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China Calms Fears, Says "Stock Plunge Is Normal Correction" As Panic-Buying Resumes On Japanese Open
After last night's bloodbathery in China, analysts and officials are out en masse to ensure a newly re-leveraged Chinese investors that the "stock plunge is a normal correction." Disappointingly, Chinese stocks are barely bouncing at the open, which is not what we can say for Japan, where the mysterious uneconomic panic-buyer-of-first-resort appeared once again and smashed the Nikkei 225 200 points higher at the open (after weakness in the US).
Japanese stocks meltup to catch up with USDJPY at the open, but are fading back...
And after last night's carnage in China...
Analysts are anxiously reeassuring everyone... (as Bloomberg reports),
Investors shouldn’t be too pessimistic about market outlook as Wed.’s tumble was “normal correction” from previous strong run, analysts Luo Wenbo and Zeng Yan at Zhongtai Securities said in report.
Some investors sold shares ahead of next week’s Party plenary session on concern gains were excessive, causing “herd effect” on Wed., report said
Room for further downside is limited as liquidity is still adequate, reform motivation is strong and market sentiment has gradually picked up: report
PBOC fixed the Yuan modestly weaker but the Offshore-Onshore spreads remains near 1 month wides...
In addition, China’s central bank added funds to the banking system using six-month loans to keep borrowing costs down as a slowdown in the world’s second-largest economy spurs capital outflows.
The People’s Bank of China supplied 105.5 billion yuan ($16.6 billion) to 11 commercial lenders on Wednesday using the Medium-term Lending Facility, according to a statement posted on its official microblog. The rate was 3.35 percent, the same as for similar-term funds injected in August.
And The USDollar is slipping against Asian FX...
Charts: Bloomberg
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I'm certain the Chinese Politburo and Elites have cashed out.
If you have a nice place to sell in D.C. or San Fran advertise in China.
PROJECT NIRP
FED rate will not rise. Too much leverage and debt. Nothing new there. Needs NIRP to keep the ponzi going. Agreed. At a certain negative rate, however, a socioeconomic cataclysm will manifest. People will rush to paper. Banks close. Only plausible scenario. You lose. Haircut. Bail-ins.
Another problem. US debt securities. If the yield across the board turns negative, who will buy? The FED will have to buy to keep the ponzi going. So the FED piles negative yielding debt securities onto its balance sheet. Operation - Hug the Tar Baby. Spiral of death. Meltdown. Can not continue into perpetuity!
QE4 and beyond, NIRP, these are the signs of something worse to come. That is hyperinflation.This mad science experiment, as far as my limited knowledge can forsee, will end cash and kill USD hegemony.
A geopolitical turning point, not seen since WWII, is approaching; and the death of cash is looking imminent. Gold will likely be made illegal. Been done before.
Once cash is dead, you can't take your 'money' out of the bank. You will have no recourse. What value is gold if it is illegal, and you are being carted off to a FEMA camp for political dissidence?
Hey Mojojojojojo,
right you are...and here's why it's all coming down...
http://econimica.blogspot.com/2015/10/economicsart-of-deception-vs_20.html
Peak demographic, peak credit (private debt), it has been reached. A colossal deleveraging is imminent. But first, the FED balance sheet must expand and initiate QE4 and NIRP. A geopolitical and economic turning point is edging ever closer. The United States of America is already in a state of emergency, is and has run consistent budget deficits to fund its disastrous military misadventures, and is one major catastrophe away from turning into a twenty-first century technocratic dictatorship.
My question is; will war precede the economic collapse, or will it be the other way around?
Meng? Oh, Vice Public Security Minister Meng Qingfeng!?
Hello? Is this thing on?
Is it supposed to be this soft? Yeah baby, it's a correction not an erection.
All the gold in China will end up offshore at this rate.
Hey, China, you gonna be all like Fort Knox soon - fictional missing gold !
Ha ha ha - velly funny.
Hey wait a minute how can the Chinese stock market crash.. i thought they made it Illegal to sell.. somebody didn't get the clean shirt and tie on Friday memo..
China... drop the treasury hammer already, quick death is always preferrable to a slow rot. Are you planning on letting Saudi and Brazil sell all of theirs first? Get this show on the road? Everybody is going broke and my popcorn is getting stale, the time is now.
I so much love the "panic buying".
Especially by "someone".
LOL..
Here are some signs of a coming recession.
1. Business loans for M&A not CAPEX.
http://www.zerohedge.com/news/2015-10-15/there-goes-final-pillar-us-recovery-loan-growth-paradox-explained
2. Factory orders continue to drop
http://www.zerohedge.com/news/2015-10-02/us-factory-orders-flash-recession-warning-drop-yoy-10th-month-row
3. Default risk spikes
http://www.zerohedge.com/news/2015-10-02/us-financials-default-risk-spikes-2-year-high
4. M&A set record
http://michaelekelley.com/2015/05/29/mergers-and-acquisitions-set-record/
5. Fed sees 2 bubbles
http://michaelekelley.com/2015/02/20/fed-warns-of-two-bubbles/
Here is how to prepare.
http://michaelekelley.com/2014/10/16/8-things-to-do-when-recession-happens/
Here is how to get your mind off this stuff.
http://michaelekelley.com/category/humor/
Good luck!
Why are the short and ultra short ETFs being closed?
Analysts Luo Wenbo and Zeng Yan are quite right. In fact a 90% market crash worse than Wall Street in 1929 would be a normal correction for a market like the Chinese stock market... considering the stupidity of the government funded run-up to begin with. Same in the USA and everywhere else. So they're right... a total brain-rattling crash will be quite normal and should be fully expected.
Look at the chart of the Shanghai Composite Index. Not for 24 hours, but for 24 years.
http://finance.yahoo.com/echarts?s=000001.SS+Interactive#{%22range%22:%22max%22,%22allowChartStacking%22:true}
The market in 2015 was a bubble which is now deflated. The SSE is right where it should be. If you look back to 2007-2008 you will see that the country dealt with a much bigger bubble and the wheels didn't fall off the wagon.
Everybody take a deep breath, sit down. It's not a BFD.