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China 7 Day Repo Rate Jumps To Highest Since Lehman Collapse
Following increasing concerns that China may finally realize that its repeated RRR hikes are insufficient and the PBoC will finally be forced to do the right thing and hike the general interest rate (or depeg the Yuan, but that ain't gonna happen), or otherwise withdraw liquidity, the 7 day Repo Rate has jumped to 3.58, the highest since October 2008, when there was no liquidity in the markets anywhere following the Lehman collapse. This merely indicates that obtaining liquidity in China, either directly or indirectly, is becoming increasingly more costly and problematic. But surely this news, together with the escalating riots in Athens, as well as the fact that gasoline prices this holiday season will be the highest on record, are not only priced in but in fact positive for the US stock market, which now responds to no negative news whatsoever, and jumps on the smallest hint that the latest fiscal and monetary stimulus is trickling through in the economy.
In the meantime, following news of a massive crude drawdown, to the tune of 9.854 million barrels, on expectations of 2.5 million, WTI is now off to the inflationary races as well.
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Wow, what a reversal in crude oil.
I'm watching DO, "the worst of the worst" of the energy stocks. Might be worth bottom fishing since that stock has a huge short interest.
And everybody and their brother has been shorting deep water drillers and buying land service companies.
That is much more prudent than buying retailer stocks.
But as I've said a lot this morning, political risk is a bitch. What are you going to do with your deep water drillers when they make deep water drilling illegal? Hence the large short interest.
Maybe the same as what Leo is doing with all his solar stocks...stitch them together and make a blanket?
Lol'
I don't think they can (ban) not with China,India coming on line also because of the Oil complex in Texas....
But if your right once that law/ban is passed they will get blowtorched.
But the time to buy is when you have questions, blood in the water... Look at the banks. BoA would have been a nice 2-3 week trade.
Pretend, extend, spend-spend-spend.
silver...physical.
China also announced it's raising taxes on rare metal exports...Blythe Masters just shit herself.
What are considered "rare" metals?
I thought China already didn't export any of its gold or silver? Taxing exports in that arena seems moot.
He meant Rare Earth Metals. The things that hybrid cars and expensive tech are made from. Think Neodymium magnets and stuff like that.
I believe China originally did a 100% ban on Rare earth metals and then decided to allow a small percent to be exported, but at a cost. And apparently, the cost is rising with taxes. And no, China is not exporting Silver or Gold. They are buying it up and telling their citizens to do the same.
Exactly, but since silver is an "industrial metal" as well as a currency, it will feel a coat-tail rise being it's in the basket.
TD- KARMA IS A BITCH- these frauds will have to face that soon.
CNBC whores just now gleeful at how the mortgage debaucle is now 'forgotten'...oh wow how convenient the 'elites' simply wont talk about the quadrillion mortgage derivatives meltdown, so it no longer exists! Is the mortgage nightmare 'forgotten' by all those with deep underwater homes and cant sell at hardly any price? Back to work, damn unwashed peasantry.
Should be great for bubble equity markets Im sure. All good news, back to work damn peasants.
Thank you Tyler,
I was wondering why oil futures suddenly and irrationally spiked. Front runners in mark up mode.
Sweet. Higher gas prices were starting to bum me out...along with everyone on the face of the planet.
The spike was due to an unexpected inventory decline that was just announced.
And yesterday the headlines were 'All is well, world awash in new OPEC production'.
'Unexpected'...lol
It will be QE to infinity unless China 'gives up the battle' and unhooks from the dollar and raises rates.
massive crude drawdown
Didn't I just read 2 days ago how OPEC's production was higher than expected and they will continue this trend for a while... (tanker storage???)
BDIY approaching 2,000 from above.
http://www.bloomberg.com/apps/quote?ticker=BDIY:IND
What? Well I didnt hear it on CNBC during what appears to be the National Collegiate Cheerleader competition...all is WELL and the latest cheerfest is about how the mortgage crisis and unmeasurable debt from it is 'gone'. Hooray!
Thx horseman,
I didnt realize the baltic index was on the fall again. Isn't that a pretty good indicator of the true economy due to the fact that transport=moving of goods. If goods are slowing down then the economy is probably slowing as well.
Theoretically, yes. However, I do believe BDIY is "priced" in dollars.
Tyler could we see a Bloomie chart of the Baltic Dry in gold and/or oil?
Would someone please ring me when all this actually matters, I'm going to nap a bit.
POMO sickology (sic) ...and like any delusional state it too will end in crisis.
POMO...LOL just over the last month Bens POMO purchases have lost $30 billion dollars? Why dont we see THAT headline come across the MSM? Too busy propagating their pumpfest.
You see NOTHING about POMO on the MSM.
The ECB has launched 2 educational games about inflation. "INFLATION ISLAND" shows how the economy and society can be affected by different inflation scenarios.
"€CONOMIA" challenges players to keep inflation low and stable by setting the key interest rate.
http://www.ecb.int/home/html/index.en.html haha...u can find these games here if interested..
Why would you raise rates when liquidity is drying up? What I see in China data is a slowing economy in the midst of asset price inflation. They need to depeg. Raising rates looks like suicide here.
reason for such a huge move??????