The Great China Ponzi - An Economic And Financial Trainwreck Which Will Rattle The World

There is an economic and financial trainwreck rumbling through the world economy. Namely, the Great China Ponzi. In all of economic history there has never been anything like it. It is only a matter of time before it ends in a spectacular collapse, leaving the global financial bubble of the last two decades in shambles. The resulting deflationary spiral will suck the global economy into its vortex. And Wall Street will go down for the count because this time the Fed will be utterly powerless to reverse the tide.

Stock Buybacks In Jeopardy: High Grade Bond Funds Suffer Biggest Outflow In Over Two Years

It is what happened in investment grade fund flows in the latest week that is making CEO, especially those whose compensation is a direct function of how much stock they repurchase, very nervous because as Lipper reported overnight IG funds just saw $1.8 billion in outflows, the most in over two years or since June 2013. And without the fund inflow train into IG funds operating smoothly, suddenly stock buybacks appear in jeopardy...

Clinton E-Mails Reveal "Top Secret Drone Talk" As She Hands Over "Blank" Server To Feds

Government officials with a security clearance are expected to exercise good judgement when it comes to their handling of potentially sensitive material irrespective of whether it’s officially marked as classified. Clinton apparently did not do so and now, it appears that some of the information contained in two flagged e-mails might have been related to "top secret" drone activity. Meanwhile, the server the Democratic frontrunner turned over to the FBI turns out be "blank."

Gold & Silver Suddenly Slammed As Dollar Surges

Around 1030ET, The US Dollar suddenly went bid, driving broad-based commodity weakness. Silver had been creeping higher all morning but it appears someone wanted to keep it below its 50-day moving average and has thrown 1000s of contracts short at it, slamming the precious metal to the lows of the day... Gold also saw a sudden heavy volume monkey-hammering...

 

Voting With Your Feet

When do we finally accept the hopelessness of reforming a self-serving machine bent on destruction?

Gold Jumps After China Reveals It Bought Another 19 Tons In July

Putting what China has just done in very simple context: China announces an increase in its gold holdings of over 58% (June and July)... and then it devalues its currency by nearly 5% in one week. Even the most brainwashed Keynesians should be able to see what is going on here by now.

UMich Consumer Sentiment Slips As Business Expectations Collapse To 11-Month Lows

It appears the US Consumer is losing faith. August preliminary UMich Consumer Sentiment slipped from July's 93.1 and missed expectations. This is the 2nd weakest print since November. Longer-term inflation expectations fell back to 2.7% and expectations for household income growth slipped to just 1.6%, but the collapse in business expectations to 11-month lows is the most crucial aspect.

Martin Armstrong Warns: "Everything Is Connected"

Whatever action we take has a consequence. It is impossible to manipulate markets and the economy for there will always be unintended collateral damage. We are living in the era that will bring about a collapse of socialism precisely as took place in communism. Government is incapable of ever managing society for they cannot escape the inter-connectivity.

Industrial Production Rises Most Since November After Significant Downward Revisions

Thanks to some considerable negative downward revisions, Industrial Production In July rose 0.6% (double expectations of a 0.3% rise) - the biggest MoM rise since November. However, year-over-year IP growth is flat at 1.3% - hovering at its weakest since the last recession. We previously noted the surge in auto inventories-to-sales (Motor Vehicle IP rose 10.6% MoM), which likely spurred this false dawn in IP, however, it is the rise in oil drilling - the first time since September - that raises an eyebrow as entirely unsustainable amid collapsing prices.

Flash Crash Alert: Navinder Sarao Granted Bail, To Leave Prison Today

Earlier today, one of the biggest farces of 2015 was remedied when a UK judge granted Sarao a bail reduction from £5m to £50,000 and was allowed to leave prison as soon as today. As profiled before, Sarao had been at the infamous Wandsworth prison - Britain's worst - since his arrest. As the FT reports, at a court hearing at Westminster Magistrates Court in London today, a lawyer for the US said he would not oppose the bail reduction.

Producer Prices Rise More Than Expected; Rent Increases Trump Energy Drag

Across the board, Producer Prices printed hotter than expected. PPI ex food and energy rose 0.3% MoM - the biggest jump since November, however, Final Demand PPI YoY remains negative for the 7th month in a row. Most notably, over 40% of the July increase in the index for final demand services is attributable to prices for guestroom rental, which jumped 9.9%. The bottom line - there is enough here for the doves and the hawks, though the headline data definitely gives The Fed ammo to hike in September.

Malaysia Meltdown: Asian Currency Crisis 2.0 Sends Ringgit, Stocks, Bonds Crashing

When China went the "nuclear" devaluation route earlier this week, everyone knew things were about to get a whole lot worse for an EM currency basket that was already reeling from plunging commodity prices, slumping Chinese demand, and the threat of an imminent Fed hike. With some Asian currencies already falling to levels last seen 17 years ago, some analysts fear that an Asian Financial Crisis 2.0 may be just around the corner. That rather dire prediction may have been validated on Friday when Malaysia’s ringgit registered its largest one-day loss in almost two decades, as stocks plunged and bond yields rose.

China Scrambles To Hide Toxic Fallout Of Tianjin Chemical Explosion

China "can't determine" what chemicals were warehoused in an industrial zone that exploded on Wednesday, leading local residents to question whether the air is safe to breathe. Meanwhile, Greenpeace suggests a hard rain risks driving air borne pollutants into the groundwater even as Beijing swears there's no evidece of chemicals in seawater.

Stock Futures Lower Despite Overnight Calm In Ongoing Currency Wars

After a week of relentless FX volatility, spilling over out of China and into all other countries, and asset products, it was as if the market decided to take a time-out overnight, assisted by the PBOC which after three days of record devaluations finally revalued the Yuan stronger fractionally by 0.05% to 6.3975. And then, as a parting gift perhaps, just as the market was about to close again, the Chinese central bank intervened sending the Onshore Yuan, spiking to a level of 6.3912 as of this writing, notably stronger than the official fixing for the second day in a row. In fact the biggest news out of China overnight is that contrary to expectations, the PBOC once again "added" to its gold holdings, boosting its official gold by 610,000 ounces, or 19 tons, to 1,677 tones.

European GDP Unexpectedly Disappoints As All "Big Three" Economies Miss Expectations

Define irony: in a quarter in which Greece was supposed to have been near death (at least according to the worst PMI print in history and of course, judging by the bank lines in front of the capital controlled institutions), yesterday we learned that Greek GDP surged relative to expectations rising by 0.8%, which was what analysts had expected but with a minus sign in front of it. Then overnight, we got the rest of European GDP, including the big three: Germany, France and Italy. The results were nothing short of a big disappointment. At the Euroarea level, the result was also a big negative surprise with Q3 GDP rising 0.3%, down from 0.4%, and below expectations. This was the worst GDP print since Q3 2014.

Greek Parliament Approves Third Bailout As Tsipras Support Tumbles, Snap Elections Imminent

Moments ago the Greek parliament, after a dramatic, most likely on purpose, overnight session - because when you are a puppet government of Belgium/Brussels you have to put in extra effort to prove you are "independent" - gave its approval for the third Greek bailout when Tsipras secured votes of more than 151 lawmakers in country’s 300-seat parliament. As on previous cases, the vote passed with substantial opposition support. In terms of numbers, the rebel faction within Syriza is now up to 42, with 43 being seen as the threshold beyond which Tsipras has no choice but to call elections. In other words the Tsipras government now hangs in the fate of just one person.