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Chinese Stock Plunge Resumes With 1200 Stocks Halted Limit Down; Yellen, Greek Elections On Deck
Just when the Chinese plunge protection team (and "arrest shortie" task force) seemed to be finally getting "malicious selling" under control, first we saw a crack yesterday when the composite broke the surge of the past three days as a result of yet another spike in margin debt funded purchases, but it was last night's reminder that "good news is bad news" that really confused the stock trading farmers and grandmas, which goalseeked Chinese economic "data" beat across the board, with Q2 GDP coming solidly above expectations at 7.0%, and retail sales and industrial production both beating, but in the process raising doubts that the PBOC will continue supporting stocks.
After all, the only purpose of the stock bubble was to deflect attention from the bursting of the housing bubble and the collapse elsewhere in the economy. So if Beijing is willing to telegraph that the worst is over for the economy, there is no further need for SHCOMP 5000 which can now be carefully deflated, as otherwise a violent bursting threatens China's social stability.
As a result the Shanghai Comp tumbled -3.0% and Hang Seng slid -0.3% with markets showing a subdued reaction as the data does dampen calls for further actions by the PBoC. However that does not do justice to yet another day of Chinese stock insanity. This does:
BREAKING: Chinese stock market ends 3% lower, w/ 1,200+ stocks down 10% daily limit; Chinese media admit gov "failure to boost market" today
— George Chen (@george_chen) July 15, 2015
Elsewhere in Asia equities traded mixed following a positive Wall Street close as soft retail sales data casted doubts over the viability of a Fed rate lift-off this year. Nikkei 225 (+0.4%) rose albeit off intra-day highs as the BoJ lowered its GDP and CPI forecasts for 2015, while the central bank also maintained its monetary base target at an annual rise of JPY 80trl. JGBs traded relatively flat in what has been a subdued session for fixed income markets.
European Equites have trended higher after kicking off the session relatively mixed (Euro Stoxx: 0.0%) as many market participants await the main risk events later in the day, namely the Greek parliamentary vote and over in the US, Fed's Yellen's semi-annual testimony.
While Yellen's testimony will hardly provide any major new data points (Fed Dow Jones data driven, ongoing bad news 6 years after the "end of the recession", such as the payrolls and retail sales misses are explained by snow in June and so on) and the only popcorn-worthy moment will be Hensaerling asking Yellen who at the Fed keeps leaking market-moving data to the market (now that Tim Geithner is gone) the best summary we have seen of the upcoming Greek vote, which is expected to pass through the parliament with support of the pro-European opposition parties, is the following:
To be clear: the Greek parliament is voting today on a deal everyone knows is unfeasible, the IMF rejects & Schäuble doesn't want. Right?
— Theodora Oikonomides (@IrateGreek) July 15, 2015
Equities have benefitted from positive sentiment stemming from comments regarding the EFSM, with it appearing that Greece will be supported during the interim period ahead of further negotiations for a medium term plan.
In the US, today sees the busiest day of earning season so far, with large cap names scheduled to report including Bank of America, Delta Air Lines, Intel, Kinder Morgan, Nefflix, PNC Financial Services and US Bancorp. Fixed income markets see Bunds trade higher today despite a technically uncovered Bund auction as participants position themselves ahead of the aforementioned Greek parliamentary vote. Bunds are also supported by the aforementioned comments regarding interim support for Greece, with this likely to lead to an increase in demand for fixed income products.
In FX markets the GBP dominates proceedings after worse than expected employment data UK (UK ILO Unemployment Rate 5.6% vs. Exp. 5.5%, Average Weekly Earnings 3.2% vs. Exp. 3.3%) saw the first increase in unemployment rate for over two years. This saw GBP/USD immediately fall 50 pips to give back all the gains of the day which comes after the recent spate of hawkish BoE comments, with a rate hike now looking further away.
Away from GBP, AUD outperformed during Asian hours after the aforementioned better than expected Chinese data, however failed to sustain this move when European participants entered the market. This choppy price action has seen the USD index fairly unmoved on the day (-0.1%) heading into the US crossover, with participants awaiting the key risk events of the day, the Greek parliamentary vote and the semi-annual testimony to congress from Fed's Yellen.
Other notable events today include comments from Fed's Mester and Williams as well as BoC rate decision and US PPI final demand, empire manufacturing and industrial production.
Fed's George (non-voter, Hawk) stated that it is time for a Fed rate lift-off, adding that the central bank will make policy decision on a meeting-by-meeting basis
In commodities, the energy complex trades lower today, still weighed on by the Iran nuclear deal despite yesterday's API crude inventory report showing a drawdown of 7300K vs. the previous drawdown of 958K. Looking ahead, todays DoE crude oil inventories are expected to show a drawdown of 1900k. The metals complex saw copper rise after Chinese GDP and industrial production beat expectations while Dalian iron ore futures rose with Chinese steel mills cutting production to reduce surplus.
In summary: European shares little changed, having risen from earlier lows, with the basic resources and utilities sectors outperforming and autos, industrials underperforming. China 2Q GDP growth, June industrial output, June retail sales above estimates. Bank of Japan leaves monetary policy unchanged as forecast. U.K. unemployment above estimates. The Italian and Dutch markets are the best-performing larger bourses, Swedish the worst. The euro is little changed against the dollar. German 10yr bond yields rise; French yields decline. Commodities decline, with wheat, Brent crude underperforming and zinc outperforming.
On the economic calendar today are U.S. mortgage applications, Empire manufacturing, industrial production, capacity utilization, PPI due later.
Market Wrap
- S&P 500 futures up 0.1% to 2103.5
- Stoxx 600 up 0.1% to 398.6
- US 10Yr yield up 0bps to 2.4%
- German 10Yr yield up 4bps to 0.88%
- MSCI Asia Pacific up 0.2% to 143.8
- Gold spot down 0% to $1155.7/oz
- 12 out of 19 Stoxx 600 sectors rise; basic resources, utilities outperform, autos, industrials underperform
- Eurostoxx 50 little changed, FTSE 100 little changed, CAC 40 little changed, DAX little changed, IBEX +0.2%, FTSEMIB +0.4%, SMI +0.2%
- Asian stocks rise with the ASX outperforming and the Shanghai Composite underperforming; MSCI Asia Pacific up 0.2% to 143.8
- Nikkei 225 up 0.4%, Hang Seng down 0.3%, Kospi up 0.7%, Shanghai Composite down 3%, ASX up 1.1%, Sensex up 1%
Euro up 0.1% to $1.102 - Dollar Index up 0.02% to 96.66
- Italian 10Yr yield down 5bps to 2.02%
- Spanish 10Yr yield down 5bps to 2.04%
- French 10Yr yield down 4bps to 1.18%
- S&P GSCI Index down 0.5% to 412.7
- Brent Futures down 1.1% to $57.9/bbl, WTI Futures down 0.9% to $52.5/bbl
- LME 3m Copper up 1.4% to $5644/MT
- LME 3m Nickel up 1.4% to $11780/MT
- Wheat futures down 1.1% to 564.5 USd/bu
Bulletin Headline Summary from RanSquawk and Bloomberg
- USD index is flat heading into the North America crossover, while GBP/USD fell 50 pips to give back all gains on the day after disappointing UK wage growth data.
- Shanghai Comp and Hang Seng failed to flourish following strong Chinese GDP, industrial production and retail sales readings, with markets showing a subdued reaction as the data dampens calls for further actions by the PBoC.
- Today sees the Greek parliament vote on their deal with creditors, Fed's Yellen's semi-annual testimony, comments from Fed's Mester and Williams as well as BoC rate decision and US PPI final demand, empire manufacturing and industrial production.
- Treasuries little changed before Yellen testimony, Beige Book as Greece’s Tsipras started pitch for a bailout that’s sparked a Syriza revolt and international officials asked new questions about country’s finances.
- As Tsipras went on TV to argue for a deal that he only agreed to with “a knife at my neck,” European officials were at a loss over how to put together a bridge loan that will keep Greece from defaulting next week
- One person familiar with the matter said that Greece’s finances seem to get worse with every meeting and governments are now reluctant to help out with even short-term funds
- Tsipras’s TV comments undermined trust that Greek govt will take ownership of economic adjustments in new bailout program, German Deputy Finance Minister Jens Spahn said on ARD public TV; “what the Greek prime minister did on Greek television yesterday irritates me”
- China GDP expanded 7% in 2Q, more than expected, with industrial production and retail sales also topping projections, according to government reports
- China’s “triple bubble” of credit, investment, real estate represent biggest risk to global economy, Credit Suisse equity strategists write in note
- The Iran accord that took seven nations almost two years to negotiate now depends on Obama’s ability to defend it against efforts from Capitol Hill to Jerusalem to kill it
- Also now comes the question of whether, after 12 years of debilitating sanctions, a resurgent Iran can avoid escalating its confrontation with a more assertive Saudi Arabia
- Sovereign 10Y bond yields lower. Asian stocks mixed, Shanghai falls 3%, other markets little changed. European stocks mostly higher, U.S. equity-index futures gain. Crude oil lower, copper higher, gold little changed
US Event Calendar
- 7:00am: MBA Mortgage Applications, July 10 (prior 4.6%)
- 8:30am: PPI Final Demand, June m/m, est. 0.2% (prior 0.5%)
- PPI Ex Food and Energy, June m/m, est. 0.1% (prior 0.1%)
- PPI Ex Food, Energy, Trade, June m/m, est. 0.1% (prior -0.1%)
- PPI Final Demand, June y/y, est. -0.9% (prior -1.1%)
- PPI Ex Food and Energy, June y/y, est. 0.7% (prior 0.6%)
- PPI Ex Food, Energy, Trade, June y/y est. 0.6% (prior 0.6%)
- 8:30am: Empire Manufacturing, July, est. 3.25 (prior -1.98)
- 9:15am: Industrial Production, June, est. 0.2% (prior -0.2%);
- Capacity Utilization, June, est. 78.1% (prior 78.1%)
- Manufacturing (SIC) Production, June, est. 0.1% (prior -0.2%)
Central Banks
- 10:00am Fed’s Yellen testifies to House Financial Services Committee
- 10:00am: Bank of Canada rate decision, est. 0.75% (prior 0.75%)
- 12:00pm: Fed’s Williams speaks in Phoenix
- 12:25pm: Fed’s Mester speaks in Columbus, Ohio
- 2:00pm: Fed’s Beige Book
DB's Jim Reid completes the overnight event summary
Today the lens will be firmly focused on Janet Yellen at the first of her semi-annual testimonies in front of the House Financial Services Committee. The reality is that she will probably keep all her options open but will probably want to get across that the committee expects the normalisation process to start soon. Whether or not it can in reality is another matter and it will be interesting to hear how much she comments on recent events in Greece and China. While I acknowledge the reasons why the Fed feel they ought to raise rates I can't help but think that with nominal activity still so weak relative to history, in another time and another place the argument could be actually spun towards more easing being required rather than hikes. In an ideal world this perhaps would be more directed at the real economy rather than asset markets but it’s worth remembering that a hike at these low levels of normal activity is almost unprecedented in the history of the Federal Reserve. However I appreciate that further easing is certainly not up for any discussion in this world but it does feel to me that the narrative is slightly too skewed towards the fact that they have to raise rates simply because they've been at rock bottom levels for too long and not because of the normal drivers of rate rises (ie a combination of growth and inflation).
The retail sales number yesterday encouraged investors that a more patient approach might be considered by the Fed which both equity and bond markets generally liked across the globe. The number saw broad-based softness across the board with the June headline (-0.3% mom vs. +0.3% expected), ex auto and gas (-0.2% mom vs. +0.4% expected) and retail control (-0.1% mom vs. +0.3% expected) prints all declining more than expected with the headline reading in particular also seeing two-tenths downward revisions to May and April. The data helped take 10y Treasuries 5.3bps lower to 2.402% and halt three consecutive days of rising yields. Fed Funds Dec 15, 16 and 17 contracts fell 1.5bps, 3.0bps and 3.5bps in yield respectively. The Dollar index also dropped immediately following the print, initially falling as low as -0.7% although paring those losses slightly into the close to eventually finish -0.21%. US equities rose steadily over the course of the day meanwhile, with the S&P 500 and Dow finishing +0.45% and +0.42% after energy stocks in particular gained following a turnaround in oil markets on the back of the Iran nuclear agreement which we’ll touch on shortly.
Before we get there though, China’s monthly data dump has been the focus of attention this morning and it’s made for better reading after Q2 GDP printed at 7.0% for the quarter, in line with Q1 and ahead of expectations of 6.8%. The rest of the data has been supportive also. Retail sales (10.6% yoy vs. 10.2% expected), industrial production (6.8% yoy vs. 6.0% expected) and fixed asset investment (11.4% ytd yoy vs. 11.2%) have all come in ahead of consensus with retail sales and IP in particular at YTD highs and showing signs of momentum. With the data perhaps lessening the need for more aggressive stimulus however, Chinese equities have marched lower with the Shanghai Comp (-2.40%), Shenzhen (-2.30%) and CSI 300 (-2.43%) all falling. The Hang Seng (-0.41%) is also down but the Nikkei (+0.29%), Kospi (+0.55%) and ASX (+0.93%) have all firmed. S&P 500 futures (+0.1%) have reversed earlier losses while China-sensitive industrial metals including Copper (+0.4%) and Zinc (+0.8%) are both up in Shanghai this morning. The data has also helped support the AUD (+0.3%) while oil markets are around +0.6% firmer. There’s been little change in the Yen meanwhile after the BoJ left policy unchanged but trimmed its inflation outlook for the 2016 fiscal year.
Closer to home, there was some reasonably hawkish rhetoric out of the BoE yesterday. It was interesting to see a Fed-like reference from policymaker David Miles in particular who said that ‘the time to start normalisation is soon’ and that ‘I attach more weight to the risks of waiting too long and then not being able to take a gradual path’. These comments were backed up Governor Carney who, citing above normal growth and higher wages, suggested that a hike may not be too far away after saying ‘the point at which interest rates may begin to rise is moving closer with the performance of the economy, consistent growth above trend, a firming in domestic costs, counter balanced somewhat by disinflation imported from abroad’. The comments suggest that the BoE is set to look through another soft CPI print last month (0.0% vs. +0.1% expected), taking the annualised rate down to zero after a modest rise to +0.1% yoy in May.
Those comments helped take Gilt yields modestly higher yesterday 5y (+1bp) and 10y (+0.5bps) while the Pound gained just shy of a percent (+0.96%) versus the Dollar. Elsewhere in Europe it was fairly subdued for the most part with markets taking something of a breather before the Greek parliamentary vote and Yellen’s testimony. 10y Bunds closed -1.8bps lower in yield at 0.834% while the peripherals ended 1-5bps lower. A late boost from energy stocks helped European equities close in positive territory with the Stoxx 600 (+0.46%), DAX (+0.28%) and CAC (+0.69%) all up. Meanwhile in the oil complex, Brent (+1.14%) and WTI (+1.61%) surged 4 and 5% off the day’s lows respectively on the back of the Iran nuclear accord developments. With a deal finally reached after nearly two years of negotiations with world powers, the complex initially dropped on fears that the removal of sanctions would see a surge in supply, however these concerns soon abated as more details emerged that a supply response would likely be gradual and unlikely to happen before 2016 which in turn helped to lift oil off its lows.
In terms of the remainder of data yesterday, along with soft US retail sales the June NFIB small business optimism survey (94.1 vs. 98.5 expected) and import price index (-0.1% mom vs. +0.1% expected) were also disappointing, while business inventories printed in line at +0.3% mom. Meanwhile the Atlanta Fed were busy revising their Q2 GDP forecast following the recent batch of data since the last forecast of 2.3% on July 7th. After an initial boost from Friday’s wholesale data (to 2.5%) and Monday’s Treasury Statement (to 2.6%), yesterdays softer retail sales and import price data offset some of that move higher and saw the model revised back down to 2.4%, still at the bottom end of current market expectations. Elsewhere in the US both JP Morgan and Wells Fargo kicked off earnings season for the major banks with beats, while we saw suggestions of a stronger Dollar as being the reason for a drop in revenue for Johnson & Johnson yesterday. Data wise in Europe, there were no surprises to the final June CPI reading for Germany which stayed unchanged at -0.1% mom and +0.3% yoy. There was some upside surprise to the July ZEW survey however with both the current situations (63.9 vs. 60.0 expected) and expectations reading (29.7 vs. 29.0 expected) ahead of consensus, although both continuing a downward trend. Euro area industrial production for May disappointed at -0.4% mom (vs. +0.2 expected).
Surprisingly it’s taken us until the 7th paragraph to run through the latest Greek developments, but in truth this reflects what was a relatively quiet day for headlines in the saga ahead of today’s Greek parliament vote today. In an interview on Greek TV, Greek PM Tsipras admitted that he takes ‘full responsibility’ for mistakes over the last six months while also saying that his priority now is to make sure the agreement is finalised. There was also some focus on an IMF paper which showed Greece needs debt relief ‘far beyond’ what the Creditors have so far been willing to consider on the back of the bank closures and capital controls enacting a ‘heavy toll’ on Greece’s finances with the Fund suggesting a 30-year interest rate holiday period may be needed. Meanwhile, talks continue around bridge financing with Eurogroup President Dijsselbloem saying that ‘we are looking at all the instruments and funds that we could use’. For now though focus will be on the Greek vote in parliament tonight with Bloomberg suggesting that this will take place around 10pm Athens time. With opposition in the Syriza ranks as well as in the coalition partners Independent Greeks, it is likely that any changes in government are decided after the vote with the possibility of a minority government or government of national unity being put in place.
Before we take a look at today’s calendar, yesterday’s ECB quarterly bank lending survey showed further support for a recovery in bank credit conditions with the pace of easing now only slightly behind the strongest reading in the history of the survey (in 2006). In particular, net demand for housing loans was said to have ‘continued to increase substantially’ while credit standards on loans to households for house purchases ‘eased considerably’ with Italy in particular the standout performer from a country perspective after a material acceleration in easing pace pointing to potential upside to Italian growth.
Looking ahead to today’s calendar now, French CPI and various UK employment indicators will be the highlight in the European session this morning. The focus this afternoon will of course be on Yellen’s semiannual testimony while it’s also a busy session for data in the US with PPI, empire manufacturing, industrial production, capacity utilization and manufacturing production all expected. The Fed’s Beige Book is also due to be released tonight. As well as Yellen we’ve also got George, Mester and Williams due up while the corporate earnings highlights are Bank of America and Intel.
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Why do they never turn off the markets in sessions of panic buying, but panic selling they are quick to pull the plug?
The future's so bright....I gotta wear shades.
Here's some hot chicks for you.....have a good day.
https://www.youtube.com/watch?v=wEp3zu2e9pE
I can't help but think of the old saying: "When the US sneezes the world catches cold" meaning that the US economy was the main driver of the world economy back then, and so whatever happened to the US so went the world. Well now China is either the largest or second-largest economy, and the same idea should apply, yet it seems like the US market is completely ignoring the problems in China. Granted it's probably the PPT that is preventing this recognition, but as we see in China, plunge protection doesn't always work.
Sum Ting Wong
Na don't worry, nothing is wrong: in addition to a housing and stock market bubble, the Chine are going to introduce a gold-backed Yuan which will become the next world reserve currency!
Everybody repeat after me: "this time it's different, and a central planning totalitarian communist government will create transparent markets and will introduce honest gold-backed money!"
Hahahahaha!
Not sure why the Chinese government wasting their time with the markets, they should just set the price of the stocks every morning. That way, all of the stocks will be up very day of the year. Cut the BS of halting the stocks, ban short sellers, restrict sellings...etc.
When written in Chinese, the word 'crisis' is composed of two characters. One represents danger and the other represents opportunity.
John F. Kennedy
Wrong! It's two characters alright, but the first one is "manipulate everything in order to save face" and the second one is "send in the tanks!"
Rhetorical question right?
No worries. Just forbid shortselling. And when the capital flees, stop it. And when the people protest in the street, kill them. Problem solved.
Sarc off.
we are at the crossroads of bullshit vs bullshit and spy vs spy. take your pick.
Banker vs banker......just let them kill each other.
unfortanatly the majority will put their life on the line for good ole merica, cause it is their civic duty and of course they are clueless as to the cause.
banksters control the armies...
like rad maryjane said; backed by violence...
So how about that Iran deal.....boy did we get screwed with that or what?
Word is Barry is going to spike the football today....hope he does it in the morning...while it's still halfway believable.
Check out the huffingtonpost.com's head lede. If it doesn't make you sick there is something wrong with you.
The work of enforcing that "deal" with the Iranians doesn't even begin until sometime in late 2016, assuming it doesn't get pushed back (and it will). So he won't even be in the WH by the time it actually needs to start being implemented.
He has a piece of paper to cement his "legacy". Anything goes wrong- and it will- it's somebody else's problem then.
imo a deal to create new strife in the me. and does anyone think iran will comply?
theatre at its best.
a moar peacefull world?
fucking joke. jkerry, ha...
Everything in the M E really will sort itself out. Eventually, ther will be a big war, with really big bombs and a lot of people will be wiped out. Hopefully, the whole world doesn't get wiped in the process, but that's what will probably happen.
The big brains know this. That's why they don't care about trillion dollar debts and blah, blah, blah. It doesn't matter. It's not that you won't get your retirement, you won't need it.
just forbid selling....only buying and it has to be 1% higher regardless of conditions. We don't need economics!
Quantitative Extermination for a Lead backed yuan?
Bullshitish?
Because the few get enriched on the way up and and they don' t want to lose their paper profits on the way down until they are first to sell and get out.
And then once the enriched (including the elites in government) are out, you impose a regressive, invisible tax / inflationary stance to socialize the losses. This is the bubble playbook.
Free double cheeseburgers and fries all summer long at Mcdonalds, that's why.
Don't TWTR us bro.
I wonder how long before cutting your losses, or even desperately trying to hang on to your life savings, will be considered malicious and therefore an illegal acts?
Double plus good, citizen.
These thoughts are dangerous. Follow me to the nearest detention centre.
Defration arert!
You da poreece?
Our minds are quite easy to manipulate.
Not if you consider all of the groundwork required.
We are vulnerable to group think, peer pressure, corruption, fear, numerous biases, e.g. cognitive bias, blind spot bias, normalcy bias. This is hard wired. No television required here.
Not disputing that, but it requires a lot of effort to erroneously define the groups and normalcies.
When you add televised propaganda, obedience and thought training in school, socially engineered manipulation (psychological operations), and various institutions that I needn't name, working to 'change' society into their image. It is little wonder that society is despondent, apathetic, docile, and indifferent. Faced with cognitive dissonance, it is quite common to brush off information that contradicts our manufactured narrative we think is our own. Our irrational and simple minds are vulnerable to the fallacious rhetoric of our demagogues. Ideologues like Krugman et al are given special status in the media.
We are easy to manipulate. The intelligentsia need to take their balls in hand, throw off their fear of ostracism, character assassination, employment termination, throw off their partisan shackles, and get in the fight. These are the people that obviously need to be silenced, intimidated, and shackled (D'Souza). They can offer alternatives that threaten the manufactured narrative. The dumb majority are suggestible and easily managed. The authoritarians and other well meaning people are consenting to forced vaccinations. The propagandized environmentalists are almost as thoughtless. It's about collectivism. We are marching toward a global totalitarian dictatorship, where faceless supranational bureaucrats manage their respective populations as they see fit. Sounds great. Sign me up.
You will LOVE this doco MJJ...
"This is a film about psychological warfare. A specific type of warfare designed to distract, mis inform and anaesthetise the brain".
The irony of of a North Korean propaganda documentary about the West is delicious. The cherry on top is that it's very iwell made, interesting and factual. Does that mean it worked on me? Or that OUR Dear Leaders are grotesque parodies of the people they claim to be? Who is the real enemy that we have to be 'with us or against us?
https://www.youtube.com/watch?v=yLU1JcoK5E0
I like this too (baaaaa!):
U.S. Repeals Propaganda Ban, Spreads Government-Made News to Americans
I would like to see North Korea make a propaganda film on Chinese propaganda.
when you write that, the first thing that comes to my mind is an old question: how is it that something so simple like "political colours" are inverted, in the US?
the GOP, on the "right", bears the colour red, the same colour that all socialists on the whole world bear since 1848
then go on with words like "liberal". it actually has a meaning, in the rest of the world. though go to the US, and it's a swearword for many... while from the point of view of the rest of the world in America there are two mostly liberal parties in power, one with a conservative wing and the other with a social wing
yes, there is a lot of effort behind all this interesting labeling and definition of "groups and normalcies"
just recently I rented a sailing skiff from a guy that was moaning about too much traffic on the road. his words: "Mr. G, if I was this country's dictator, I would prohibit any car to use the road as long as it is not fully paid". Interesting point of view, I had to admit
what is the correct answer to such a proposition? a conservative might agree, up to a point. a socialist might shrug his shoulders, or talk about discrimination of the poor. a liberal, including the libertarian cousin of his ideological family would have to say that it's a restriction of personal freedom and freedom of business, wouldn't he?
what would actually the ZH average opinion be of a government that would restrict credit? one that would, for example, rule that nobody is allowed to owe more then hundred bucks without giving hard guarantees, like a mortgage? one that would put downpayments on mortgages at 40% of the market prices? one that would forbid nearly all credit for consumption? one that would forbid things like US Student Debt? I truly wonder
those questions, btw, aren't "just academic". every and each of us has some notions of what is "just". The Debt Jubilees of old only happened when everybody had the impression that everything had become unjust. Interestingly, debt jubilees were always only for personal and unbacked debt, not backed or commercial debt
funny how even Babylonians three thousand years ago made such differences, eh? If you walked the streets of ancient Ur or Lagash and told the peple that debt is not created equal, people would have nodded in comprehension. If you "walk the streets of ZH" today...
You are trying to reason with bankers who don't take gold as colladeral for anything, they have a set plan, and stick to it.
You are trying to reason with bankers
Forget it......he's rolling.
I'm just asking. are you... answering? what I am writing has little to do with "bankers", and a lot about lenders and borrowers
My first comment and concern is that modern day bank deposits are unsecured debt from the people who earned it through their labor to the banks who hold a monopoly of money creation power. The system is unbalanced and unfair.
I would have no problem with banks getting rid of unsecured/revolving credit. But in that case, bank deposits should be secured by bank assets and the personal assets of the banks' owners.
The public company/corporate veil is a travesty, against personal responsibility, and IMO the allowing of the financial and legal separation between owners and their company's actions we have created an environment for the troubles we have today. But those who create money have all of the power ... today.
Some very good points here, especially about the newspeak.
Sub-prime loans are reckless. Would you lend to someone who couldn't pay it back with the expectation of being paid off eventually? Nope. Would a car salesmen lend his own savings to a customer he thought was a risk? Nope.
Free and easy credit for privileged organizations is not helping the real economy. There is no free lunch. If the FED balance sheet wasn't at 4.5 trillion, and if the TBTF zombie banks had been let to fail, then we would be in a more realistic position. A cataclysm would have been set off. The ponzi scheme would of come crashing down.
If home loans were no longer made, then the price of housing would come crashing down. It is floating on a sea of debt.
in ancient times, they were not "reckless". and the simple reason was that there was collateral: people not paying back debt would become slaves
in later, up to Victorian times, people could land in debtor's prisons, or be sent as "bonded slaves" for a few years of debt serfdom to the colonies
yes, price of housing. isn't "easy credit" a form of... subsidy?
what would the price of housing in the US be without all those trillions spent over decades for various subsidies, from tax rebates to easy credit to the huge governmental-backed orgs offering something like 30-years mortgages at rebate?
how costly was education before the US Student Debt loans were offered?
subsidies are a strange thing. first they have one effect. then, if continued, they can have a lot of unintended consequences
I'm not into predatory lending and collateralizing peoples bodies, kidneys.
predatory lending? you might not be into it, but US Students not being able to default on their US Student Debt is a form of predatory lending
Student loans are not dissimilar to any other form of predatory lending. Spend 12 years in public education, get a student loan to get a job, then get a home loan to get a home. Get a personal loan to buy luxuries. Pay tax on your labor to pay off the nations debt. Inflation eats away at your savings. Tax, debt, slavery, die. Thanks for coming.
Student loan fiasco. People with various degrees taking whatever jobs they can get their hands on to make payments. It's just what we have to do to get a job. We gotta get into debt to get a job. Fuck yeah. Lets all go to university and study something. Not because wer'e all that interested in the subject, or that we even now what we want to do. Just do it, because it will be vary hard to get a job without one, because most people have one. So the decision was made.
I would love to see a comprehensive study on the workforce, their work history, and their education and student debt.
Our minds are quite easy to manipulate.
I've cut way back on CNBC.....I feel much better.
vince, silence is golden, let your thoughts flow from silence, ha...
Of the several voices in my head, the ones that I pay closest attention to, are the ones with a single simple message: Beer.
So, fudging official government numbers, caning short sellers in the streets, government buying (directly or indirectly) company stawks to give the illusion of prosperity doesn't actually pass the smell test?
Quick someone alert Krugman! ;-)
Krugman would defend it.
Strange world where bad news is good news and good news is bad news.
Wrong decade to quit LSD.
I check my mail everyday for the free ACA LSD......nothing yet.
There's only four options:
Baboons is baboons
"No gnus is good gnus."
Every morning when I when I wake up I say Thank you Lord for another day....
The rest is all bullshit
As another Fight Club member said ,
"I am not unfit for soceity , Soceity has become unfit for me"...
Trust me.....everything is going to be fine.
https://www.youtube.com/watch?v=E1d5VvCa8Fo
If you look close enough....you'll see one of those buildings is WTC-7.
markets could care lass about fundamentals or the real economy anymore. all that matters is the crack cocaine of central bank stimulus.
How does one pack 40 years of education on the evils of bankers into a couple of months?
It will be interesting to see if the Chinese learn the lesson or whether they are deluded into thinking there are such things as free market forces allowed in this world..
Right now, I believe the Chinese government is hoping for a soft landing, which will mean that they will be asking the banks to purchase the majority of their best companies... with brand new foofoo fiat RMB created out of thin air.
Actually, the press admitting that the GOV cannot stop the carnage IS a healthy dose of market reality.
That lasts one news cycle, or until the next squirrel/ Kardasian/ Presidential candidate runs by.
Build MOAR empty cities.
Stupid fucking communists.
http://govtslaves.info/isis-leader-admits-we-are-being-funded-by-the-oba...
Prolly so. There's only one world in the future, and that is a world of USA military-industrial-financial-media dominance. Get used to it. Cough cough.
Did the entire system collapse yet?
i see a re-education camp in someone's future
1200 halted at limit down. LMFAO. Everything's fine.
Better dead than Red.
Bring back HUAC!
HUAC-a-mole
At work today but would bet 10,000 shares of Apple that someone on Bloomberg and CNBC said "Chinese markets are off their lows of the day" in the last 30 minutes.
Watched a couple of times last week and both stations would report that Chinese markets rebounded completely ignoring that large investors were not allowed to sell and thousands of stocks could not be traded.
1. Moar FED patience.
2. China's official numbers are funnier than a rubber crutch.
3. Greek vs EU pong
4. The entire system is pure fake, thru-n-thru.
we all know college kids are chumps. face it, in 'murica ur demographic matters more than the way you look, talk, or how much you make. Someday, sugar lips will know she's a chump. Don't laugh at me.
And before you judge, that's not what I have to say to society if I'm the King Monkey. Just the demographic that views zh. In fact I bet it takes a little bit of a chip on the shoulder to get past drudge if you're a college student. Now I know some people have to eat, and 0 is 0, just I can whip ur ass at smite. It's just like that old saying.