China has moved in the direction of direct intervention in its flagging equity markets, although it appears Beijing will try to orchestrate a “private” sector (whatever that means in China) solution first before going the nuclear route with the central bank’s balance sheet. As Bloomberg reports, the country’s largest brokerages are teaming up to invest nearly $20 billion in “blue chip” Chinese equities.
The Greece impasse set to culminate on Sunday continues to have a massive impact on at least one stock market, unfortunately it is the wrong one, located on a continent which is mostly irrelevant to the future of the Greek people (unless that whole AIIB bailout does take place of course). We are, of course, talking about China which as noted earlier, started off horribly, plunging over 7% with over 1000 stocks hitting 10% limit down, then in the afternoon session mysteriously recovering all losses and even trading slightly higher on the day, before the late selling returned once more, and the Shanghai Composite plunged to close down 5.8%: an unimaginable 20% total roundtrip move!
"The selling pressure so far has mainly come from stock-related borrowings via various unofficial channels where the leverage is much higher," BofAML says of the dramatic sell-off in Chinese equities. On Wednesday, the country's securities regulator moved to reassure markets as the unwind of hundreds of billions in leveraged trades threatens to collapse China's world-beating stock bubble.
In the race to get to the top what does it matter that we destroy the planet along the way?
At the open, Europe looked in the abyss, and with no help coming from China, it did not like what it saw: And then the answer came from the Swiss National Bank, which stepped in to prevent the collapse just as Europe was opening. Because seemingly out of nowhere, a tremendous bid came in to life the EURCHF, buying Euros (against the CHF and the USD) and selling Europe's last left safety currency. We now know that it was the SNB, the same central bank which is the proud owner of well over $1 billion in Apple stock.
The Fed's QE policies of recent years have, for all intents and purposes told the world that “the dollar is our currency and your problem.” And, in recent years, the dollar has been a genuine problem for a number of emerging countries. Following this traumatic event, and the change in the perception of US stability, China went around the world and invited the likes of Brazil, Indonesia, South Africa, Turkey and Korea to shift some of their China trade away from the dollar and into renminbi. China started doing this in 2011 and, as we see it, the renminbi’s attempt to become a trading currency is potentially one of the most important financial developments. Yet no-one seems to care.
- Chinese Stock Plunge Leaves State Media Speechless (BBG)
- China’s Market Selloff Accelerates (WSJ)
- Any Deal on New Greek Bailout Funds Put Off Until Weekend (WSJ)
- ECB keeps ELA funding limit for Greece unchanged for third day in a row (Reuters)
- Impoverished Greek City Stands With Alexis Tsipras (WSJ)
- Why It Won’t Be a Default If Greece Misses IMF Payment Next Week (BBG)
- Valeant Makes Takeover Approach to Zoetis (WSJ) - or how Ackman assures himself another good T+3 quarter
- Obamacare ruling puts Supreme Court on hot seat in U.S. presidential race (Reuters)
- This headline needs updating: Creditors set bailout ultimatum for defiant Greeks (Reuters)
- Greece’s Fragile Banks Leave Alexis Tsipras Few Options in Bailout Talks (WSJ)
- Dueling Greece Plans Presented as Ministers Race for Aid Deal (BBG)
- Icahn Cashes In His Netflix Chips (WSJ)
- Meet the Health-Law Holdouts: Americans Who Prefer to Go Uninsured (WSJ)
- ECB holds Athens lifeline unchanged as Bundesbank protests (Reuters)
- Supreme Court Guide: Six Big Decisions Remain (WSJ)
- The Rise of the Compliance Guru—and Banker Ire (BBG)
- We need a free market in currencies, not bail-ins and a war on cash and gold - People blindly trust “experts” so welcome that some of them giving prudent advice regarding diversification - Currencies of creditor nations – Norway, Switzerland, Singapore, Hong Kong will outperform in long term
- Greece Handed New Terms as Tsipras Approaches Decision Time (BBG)
- As U.S. Probes $12.7 Trillion Treasury Market, Trader Talk Is a Good Place to Start (BBG)
- Signs Swedish QE Backfiring as Liquidity Evaporates (BBG)
- ECB approves ELA funding requested by Greece- banking source (Reuters)
- Greek Millennials Can't Find Work But Actually Want to Keep the Euro (BBG)
- Greek deal or not, the euro is now a different beast (Reuters)
- Promoter’s Arrest Sheds Light on Cynk’s $6 Billion Surge (BBG)
- The World's Biggest Economies Are About to Feel the Impact of China's Slowdown (BBG)
- Senate Clears Trade Bill’s Way to Passage (WSJ)
- Greek offer to creditors runs into angry backlash at home (Reuters)
- Tsipras Seeks to Stave Off Greek Defections Over Aid Plan (BBG)
- Austria finmin says no agreement on Greek proposals without concrete plan (Reuters)
- Another ELA raise, this time under €1 billion: ECB raises emergency funding for Greek banks (Reuters)
- Greek energy, foreign ministers divided on Russia gas deal (Reuters)
- China’s Plan for Local Debt Amounts to a Bailout (WSJ)
- Key Democratic senators back plan for trade legislation (Reuters)
- South Carolina Governor: Time to Furl Flag (WSJ)
“Sluggish westbound volumes have brought about the worst spot market rate collapse that this trade has experienced.”
- Mood brightens after latest Greek offer to creditors (Reuters)
- ECB's Nowotny - Greek banks have funding extension for today (Reuters)
- Any Greece deal must match party manifesto, minister says (Reuters)
- Greece says now up to lenders to move on an agreement (Reuters)
- Greece sends wrong documents to monitors... Again (FT)
- U.S. won't let Russia 'drag us back to the past': Pentagon chief (Reuters)
- Belgium unblocks part of Russian diplomatic missions’ frozen accounts (Tass)
- Fed Scoop Heralded Era of Closed Doors for $100,000 Newsletters (BBG)
The West is impotent to prevent Armageddon. It is up to Russia and China, and as Washington has framed the dilemma, Armageddon can only be prevented by Russia and China accepting vassal status. This is not going to happen. Why would any self-respecting people submit to the corrupt West? The hope is that Washington will cause its European vassals to rebel by pushing them too hard into conflict with Russia. If European politicians were to break from Washington’s hegemony and instead represent European interests, Washington would be deprived of cover for its war crimes. The breakdown of the neoconservative unipower model would then be apparent even to Washington, and the world would become a safer and better place.
A Greek exit from the euro would change everything. The greatest change being simply doubt and fear regarding the outlook for other vulnerable EU nations, EU banks and the EU banking and financial system. We discuss short and long term considerations, best and case outcomes, and wealth preservation strategies.