"China 2016 Is US 2008" Felix Zulauf Warns "The Outcome Of A Major Yuan Devaluation Would Be Disastrous"Submitted by Tyler Durden on 01/22/2016 16:55 -0400
"China is to the current cycle what the US housing market was for the Global Financial Crisis in 2008. It will take years to correct the excesses that were built up in China... the consequences of a weaker yuan would be disastrous...If China devalues, all the other countries in the region will follow suit which will lead to a global deflationary shock. There is a real chance of a bigger correction than many investors realize..."
Ultimately the efforts of the Davos elites to control the world economy are in vain, for attempting to improve the economy through force never quite works out the way the planners intend. New complexities arise to make a mockery of their efforts. The simple fact is the planners’ solutions to the problems their policies created in the first place result in even greater problems... and even greater solutions. In short, their cure is worse than the disease. Nonetheless, they’ll never give up chasing the wild goose.
"I don't think China's economic slowdown is that severe to threaten the global economy."
"China has managed debt restructurings superbly."
In the most blatant and open admission of direct manipulation, China's Vice President Li told a room full of Davosian elites that China is willing to keep intervening in the stock market to make sure that a few speculators don’t benefit at the expense of regular investors. Following last night's largest liquidty injection in over 3 years (and subsequent plunge in Chinese stocks), it appears the Chinese economic/market "bucket" has more holes than the intervention 'hose pipe' can handle.
When Correlation Is Causation - The Most Important Chart In The World If You're A Realtor In London Or NYCSubmitted by Tyler Durden on 01/19/2016 22:15 -0400
If ever there was any doubts about the narrative of freedom-seeking China capital outflows driving the irrationally exuberant prices of homes in some of the world's largest cities to record highs, the following two charts will extinguish them entirely. As China continues to strengthen (as quietly as possible) its capital controls to slow the leak of money from the devaluing currency nation, and US authorities clamp-down on the anonymity of cash-only transactions, realtors in NYC, Miami, and London better hope that correlation is not causation.
While it refuses to admit the abject failure of its gun control program, the Mexican state instead attempts to shift the blame to Americans and has attempted to impose international gun control measures on the US. For Mexican politicians, it's easier to shift the blame than to recognize the fact that neighboring Americans right across the border enjoy far lower homicide rates along side relatively easy access to firearms. (Even California looks like a gun-owner's paradise compared to Mexico.) The Mexican state (and many Mexicans) are unfortunately impervious to these facts, and, many Mexicans still believe that Mexicans will be safer if the Mexican regime tightens its grip even more on firearms, in spite of the spectacular failure of gun control in that country.
Canada’s oil “dream” is dying thanks to the inexorable slide in crude prices and as the IEA made clear earlier today, the pain is set to persist for the foreseeable future as the world “drowns in oversupply.” Now, the Bank of Canada must make a choice: cut to support the economy and the country's dying oil patch, or hold to shore up the plunging loonie. Whatever the BOC decides on Wednesday, some say the country's depression means NIRP is right around the corner.
- Spot the common thread: China's growth hits quarter-century low, raising hopes of more stimulus (Reuters)
- And here: China stocks climb on hopes for new economic stimulus (Reuters)
- Welcome to the Crisis Economy, Where Tumult Reigns (WSJ)
- IEA Sees Risk of World Drowning in Oil (BBG)
- IEA Sees Iran's Return Intensifying Battle for Europe Oil Market (BBG)
- China 2015 power, steel output drop for first time in decades (Reuters)
"The events of 1929 taught us that the absence of any rise in prices did not prove that no crisis was pending. 1937 has taught us that an abundant supply of gold and a cheap money policy do not prevent prices from falling."
Over the last 5 years the various Fed QE (quantitative easing) interventions into the capital markets has facilitated dumb luck trading into “genius” status, and no clue analysis into “spot on brilliant” prognostications. The real issue at hand is many believed their own press, and the current state of egg on their face would make many a Denny's blush. As bad as that sounds – it gets worse.
- Crude sinks 4 percent as market braces for more Iranian oil (Reuters)
- Plunge in crude oil prices send stock futures sliding (Reuters)
- Oil Slides, Deepening Gloom in Stocks as Bond Buyers Celebrate (BBG)
- China Stocks Enter Bear Market, Erasing Gains From State Rescue (BBG)
- Friendly no more: Trump, Cruz erupt in bitter fight at Republican debate (Reuters)
- Dollar in Best Run Since July on Haven Bid Even as Fed Odds Fall (BBG)
Norway is in trouble. As we have detailed previously (here, here, here, and here), the world's largest sovereign wealth fund has begun liquidating assets (after its largest quarterly loss) as the nation faces recessionary fears (key data deterioration as oil stays lower for longer) with expectations building (despite denials by the central bank) that ZIRP (or even NIRP) is coming. Why? Simple - as the following real-time map shows - every one of Norway's oil fields are currently underwater!