• Vitaliy Katsenelson
    10/07/2015 - 12:23
    Having government control over the levers of the economy can have advantages. For example, by taking prompt action, the Chinese government was able to pull the economy out of the recession remarkably...

Market Crash

Capitalist Exploits's picture

From the Mailbag: On Japan and the Yen

Will the Japanese “monetary perpetuum mobile” ever get questioned by financial markets?

Tyler Durden's picture

Bubble Finance And A Tale Of Two Spheres

We have argued that it is a perilous myth that central bankers these days control a general price level. They instead incentivize massive financial flows into securities markets and fashionable sectors. Over time, ramifications and consequences reach the profound. For one, excess liquidity promotes over/mal-investment. It’s only the scope and nature that remain in question. If major Bubble flows inundate new technology investment, the resulting surge in the supply of high-margin products engenders disinflationary pressures elsewhere. Policy responses to perceived heightened “deflation” risks then only work to exacerbate Bubbles, mounting imbalances and structural fragilities. This was a critical facet of “Roaring Twenties” analysis that was lost in time.

Tyler Durden's picture

11 Red Flags As We Enter The Pivotal Month Of August 2015

Things are unfolding in textbook fashion for another major global financial crisis in the months ahead, and yet most people refuse to see what is happening.  In their blind optimism, they want to believe that things will somehow be different this time.  Well, the coming months will definitely reveal who was right and who was wrong.  The following are 11 red flag events that just happened as we enter the pivotal month of August 2015...

Phoenix Capital Research's picture

China and Greece Signal a New Round of Deflation

At the end of the day, both China and Greece are signaling that a new round of deflation has begun in the markets. Stocks are bouncing today, but a tectonic shift has begun.

Tyler Durden's picture

Stuck In Market Purgatory: How China's Citizens Lash Out At The Broken Market, In Their Own Words

"I have lost everything. I don't know what to do... I trusted the government too much... I won't touch stocks again, I have ruined everyone in my family." "I will sell all my shares tomorrow if there is a chance." ... "I am pretty sure that if the government does not come to rescue us, the situation will get much worse," ...  "I managed to sell them all at a loss today, and so I lost 320,000 yuan in two days. I don't have confidence on the market any more. I don't want to get into the market again."

Tyler Durden's picture

American Automakers High Exposure In China Is Not Good; Here's Why

The Chinese stock market crash has hit the world’s largest auto-market hard. For now, China is a dream turned sour for the Michigan-based Ford and General Motors and Germany’s Volkswagen. The risks are enormous and will become greater with time.

Tyler Durden's picture

The Complete Guide To China's CNY 4 Trillion Margin Doomsday Machine

On the heels of a veritable bloodbath in Chinese equities overnight which saw the SHCOMP slide a harrowing 8.5%, the entire world is now beginning to take a hard look at the notion that dramatic bouts of selling pressure are aggravated and perhaps triggered by an unwind in the multiple backdoor margin lending channels that allowed investors to skirt official restrictions on leverage and helped to drive the market’s world-beating rally. Here is the complete guide to China's CNY4 trillion shadow margin edifice.

Tyler Durden's picture

Copper, China And World Trade Are All Screaming That The Next Economic Crisis Is Here

If you are looking for a “canary in a coal mine” type of warning for the entire global economy, you have a whole bunch to pick from right now.

Tyler Durden's picture

Chinese Stocks Slide Into Red After Business Sentiment Crashes To 6-Year Lows

After a modesly positive open, Chinese stocks have pushed back into the red after Chinese business sentiment collapsed in July. The MNI China Business Indicator fell a straggering 8.8pts to 48.8 in July (below 50 signifying pessimism) - the lowest since January 2009. It appears the encouraging bounce after the massive creduit injections into June has been eviscerated and future expectations also dropped 6.4 to 54.1 in July (below the long-run average). While bad news is good news for much of the rest of the world, for China, as it continues to try to project a strong underlying economy to sustain its still extremely rich stock market, bad news is bad news.

Tyler Durden's picture

The Case Of China’s Missing Gold

Chinese Gold reserves jump 604 tons from 1,054 tons last reported in 2009 to 1,658 tons. Many gold observers ask: "Is that it"? Since 2009 China has mined over 2,000 tons of gold and imported over 3,300 tons of gold through Hong Kong*. Where did it all go?

Phoenix Capital Research's picture

Oil and Coal Indicate the Global Economy is in a Free Fall

In short, the era the phony recovery narrative has come unhinged.  We have no entered a cycle of actual price discovery in which financial assets fall to more accurate values. This will eventually result in a stock market crash, very likely within the next 12 months.

Tyler Durden's picture

Credit Deflation & Gold

So having acquired substantial quantities of gold for itself and having also ensured it is widely held by its public, the Chinese government is arguably in a more compelling position to encourage a gold revaluation as a means of stabilising her economy in a credit crisis than America was eighty years ago. It will be China's only option, and if the government doesn't go for it, China's middle classes certainly will. This simple fact could override all the geostrategic considerations upon which China-watchers have tended to focus. A gold revaluation would be presented to the world as bound up with China's domestic economic problems, instead of an act aimed at undermining the dollar's reserve status: a solution that is less confrontational than outright disagreement with Western central banks over gold's role in the international monetary order.

Tyler Durden's picture

5 Things To Ponder: Beach Reading

While the markets have improved since the "resolution" of the Greek crisis, in my opinion we would have expected substantially more given the overall "angst" that the situation was generating. Yet, the market remains in a bearish consolidation pattern. Furthermore, relative strength, momentum and volume remain a detraction from the "bullishness" of this week's "crisis resolution rally."

Tyler Durden's picture

"The Stock Market Is Too Important To Leave To The Vagaries Of An Actual Market"

The stock market is just too important to leave to the vagaries of an actual market now. Too much depends on good-looking numbers now. It must be guided and controlled, or else the stilts on which our global financial system balances become shakier and more visible. The market must be rendered increasingly meaningless simply because it's too meaningful to our current economic system.

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