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Chinese Stocks Crash 10% In 2 Days Despite Stable Yuan, Margin Debt Drops First Time In 8 Days
At the end of the morning session there is more blood on the streets as The PPT never turned up...
- *INVESTORS SELLING CHINA SHARES ON WEAKER YUAN: CHANGJIANG SEC.
- *CHINA GOVT INACTION ON STOCKS CLD SPUR SELLING: CHANGJIANG SEC.
* * *
As we noted earlier...
Following yesterday's massive CNY120bn liquidity injection - the largest since Jan 2014 - and the notable absence of the plunge protection team in the afternoon rout ("we're only here for emergencies"), we note that margin debt fell for the first time in 8 days as Chinese farmers and grandmas realized once again that the stock market is not a free-ride to nirvana. Chinese stock futures indicate the losses will be extended at the open (SHCOMP -2.7%) as the Yuan fix is held unchanged.
Weakness in stocks continues...
- *CHINA'S CSI 300 STOCK-INDEX FUTURES FALL 0.6% TO 3,603
- *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 2.7% TO 3,646.80
We suspect The Chinese Plunge Protection Team will be out today as we near the 200DMA once again...
And The PBOC sets the CNY Fix unchanged:
- *CHINA SETS YUAN REFERENCE RATE AT 6.3963 AGAINST U.S. DOLLAR
For now, no further liquidity injections following yesterday's outpouring...
In a routine operation Tuesday, the People’s Bank offered 120 billion yuan ($18.77 billion) worth of seven-day reverse repurchase agreements, or reverse repos, short-term loans to commercial lenders in the money market.
The cash injection marks the biggest of its kind since Jan. 28, 2014, when the bank offered 150 billion yuan via 14-day reverse repos.
Some good news - or sanity...
- *SHANGHAI MARGIN DEBT FALLS FOR FIRST TIME IN EIGHT DAYS
Outstanding balance of Shanghai margin lending fell by 1.6%, or 14.6b yuan, from previous day to 879.9b yuan on Tuesday, according to exchange data. Tuesday’s percentage drop was biggest since Aug. 3.
* * *
Finally, we offer, once again, Alhambra Investment Partners' Jeffrey Snider's perspective on the "dollar run" that China is undergoing...
To start this week, Ma Jun, chief economist for the PBOC, gave an email interview where he expressed his belief that the yuan will be more volatile but in either direction. Many still took those comments as if it were a veiled prescription toward devaluation.
In the near term, it is more likely there will be “two way volatility,” or appreciation and depreciation of the yuan, Ma said in a question-and-answer statement sent by email.
The central bank would move only in “exceptional circumstances” to iron out “excessive volatility” in the exchange rate, Ma said.
If the central bank will only intervene under “exceptional circumstances” then the mainstream immediately turned that into “the PBOC is allowing devaluation because that is what it wants.” How any such thoughts could be considered consistent with what the PBOC has been doing until last week can only be misunderstanding the wholesale nature of global finance. Before last week, the PBOC had been intervening (who else could it have been?) so that the yuan wouldn’t move at all.
This week has so far conformed to the wholesale interpretation. Just two days after Ma’s “exceptional circumstances” reference, the PBOC was “forced” to act once more, this time in one of its largest internal injections to, one more time, keep the yuan from depreciating sharply. Pay close attention to net results despite the conventional language:
China’s central bank poured the largest amount of cash into the financial system on a single day in almost 19 months, signaling Beijing’s growing concerns about capital flowing out of the country following the recent weakening of its currency.
Short-term interest rates and bond yields in the world’s second-largest economy have spiked in the past week, following an abrupt decision by the Chinese authorities to devalue the yuan last week. As money leaves the country, the amount of cash in the financial system declines, pushing rates higher.
How is that not a “dollar” run, especially since it predates the assumed “devaluation”? The fact that the PBOC continues to flush “dollars” only suggests that it is not over; not even close (the amount of reverse repos PBOC undertakes in yuan is related and proportional to any “dollar” activity). Thus, I think that is why Ma reinforced the idea that China’s economy is in recovery and that the worst had passed at least economically. As I mentioned last week, after holding the yuan steady for five months the PBOC is just hanging on for dear life, hoping that the recovery message takes root and ends the run because it is obviously unable to do so in any fashion of either direction.
While some indications show that perhaps the most acute part of the turmoil has passed, dating to around last Wednesday, that isn’t nearly the same as its welcome end.
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If shark fin, rhino horn, tiger penis no help, get the fuck out, Grasshopper.
I tried to devalue my dong, but the ladies just love me more for it.
Sometimes inflation is a good thing.
Down the Chinese toilet.
http://www.planbeconomics.com/2013/11/toilets-in-china.html
Burrish!
Hmmm...Chinese chart porn...
I dunno...just doesn't do it for me. I guess I'm a rayciss...
Keep stackin' phyzz, bitchiz...the shit's closer to hitting the fan than ever before.
PPT + NaCN = BOOM !
that's just everyday volatility
Doesn't sound like their "superior" long term central planning is working out to well.
Rodham from God...?
you do realize that 4-5 of the top 25 names or words in Chinese have distinct English-phonetic 'L's lol
asians r hard mode am i rite
Another American firm I will never, in the rest of my life, buy from.
http://www.usatoday.com/story/money/cars/2015/08/17/gm-may-export-china-made-buick-us/31864817/
Take your bail out and fucking live with it. I'm done. I WILL NO LONGER BUY AN AMERICAN CAR. Shove that up your ass.
And I'm someone that could pay cash. Fuck you.
fuck gm...
at or by 150m(being generous) alternator, rebuuild caliphers, starter, 2nd set of brakes, water pump, erg ect pollution problem.
plus shit resale
compared to honda toyota
lets see, zero repairs on 171m and 175 m toyotas.
fuck gm
Time for a drink.
How much pain can the little Chinese investors can handle.... Lost everything + more... And still have an account open and still holding long on junk chinese companies ?! That's more than the pain and suffering Jesus took... Those little chinese investors should be rewarded with sainthood.
Margin debt tends to drop when trades get closed(squaring up). I think a lot of Chinese equity exposure still wants to exit.
Where's Carl Ican? How's those APPL calls you purchased against your shares Carl? You know, and I know some paperwork needs to get filed, if you hold them.
Nasty risk( rate-time decay) premium? You're still in the money Carl.
For how long?
Previous reports about margin debt rising made me wonder if some people were taking one more double-down sucker bet in hopes of getting back some of their earlier losses before bailing. With the ticker going up no matter how ludicrous the fundamentals might look, the temptation must have been great for some of those who were deepest underwater.
but didn't we read the government or the Shanghai market wasn't going to permit greedy short selling?
Doesn't that suggest that closing a short position would be frowned on the same as opening one?
I defer to your expertise.
The first rainfall to wash over Tianjin since a series of blasts struck a warehouse in the Binhai district last week has sparked a new wave of concern as an unidentified white foam has appeared on the streets.
Some who made contact with it are reporting a burning sensation on their face and lips, while others are reporting a stinging sensation on their arms. Some have said they experienced an itchy sensation, according to a NetEase News report.
http://shanghaiist.com/2015/08/18/first_rainfall_since_tianjin_explos.php
A burning sensation on their face and lips????
WTF, are they drinking it or just so stoned that they're falling facedown in the street.
Interesting to consider what happens now. We are drowning in cheap asian crap that we don't need, there is no need for more factories in China, or anywhere else for that matter. So....what do 7 billion people do now?
The petrie dish is looking mightly crowded and polluted. Mother nature?
The human race is on a precipice. It'll be fascinating to be alive and bear witness to the collapse of civilisation however on the down side things may become somewhat unpleasant.
We have plundered this earth to within an inch of our own lives and 99.9% of people don;t give a flying fuck.
This is precisly why civilsations collapse.
Buckle up everyone.
chinese markets are in free fall as I write .. 300 points in few mins and no uptick
Bitcoin was also in free fall a couple of hours ago.
Brings to mind a little Phil Collins .. In the Air Tonight. Part crash .. part cyanide
Reminds me of Bowie...
My little China girl
You shouldn't mess with me
I'll ruin everything you are
I'll give you television
I'll give you eyes of blue
I'll give you man who wants to rule the world.
That song has to be about drugs. Heroin.
Reminds me of David Letterman 1989
https://www.youtube.com/watch?v=oUMnqHaG3mM
reminds me of white phosphorus
https://www.mecaforpeace.org/sites/default/files/images/white-phosphorus...
Second the popcorn idea. Will the Party come in and buy support at the 200 DMA or won't they? Or will they allow a bloodletting below the 200 then snap it back? Betting on the latter is higher-percentage since it bypasses risk based on the uncertainty of the former. They did say they would support the market for years to come ... can't let down the people here can they?
Bullish for US equities just because.
:)
Bitcoin takes a huge shit today (over 15%) and ZH is silent on the event...
I can't stand Bitcoin stories but this one is the first one to matter in a while.
I have no bitcoin, no gold, and 2 silver dimes. I'm going down with the ship.
Buy canned food and sell it when the store shelves are empty. Especially canned chicken. If it doesn't pan out, you can always eat it.
So, you devalue your currency 5% which is an automatic, immediate and irretrievable loss. Your own citizens have been trying sneak out of your currency by buying assets abroad and you just proved them right. People like to invest in a strong currency with minimal shenanigans. Yet, the Chinese want everyone in and outside the country to buy into their heavy handed direct manipulation of the markets.
Just shoot the sellers, short sellers and off shore traders. That would be about right.
Tell me again what economic geniuses the Chinese are? I seem to remember the same thing being said about the Japanese not so long ago.
meh in a comunist run exchange everything is possible!
simple - outlaw margin debt and the market will stabilize
5% drop is not allowed for more than one day... so buy when it is down 5% for a move up and then sell again... China govt is there to assist you in this rigged game
But, is this due to China or the US Banks shorting the shorts out of it for some short term gain.
Now if it's US Banks, then under whose orders, the Government or Federal Counterfeiters ?
Just seeing how those communist government officials rig the market and lured all the ignorant people is disgusting. The corrupted officials sent their offsprings to the western world and then leave the civilians bloodbath in the stock market and the real world.
Communists and Islam are two worst thing mankind has invented.
hey
prolly Tianjin rage
The Party Bosses and Princelings and politically connected Fat Cats have had all their shares bought up by the captured State Enterprises with buybacks and by the Trading Desks which were forced to do so by Party fiat.
The rest who were not smart enough to bail or who couldn't because trading in the shares they held were suspended are going to be left to crash and burn...
Rigged Casino...
I was going to say that!
Buy Gold, Silver, Platinum and Palladium with Bitcoin for lowest premium above spot!
That is some funny porn.