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Asian Currency Crisis Continues As China Holds, Malaysia Folds, & Japan Heads For Quintuple Dip Recession
Asia got off to an inauspicious start this evening with Japan printing a disappointing 1.6% drop in GDP - heading for its fifth recession in 6 years... so much for Abenomics, but, of course, Amari spewed forth some standard propaganda that he expects Japan to recover moderately (and Japanese stocks popped modestly assuming moar QQE). Then Malaysia continued its collapse with the Ringgit down another 1% hitting fresh 17-year lows and stocks dropping further, as the Asian Currency crisis continues. Heading into the China open, offshore Yuan signaled further devaluation but the CNY Fix printed very modestly stronger at 6.3969; and following last week's best gains in 2 months, Chinese stocks are plunging at the open after Chinese farmers extend their streak of margin debt increases. Finally, WTI Crude drifted back to a $41 handle in early futures trading.
Asian Contagion...
Japan heads for Quintuple Dip recession...
The Asian currency crisis continues (led by Malaysia)
- *MALAYSIAN RINGGIT DROPS 0.9% TO 4.1155 PER DOLLAR
- *MALAYSIA'S KEY STOCK INDEX OPENS DOWN 0.4% AT 1,590.81
But broad-based USD strength against Asian FX continues...
Then China opened..
Great news - Chinese farmers and grandmas are releveraging!!
- *SHANGHAI MARGIN DEBT HAS LONGEST STREAK OF RISE IN TWO MONTHS
Seriously!
And Chinese futures appeared to mini-flash-crash...
As China revalues modestly..
- *CHINA SETS YUAN REFERENCE RATE AT 6.3969 AGAINST U.S. DOLLAR (against 6.3975 fix Friday)
- *PBOC'S YUAN REFERENCE RATE SET WITHIN 0.1% OF FRIDAY'S CLOSE
Offshore Yuan leaking weaker...
And finally WTI Crude continues to drift lower... once again trading with a $41 handle...
So while China may have succeeded in jawboning/intervening the yuan back to some semblance of (temporary) stability, the global reverberations look to have just begun.
Charts: Bloomberg
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The only thing that will stop the fall is the bottom. (Splat)
Tis just a flesh wound
http://i.ytimg.com/vi/9rNN8B2ul-M/maxresdefault.jpg
What is Japan at now... something like 250% Debt/GDP?
Heck, they can always print more Yen.
Can we please set some rules
Surge......plus 5%
Moon shot.....plus 10%
Dip.....minus 2%
Flash crash minus 5%
Crash .....minus 20%
Thank you
Over and out
but it's a bottom-less pit (eh, hole), no?
BIG hole, and they're worried about cyanide gas if it rains.
Overhead photos and article of Tianjin explosion aftermath:
http://www.independent.co.uk/news/world/asia/china-warehouse-explosion-t...
Fair value......plus 5%
Gains driven by strong fundamentals.......plus 10%
Buying opportunity......minus 2%
Incredible buying opportunity......minus 5%
Slight contraction (weather related)......minus 20%
Good Lord! you people are soooo Fucking Cynical! Everything is FINE! Buy some more stock and go back to sleep.. THEY KNOW WHAT THEY ARE DOING :-)
Another chart to look at is the monthly prices of WTI crude. From the chart covering the last 60 years, unless there is some change, the barrel price will break the $30 price barrier. There is nothing holding up the oil price. We could have a dual tier economy, with deflation in mineral resources and inflation in living costs such as rentals, education and food. And, of course, let's not forget the tremendous cost of carrying out Obama and the NWO's proxy war goal to corner the Middle East oilfields. The U.S. economy could end up wrecked for decades.
This crude future shows the recent 17 year uptrend break, and how easily oil will drop to temporary support at $32 and then $20, or lower. Watch it live here:
http://www.investing.com/commodities/crude-oil-advanced-chart
I was saying the same thing to some friends just last night.
We are currently seeing simultaneous deflation in production materials (driven by China and BRIC slowdown) AND fairly intense and wildly understated inflation in many of our big ticket living expenses (housing, healthcare, education, autos) due to ZIRP. This will end badly.
The plates have nearly stopped spinning. Things are getting interesting.
Tick tock, tick tock....
We are being lied to in New Zealand too. They say we have low inflation yet conveniently dont include housing costs. New Zealanders cant afford to buy homes because of all the Chinese that have been pouring into the country and those from mainland China inflating house prices. Same in Australia, except they are starting to clamp down on the dirty money being put through their housing market. We have a low wage economy and knuckledheads ruining what was a great place to live.
everywhere nice on the planet has two many humans. two many as in fucking and having moar fucking humans. wouldn't be so bad if they were a tad more intelligent and weren't part of the free shit army. the great purge of humans is coming and reversion to the mean(or less) will take place by starvation disease and/or moar war. i am part of this problem and don't put myself above the situation. since i minimalize i can say i is less part of this too many fucking humanoid thingy. people suck...
Yup, real economic deflation is met by monetary inflation. It's the only thing they can do in this system, which is now nearly done.
This week assuredly will be very interesting.
i'll take the other side of that bet
yep. Could easily be boring as fuck.
Im gonna LOL when these retard currency traders realize that this isn't 1997. Asia is the CREDITOR now. Not the DEBTOR. When Asia starts putting its dollars to work to defend their markets, watch TF out.
What the fuck is a frush?
Great movie and even greater times...
I love the one sided "yen flows" The S.S. YenTanic can't roll over, because the Wheel House is driven by $usd Bonds.
Nominal gains in the usd/jpy long trade. If you purchase a security priced in a depreciating currency, you have an " NOMINAL" gain.. What's going to kill Japan without looking at the GDP numbers, is the fact that Japan can't buy INFLATION!
I try to explain inflation to people, and their response is. " Everything is so expensive!"
When OIS is 15-25 basis points, and the Fed still can't take the tail (extra basis points) off of the longest part of the debt curve?
Demand is created by cheap prices, for good products. The Fed apparently is selling "dog shit", at the cheezy furniture store.
Thanks Tyler.
store.
If Mr. Yellen wants to lift rate? "At least buy the long end of the curve."
She can't! WON'T
The Fed twisted the long end of the curve almost 3 years ago. There's no liquidiity, unless the Fed. monitizes moar debt.
Long GOLD
Long> Smart, well trained, articulate, serfs.
150 Days: Treasury Says Debt Has Been Frozen at $18,112,975,000,000
Japan is like a huge turd swirling the bowl and just wont flush
this too, is bullish
Fras ras
C'mon global debt serfdom bankster ponzi, explode!
https://www.youtube.com/watch?v=SG8iDbBrYjA
Help me out here. I read just minutes ago in The Guardian that Japan's economy shrunk 0.4% in Q2 2015, and then I look over at the Nikkei 225 and it is +.5% so far today. I look back two years and it is an almost unbroken bull market to all time highs.
Is this just a case of 'bad news is good news' because investors expect more fiscal stimulus on the heels of a bad GDP print?
On the surface, the Nikkei looks bulletproof.
1) The stock market is not the economy
2) a devalued currency makes the stockmarket worth more of that devalued currency, not worth more in real terms
Yes, but it seems that the devaluation continues indefinitely without any consequences to the Nikkei, which is supposed to reflect real world performance of its major businesses.
I have been an almost daily lurker on ZH since around 2012 and just recently decided to jump into the fray, so thanks to the Tylers and the lively comments section, I have learned about the insane "Three Arrows" of Abenomics and the manipulations that goes on with USD/JPY FX market.
I guess what I'm asking is when do the chickens come home to roost?
No one knows the exact when. Could be next month, could be next year.
I'll tell you what though. Something that is unsustainable (like the current world financial & economic systems) won't be sustained.
I would be prepared to guarantee if things don't crash under Obama (I'd rate that 50:50), they will definitely crash under the next President - whomever that may be (100:0).
So I would say we've got about 5 years max of the current system - it won't endure beyond 2019/2020. The stresses are becoming too great.
Believe me, Obama can see the crash on the way and he's hoping like hell it won't happen on his watch. How else do you explain the reticence to get involved with Syria, the hoped for deal with Iran and the refusal to give into the Neo-con artists and supply a heap of deadly weapons to Ukraine??
Obama is pulling on the brake while at the same time trying to appease the more hawkish elements of his administration and the likes of AIPAC.
He can see what they're pushing him toward and he's resisting - not on my watch. He doesn't give two hoots if the world goes to hell in 2017-2021 - not his problem!!!
japan inc debt to market cap ratio is the future bitchez
muh muh muh my kuroda
"Bulletproof" like the Zimbabwe stock market a little while back... Nominal charts are useless when you factor in real inflation (decrease in purchasing power, aka currency depreciation).
I have lived in thailand for 15 years. Since the last asian crisis property has only gone up for 18 years.The prices are at obscene levels. The greedy bastards are still clearing and building. Cant wait for a collapse, willl be some great deals, just like in 98.
Yep wait for it. Keep your powder dry. Zulauf mentions that he bought commercial property at 40% of cost in *Switzerland* (he is Swiss) back in 98. Cycles still happen in spite (or especially because) of Central Planning.
Plugging this hour of Zulauf wisdom. Worth sharing - the whole hour is awesome:
https://www.youtube.com/watch?v=oRieqkbbrLg
My notes numbers are minutes in:
18 infrastructure GOOD 22 debt capacity limit 31 dollar debt 10T BIS 33 euro 36 Swiss franc controls lockin/out 42 ezone 44 greece 51 bonds
Ever see a dog shake itself in slow motion? It starts small at the head with a slowly building wave that ends in a crescendo at the tail.
It's like that.
Bullish for everything.
Japan is going for the 4-1/2 Deschmeddy? You don't see that every day. The difficulty factor on this dive is tremendous.
I will say affectionately that ZH predicts 20 economic distasters for every two that happen.
I do not think that the analyses are wrong. It is just very hard to tell how much stress the system can take and time the breaking point.
One thing that is always and forever in the favor of the central planners and socialists is the natural human energy to adapt and succeed. Even in Venezuela where everything is pretty much broken there are people trying to succeed and the basic necessity to survive rules. Black markets actually help government in that they prevent total collapse. As long as people can survive without violence or avoiding government violence, they will.
I sometimes wonder why we do not have small corrections to keep things on a more even keel and I realize that this is precisely the result of interventions. Without government interventions like ZIRP and "stimulus" we would get lots of smaller corrections and the market would always be properly revaluing. However, because of intervention these forces build up until they explode. When a dam breaks you get things that are far worse than any flood, not to mention that people have built ever closer to the river bed because there have not been any floods. In the end, the disaster is greater.
Each pull back we have had in my lifetime has been like an increasing sine wave and larger than the last disaster. The next one should be one for the history books.
When did things go wrong in Japan?
1989
What happened?
It’s bankers loaned money freely into the greatest real estate bubble of all time.
What did they do when the bubble burst?
They tried to hide the banker’s incompetence and losses through QE and low interest rates.
When did things go wrong in the Global economy?
2008
What happened?
US bankers loaned money freely into a massive real estate bubble. They then exported this problem around the world through complex financial instruments and leveraged up this bubble to unimaginable proportions.
What did they do when the bubble burst?
They tried to hide the banker’s incompetence and losses through QE and low interest rates.
WWIII the war against banksters. Long live the revolution.
CTRL+P faster?
looks like the china takedown is not going as planned. the chinese have been planning for this fight since 1997. in a coupla years the zionazis will no longer be needed by 2/3 of the world. in other words, the chinese win.
China's comming crisis
http://viableopposition.blogspot.ca/2015/08/the-impending-crisis-that-wi...