Chinese 'Dead Cat Bounce' Fades, "Hostile Sellers" Appear As Goldman Warns "Not Yet Fully Purged"


Amid the highest level Typhoon warnings, China's stock market continues to storm as only 49% of Chinese stocks are halted (down from 54%) as local analysts fear yesterday's bounce (just like last week's) was nothing but a dead cat bounce: "bounces like today prolong the timeframe to get that final bottom in place." For the 14th day in a row margin balances declined with the pace accelerating (down 10.9% yesterday alone) for a total over 36% decline so far. Seemingly on pain of death, someone is selling Chinese stocks as CSI-300 futures opened a mere 0.2% higher then sold off - no follow through for now. Goldman warned to expect another 30% decline margin balance and concludes, China "hasn't yet fully purged."

When The Going Gets Tough, The Feds Take Your Money

The time of deflationary confiscation is coming closer for the remaining Greek bank depositors. Those who kept their cash in safe deposit boxes at banks are out of luck too: the government has decreed they may not take it out. This is something one needs to keep in mind – if one wants to keep cash outside the banking system, one cannot leave it in a bank safe deposit box either. The government will confiscate it when push comes to shove and the banks need to be rescued.

Even The Economist Is Now Mocking Central Planning

Buying stocks "is buying the Chinese Dream," proclaimed a top brokerage after officials 'promised' a centrally-planned bull market for the on-the-verge-of-social-unrest-after-real-estate-collapse population... but instead they have lured them into a bear trap. Even The Economist sees the irony... as yet another centrally-planned market economy scars a generation of investors...

Free Trade Is Quantitative Easing For The Heroin Market

This all seems like good investment strategy: Convince everyone that "free trade" is good, take their jobs, make them desperate enough to become heroin addicts, and then take the last bit of their money by profiting from their drug-related healthcare expenses. For some reason, the average person always seems to come out on the wrong side of quantitative easing.

Chart Of The Day: Bulls Better Hope It's Different This Time

If earnings are the mother's milk of stock bull markets, then the endless supply of talking heads bloviating on the next leg of the stock market rally being driven by a post Q1 renaissance in earnings growth (ever ready to pull out their hockey-stick forecasts) may want to look away from the following chart...

A Union Divided: "More Europe" Means "More Germany"

The tense division in Europe's union are becoming increasingly evident. Between Greece's "no" vote, yesterday's EU Parliament outbursts, and today's German parliament commentary it is clear that, as Bloomberg reports, the centerpiece of Merkel’s cure for Europe - fiscal retrenchment - has catalyzed her in the eyes of many as despite her calm but firm entreaties, an economic bully. “The lesson of this crisis is more Europe, not less Europe,” Angela Merkel said in 2012 as the integrity of the region’s monetary union was threatened by financial instability, but many, like Greece, have come to understand "more Europe" means something different: "more Germany."

3 Things: Correction, Interest Rates & Oil Prices

While yesterday's suspension of trading on the New York Stock Exchange drew attention to the plunge in equity prices, the reality is that stocks have been in a correction since the all-time highs posted back in May. Of course, until yesterday's headlines, you may not have realized that the correction was in process as it has been "as slow as a turtle running in peanut butter."

Nobel Prize-Winning Economist Demands US Taxpayers "Show Humanity & Save Greece"

When the going gets tough, the taxed get going and that is what Nobel Prize winning economist Joseph Stiglitz thinks should happen. In a Time op-ed, Stiglitz warns (likely correctly) that if Greece continues with austerity, it would be depression without end; and so his solution is simple... "The U.S. was generous with Germany as we defeated it. Now, it is time for the U.S. to be generous with our friends in Greece in their time of need, as they have been crushed for the second time in a century by Germany, this time with the support of the troika." Strawman much?

Rick Santelli Unleashed: It's Not The Economy, Stupid - "The Central Planners Are In Control"

"China is not doing anything that the US has not already tried," exclaims Rick Santelli as he derides the 'entitlement' society that has reached the investor class. Whether it's US, Japan, Europe, or China, "the idea of trying to prop up returns in the equity market - admitted or not - is going on," Santelli notes, asking - after forcing every mom and pop out of savings and into investment, "if it doesn't turn out well... do they have a moral obligation to help out?" Simply put, he rages - drawing the chart of the year - "the central planners are in control... and I don't suspect they will give up the reins any time soon."

Greek "Compromise" Proposal Leaked, And There May Be A Problem

Moments ago MarketNews reported that during today's "marathon governmental meeting" in which Greek PM Alexis Tsipras sat down with his party to hammer out and complete the "compromise" Greek proposal to be sent to the Troika before midnight, the prime minister told his ministers that he was "ready for compromises," suggesting he was willing to clash with the ultra-left part his party, Syriza. So far so good, and perhaps indeed suggestive of a big step down. The problem emerges upon a closer read of the proposal, which is clearly not nearly "capitulatory" enough.

Nasdaq Gives Up All "China & Greece Are Fixed" Gains, Dow 500-Point Pump-&-Dump

Who could have seen that coming? A US equity rally on the basis of an entirely manipulated Chinese stock market rally overnight and hope for a last minute Greek deal (dashed by calls for a massive EUR80billion bailout which zee Germans will never give in to). The Dow just experienced a 500-point-pump-and-dump as this morning's exuberant TV anchors are suddenly silenced by the reality that China and Greece matter after all...

Are The EU And Asia Turning A Blind Eye To Russian Sanctions?

We previously questioned whether western sanctions imposed on Russia were being regularly breached by E.U. and Asian companies, noting that sanctions only work if all countries unite behind them. Now, only one year after being imposed, the sanctions are eroding as it seems that government and business policies are pulling in opposite directions. A U.S. State Dept. representative may have let the truth slip out recently when he noted, "if you tell us you’re going [to break a sanction], we’ll probably order you not to, but if you go and don’t tell us, we’ll probably do nothing."