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China Cuts Benchmark Interest Rate By 25bps, Cuts RRR By 50bps

Tyler Durden's picture




 

What China was supposed to do over the weekend, and waited until its stock market tumbled another 16%, it has just done, because as MarketNews, Reuters and Bloomberg all just blasted, moments ago the PBOC cut both the benchmark and RRR rates:

  • CHINA PBOC CUTS INTEREST RATES
  • CHINA PBOC CUTS REQUIRED DEPOSIT RESERVE RATIO
  • CHINA PBOC CUTS 1Y DEPOSIT RATE BY 25 BPS
  • CHINA PBOC CUTS 1Y LENDING RATE BY 25 BPS
  • CHINA PBOC CUTS BANKS DEPOSIT RESERVE RATIO BY 50 BPS
  • CHINA PBOC: OVERALL PRICE LEVEL STILL LOW DESPITE PORK PRICE
  • CHINA PBOC: GLOBAL FINANCIAL MKT SEES BIG VOLATILITY
  • CHINA PBOC: ECO STILL FACING DOWNWARD PRESSURE
  • CHINA PBOC LIFTS CEILING ON DEPOSIT INTEREST RATES

From the PBOC:

People's Bank of China, from August 26, 2015, down financial institutions RMB benchmark lending and deposit interest rates in order to further reduce financing costs. Among them, one-year benchmark lending rate by 0.25 percentage point to 4.6%; year benchmark deposit rate by 0.25 percentage point to 1.75%; all other grades of loans and deposit benchmark interest rate, adjusted individual housing provident fund deposit and lending rates. Meanwhile, the release of more than one year (excluding one year) fixed deposit interest rate floating ceiling, demand deposits and time deposits of one year or less floating interest rate ceiling unchanged.

 

Since September 6, 2015, down financial institutions RMB deposit reserve ratio by 0.5 percentage points, in order to maintain reasonably adequate liquidity in the banking system, guide steady moderate growth of money and credit. Meanwhile, to further enhance the financial institutions to support the "three rural" and the ability of small and micro enterprises, additional lower county rural commercial banks, rural cooperative banks, rural credit cooperatives and rural banks and other rural financial institutions reserve ratio by 0.5 percentage points. Additional reduction of financial leasing companies and auto finance companies reserve ratio three percentage points, to encourage it to play a good role in the expansion of consumption.

This move takes the RRR from 18.50% to 18.00%, the deposit rate from 2.00% to 1.75%, the lending rate from 4.85% to 4.60%, and the PBOC also announced a further 300 bps RRR cut for financial leasing and auto leasing companies.

Here is the initial take from the WSJ:

China on Tuesday cut interest rates by one-quarter of a percentage point and reduced bank-reserve requirements by half of a percentage point amid market turmoil.

 

China also did away with its ceiling on most bank deposits.

 

The People’s Bank of China said in a statement on its website that it also cut bank reserve requirements for rural banks by an additional half a percentage point.

 

The interest-rate cut is effective Wednesday, while the reserve-requirement reduction is effective Sept. 6. The rate cut is the fifth by the Chinese central bank since November, while the reserve-requirement cut for all banks is the third this year.

 

The moves came after China’s stock-market slumped again amid worries over a slowdown in growth. Its main stock index fell 7.6% on Tuesday after an 8.5% fall on Monday, bringing it down more than 20% over four trading days.

This is what the PBOC said in connection to the rate cut (google translated):

1. what the introduction of the combination of measures to cut interest rates drop quasi major consideration is?

A: At present, China's economic growth is still downward pressure, steady growth, adjusting structure, promoting reform, benefit people's livelihood and risk prevention task is still very arduous, global financial markets recently greater volatility, the need for more flexible use of monetary policy tools to create a favorable environment for monetary and financial adjustment of economic structure and stable and healthy economic development.

The lower the benchmark interest rate loans and deposits, the main purpose is to continue to play a guiding role good benchmark interest rate, help lower the cost of financing community to support the sustainable and healthy development of the real economy. Since November 2014, the PBC has four lowered the benchmark interest rate loans and deposits, guide financial institutions lending rates continued to decline. July 2015, the weighted average interest rate of loans from financial institutions was 5.97%, the first decline since 2011 to the level of financing high social cost below 6% effective mitigation. Although the past two months, CPI rose slightly, but the main impact of structural factors such as rising pork prices are significantly affected, the overall price level is still at historically low levels, but also for the re-use price tools to further contribute to the reduction of social financing the cost of providing the conditions. To this end, the approval of the State Council, the People's Bank of China decided to further cut the benchmark interest rate loans and deposits, lending rates of financial institutions and to promote all kinds of market interest rates continue downward, to consolidate the macro-control policy effects preliminary.

The lower the deposit reserve ratio, mainly based on changes in the banking system liquidity, adequate long-term liquidity, in order to maintain adequate liquidity and reasonable, and promote stable and healthy economic development. People's Bank recently improved the exchange rate of the RMB against the US dollar quotation mechanism, and spreads over the central parity and the market exchange rate correction, reaching equilibrium in the foreign exchange market in the process, can cause fluctuations in liquidity, requiring remedy the resulting liquidity gap and reduce the deposit reserve ratio may play such a role. In addition, the county additionally reduce rural commercial banks, rural cooperative banks, rural credit cooperatives, rural banks and financial leasing companies, auto finance companies RRR, related primarily to guide financial institutions to further increase the "three rural "Small and micro enterprises and the expansion of consumer support.

2, the combination of interest rate cuts open the background and significance of what one-year deposit rate over the floating ceiling is? Why should we continue to keep the upper limit of the floating interest rate deposits and demand deposits within the same year?

A: According to the State Council's strategic plan, in recent years, the People's Bank to accelerate market-oriented interest rate reform, and made important progress. Currently, in addition to the deposit interest rate controls have been fully liberalized, the deposit rate floating ceiling has been expanded to 1.5 times the benchmark interest rate for businesses and individuals formal certificates of deposit issued, the market interest rate pricing mechanism and continuously improve self-discipline, the central bank interest rate management capacity to gradually enhance the smooth introduction of the deposit insurance system, further promote market-oriented reform of interest rate conditions are more mature. Meanwhile, the current overall price level in China is low, the total amount of ample liquidity in the banking system, relatively small upward pressure on market interest rates, but also to promote market-oriented interest rate reform to provide a better macroeconomic environment and the time window.

In this case, put the reform in regulation with a combination of interest rate cuts and further promote the interest rate market-oriented reforms, open the one-year deposit interest rate floating above the upper limit of interest rate reform marks another important step forward. As financial institutions to further expand the independent pricing space, is conducive to the promotion of independent pricing capability of financial institutions to improve and accelerate the transformation of the business model, improve financial services, but also help promote the fund price more realistically reflect the market supply and demand, give full play to the market decisive action, and further optimize the allocation of resources, promoting economic structure adjustment and transformation and upgrading, create favorable conditions for healthy and sustainable economic and financial development.

Remain within the one-year deposit and deposit interest rate floating ceiling unchanged, reflecting the "first long-term, short-term," the basic order of progressive liberalization of deposit interest rate ceiling of reform ideas, but also with international practice consistent. Judging from past experience, this order to promote market-oriented interest rate reform, help foster and exercise independent pricing capability of financial institutions, to lay a more solid foundation for the full realization of the final interest rate market; but also conducive to the stability of financial institutions deposit interest rate and overall financing costs, contribute to the reduction of social financing costs, for the sustained and healthy economic development has a positive meaning.

3, release the one-year deposit rate over the floating cap, how to guide scientific and rational pricing of financial institutions?

A: The release of more than a year after the floating deposit rate cap, the PBC will continue to improve related measures, further scientific and rational pricing guide financial institutions to maintain a fair and orderly market competition order. First, we continue to publish benchmark deposit rate by existing maturities. Further play the guiding role of the benchmark rate, providing an important reference for the one-year deposit rate over pricing. Second is to improve the regulation of interest rates and the transmission mechanism. Further improve the central bank interest rate management system, enhance the ability to control interest rates. Strengthen financial market benchmark interest rate to cultivate and improve the market interest rate system, improving monetary policy transmission. Third is to play the role of industry self-regulation. Guide market interest rate pricing discipline mechanism to further play an important role in a good industry pricing discipline, in accordance with the principles of compliance with laws and regulations, incentives and constraints of both, for a better interest rate pricing financial institutions continue to give priority to give more power market pricing and product innovation, expand the main issue certificates of deposit and interbank deposit investment range; with the necessary self-restraint on deposit interest rates beyond a reasonable level, disrupt the market order financial institutions.

4. recent central bank action to provide liquidity What?

A: The central bank to provide liquidity more channels and tools, in addition to the RRR, the recent expansion of the central bank has also implemented a reverse repo, the medium-term lending to facilitate (MLF), supplementary mortgage loans (PSL) and so increase market liquidity and loanable funds initiatives. Since August, the cumulative carry out reverse repo operations put in 565 billion yuan of liquidity to carry out the central treasury cash management deposits at commercial banks operating liquidity put 60 billion yuan. August 19 six-month period to carry out MLF operating 110 billion yuan, 3.35% interest rate, at the same time increase market liquidity and guide financial institutions to increase small and micro enterprises and the "three rural" and other key areas of the national economy and weak links support. Continue to provide long-term stability, adequate sources of funding for the development costs of the financial support shed change by PSL, 7 PSL amounted to 846.4 billion yuan at the end, an increase of 463.3 billion yuan over the beginning. The timely play of price leverage, as well as adjustments to adapt keep the benchmark lending rate, since the funds rate three times this year cut PSL to increase the shantytowns, support, promote lower financing costs. In addition, the central bank continues through agriculture, support small refinancing and rediscount support financial institutions to increase the "three rural" small and micro enterprises credit. The end of July, the balance of agriculture lending 213.9 billion yuan, an increase of 26.2 billion yuan over the previous year; supporting small balance lending 62.5 billion yuan, an increase of 25.4 billion yuan over the previous year; rediscount balance of 127.2 billion yuan over the previous year increased 11.8 billion yuan.

Next, the central bank will continue to closely monitor changes in liquidity, comprehensive use of various instruments properly adjusted combinations of liquidity, to maintain adequate liquidity and reasonable and stable operation of the money market, to guide steady moderate growth of money and credit, and promote stable and healthy economic development.

 

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Tue, 08/25/2015 - 06:22 | 6467613 semperfidelis
semperfidelis's picture

Let the print contests begin!

Tue, 08/25/2015 - 06:32 | 6467635 XAU XAG
XAU XAG's picture

 

 

Like trying to stop the sea TIDE

Tue, 08/25/2015 - 06:45 | 6467663 NoDebt
NoDebt's picture

Well, that should do it.  You can all continue your regularly scheduled BTFD-ing now.

Tue, 08/25/2015 - 07:15 | 6467736 VinceFostersGhost
VinceFostersGhost's picture

 

 

The kitchen sink....don't forget that.

 

Let's get serious here.

Tue, 08/25/2015 - 07:31 | 6467759 Haus-Targaryen
Haus-Targaryen's picture

Its already priced in.  No worries.  

 

Tue, 08/25/2015 - 07:47 | 6467802 walküre
walküre's picture

Haus, where do you see EUR in a month?

Fed is raising rates in September .. 100%

Tue, 08/25/2015 - 07:32 | 6467763 Divided States ...
Divided States of America's picture

Just shows the pboc is losing control, anyways this rate cut only makes the cny weaker no?

This is a rally you sell into, the gs and ms of the world will be doing so.

Tue, 08/25/2015 - 07:37 | 6467775 NoDebt
NoDebt's picture

"this rate cut only makes the cny weaker no?"

Not when it's pegged to the dollar.

Look, China's gonna be at ZIRP in a few years, just like everyone else.  Every developed country in the world is suffering from the same disease- massively too much debt.  And central banks are all prescribing the same treatment- ever lower rates so the interest on that debt doesn't eat everything alive too quickly.  

Tue, 08/25/2015 - 07:40 | 6467782 new game
new game's picture

200 dma? 50 dma? we got a problemo-nowhere close- oh goalseek numbers- undeathcross us-plez?

Tue, 08/25/2015 - 07:44 | 6467797 max2205
max2205's picture

XMAS IS SAVED!!!

Tue, 08/25/2015 - 07:52 | 6467818 Ghordius
Ghordius's picture

"And central banks are all prescribing the same treatment..."

NoDebt, there is only one country in this world were "all central banks" are routinely bundled together in "critical" commentary

fact is that we live on a planet where there is a global reserve currency in place, and it's the USD since the Bretton Woods Conference, and a fiat currency to boot since the Nixon Shock

fact is that King Dollar dominates various key parts of the global economy, from resources to finance and beyond

ergo... the FED sets the tune, is the key active player, while the others are mostly re-active to the FED's policies

and the term for a foreign CB not rolling on it's back and purring is simple: currency manipulator. remember how Washington was agonizing over casting that label on the PBOC?

another term for resistance to the FED is btw currency war

so in short, and imho, all sentences containing "all central banks" trying to paint them as a group collaborating towards common policies as friends and allies are at best strong simplifications and at worst obfuscating propaganda of the populist (read: for uneducated masses) kind

Tue, 08/25/2015 - 07:55 | 6467824 overmedicatedun...
overmedicatedundersexed's picture

Ghordius you are aware that many EU banks are member/owners of the FED, Right? that kinda makes them a single group for common policies or at least having very common self interest??

Tue, 08/25/2015 - 08:05 | 6467862 VinceFostersGhost
VinceFostersGhost's picture

 

 

Wait.....what?

Tue, 08/25/2015 - 08:19 | 6467898 Never One Roach
Never One Roach's picture

Rate Cut salvo in the currnecy wars that are heating up.

 

We'll see moar.

Tue, 08/25/2015 - 08:54 | 6467965 Tarzan
Tarzan's picture

Be nice to see the list of centeral bank owners.  I'm betting its a short list.  But there are no dought divisions among them. PBOC is cutting their rate following the Fed, but their rate is still no where near zero!

The Fed will be forced to move, not up, but down...  -ZIRP here we come!

Tue, 08/25/2015 - 08:39 | 6467976 spekulatn
spekulatn's picture

Biff needs more chardonnay.

Tue, 08/25/2015 - 08:49 | 6468003 runningman18
runningman18's picture

ALL CENTRAL BANK POLICY is controlled by the BIS, this is openly admitted and has been for decades:

http://www.edwardjayepstein.com/archived/moneyclub.htm

They are in fact coordinated (even with China).  The Fed is nothing more than a branch bank of the globalist cabal, not the center of the universe.  The so called "currency war" is a distraction away from the reality that all central banking is designed to lead respective nations to reduced living standards and to eventual acceptance of a single global monetary authority.  It is a conspiracy, plain and simple.

Tue, 08/25/2015 - 06:47 | 6467666 Relentless101
Relentless101's picture

Hey hey hey. These are economic tools were talking about here. This stuff is science.... fiction.....

Tue, 08/25/2015 - 06:54 | 6467692 Arnold
Arnold's picture

I do find these types of financial statements easier to read than the ones issued by the Federal Reserve.

I give large kudo s to the translators.

 There seems to just the right amount of cowbell.

Tue, 08/25/2015 - 06:49 | 6467670 petolo
petolo's picture

Isn't that shoveling shit against the TIDE? 

Tue, 08/25/2015 - 06:52 | 6467679 JamesBond
JamesBond's picture

Better call in Auburn then.  They're the ones who do it best.

 

jb

Tue, 08/25/2015 - 06:56 | 6467656 Ham-bone
Ham-bone's picture

The linkage between nations slowing population growth and increased indebtedness made very plain in the link.

http://econimica.blogspot.com/2015/08/slowing-engines-of-growth-examinedor.html

And why this is going to get so much worse before it never gets better.

Tue, 08/25/2015 - 08:50 | 6468006 Tarzan
Tarzan's picture

Understanding Demographics and it's effect on economies bring new understanding to the push FOR a flood of immigrants in shrinking western Countries. 

Problem is, it doesn't square with the progressive mime that "world overpopulation" causes poverty.

Shrinking Countries Die of economic collapse, then starvation. And Progressives want to depopulate the world, go figure...

Tue, 08/25/2015 - 07:41 | 6467787 The Wizard
The Wizard's picture

Money for nothing and chicks for free. That's the way you do it.

Tue, 08/25/2015 - 07:42 | 6467789 The Wizard
The Wizard's picture

Money for nothing and chicks for free. That's the way you do it.

Tue, 08/25/2015 - 06:22 | 6467615 nmewn
nmewn's picture

Uncle! We give!

Wimps.

Tue, 08/25/2015 - 06:23 | 6467616 fockewulf190
fockewulf190's picture

Thats like an umpire calling "SAFE!" at a play at the plate when the ball game is long over.

Tue, 08/25/2015 - 06:25 | 6467621 Dogspurt
Dogspurt's picture

Well such panic measures worked so well in 2008, didn't they?

Tue, 08/25/2015 - 06:37 | 6467645 Urban Redneck
Urban Redneck's picture

They did work in 2008.  It was a (largely) controlled descent, not a crash.

Tue, 08/25/2015 - 07:57 | 6467828 Ghordius
Ghordius's picture

lol. UR, you seem to have hit a nerve, here. -4, up to now the most downvoted comment of this article, and not even one reply. double-lol, +1

Tue, 08/25/2015 - 08:27 | 6467929 Urban Redneck
Urban Redneck's picture

But it's not mere mortal and fallible bankers and central planners who manipulate the markets, they are the omnipotent minions of Mamon, so if the market does not perform as sheeple imagine their masters would like it to in some idealized fantasy... then the intervention must have failed.

Of course- I'm getting older and handicapped by conditioning to actual extreme volatility in the hinterland frontier markets, so I probably yawn at US/EU/JP volatility when I shouldn't.  However, if most people actually understood banking, accounting, legal, and foreign policy implications of what happened in the fall of 2008, then the S&P would have went far lower than 666 over a much shorter timeline than 9 months (in addition to some much worse things happening).  

Tue, 08/25/2015 - 06:25 | 6467622 Infinite QE
Infinite QE's picture

Global QE continues unchecked.

Tue, 08/25/2015 - 06:31 | 6467632 Headbanger
Headbanger's picture

Oh it'll get checked alright..

Tue, 08/25/2015 - 06:52 | 6467660 Supernova Born
Supernova Born's picture

Has central bank direct manipulation EVER been more obvious?

Tue, 08/25/2015 - 06:53 | 6467683 new game
new game's picture

gold hammer tyme, getting a tad too high...

Tue, 08/25/2015 - 06:33 | 6467624 Tinky
Tinky's picture

Further underscoring the importance of...

...timing, party leaders have also insisted on strong regulation of explosive materials.

Tue, 08/25/2015 - 06:26 | 6467625 Two Theives and...
Two Theives and a Liar's picture

That did it...everything is fixed now! Scary thing is half my Lumpen coworkers will really believe it. Never underestimate the power of normalcy bias!

Tue, 08/25/2015 - 06:27 | 6467627 booboo
booboo's picture

Yesterday all the pundits were pissed because China manipulates their market as well as their currency today they are jizzing themselves because China manipulates their market and their currency.

Tue, 08/25/2015 - 07:07 | 6467634 Supernova Born
Supernova Born's picture

If anyone is still in doubt about direct Fed involvement in the market it's time for you to go play on the freeway.

Tue, 08/25/2015 - 06:52 | 6467676 ThroxxOfVron
ThroxxOfVron's picture

The difference is: today they perceive that the manipulation is to their direct benefit.

Stealing is suddently entirely acceptable to certain types if they perceive that they are going to be granted a portion of the loot.

Tue, 08/25/2015 - 07:15 | 6467704 Supernova Born
Supernova Born's picture

Less than zero sum game inevitable.

 

Tue, 08/25/2015 - 07:54 | 6467820 Doubleguns
Doubleguns's picture

All CB Wac-O-Mole games. Question is what happens when moles are coming 3 at a time from every hole. 

Tue, 08/25/2015 - 06:33 | 6467633 Tall Tom
Tall Tom's picture

Yeah...When your Banks are insolvent the solution is to make them more insolvent.

 

In that way when it craters you will end up with a larger crater.

 

It is more spectacular in that fashion.

 

 

Tue, 08/25/2015 - 06:35 | 6467643 Linoleum Blownapart
Linoleum Blownapart's picture

As a wise sage once said, "Alcohol is the cause of and the solution to all of life's problems."

Tue, 08/25/2015 - 07:04 | 6467713 Arnold
Arnold's picture

Geeze, I hate putting the tap on a stranger, but, can I borrow a beer?

Tue, 08/25/2015 - 06:36 | 6467644 new game
new game's picture

owwww, the smell of desparation...

Tue, 08/25/2015 - 06:34 | 6467637 new game
new game's picture

the need for more flexible use of monetary policy tools to create a favorable environment for monetary and financial adjustment of economic structure and stable and healthy economic development.

 

or:

we fucked up up and stimuated our economy to hell and beyond. we brought forth 50 years of growth. we built empty cities and built steel mills that are idol with wanning worldwide demand. we needed the growth to keep you the sheep busy rather than uprising in the streets with no work. we know this is a tempory fix but wtf, every other economy is at zirp and we are at least not there yet. we see a prosperous year of declining growth because we are desparate and want the worlds debt woes to go away so we will lower rates and hope this at least stimulates the stock market.

Tue, 08/25/2015 - 06:34 | 6467638 wizteknet
wizteknet's picture

Its all fixed, or is it we shall see the next 2yrs, forget after that anarchy, if we don't reach that point sooner.

Tue, 08/25/2015 - 06:34 | 6467641 wmbz
wmbz's picture

 "help lower the cost of financing community to support the sustainable and healthy development of the real economy"

"Real economy" You have to laugh when you read this crap!

DOW will off like a rocket ship today! Could be 18,000 by Friday.

None of this shit should come as a suprise to anyone.

Tue, 08/25/2015 - 06:37 | 6467646 new game
new game's picture

1929- 1938

lower lows, lower higths

we are heading in the right direction :)

s/ off

Tue, 08/25/2015 - 06:47 | 6467662 Wannabe_Oracle
Wannabe_Oracle's picture

I'm not sure. I'm thinking a dead cat bounce today with the DJIA ending +345 - but it will not sustain. Losses continue Wednsday thru Friday with the DOW shedding another 9% off of yesterday's close.

Tue, 08/25/2015 - 07:12 | 6467731 Arnold
Arnold's picture

Some equities are more equal than others.

Some will be supported, some will not.

The rising tide will not float all boats,especially the ones with gaping holes in there fundamentals.

Sorry for the obligatory cliche interruption.

Back to our regular programming.

Tue, 08/25/2015 - 10:16 | 6468310 Wannabe_Oracle
Wannabe_Oracle's picture

Can you dumb that down for me - please..

Tue, 08/25/2015 - 06:37 | 6467642 Brazen Heist
Brazen Heist's picture

Hmm that should calm markets down - NOT!

Tue, 08/25/2015 - 06:38 | 6467648 BurningBetty
BurningBetty's picture

This and everything else will prove to be a short term solution as with everything else CBs attempt to do. There is so much contagion now that these cuts here and there won't be of much help on the way down. Technically, the markets were ready for a bounce today. BB-extension on many indices screamed a short term buying opportunity.

Tue, 08/25/2015 - 06:39 | 6467652 FrankIvy
FrankIvy's picture

PANIC.

Tue, 08/25/2015 - 06:40 | 6467654 Bangin7GramRocks
Bangin7GramRocks's picture

U.S. All time highs before the end of next week. Jokes on you. Once again!

Tue, 08/25/2015 - 06:55 | 6467693 Oldwood
Oldwood's picture

Theme on every news service is 'do not sell". Buy and hold. It is possible, if they can pull it off, for this "correction" to provide a scare but also show their omnipotence to be able to bring it right back. Their dream is to have our complete "confidence", even if we accept it is all a false construct....a lie if you will. No one ever sells unless it is to free capital to buy more. Sell and sell and sell until every person on the planet is in the markets, and as we see with China, once in, you can check out but never leave.

A huge traunch of worthless "assets" that become the repository that every earner uses to store their hard earned wealth. It used to be enough to simply hold our cash in the banks, but that is not lucrative enough. Not allthat different from the notion of Manhattan Indians trading their land for glass beads. Its all about trading something of value (our labors) for something of less (or no) value.

Tue, 08/25/2015 - 08:43 | 6467991 IridiumRebel
IridiumRebel's picture

Someone tell that to the algos.

Tue, 08/25/2015 - 06:42 | 6467659 22winmag
22winmag's picture

Better dead than red.

Tue, 08/25/2015 - 06:47 | 6467667 kizell
kizell's picture

As I've said multiple times, there never again be a prolonged stock market crash in the US and most countries.   There may be big drops for a day or 2, but some central planner somewhere will come to the rescue.  You can forget about stock market crashes ever happening.  No doubt US markets will soar in opening trading this Tuesday morning. 

Tue, 08/25/2015 - 06:50 | 6467673 Supernova Born
Supernova Born's picture
You can avoid reality, but you cannot avoid the consequences of avoiding reality.
Tue, 08/25/2015 - 06:48 | 6467668 ThroxxOfVron
ThroxxOfVron's picture

Chinese interbank lending rates.

Published is one thing.

Getting money handed through the window is another.

Tue, 08/25/2015 - 06:49 | 6467672 koaj
koaj's picture

Good. Now that this crisis has been averted I can get back to the Kardashians

Tue, 08/25/2015 - 06:51 | 6467674 JamesBond
JamesBond's picture

"promoting reform"

===

 

Careful... that's how it started the last time in China.  

Tue, 08/25/2015 - 07:46 | 6467800 overmedicatedun...
overmedicatedundersexed's picture

today they will try to paper over (thank china)the damage..the damage is still there, in fact it will get worse.

today,ave people will feel safe that .gov's got things under control..but do they?

those that took half a trillion in hours otta the money markets in 08 are still out there.

economic growth is as real as pam anderson's tits. the Fed is going to bring us down while thinking they got it.

wild swings in stock valuations rhyme with 1929.

 

Tue, 08/25/2015 - 07:49 | 6467810 overmedicatedun...
overmedicatedundersexed's picture

one speaker on fox bis, yesterday let out..the real problem ..one stock exelon went from 38 to 5 bucks then back to 38 , he said, this is a problem...no shit.

Tue, 08/25/2015 - 06:52 | 6467678 Being Free
Being Free's picture

Yin - Yang m'f'ers.

China has your back Janet.  The markets are fine, everything is awsome.  Time to start raising rates.

Tue, 08/25/2015 - 06:52 | 6467680 I AM SULLY
I AM SULLY's picture

"Problem - solved ..." - Archer

(this is going to take the emerging market problem from worse to trans-spatial-horrible)

Tue, 08/25/2015 - 06:53 | 6467682 DanDaley
DanDaley's picture

Dow futures up almost 600...isn't that just precious.

Tue, 08/25/2015 - 07:17 | 6467737 VinceFostersGhost
VinceFostersGhost's picture

 

 

Tomorrow will be replaced by today.

Tue, 08/25/2015 - 06:53 | 6467684 nmewn
nmewn's picture

Oh look! The other Mao's are back from vacation...

http://directorblue.blogspot.com/2015/08/pic-well-it-appears-obama-famil...

...looks like they had a wonderful time...golfing...lol...whatta guy!

Tue, 08/25/2015 - 07:59 | 6467841 Arnold
Arnold's picture

Wow, looks like they just got the word on the 'family plan' Ashley Madison  account.

Tue, 08/25/2015 - 06:55 | 6467695 Hughing
Hughing's picture

smell that? That ink smell? The whole hill smells like that. Smells like, victory, Janet. Victory

Tue, 08/25/2015 - 07:03 | 6467712 exartizo
exartizo's picture

..... The PBOC taking Tyler(s) advice a day late?

priceless

Tue, 08/25/2015 - 07:04 | 6467715 deerhunter
deerhunter's picture

dow futures up 600.  This reminds me of a rite of passage in my neighborhood.  To become a man and walk down the street without getting your ass kicked to pass from grade school to middle school you climbed the water tower.  For perspective the year for me that happened would have been 1967,  well before full body armor of today required by parents and children alike before they venture out on a city sidewalk on their bicycyles.  We knew there was no room for error.  We knew where the bottom was.  That first misstep was the only one that was allowed.  After climbing on an angled leg almost to the top the worst was the last fifteen feet or so up to the gangplank that ran around the tower.  This part of the ladder was straight up.  After the angled ascent for 120 or so feet plus going straight up felt like hanging backwards.

The tower has since been barb wired off.  A kid did plunge to his death in the 80s.  Unfortunately.  We all knew the risks.  Peer pressure?  Herd mentality?  Needing to look like you fit in?  Something to do?  All of the previous?  To this day I am not quite sure but I did it.   The need to fit in the market is like that if you wish for your money to work for you.  Or so "they" say.

There is little to nothing under this market.  Even as I became more knowledgeable as to true markets and credit, and banking and the federal reserve everything in me didnt want to believe that when I got a 30 year mortgage that "money" was created out of thin air.  Our money isnt money.  It is a cloth/paper hybrid.  It is worth exactly what someone will give you for it.  Until they dont.  I dont know the future but the herd mentality is strong.  We had an old guy in the neighborhood that would pat us on the head while walking with mom and pull a quarter out of our ear and hand it to us.  I didnt know until older the quarter didnt come from our ear,  it was in his hand all along. The bankers have always treated us like that old man though his intentions for us kids were good the bankers are nefarious.  Smoke and mirrors. 

Don't buy it.  The bottom is there.  You don't want to reach it.  Smoke and mirrors.  Cognitive dissonance?  Denial?  We have no soup lines because you and I,, if you are working and paying taxes,   are feeding the invisible soup lines.  I am 60 and I no longer recognize my country.  Remember,  always keep one eye on your bobber.

Tue, 08/25/2015 - 08:40 | 6467984 IridiumRebel
IridiumRebel's picture

I am standing and applauding right now.

I got out two weeks ago. I lost on miners, but nothing like what is being lost daily now.

Tue, 08/25/2015 - 07:35 | 6467719 TeethVillage88s
TeethVillage88s's picture

Ranswaq: Chinese Gold Imports in July from Hong Kong Up from 47,841 Kg to 63,766 Kg.

Is that a lot?? 63,766 x 1000 = 63,766,000 / 31.1 = 2,050,000 oz

-

32153 X 211 Tons = 6,784,283 oz Gold Production in the US in 2014.
-

US Year: 2010, 2011, 2012, 2013, 2014

Gold Production:
Mine: 231 tons, 234 tons, 235 tons, 230 tons, 211 tons,

Exports, 383 tons, 644 tons, 695 tons, 691 tons, 430 tons,

http://minerals.usgs.gov/minerals/pubs/commodity/gold/mcs-2015-gold.pdf

Tue, 08/25/2015 - 07:13 | 6467733 Nothing Ever Happens
Nothing Ever Happens's picture

So this was all about shaking out the banana vendors?

Tue, 08/25/2015 - 07:17 | 6467738 TeethVillage88s
TeethVillage88s's picture

The US Carry Trade. And Devaluation of Yuan.

If you get a loan in US Dollars and Exchange to Invest in China or Yuan Denominated Investment... your pay off just took a hit and you might not be able to pay off the whole Loan if in Europe or USA or wherever.

Tue, 08/25/2015 - 07:31 | 6467754 falak pema
falak pema's picture

cheap money is now chop suey. Throw it outa the window for a free lunch to the leveraged mafia. Hope that groooowth rumbles and depression tumbles!

Some mumble bungle logic that denies that bubbles are supposed to go...POP !

Is 1997 calling already? Did he leave his business card with : don't bother calling me 'cos I'LL be CALLINg you!

Tue, 08/25/2015 - 07:30 | 6467757 Bernoulli
Bernoulli's picture

Can somebody please explain to me why THE FUCK such a desperate move that didn't work the last 3 times would push the DAX and SMI and ESTX50 and FTSE and all the US indices sky high? This is completely and utterly ridiculous.

I INVENTED THE PIANOKEY NECKTIE! I INVENTED IT!!!!

Tue, 08/25/2015 - 07:36 | 6467773 Calculus99
Calculus99's picture

If this 'prop' doesn't work for a propped up market then we'll have to have a prop to the prop of a propped up market. 

And if that one doesn't work then we'll have to have a prop to a prop to a prop of a propped up market. 

And so on. 

Tue, 08/25/2015 - 07:38 | 6467777 Dre4dwolf
Dre4dwolf's picture

http://www.soulseeds.com/wp-content/uploads/2013/03/man-holding-rock.jpg

 

You can try and prop it up all you want, but in the end, its just dead weight and you aren't getting anywhere.

Tue, 08/25/2015 - 07:36 | 6467774 Dre4dwolf
Dre4dwolf's picture

China is in death spiral.

Tue, 08/25/2015 - 07:38 | 6467780 Calculus99
Calculus99's picture

Good point many on here about 'manipulation'. It's always bad when it doesn't help them, always kept quiet about when it does. 

No different from speculators, everybodies favourite bogeyman when things go down. Speculationworks both ways so you never hear a word when there's upside speculation in stocks or housing.  

Tue, 08/25/2015 - 07:53 | 6467819 Oldwood
Oldwood's picture

When you invest in a company or yourself, you are putting your excess labors into other means of production. When you speculate, you simply seek to sell that which you bought, for a higher price with no added value, nothing changed but perception of value.

This perception is what is under attack as it is becoming increasingly impotant that these "implied" values increase, when there is NOTHING actually added to their productivity. So now we weave and spin metrics and perspectives to suggest that what has no value ( a simple gambling chip) is on a prepetual climb in value, and when all else fails, create monetary policy ensuring a eroding currency market that would suggest that the speculative markets are if nothing else, a safe vessel against currency devaluation. Every bit of it contrived and manipulated to herd normal people who simply work for a living and are fortunate or bright enough to actually avoid spending every dime they earn, to buy into this con game, designed to benefit no one but the owners and shills of the casino.

 

Tue, 08/25/2015 - 07:41 | 6467785 gwar5
gwar5's picture

Phone calls were made.

Tue, 08/25/2015 - 07:41 | 6467788 mydogisprettier...
mydogisprettierthanyou's picture

I get a survey (intelligence gathering) from Google opinion rewards once or twice a month. Usually it asks about household cleaners and other non sense. Today it asked about my investment strategy and future interest into investing. Lmao

 

FFuCCk OOfFF!!!

Tue, 08/25/2015 - 07:45 | 6467798 shantyman
shantyman's picture

It changes nothing....this entire global debacle is coming to a close in under 20 days....

Tue, 08/25/2015 - 08:03 | 6467853 Quinvarius
Quinvarius's picture

Nothing is ending this shitshow.  After the asteroid hits, some asshole from the Fed will crawl out of his bunker, and standing on the mountain of rubble, he will hold up a tablet with bid for 1 billion S&P futures contracts at 2200 on it. 

Tue, 08/25/2015 - 08:39 | 6467979 Aaronson.Jones....
Aaronson.Jones.Rutherford's picture

Thank you for this. Actually laughed out loud in work at this classic. I love it, will remember this one for life.

Tue, 08/25/2015 - 07:51 | 6467811 poldark
poldark's picture

?

Tue, 08/25/2015 - 07:51 | 6467816 walküre
walküre's picture

Back to the regular programming about GREECE

Elections and new government which will not honor any of the reforms and contracts.

Oh what a joy ride this is gonna be!

September crap shoot right on cue!

Tue, 08/25/2015 - 07:57 | 6467834 mydogisprettier...
mydogisprettierthanyou's picture

What about the kardashians though?

Tue, 08/25/2015 - 08:15 | 6467829 Big Cog
Big Cog's picture

Popcorn and Doritos. Buy the dip!

Tue, 08/25/2015 - 08:00 | 6467845 Quinvarius
Quinvarius's picture

The stock market is the most important thing...ever!

Tue, 08/25/2015 - 08:04 | 6467856 Latitude25
Latitude25's picture

Just how many hundreds of billions of dollars did the Fed create yesterday, out of thin air, to prop up markets?  It must have nearly equaled an entire year of QE3.

Tue, 08/25/2015 - 08:25 | 6467927 mijev
mijev's picture

Yup, I'm guessing yesterday and today will add close to $1T to the fed balance sheet. I don't know how much a DOW (or the S&P, nasdaq) point is worth in dollars but with a 4500 point ride up and down all day it gets really expensive. As soon as the price was moved up, other sellers exited and the cycle began again. How many dollars traded hands in just APPLE alone?

Tue, 08/25/2015 - 08:10 | 6467867 CitizenPete
CitizenPete's picture

China permits pension-fund investment in stock marke

China is turning to pension-fund money to prop up the stock market, after an injection of billions of yuan has failed to revive prices. The State Council is letting the country's pension fund invest as much as 30% of 3.5 trillion yuan worth of assets in equities. The fund had been limited to bank deposits and low-yield treasury notes. South China Morning Post (Hong Kong) (free registration) (23 Aug.)

Tue, 08/25/2015 - 08:23 | 6467916 Son of Captain Nemo
Son of Captain Nemo's picture

Oh my but this is too beautiful and funny!...

Can' wait for Janet Yellen's announcement for a rate hike now!

Tue, 08/25/2015 - 08:29 | 6467936 NDXTrader
NDXTrader's picture

Desperation move. If this hail mary fails and gets faded...look out

Tue, 08/25/2015 - 08:39 | 6467977 Dis-obey
Dis-obey's picture

 

check out the 10 year USD/CNY exchange rate:

http://www.xe.com/currencycharts/?from=USD&to=CNY&view=10Y

trading today at 6.41 RMB to the dollar up from ~6.2 USD/CNY 2 weeks ago and the main stream is screaming bloody murder: those damn Chinese currency manipulators! Look at recent history and you'll see there is plenty of space for the CNY to go up.

in the thick of the 08-09 recession it traded at 6.83 USD/CNY

In the Chinese boom year 05 the rate was >8 USD/CNY

 The truth: The Chinese are finally decoupling from the dollar because it is not in their interest to continue a peg. China is a production based economy they benefit from having a weak currency so they can have pricing advantage over other exporting nations.    Like it or not America is now overwhelming a consumption based economy  and benefit from getting more for their buck by having a strong currency. 

Tue, 08/25/2015 - 08:59 | 6468036 Son of Captain Nemo
Son of Captain Nemo's picture

The truth: The Chinese are finally decoupling from the dollar because it is not in their interest to continue a peg. China is a production based economy they benefit from having a weak currency so they can have pricing advantage over other exporting nations. Like it or not America is now overwhelming a consumption based economy and benefit from getting more for their buck by having a strong currency. 

"And that's the truth"! -Edith Ann

Tue, 08/25/2015 - 08:42 | 6467982 Dis-obey
Dis-obey's picture

cut away China the US will print some more to buy up your made in china ass hats. 

Tue, 08/25/2015 - 09:11 | 6468073 Son of Captain Nemo
Son of Captain Nemo's picture

Of course D-o we know where this will all be heading...

Nobody is talking about the ongoing violations of the Minsk agreement by the installed Kiev government and that shelling has been  ongoing for several week albeit not as aggressively as several months ago but innocent people be killed nevertheless.

Massive human traffic from the Middle East moving through Southern Europe to escape the carnage this is their own homes with nowhere else to go... Afghanistan, Yemen, Iraq, Syria, Turkey... Take your pick of the daily destruction.

Then of course the short selling binge late last month followed by China's systematic de-peg of their currency to the U.S. dollar followed by some nice "fireworks" and then the IMF announcing that China would not be eligible to the SDR for at least another year.  Too many pretext(s) to ignore...

Make no mistake the Anglo-American/Brussels contingent wants war.  And sadly they feel they have no other recourse in order to keep their "day job"!

 You have to ask yourself ultimately which is sicker ?  The devastating crimes that have been commited in our names for decades through these wanton psychopaths?  Or the people they control that allow it by continuing to play the game by their rules?

Tue, 08/25/2015 - 10:57 | 6468484 robertocarlos
robertocarlos's picture

That was the wrong move unless you want inflation. Still you won't get inflation, just some angry peoples.

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