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Asian Stocks Tumble After China, Japan Disappoint On Additional Stimulus

Tyler Durden's picture




 

The last time global equity markets were falling at this pace (on a growth scare) was the fall of 2011. That time, after a big push lower, November saw a mass co-ordinated easing by central banks to save the world... stock jumped, the global economy spurted into action briefly, and all was well. This time, it's different. The Fed is tapering (and the hurdle to change course is high), the ECB balance sheet is shrinking (and there's nothing but promises), the PBOC tonight said "anyone anticipating additional stimulus would be disappointed," and then the BoJ failed to increase their already-ridiculous QE (ETF purchase) programs. The JPY is strengthening, Asian and US stocks are dropping, CNY is weakening, and gold rising.

 

The last time stocks were stumbling on the back of a high-growth hopium scare... central banks saved the world...

Commentary from China's Xinhua News Agency (implicitly the point of exit for open mouth operations by the PBOC) suggest hope is fading for a big save...as Bloomberg reports,

China won’t rely on a large stimulus like the one following the 2008 global financial crisis to boost its economy after a “string of lukewarm economic indicators,” according to a commentary from Xinhua News Agency written by Zhang Zhengfu.

 

Talk about an incoming stimulus is “misleading” and those anticipating a package will likely be “disappointed,” the commentary says. A “mini stimulus” theory started after the State Council announced a set of policies including tax breaks and support for poor areas, the commentary says. China’s economy needs “a little” but not a “fully fledged” stimulus, the commentary says

 

and then the defaulting names started to fall

  • *CHAORI SHRS FALL AFTER BONDHOLDER SEEKS BANKRUPTCY RESTRUCTURE
  • *CHAORI SOLAR SHARES FALL 5.02% TO 2.46 YUAN IN SHENZHEN

But they promise dthey would pay in July

 

Shanghai Property stocks are lower once again

Then the BoJ disappointed... (even as Kuroda hinted last month inflation was well on its way to target)

Expectatations were for static monetary base expansion, a doubling of ETF purchases, and boosting bond purchases by 10 trillion yen

 

They did not...

 

*BOJ RETAINS PLAN FOR 60T-70T YEN ANNUAL RISE IN MONETARY BASE

 

No change to bond purchases

 

No change to ETF purchases

 

And JPY remains stronger and NKY weaker...

 

 

Japan is pumping the propoganda...

 

*BOJ: JAPAN'S ECONOMY HAS CONTINUED TO RECOVER MODERATELY

Except it hasn't...

 

 

The last time Japan attempted a consumption tax hike without the aid of monetary stimulus satefy net, this happened...


With broad-based currency volatility at 7-year lows, we suspect the ongoing currency war escalation with China may see this rise... and of course, FX traders' complacency handed Kuroda an opportunity to have maximal impact with any changes - but he didn't - which makes you wonder if/when he will given how high inflation is...

 

  • Chinese stocks are up modestly (led by banks) but property developers are being sold hard
  • Japan, Shenzhen, Australia, India, Malaysia, New Zealand, Philippines, and Taiwan are all red
     

 

Full BoJ statement here.

 

As a reminder Fed minutes are released tomorrow.

 

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Mon, 04/07/2014 - 23:01 | 4634596 SDRII
SDRII's picture

all this and the US Treasury is worried over tthe yuan de valuation and the instability it might usher in. Who took those spec losses on the yuan devalue Morgan Stanley warned about? 

Mon, 04/07/2014 - 23:13 | 4634622 swanpoint
swanpoint's picture

No stimpack black swan

Tue, 04/08/2014 - 00:35 | 4634747 Oh regional Indian
Oh regional Indian's picture

The number of variables and derivative effects of those variables are so mind-boggling right now, traders really have no idea what they are up against.

And we do nto have the one ring that rules etc...

I suggest astrology as the best trading guide.

ori

Tue, 04/08/2014 - 02:30 | 4634853 Manthong
Manthong's picture

gee, it is so clear now..

Leo is in Sagitarious with Picses in Gemini.

It's a pornish group thing. 

market converges with geology?..

https://www.youtube.com/watch?v=It7107ELQvY

 

-please don't take anything even remotely connected with the "market" or con-artist/slave masters seriously anymore. :-)

Tue, 04/08/2014 - 05:20 | 4634938 ilion
ilion's picture

At the same time UK manufacturing data massively beat today. Or is the data rigged again?
https://twitter.com/ArmadaMarkets

 

Tue, 04/08/2014 - 07:03 | 4635012 new game
new game's picture

things are looking normal! gold is golden, red when red should be red. wow, and the sky blue, and my shit brown.

green with envy i didn't short this bitch, but my balls need a rest...

Tue, 04/08/2014 - 07:39 | 4635052 Bangin7GramRocks
Bangin7GramRocks's picture

We want more free money or we are going to make the markets go down, down, down! Waaaaaaaaaaa!! Reminds me of 2007 when every doucheknuckle on CNBC would yell "the markets demand a 50 point rate cut" and the markets would go down and magically rates would be cut by 50 points. Free market capitalism....haven't seen nothin' like that in these parts for bout' 50 years.

Mon, 04/07/2014 - 23:16 | 4634628 TruthInSunshine
TruthInSunshine's picture

Yellenanke could come out & announce "untapering" and QE28, along with a massive ramp up in LSAP tomorrow and it wouldn't help equity markets; the smart (i.e. insider) money has already been liquidating for some time and will dump everything.

They were hoping for more retail to come into the market before doing so, but with the Fed/Treasury & the most idiotic buyers of all, being Pension Funds, acting the role of greater fools, the insiders are bagging the already lofty, irrational, artificially inflated gains they already culled and bailing.

Mon, 04/07/2014 - 23:53 | 4634683 CrashisOptimistic
CrashisOptimistic's picture

"This time, it's different. The Fed is tapering (and the hurdle to change course is high), the ECB balance sheet is shrinking (and there's nothing but promises), the PBOC tonight said "anyone anticipating additional stimulus would be disappointed," and then the BoJ failed to increase their already-ridiculous QE (ETF purchase) programs."

 

It's different, but all that stuff doesn't matter.

2011 had avg oil price of $95.

 

Tue, 04/08/2014 - 07:09 | 4635018 negative rates
negative rates's picture

Cinderella?

Mon, 04/07/2014 - 23:11 | 4634619 Atomizer
Atomizer's picture

If we try to tax and spend just one more time, our efforts will pull us out of the deflationary spiral.  

- love Japan 

Mon, 04/07/2014 - 23:14 | 4634625 LetThemEatRand
LetThemEatRand's picture

TBNTF - too big not to fail.  The harder they come, the harder they fall.

Mon, 04/07/2014 - 23:33 | 4634643 erg
erg's picture

A Lard-ass Hogan pukefest.

Mon, 04/07/2014 - 23:29 | 4634644 ArkansasAngie
ArkansasAngie's picture

Hope they have their living wills ready.  I will want to buy economic value with the CASH I've got.  Take that you zirpester jerks.

No bailouts this time.

Screw'em

Mon, 04/07/2014 - 23:30 | 4634647 Yen Cross
Yen Cross's picture

  I don't know if I would call it a tumble. Hong Kong and China are up almost 1% and the Pennikkei is only down about 1%. The Asian markets often trade divergent of Western markets though.

Tue, 04/08/2014 - 07:41 | 4635054 Bangin7GramRocks
Bangin7GramRocks's picture

Anything worse would be a "crash" and or "bloodbath".

Mon, 04/07/2014 - 23:52 | 4634682 q99x2
q99x2's picture

If the Central Banks aren't going to save the world then arrest them for treason.

Anyhow we have two solar coronal holes and a high earthquake alert and I have to drive Topanga Canyon. That's the road where the boulders fall down even when it isn't shaking.

Tue, 04/08/2014 - 00:02 | 4634697 Downtoolong
Downtoolong's picture

gold rising.

Fuck, I had to read the entire paragraph to find out what mattered most.

Tue, 04/08/2014 - 00:22 | 4634725 knukles
knukles's picture

Well, I'm a shufflin' off ta the old bed roll, watch the stars as I fall asleep next ta the fire, lookin ta be awakened with Jane there cookin eggs bacon and hash browns an some uh da best coffee in the world, before I gotta get out n rustle up some of them pars an bogeys on the front an back nines.
It's a beautiful place if you can just accept it for what it is, pilgrim.

Tue, 04/08/2014 - 00:25 | 4634732 MrTouchdown
MrTouchdown's picture

Weird. I thought +202 and a green color meant Asian stocks are increasing, not "tumbling".

Tue, 04/08/2014 - 01:26 | 4634811 skm
skm's picture

Japan, Shenzhen, Australia, India, Malaysia, New Zealand, Philippines, and Taiwan are all red

yes thats what i thought too..also india is closed today. shanghai up 1.5%, hangseng up 0.8%. not sure where you are looking at sounds like tumble reverse to me...

Tue, 04/08/2014 - 03:37 | 4634898 james.connolly
james.connolly's picture

The only red is JAP, all else is solid GREEN.

2 + 2 = 5, and up is down, and forward is backward, welcome to Tyler in Unicorn-Land

 

Tue, 04/08/2014 - 01:09 | 4634796 nightshiftsucks
nightshiftsucks's picture

You people are crazy,yeah they're going to do nothing and let the economy go into a deflationary death spiral.We are Venezuela,I'm looking for a big stimulus package and another big QE coming right up.

Tue, 04/08/2014 - 01:21 | 4634809 slaughterer
slaughterer's picture

Funny, ES is up .24%.  

Tue, 04/08/2014 - 01:31 | 4634820 I Write Code
I Write Code's picture

In Yellen we trust.

The markets won't really fall while the Fed has a drop of ink and baby, they've got a lot of ink.

Tue, 04/08/2014 - 01:33 | 4634822 Philalethian
Philalethian's picture

Well, it was only a matter of time before the usurper and his assorted pointed heads got the whole world pissed off at America. All as planned of course. Next up, moar war on the world by a very small cabal of evil that are giving weapons to the Syrian coo-coo rebel nutz. They do not represent the American people, rather they represent pure evil.

What next, and when is the false flag event coming to blame on Syria or Poor ol innocent Iran?

http://rinf.com/alt-news/latest-news/world-war-iii-imminent/

The people of the world have finally had enough of the washington-loony-bin of warmongering to kill America, and start world war three. They are doing what the banksters wanted and everyone is dumping the dollar and trading in the new world currency, the gold backed yuan.

How about that for a change!

http://www.youtube.com/watch?v=TEnosIv8DYA

 

 

 

 

 

Tue, 04/08/2014 - 05:35 | 4634945 inky
inky's picture

@Philalethian  +100

Tue, 04/08/2014 - 06:54 | 4635001 SmallerGovNow2
SmallerGovNow2's picture
Awesome Analysis at the end of that piece....

If Russia is allowed to occupy Ukraine, Putin will subsequently blackmail Europe with the Russian gas that flows through Ukraine. Putin would undoubtedly refuse the Petrodollar as payment for the Russian gas and this will send the US into a tailspin. As a result, NATO will disintegrate and the United States will be left isolated. The NATO plan is becoming quite clear. First, Ukraine is being plundered by Western Banksters with a series of austerity programs including the theft of all Ukrainian gold. Banksters are ensuring that if Russia does prevail and occupy Ukraine, Putin will have taken over a country which would already be destroyed by these austerity programs. Also, I fully expect that when the Russian invasion occurs, that NATO forces will destroy Ukraine’s gas pipelines. The US move into Romania with ground forces, and more importantly aircraft, is highly significant because it places the Crimean based Russian Black Sea Fleet under direct threat. Additionally, air cover for Ukraine will have been achieved. The move by NATO to militarize Azerbaijan, blocks a Russian military rescue mission which could come to the aid of Iran in case of a joint US/Israeli attack. NATO is quickly mobilizing to confront Russia by this summer. If you were Putin, what would you do? Putin has 60 days to act, and act he will. NATO knows it cannot win in Ukraine, however its provocative move will tie up Russian forces and block a Russian advance into the Middle East and Iran and Syria will be captured and the Petrodollar will live on for another day. As with all wars, when the shooting starts, there are no limits as to the escalation potential. Again, I issue my warning to stock up on necessary supplies for if this war goes global, all bets are off.

Tue, 04/08/2014 - 07:06 | 4635016 surf0766
surf0766's picture

Putin and Mommy Jeans are on the same side.

Tue, 04/08/2014 - 02:11 | 4634850 pachanguero
pachanguero's picture

Living in Thailand and working around Asia I can tell you that this country/Asia rocks!  However big problems too.

However Thailand is on the verge of civil war.  Same story as the US.  Corruption and out right thief by government officials and business leaders.

 The .1% sucking the life out of the poor.  

I just can't see the Chinese yuan being the world's reserve currency.

Nobody likes  the Chinese. Not the Thai's, Filipinos, Indonesians, or anyone in Asia for that matter.

But Gold is money.  Here in Asia it's in their DNA

 

Tue, 04/08/2014 - 02:30 | 4634864 james.connolly
james.connolly's picture

Nobody likes the Jap's, they make the Chinese look like virgins.

Make one thing certain, everyone loves the CHINESE money.

Once the USD starts losing value the hearts will change and quick,

Also of course 'gold' is the deal, nobody would ever put paper money in a mattress, gold would be the only option

Asia more than anywhere respect RICH folk, ... they ask "HOW RICH", ... Then ask 'Where is your home'

>>

Tumble my ass.

>>

China has said many times "They don't want to be Reserve Currency".

I agree with you  completely NO EX-PAT is unhappy in ASIA, unless he's a MORON and gave his money to a woman, but in the west they can take your money, in ASIA they can only take what we give them.

ASIA is god damn 'sexual' disneyland for white men. :) There's A & E tickets rides in every direction and always on.

In the west women quit fucking because their lazy, in ASIA a woman fucks her man because she knows if she doens't another women will.

 

Tue, 04/08/2014 - 05:25 | 4634942 pachanguero
pachanguero's picture

you know your shit bro!  Westen women suck  My part time girl is 26 years younger!

Tue, 04/08/2014 - 07:23 | 4635031 Comebackkid
Comebackkid's picture

As an Ex-pat in Asia, I partly agree with you. Everyone loves Chinese money, just like they like money from the Chaebol in Korea and the Zaibatsu in Japan.  Asia is an area finding itself, and all the little guys are scared shitless of someone becoming too strong again.  

I don't think anyone dislikes the Japs more than they dislike the Chinese. They remeber what the Japs did and they know what the Chinese can and already are doing. China has become much more agressive in territorial claims and they will just as soon annex small areas like Putin did with Crimea. If Japan has a major dump, you will see all the Koreans take back their "apologize again Japan" rhetoric and starting sucking some Abe D for any help possible to keep them isolated from the North and a take over by Chinese puppet state. 

I think everyone outside the Sino-Japan dichotomy are just cupping their nuts and praying that neither one collapses so that the other blows up into the new baddy on the block.

 

Tue, 04/08/2014 - 03:20 | 4634887 mobydick
mobydick's picture

There's no tumbling. Shanghai & Hong Kong both up & the Yuan has strengthened. US futures are up too

Tue, 04/08/2014 - 03:35 | 4634895 james.connolly
james.connolly's picture

The problem is that when Unicorns  speak ...

Tumble means -0.001 %

Skyrock means +0.01 %

...

You get the idea, when and if SHTF people will so fucking tired of the UNICORN "SKY IS FALLING", that nobody will give a flying fuck.

 

"Tyler is a Unicorn" Copyright @ ABC Media, UK

Tue, 04/08/2014 - 03:43 | 4634902 JuliaS
JuliaS's picture

You know what a dead cat bounce looks like? Nikkei, I swear, looks like a cat in a tumble drier.

Tue, 04/08/2014 - 04:30 | 4634919 Goldenballs
Goldenballs's picture

And the future was written thus for all the parasites in Banks and Big Business,

http://www.maxkeiser.com/2009/04/music-video-gene-burnetts-jump-you-fkers/

 

Tue, 04/08/2014 - 04:57 | 4634930 Julian
Julian's picture

The market vibe at the moment reminds me of a baby who has lost its bottle and is just waking up to the fact..you know that terrified look toddlers get just before they lose it?

Tue, 04/08/2014 - 05:05 | 4634933 buzzsaw99
buzzsaw99's picture

The japanese don't care. Open looting of the treasury and pension funds and they don't care. The Nikkei is worthless and they don't care. Honestly, I don't think anyone in Japan gives a crap except the kleptocrats, they have been busy, but again, the people don't give a damn. They are apathetic and embrace the encircling doom.

Tue, 04/08/2014 - 06:22 | 4634974 SmallerGovNow2
SmallerGovNow2's picture

Sounds exactly like the sheeple and politicians in the USSA....

Tue, 04/08/2014 - 07:32 | 4635044 Comebackkid
Comebackkid's picture

This is funny because my Japanese coworkers looked shocked when I told them I was going to use the foreign option to cash my pension at 6 years and start over.  When they asked me why I would ever take money out of pension I told them that I dont trust that the money will be there when I retire.  That the money will most likely be looted in order to pay off other insane debts that the governent has accumulated. I told them that I can not trust a country to pay that has the high debt to GDP ration on the globe and that it would be foolish to expect money back that has any value. 

Then my coworkers went from friends/coworkers to just coworkers.

They. Are. Clueless. About this.

I work at a Japanese engineering company as an International Account Manager in overseas sales. We had guys from Sumitomo-Mitsui bank come to our offices to give consulting on payment options with India companies and we got to talking about Japanese debt (I initiated). When I pressed them, they said that Japan could and would never default.  So then I said that inflation would be a big problem if they dont  default. They asked me why I thought inflation would increase, I told them because they have to print enough money to service the debt, especially since the economy will not grow to soak up the loss. They said that Japanese debt was different because it was owned by Japanese citizens.  That is where I slapped my forehead. I am so tired of hearing that line.  The big guys at that bank, when they realize that the government cant pay them bank on their domestic bonds (these guys also run the pension pot) they will pull like anyone else because self interest is the number one driving motivator behing human action.

The Japanese are one of the most arrogant people I have encountered in Asia.  They believe Japan is special, that Japanese are special, and any problem in Japan can only be understood by Japanese.  Even if you speak Economic sense to them, they ignore you because it is a Japanese problem and with your foreigner ekonomiks you cant understand jack. 

Tue, 04/08/2014 - 06:53 | 4635000 Bernoulli
Bernoulli's picture

Hey everybody, don't panic. This "sell-off" is officially over - according to GS and CNBC.

SELL defensive and BUY "cyclical" (= all the risky shit)! Go guys! And BUY fast, because right now, nobody else knows. GS says this news hasn't been "fully priced" yet. So there is upsides with the risky stuff! ACT FAST.

http://www.cnbc.com/id/101563403

 

"...Goldman Sachs is also eyeing a pro-cyclical stance, following the downgrade to China growth. The volatility in emerging markets from December to mid- March had eased significantly from the shock the market saw from May to July 2013.

"As a result, we think that cyclical improvement is likely to be the major theme in the next month or two as the reality of some improvement on these fronts is reflected more broadly," said chief markets economist at Goldman Sachs, Dominic Wilson.

"We think the reality of a better cyclical picture has not yet been fully priced. If we are right, the improving cyclical environment should continue to support equities, while pushing yields higher," he added..."

if we are right...

IF....

http://www.goldmansachs.com/our-thinking/archive/bios/dominic-wilson.pdf

http://www.goldmansachs.com/careers/why-goldman-sachs/our-divisions/glob...

Global Investment Research delivers client-focused research in the equity, fixed income, currency and commodities markets. GIR analysts help the firm’s investing clients achieve superior returns through differentiated investment insights and ideas. Our clients include mutual funds, hedge funds, and pension funds, among others.

Tue, 04/08/2014 - 07:02 | 4635014 Bernoulli
Bernoulli's picture

And also this on the frontpage:

http://www.cnbc.com/id/100746255?region=world
Markets
EU
Europe cautiously lower after selloff; Ukraine watched
DAX - 0.84%
FTSE - 0.95%
CAC40 - 0.77%

Sell off is OVER! Didn't you get the message?

I smell panic...

Tue, 04/08/2014 - 07:18 | 4635023 Buttertooth
Buttertooth's picture

I just took the biggest dump since October 2012.  In November of the same year my wife became pregnant.  Looks like we'll be expecting again!

Tue, 04/08/2014 - 07:23 | 4635029 lakecity55
lakecity55's picture

Maintain current course, Mr Sulu. If I am right, our gains in PM should offset our energy equity losses.

Aye, Captain.

Captain....

I know, Spock, it makes no sense, but neither does this market

Tue, 04/08/2014 - 08:03 | 4635070 AdvancingTime
AdvancingTime's picture

Japan is the most indebted developed country in the world and its future prospects are dim and getting worse. It is only a matter of time before the yen becomes worthless and as inflation begins to take root it will place upward pressure on Japanese bond yields and raise the cost of government to service its massive debt.

With the BOJ  set to absorb half of the government bonds planned for sale this fiscal year, domestic investors have already started venturing overseas for higher yielding assets. If this turns in to a tsunami of  money fleeing Japan it will constitute the end of the line for those holding both JGBs and the yen. More on this subject below,

http://brucewilds.blogspot.com/2013/08/japans-economy-going-forward.html

Tue, 04/08/2014 - 09:37 | 4635327 Baldrick
Baldrick's picture

"open mouth operations" lol

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