumane and excessively large.

With China already stoking fears in The South China Sea (and now entering the currency war) and Japan re-militarizing (and having led the currency war for years) it appears tension within Asian nations is escalating. The latest egregious example of these tensions is evident, as Reuters reports, an 80-year old South Korean set himself on fire on Wednesday during a protest calling for Japan to apologize for forcing Korean girls and women to work in military brothels during World War Two, days ahead of the anniversary of the end of hostilities.

A week before The EPA disastrously leaked millions of gallons of toxic waste into The Animas River in Colorado, this letter to the editor was published in The Silverton Standard & The Miner local newspaper, authored by a retired geologist detailing verbatim, how EPA would foul the Animas River on purpose in order to secure superfund money...

The problem for Clinton may be particularly damaging. Every email sent within the State Department’s own systems contains a classification; an employee technically cannot hit “send” without one being applied. Just because Clinton chose to use her own hardware does not relieve her or her staff of this requirement. Some may say even if Clinton committed security violations, there is no evidence the material got into the wrong hands – no blood, no foul. Legally that is irrelevant. Failing to safeguard information is the issue.

On October 24, 2014, the 19-year old son of a wealthy Swiss businessman walked into a brothel in the Bavarian town of Augsburg. Although by almost any standard he led a rather splendid existence, on this particular night he had reached his breaking point. The problem: he drove a 2011 Ferrari 458 Italia.

Despite the firm's rather checkered history when it comes to open source software, Goldman is reportedly set to make some of its technology available to clients. This new, enlightened stance comes six years after the bank accused a former employee of stealing code that, if it fell into the "wrong" hands, had the potential to "manipulate markets in unfair ways."

In some ways the question is not whether the renminbi is competitive or uncompetitive. The problem is that the renminbi is unambiguously less competitive than it was. This comes at a time when the Chinese economy is struggling and the stock market bubble is bursting. To all but the most PollyAnna’ish of observers that means this is the start of a major renminbi devaluation forcing the US to import even more of the world’s unwanted deflation.... Prepare for sub-1% 10y Treasury yields and another financial crisis as policy impotence is soon revealed to all.

Despite 2 significant interventions to stall what is likely an avalanche of wrong-way carry trade unwinds (or perhaps to stop the boat swinging to the other side too much), offshore Yuan has continued to depreciate since China closed and now implies another 1% devaluation is looming (having been up to a 2.6% discount earlier in the day).

We all know how sectarian, religious and political differences have thrown many Middle Eastern countries into chaos and armed conflict. But there is a deeper factor at play which deserves greater recognition: severe water scarcity.

Retail money tends to chase returns, resulting in a "positive" rather than a "negative" feedback loop, where mean reversion simply falls by the wayside.

China’s central bank has taken global markets by surprise with a historic shift in its management of the yuan. As Bloomberg's Tom Orlik notes, The PBOC also signaled that going forward it would adopt a more hands-off approach to the exchange rate. Given the current direction of market pressure, that likely means depreciation. The yuan has already fallen to 6.3858 at the close of trading on Wednesday afternoon, from 6.2097 at Monday's close — a level last seen in the summer of 2012. In this chart, we map out the history of moves in the yuan in the decade since the PBOC broke the dollar peg in 2005... and all the rhetoric that will now be undone...

As we hurtle toward the absolutely critical months of September and October, the unraveling of the global financial system is beginning to accelerate.