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"Turmoil" - Aussie Miners Mauled, EM FX FUBAR, Japan Jolted, & Asia's "Glencore" Crashes
Following on from a weak Europe and US session (despite late-day heroics in China last night), Fed confusion and commodity-complex counterparty-risk-concerns have sparked further turmoil across AsiaPac in the early going. Noble Group (asia's Glencore) is crashing, down 6.7% at the open. FX markets are seeing outflows send CNH below CNY for the first time since July and crush Thai Baht to its weakest since Jan 2007. Equity markets are in trouble with Aussie stocks hammered (driven by a plunge in Miners) and Nikkei 225 down 1000 points from Friday's highs. Asia credit markets have spiked to 2-year wides. China injected another CNY40bn and strengthened the fix (by the most since 9/2) for 2nd day in a row.
FX markets are turmoiling across the board with Thai Baht at its weakest sicne Jan 2007...
And Malaysian Ringgit is collapsing for the 7th day in a row - to its lowest since 1997 - MYR is down 41% since the end of QE3
Japanese stocks are plunging as the last leg of support for Abe's government fades into the abyss of suicidal monetary policy... The Nikkei 225 just broke Black Monday's lows and is trading back to January lows
Japan's VIX is surging once again - back above 33.
In other Japanese news, Daiichi Chuo KK, a firms that was USD2.5 billion markets cap in 2008 and operates specialized carriers, oil tankers, and coastal shipments, is halted and expected to file bankruptcy today... so much for devaluing your currency by 40% to export growth...
Aussie stocks are in freefall as Aussie Miners get mauled...
And Asia's Glencore, just as we warned...
If you like GLEN CDS, you will love NOBLE http://t.co/itRvATiSFf
— zerohedge (@zerohedge) September 28, 2015
Is getting hammered...
- *NOBLE GROUP SLUMPS 11%, HEADING FOR LOWEST CLOSE SINCE 2008
And bonds have crashed...
- *NOBLE 6.75% 2020 BONDS DOWN 15PTS TO RECORD LOW OF 65
* * *
Credit risk is surging...
Chinese markets are in serious turmoil also...it appears serious amounts of USDollars are being dumped as....
- *OFFSHORE YUAN STRONGER THAN ONSHORE SPOT FIRST TIME SINCE JULY
- *OFFSHORE YUAN TRADES STRONGER THAN MONDAY'S ONSHORE CLOSE
and Chinese stocks are weaker...
- *FTSE CHINA A50 OCTOBER FUTURES DROP 2.2% IN SINGAPORE
- *CHINA'S CSI 300 STOCK-INDEX FUTURES FALL 1.3% TO 3,108.2
But this is the real problem in our view that is building up major tension...
The PBOC is clearly suppressing interbnak rates "dead" even as defgault risk soars (systemically) - just as we saw with CNY "suppression" this cannot last forever and will blow at some point.
PBOC strengthens Yuan fix for 2nd day...
- *CHINA SETS YUAN REFERENCE RATE AT 6.3660 AGAINST U.S. DOLLAR
PBOC injects another 40bn...
- *PBOC TO INJECT 40B YUAN WITH 14-DAY REVERSE REPOS: TRADER
But never to worry...
- *CHINA WILL REMAIN GLOBAL GROWTH ENGINE: PEOPLE'S DAILY
The propaganda is heavy tonight.
Charts: Bloomberg
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A dingo ate your profits.
This has got Global Warming's fingerprints all over it...
And for a $200,000.00 research grant I can prove it!
Noble: worst Glencore since Lehman
Glencore was always a bit sus to me because of the involvement of the now late Marc Rich. He sold sanctioned Iranian Oil to Israel, pocketed billions of Moscow's assets in the turmoil, and was then pardoned by Bill Clinton for some bad deed or another. People like that, and the company they ruled and kept should never be invested in because you may not get what you see.
exactly anyone who paid off the clintons like rich and dozens of others should be ripe shorts because they are 100% worthless scams like the clintons. mena
Where can I get access to CDS trading (for example Glencore). I digged through the trading instrument list of my current brokers Tickmill and Interactive Brokers and none offer CDS trading. I can, however, trade options and CFDs on Glencore with my current brokers.
If not Global Warming's, perhaps then Global Crossings?
You'd be the cheapest climate "scientist" ever.
Not to worry, the Peoples Republic of China (there's an oxymoron if there ever was one) is "buying" gold!!! Now, what the Chi-Com officials who control the gold are doing with "the peoples" gold is an entirely different matter.
Easy come, easy go, eh road side squatters? ;-)
Gods work.
So the Big banks are going to Buy up a Bunch of Miners on the Cheep..
who would have knowed.. hope some economic historian records this for our grand kids
Since i am not black or muslim. I dont expect my progeny to make it that far
No reason to not be one of those historians yourself.
Throw another dingo on the barbie, eh mate?
All real bad news; should send US equities to all time highs tomorrow; if there is an ounce of ammo left.
Every once in a while, the bad news gathers momentum and it is best to just get out of the way and let Ferguson or the stock market tear itself apart for a while, and then come in and rescue everyone left.
I love the smell of fresh Chinese propaganda on such a beautiful pollution infested morning. A deep breath in and all is good.
"Another fine mess you got us into Ollie".
" We propagandized some folks. "
Yes, but "GLOBAL GROWTH ENGINE" is merely an anagram for "Whore Bang Tingle Log." Ah, those inscrutable Chinese...
Yet Gartman says commodities have bottomed as the banner headline on CNBS reads calling him a 'famed analyst.' What a laugh.
… well, he is a famed analyst, but what he’s famed FOR is subject to debate.
Famed for always being wrong. If he was famed for being right he wouldn't show his face on that farce of a channel. He obviously needs the paycheck and, being the farce they are, they keep paying him.
Looking forward to his flip-flop to going short.
Blow back is a Bitch but the reality is The Famous Federal Reserve are completely powerless to stop what they started and it is coming back to bite them. Another pile of retirement savings going up in flames. Two days to the end of the Quarter
Where is that Sniveling Bernanke, speak up you Kiting Kike
He was on the Sunday Morning
http://www.cbsnews.com/news/q-a-ben-bernanke/
wild jumps on the nikkei methinks BOJ is struggling today
What about the Vietnamese Dong?
Its still rather small and powerless.
Please!! There are ladies present!!!
Really?
Don't mind me... I'm diggin' it!
ZH chicks are hot!
a little soft tonight
Australia is in for a double whammy. First it shuts down all of its production facilities (especially automotive), then sells RE out to the Chinese land bankers and then places all of its chips into banking and mining.
China's dump hasn't only affected the RE bubble but directly decimated the commodity sector, the only fuckin productive thing left.
Very perceptive and true! China now needs to call in it's assets for cold hard cash to fund the falling Chinese Markets. OZ had it's RE boosted by Chinese cash looking for a home. But now the Chinese need to convert to cash badly. China is selling all kinds of things to gain cash.
Or they could just .... print more Yuan! And some more, and more, and ... more..
Don't forget Australia just let the IRS pickpocket the country by allowing the transfer of private banking information of about 50,000 Australian citizens (just because they were born in the USA) to the IRS through the bank or Australia
FATCA is what is causing this worldwide dislocation
Boy, are those women landing the anchor babies down by the border gonna be pissed when their kids find out about FATCA!
commodity-complex counterparty-risk-concerns
This is the type of modern financial engineering bullshit that hardly existed a decade ago, but now holds the entire world economy hostage. All the fucking hedges, and default insurance and CDS, and you name it. Any break in the bubble markets, will cause a cascade of unlimited counter party obligations that CAN NOT BE MET.
So, the markets are like a mine field, blow up one, and the others counter mine and all go off.
Remember last time? When AIG could not meet all it's counter party obligations and insurance on defaults? This time around it is all far, far worse. The Fed will have to print trillions, and then the IMF will have to step in and do SDR to infinity. All along the plan was for the IMF to take over the world economy with their new SDR's. That was the idea all along. A new world order awaits you, and in it, YOU ARE FUCKED!
Optimist.
Australia is facing a housing market Bloodbath. Consider this; the median house price in Australia is over $600,000 ?! That's last years number. As $165k/year commodity truck drivers lose their jobs who will be paying that whopping mortgage?
My guess is Australia's bailout of thier banks will go the same way as in the USA and their QE will be quadruple what Hank Paulson/bernanke's was. Gold will react accordingly like last time esp in Oz Dollasrs.
Brace yourselves down under; you're gonna need lots of lube!
Yeh but the aussie banks will ALWAYS brag about how they're the most profitable in the world. Let's see 'em dig out of this one.
PS. Til this day, my Aussie mates tell me how things are different there, you know, how their banks had "stricter rules" and all that horseshit.
It's not really the mining truck drivers you have to worry about, the mining industry was never a big employer anyway.
It's the old boomer imbeciles who were borrowing 100% to speculate and lose money because the capital gains would make up the difference. It was mostly old fucks and chinamen duking it out.
The banks are pulling it in now - 20-30% down. Nothing stalls a market like needing to stump up money to buy!
Good night.
"Any break in the bubble markets, will cause a cascade of unlimited counter party obligations that CAN NOT BE MET."
So, we're to expect something akin to the MF Global debacle, on steroids? That could be universally painful!
Under the surface there are gigantic loses in commodities being racked up and I think this is just the beginning of the unwind.
Goddamn if this keeps going - and it will - no ones going to give a flying fuck about the next FOMC word cloud.
Just a few more collateral calls to Glen or Noble and the shit will hit the fan.
Mr. Armstrong - paging a Mr. Martin Armstrong. Your economic confidence model is on line 2. Something about 2015.75?
How's that comex vault looking? Last run I heard there was like 37 bars left.
Didn't zerohedge used to have a home link at the bottom of every page? At the very least have a cheesy back to the top for fucks sake.
+1000 or whatever it takes.....totally agree
Home button on your keyboard will bring you back to the top.
CTRL Home will bring you back to the top.
According to VTB Capital:
https://app.box.com/s/to11bysjl4r6o4op1n97y2uv3yxnmkq8
Growth concerns
It has been a volatile few weeks for the financial markets, with investors’ main issues being the health of the global economy, especially the Chinese economy, concerns that deflationary forces might be quite intense and uncertainty over the intentions of the Fed as regards its monetary stance.
For most investors, the base case is a disinflationary economic recovery with the US leading the way, the Eurozone gradually recovering and China avoiding a hard landing. Inflation remains generally subdued, with the major central banks managing to meet their 2% inflation targets and with the Fed gradually lifting the fed funds rate commencing at the December FOMC meeting. A divergent monetary policy between the US and the rest of the world means a stronger US dollar. The US is the only economy that can cope with a stronger economy because of better economic growth prospects while everyone else, including China, prefers currency depreciation, albeit not in the form of an outright currency war. Policymakers prefer to stay within the confines of the G-20/G7 policy umbrella, despite there being little sign of any policy co-ordination.
The disinflationary economic recovery scenario is probably what is priced into markets at the moment. Investors do not want to deviate from the ‘Buy The Dip’ equity market mantra on the basis that Fed policy will still remain accommodative so that equities will outperform bonds and cash. BoAML points out that this might be the first year since 1990 that cash outperforms both equities and bonds.
The S&P500 index is down 6.2% year-to-date, with the global equity index down over 2% while a global government bond index is down a similar amount over the same period. The MSCI World Equity Index (MXWO) peaked in May this year but is now at its lowest level since late 2014. The MXWO has to defend current levels, in other words, investors have to retain conviction and buy here if a global recession and deflation scenario really is not on the agenda. For the S&P500 index, this translates into levels around 1,850 holding (the low in October 2014 and in August 2015). For the MSCI EM Equity Index (MXEF), this means that the August low at 762 also has to hold. A global recession and deflation scenario could easily plunge MXEF back to the 2008-09 low around the 445 level. Corresponding signals of recession-recovery risk are to feature in oil and other commodity prices, such as iron ore, steel and cooper. Recent lows have to hold up otherwise this too would reflect a move into global recession. Watch the Glencore share price as a commodity indicator and Caterpillar as a China play.
In terms of economic indicators, most investors watch the monthly purchasing manager indices, the PMIs. China’s PMI for the manufacturing sector (47.0 in September) already points to recessionary conditions, though the service sector PMI is slightly more resilient. Japan’s PMI is just above 50 and this week’s Tankan survey is an important indicator of business confidence. The global PMI stands at 53.7. It has to drop below the 50 level for recession concerns to intensify.
Against this backdrop of global economic uncertainty, it is no surprise that more recently there has been a focus on how policy-makers might respond. This includes the possibility of fresh ‘unconventional’ monetary policy measures such as ‘helicopter money’, negative interest rates in the UK, QE4(-ever) in the US and explicit debt monetisation.
Whether more QE is the answer is debatable, though the main central banks such as the Fed, ECB and BoE would probably prefer to extend or renew existing QE programmes before venturing into the uncharted waters of ‘helicopter money’. China has scope to cut interest rates and reduce the banks’ reserve requirements ratio (RRR) before resorting to outright QE, though some argue that there has been implicit QE through the official underwriting of local government debt. The latest data, out this morning, shows that Chinese industrial profits fell 8.8% year-on-year in August.
However, we would be concerned from a general perspective that implementing such policies just perpetuates a financial cycle which has already inflated financial asset prices, increased leverage and distorted savings and investment decisions in the real economy. Japan is a classic case where a quite aggressive QE programme has failed to spark an economic recovery or meet the BoJ’s inflation objective of 2%. There are a number of Fed speakers this week including Janet Yellen, Stanley Fischer and Bill Dudley who might inject some clarity into the Fed’s policy intentions. The key US economic data release this week is Friday’s nonfarm payroll report and the market is discounting an increase of 200k in jobs, with the unemployment rate just above 5.0%. So far, wage inflation has remained subdued, but in the UK it has started to pick up even though the market still thinks that the BoE will defer a rate increase until February 2016.
One thing that caught our attention in Janet Yellen’s speech on inflation dynamics last week was the fact that she believes that inflation is determined by an ‘Expectations-augmented Phillips Curve’. In her inflation model, there is no role for money supply growth. Readers who recall their economics education will remember the quantity of theory money and Milton Friedman’s adage that “inflation is always and everywhere a monetary phenomenon.” Yellen might be looking at the wrong inflation model.
The problem facing the main central banks is that by delaying the normalisation of monetary policy, especially in the US and the UK where economic growth has actually been quite good (3.9% real GDP growth in the US in the latest data), the central banks become boxed in and at the mercy of external developments. Investors might start to become concerned that the central banks are running out of ammunition with which to combat the next recession and/or financial crisis. Certainly, the use of fiscal policy is constrained, in some cases, by the increase in government debt-GDP ratios since the crisis. In the US, there is also a renewed concern that there might be a repeat of a federal government shutdown (at the end of this month) as well as a fresh debt ceiling crisis in October-November. The US presidential election in November 2016 has the potential to create some degree of policy paralysis even though, in principle, the US has scope for an expansionary fiscal policy given that the US budget deficit is now at 2.5% of GDP, compared with the peak of 10% in 2009.
In the Eurozone, through the course of this year, there has been evidence of a gradually improving if unexciting economic recovery. Money supply growth in the Eurozone is picking up and bank loans to households and corporates are increasing. However, the VW scandal has just seen the ECB limit its funding which might have adverse knock-on effects on corporate bonds elsewhere in the auto sector. The slowdown in the Chinese economy had already adversely affected the car sales of the big European manufacturers. European small caps have outperformed large caps, reflecting this China/EM exposure. Euribor futures are pricing in a cut in interest rates. On top of this, there is growing political uncertainty as evident in the Catalan elections yesterday where separatists won 72 out of 135 seats. Catalonia accounts for 20% of Spanish GDP. Wolfgang Munchau writes in the FT today that Europe is juggling five simultaneous crises: the migrant crisis, Eurozone periphery debt, a global downturn, Russia and the VW scandal, which all limit Germany’s fiscal space. Problems indeed.
Dang! That Blood Moon was the real deal I guess. Worldwide collapse in the making!
S&P futes hovering around 1870. I don't foresee much BTFD-ing over the next few days.
Major and I'm talking MAJOR support going back to 2009 was tapped on the S&P today. If it breaches, look out
with VTB standing for "Vociferous Terminal Buy" - which carribean island are they on?
*CHINA WILL REMAIN GLOBAL GROWTH ENGINE: PEOPLE'S DAILY
*I will remain a super stud with awesome girth and staying-power galore and chicks will dig me
*CHINA WILL REMAIN GLOBAL GROWTH ENGINE: PEOPLE'S DAILY
*I will remain a super stud with awesome girth and staying-power galore and chicks will dig me
"The PBOC is clearly suppressing interbnak rates "dead" even as defgault risk soars (systemically)"
Cool! A new portmanteau! Going Galt, by default! I LOVE IT!!!!
Who is John Galt?
Japan is going to get crushed when they open after lunch. I hope they enjoyed their sushi and saki bombs!
Naw, Nikkei only down 3 12% today, not to worry.
Japenese lady who fly airplane upside down have crack up.
The sad thing is China actually does account for most of the global growth at the moment... as anemic as it is.
Nikkei future down 4% tonight and 400 points in the last 4 hours, and threatening the Nov-Dec '14 lows, looks headed for a 15K handle, in what my screens suggest is an impending world equity collapse, or are the varsity knife-catchers really out there hiding in plain sight and ready for tomorrow's opening?:
http://www.investing.com/indices/japan-225-futures-advanced-chart
All Asian markets getting butchered again today. Closing at the lows....not a good sign for tomorrow. US futures barely off. Hahahaa...somehow, I suspect there will be more blood in the US markets than the futures currently indicate.
Bombs away!!
Tick tock...tick, tock...
can you hear the roar
MOAR
MOAR
MOAR
UNTIL
THEY
CAN
PRINT NO
MOAR
Big fight at the moment to keep nikkei 17000
AAAANNNNNNND - They Lost
They get NO 17000 (bet 16,800 is in reach ?)
You know what they said about Blood in the Streets ... BFTD
How much Blood ? How much Dip ?? When the Dow just dies? or the Nikkei goes first and the carnage spreads East. And West.
Yen - Dollar pair now down to 119.4 and headed south. Gold may break 1100 ?? Sucks being a gold advocate these days - people even laugh.
Carnage and Chaos tomorrow - Got popcorn, pizza, and ribs planned, with Jack in the fridge. Oops, it's already tomorrow. Dow Futures are near 15,800, there was a 170 point downside gap in the Nikki at open, and things are getting exiting.
Have a Great Day and if you actually trade, unlike most of the posters hereon, Good Luck, may the odds be with you !
Carnage and Chaos tomorrow - Got popcorn, pizza, and ribs planned, with Jack in the fridge. Oops, it's already tomorrow. Dow Futures are near 15,800, there was a 170 point downside gap in the Nikki at open, and things are getting exiting."
You refrigerate your Jack?
I never thought of that...
Popcorn?
And ribs?
I think this is going to be some week; could even set off the "big one".
Just like 2008, someone wakes up from the Fed high, and realizes where they are: on the ledge and losing their balance. The reality of the situation finally takes hold, and the dope quits working.
They don't call it hitting bottom for nothing, and it's a helluva place to be. Lotsa innocent folks are going to be hurt badly, and never got a damned thing outta it. The headwaters of this goes back several decades, and it really didn't have to be this way.
BTW: is that you in your avatar?
Pretty nice.
I like ribs, too...
m
The world is far too unstable to even think of trying to run a company.
Investing is the only sensible option where you can see the trouble and exit or short it immediately.
Problem - what do you invest in or short when all the companies have gone?
When Capitalism reaches its zenith, everyone will be an investor and no one will be doing anything.
Central Bank inflated asset bubbles will provide for all.
The biggest market in the world today is derivatives, money making money without a useful product or service in sight.
With the market in derivatives being ten times larger than global GDP we can see that making useful products and providing useful services is nearly irrelevant even today.
We are nearly there.
Look out below! When trying to fix the unrepairable, one's resolve is quickly dissipated and beads of sweat appear as the Oh Shit! moment directly stares you in the face!...This is the point when you find what you truly are made of....
Looks like the chain reaction has started and the first dominos are past wobbly and start to fall over... Not good at all...