The Carnage Returns: Stocks Tumble After Sharp Chinese Devaluation; Brent At 2004 Lows; Gold Surges

Tyler Durden's picture

On the first trading day of the year, stocks crashed after China shocked the world with a circuit-breaking market slide that was not contained by the government. On the second trading day, after the Chinese government intervened drastically, global equities stabilized if just barely.

Then overnight, even as Chinese stocks surged higher by 2.3% after the ban on major shareholder selling was extended, the global market was far more focused with what was going on in China's currency, which as previously reported, plunged to new 5 year lows, while the spread between the onshore and offshore Yuan rose to a record wide, suggesting the depreciation in the currency is only going to accelerate from here, and a big payday for Kyle Bass is coming.  Then again, how this is surprising since China's December 11 announcement it would devalue against a basket of currencies, not just the USD, is not exactly clear to us.

 

“China is for sure back in focus,” said Didier Duret, chief investment officer at ABN Amro NV’s wealth-management unit. “I’d say this is an echo of what happened in August maybe more than a replay. It’s making people nervous.”

This accelerating depreciation, despite constant official lies to the contrary, such as this one from yesterday....

  • CHINA'S YUAN WON'T SEE SHARP DEPRECIATION: SECURITIES JOURNAL.

... has clearly spooked traders and heightened concerns that the outlook for global growth is dimming.  To be sure, North Korea's first hydrogen bomb test overnight even as geopolitical tensions in the Mideast refuse to go away, have not helped risk sentiment.  The MSCI All-Country World Index fell 0.4 percent at 10:49 a.m. London time. The Stoxx Europe 600 Index slid 1.1 percent and futures on the Standard & Poor’s 500 Index dropped 1.4 percent.

As a result, the sharp weakness seen early in the session in US equity futures has growing worse, and while global equities are down across the board, today's session could be as bad as that of Monday if not worse, especially since moments ago Brent tumbled below $35 for the first time since 2004.

 

Elsewhere, the yen reached its strongest level since October and Treasuries rose for a fifth session on demand for haven assets. Finally, despite or perhaps due to the broad risk-off sentiment, gold has finally woken up and as of this morning was trading at the highest price in over a month.

Before we go into details of the overnight carnage, this is where we stand currently: S&P futures now down 33 points or 1.63% while 2Y Treasury rallies pushing its yield back below 1% as EU stocks extend their drop after China weakened its currency, North Korea says it tested a hydrogen bomb; Brent crude falls to lowest level since 2004.

Equity Futures:

  • S&P 500 futures down 33pts or 1.63% to 1978; (high 2012; low 1976)
  • DJIA futures -266pts or 1.5%
  • Nasdaq 100 futures -79pts or 1.8%
  • Stoxx 600 down 1.5% to 354
  • MSCI Asia Pacific down 0.9% to 127
  • Brent Futures down 3.1% to $35.09
  • Gold spot up 0.5% to $1,083
  • Silver spot up less than 0.1% to $13.99

Commodities:

  • WTI Crude -2.5% to $35.09/bbl (range $34.80 to $36.39)
  • Brent Crude -3.6% to $35.12/bbl
  • Gold +0.8% to $1,087/oz
  • Copper -1.1% to $2.07/lb

Rates/FX:

  • 30-yr -5.92bps to 2.9359%
  • 10-yr -5.31bps to 2.1826%
  • 2-yr -2.19bps to 0.992%
  • Dollar Index Spot little changed at 99.43
  • Euro/Dollar -0.1% to $1.074
  • GBP/Dollar -0.1% to $1.4659
  • Dollar/Yen +0.6% to 118.37

Looking at regional markets, Asian stocks traded mostly lower following the subdued lead from Wall St., with further weak Chinese data, more aggressive CNY softening by the PBoC and a North Korea nuclear bomb test adding to the risk averse tone. ASX 200 (-1.2%) was led lower by commodity-linked weakness, while Nikkei 225 (-1.0%) declined as JPY strength dampened exporter sentiment, with poor Chinese services PM! which posted a 17-month low, adding to the region's gloom . Elsewhere, US equity futures also saw a bout of pressure overnight in the wake of a North Korean nuclear bomb test and further softness in the CNH which was
perceived as a negative signal from the world's second largest economy, while the MSCI emerging market index reached its lowest level since July 2008. However, the Shanghai Comp (+2.3%) outperformed on reports that China is to extend the ban on major shareholders from selling shares. Finally, 10yr JGBs gained as the negative sentiment in the region spurred demand for safer assets, while the BoJ were also in the market for 1.27tr1 of government debt.

A quick reminder why China's devaluation is bad - in a zero sum world, China's export gains, mean everyone else's export losses: "This isn’t good for the rest of the world. Until China stops weakening the yuan, global markets will struggle to stabilize,” said Koichi Kurose, Tokyo-based chief market strategist at Resona Bank Ltd. "The Chinese authorities may be trying to prop up the economy by boosting exports, but while that’ll help one part of China’s economy, it comes at the sacrifice of someone else."

"There’s word spreading in the market that state funds are buying, but the idea is to hold up the market, not to bolster it by a large margin,” said Dai Ming, a fund manager at Hengsheng Asset Management Co. in Shanghai.

Top Asian News:

  • Caixin China Services PMI Falls to Second Lowest in Decade: Gauge fell to 50.2 in Dec. vs 51.2 in Nov.
  • Chinese Brokerage Head Targeted in Probe by Communist Party: Changjiang Securities case adds to wave of probes in finance
  • Rupee Bonds Cheaper Than Loans Make Arrangers Bullish for 2016: Offerings will probably rise to a record this year
  • Huawei Starts Selling Honor-Brand Smartphone in U.S. Market: Available for pre-order on Amazon and Newegg.com

European equities sank after emerging-market stocks dropped to a six-year low and developing-nation currencies slid on concern a weaker yuan may spark a wave of global turmoil similar to what followed China’s shock depreciation in August. Indeed, sentiment in Europe today has once again been dictated by events in Asia overnight, with China remaining in focus, while elsewhere sentiment has been shaken by North Korean hydrogen bomb tests . European equities spent the morning in the red, with Euro Stoxx down over 1% on the day and around 3.8% for the week. Dialog Semiconductor (-4.2%) is the worst performer in Europe today after reports that Apple are to reduce output of its latest iPhone by 30%.

Amid the concerns surrounding China, the materials sector is the notable underperformer amid growth concerns, while the metals complex sees gold as the notable outperformer amid risk off sentiment. Separately, the energy complex has seen further softness this morning to pare yesterday's API inventory inspired gains, with the weakness attributed to USD strength.

"It could be a difficult year,” said Fredrik Nerbrand, HSBC’s London-based head of asset allocation. “We believe 2016 is a year for capital protection rather than appreciation. The increased focus on uncertain and volatile economic data releases is likely to cause markets to overreact.”

Top European News:

  • John Lewis Provides Holiday Cheer as Store’s Online Sales Soar: Web sales rose 21% in six weeks ended Jan. 2
  • U.K. Services Cool in December as Confidence Hits 3-Year Low: Markit said report together with its latest surveys of manufacturing and construction indicates U.K. economy grew 0.5% in 4Q, down from 0.6% it estimated last month.
  • ‘Brexit’ Gamble Enters Crunch Phase as Cameron Returns to Merkel: Cameron travels to Bavaria on Wednesday to meet with German Chancellor Angela Merkel

Dialog Semiconductor Plc, the chipmaker whose biggest client is Apple Inc., dropped 4.3 percent as Nikkei Asian Review reported the U.S. company would reduce the first quarter output of its latest iPhones by about 30 percent. AMS AG and ARM Holdings Plc, also Apple suppliers, lost at least 3 percent.

Taiwan’s Largan Precision Co. and Catcher Technology Co. led declines among Apple suppliers, slumping more than 5 percent and sending Taiex index to a four-month low.

In FX, today's session was again dominated by the JPY pairs, with Asia once again providing the major drivers of trade. China Caixin services PMI contract dropped significantly, and with the CNH weakening to fresh multi year highs, growth and instability concerns dominated. North Korea added to global woes with its first H-bomb test, so it was no surprise to see spot and cross JPY extending recent lows, though notable was USD/JPY finding strong support comfortably ahead of 118.00. As a result, the yen appreciated 0.5 percent to 118.46 per U.S. dollar and reached 118.34, the strongest since Oct. 15.   Japan’s currency surged more than 1 percent against the yuan to the highest level since October 2014, just before the Bank of Japan expanded monetary easing.

EUR/JPY has tested 127.00 and AUD/JPY to sub 84.00, dragging the respective spot rates lower, though anticipated EUR/USD bids ahead of 1.0700 continue to support. CAD has raced through 1.4000 on broader risk sentiment, with fresh losses in Oil adding to weakness here. AUD now eyeing a fresh move on .7000. GBP largely ignored the small miss in UK services PMI (55.5 vs 55.6 exp).

In commodoties, Brent crude for February settlement fell as much as $1.59, or 4.4 percent, to $34.83 a barrel on the London-based ICE Futures Europe exchange. West Texas Intermediate declined 2.5 percent after dropping 2.2 percent Tuesday. U.S. oil inventories probably increased by 500,000 barrels last week, according to a Bloomberg survey before Energy Information Administration data Wednesday. The industry-funded American Petroleum Institute was said to report stockpiles fell by 5.6 million barrels while fuel supplies gained.

Gold for immediate delivery advanced 0.6 percent to $1,084.52 an ounce following two days of gains. Demand for the precious metal has been bolstered as gyrations in global stock markets enhance its allure as a haven investment. Zinc on the London Metal Exchange dropped 2.2 percent to the lowest since Dec. 29. Copper fell 0.9 percent.

It's a busy session on the US calendar today, where the session kicks off firstly with the December ADP employment change print, followed closely by the November trade balance. The final December services and composite PMI’s follow this before we get the all-important ISM non-manufacturing where market expectations are currently sitting for little change at 56.0. November factory orders data along with the final revisions to durable and capital goods orders are also due out before we get the Fed's FOMC minutes from its first rate hike in 9 years at 2pm.

Top Global News:

  • Yuan Sinks to Five-Year Low as PBOC Surprises With Weaker Fixing: China sending out confusing policy signals, Macquarie says
  • Valeant Said to Name New CEO With Pearson Still Hospitalized: Schiller, Rosiello may be candidates, Wall Street Journal says
  • North Korea Says It Successfully Tested First Hydrogen Bomb: Regime in Pyongyang says won’t give up nuclear development. North Korea’s Hydrogen Bomb Claim Disputed by Weapons Experts: Data show explosion yield lower or similar to previous blasts
  • Apple Suppliers Drop in Asia After IPhone Output Cut Report: Nikkei Asian Review reports cut of 30% in first quarter
  • Brent Crude Drops to 11-Year Low Before U.S. Oil-Stockpile Data: Citigroup, UBS see possible slide in prices toward $30
  • Halliburton Faces Longer EU Probe on Missing Early Offer Slot: Co. will likely face protracted antitrust review of its plan to buy oil services rival Baker Hughes for $26b
  • Verizon Said to Start Process to Sell Data Centers, Reuters Says: Co. hopes to get more than $2.5b from sale
  • NuVasive to Acquire Ellipse Technologies in $410m Deal: Elipse develops surgical implants to treat skeletal deformities

Bulletin Headline Summary from RanSquawk and Bloomberg

  • Aggressive CNY softening by the PBoC and a North Korea nuclear bomb test have added to the weeks risk averse tone
  • In FX markets, today's session was again dominated by the JPY pairs, with Asia providing the major drivers of trade
  • Highlights today include, US ADP employment change, ISM non-manufacturing composite, factory orders, durable goods and the release of FOMC minutes
  • Treasuries gain for a fifth day as China devalues yuan, North Korea says it successfully tested its first hydrogen bomb and a report said Apple would reduce 1Q output of iPhones.
    North Korea’s hydrogen bomb test risks reigniting tensions with China and the U.S. after months of calm even as some experts cast doubt on the full extent of Pyongyang’s claim
  • The yuan sank to a five-year low and tumbled 1.1% in Hong Kong after the PBOC set the reference rate at an unexpectedly weak level, a sign that policy makers are becoming more tolerant of depreciation
  • A private Chinese services gauge slumped to the second- lowest reading since the series began a decade ago and close to a level signaling contraction, suggesting conditions may be weaker than the government’s official index indicates
  • The Chinese economy may be headed for a “hard landing” as borrowers are taking on record amounts of debt to repay interest on their existing obligations, said Marc Faber
  • Apple Inc. suppliers from Asia to Europe fell after a report saying the world’s most valuable company would reduce 1Q production of its latest iPhones by about 30%
  • S&P 500 will fall into a full-sized bear market this year as seven-year cycle in equities is rolling over, UBS technical analysts wrote in a note
  • Merkel’s government said about 1.1m asylum seekers entered Germany last year, reaching a record as Europe struggles to manage the influx of refugees from the Middle East and beyond
  • A U.K. services gauge eased in December as risks including a British exit from the EU weighed on hiring and business expectations fell to a three-year low
  • $25.75b IG priced yesterday, no HY. BofAML Corporate Master Index OAS holds at +173, YTD range 180/129. High Yield Master II OAS narrows 7bp to +703; YTD range 733/438
  • Sovereign bond yields lower. Asian and European stocks lower, U.S. equity-index futures slide. Crude oil lower and copper lower, gold gains

US Event Calendar

  • 7:00am: MBA Mortgage Applications, Jan. 1 (prior 7.3%)
  • 8:15am: ADP Employment Change, Dec. est. 198k (prior 217k)
  • 8:30am: Trade Balance, Nov. est. -$44b (prior -$43.89b)
  • 9:45am: Markit US Services PMI, Dec. F, est. 54 (prior 53.7); Markit US Composite PMI, Dec F (prior 53.5)
  • 10:00am: ISM Non-Mfg Composite, Dec., est. 56 (prior 55.9)
  • 10:00am: Factory Orders, Nov., est. -0.2% (prior 1.5%)
    • Factory Orders Ex Trans, Nov. (prior 0.2%)
    • Durable Goods Orders, Nov. F (prior 0%)
    • Durables Ex Transportation, Nov. F (prior -0.1%)
    • Cap Goods Orders Non-def Ex Air, Nov F (prior -0.4%)
    • Cap Goods Ship Non-def Ex Air, Nov F (prior -0.5%)
  • 2:00pm: FOMC Minutes, Dec. 15-16

DB's Jim Reid concludes the overnight wrap

With the exception of bourses in China, it’s been a broadly weak start for risk assets for most of the region as concerns reverberate around further weakening of the Chinese Yuan, while headlines of nuclear testing in North Korea are not helping sentiment. Losses are being led out of Japan where the Nikkei is -1.15%, while there’s been falls also for the Hang Seng (-0.92%), Kospi (-0.50%) and ASX (-1.07%). In credit the Asia iTraxx is currently +3bps wider. This is in contrast to moves in China however where the Shanghai Comp (+0.69%), CSI 300 (+0.35%) and Shenzhen (+0.56%) are all up at the midday break and more than likely a sign of those government support measures yesterday. Much of the newsflow this morning however is being dominated by the latest moves in China’s currency. The PBoC set the Yuan fix 0.22% weaker this morning (lower for the seventh day in a row) to the weakest level since 2011 while the spread between the onshore and offshore currencies at one stage widened to the largest on record. The offshore Yuan is currently down -0.48% as we type and at its weakest level since 2010. That’s seen EM currencies come under similar pressure this morning where there are declines of around half a percent for most.

Meanwhile we’ve also had some data out this morning and it’s made for more disappointing news. The non-official Caixin services PMI in China revealed a 1pt fall to 50.2, the lowest reading since July 2014. Combined with the soft manufacturing print from earlier in the week, the composite dipped below 50 last month to 49.4, a fall of 1.1pts. China was cited as a big risk for markets in most 2016 outlook publications and while it’s very early days, events there are dominating markets and price action for now.

Recapping the rest of the news and price action yesterday. 2016 hasn’t been too kind for Oil markets so far and yesterday saw WTI (-2.15%) take another dip lower, at one stage falling below $36 only to finish slightly above that by the closing bell. Despite that US HY spreads actually closed more or less flat although still underperformed relative to the modest gains over in Europe. With markets a bit more stable, yesterday saw the new issue market get going, with over $25bn pricing in the IG space alone.

Meanwhile, yesterday saw our US economists slash their Q4 GDP forecast. They now expect Q4 real GDP to be just 0.5%, a full percentage point cut from the previous forecast while at the same time highlighting that this still might be too high in light of what could be a much larger inventory liquidation than what they have assumed. This downward adjustment has the effect of now lowering their projected Q4-over-Q4 rate of real GDP growth by 30bps to 1.7%. They highlight however that some of the expected Q4 GDP softness may carry over into the current quarter and so have also trimmed their current quarter growth projection by 50bps to 1.5%. Highlighting the reasons for the downward changes to the forecasts, our team highlight that the data released over the last couple of weeks (i.e. durable goods, international trade, constructing spending and manufacturing ISM) have been softer than expected with most of this adjustment due to less stockpiling. They point out that there is a high correlation between the change in private inventories and the inventory component of the manufacturing ISM (nearly 0.8). In fact, last quarter ISM inventories fell to 44.3 from 48.8, the lowest since Q4 2009, when inventory liquidation totaled nearly -$50bn. This raises the possibility that inventories could in fact be lower than what they predict and raising the possibility of taking GDP temporarily into negative territory. It’s worth reminding, as we noted yesterday, that the Atlanta Fed recently downgraded their Q4 GDP forecast to just 0.7%.

Staying on the data theme, after Monday’s disappointing German inflation numbers, Euro area CPI failed to meet hopes for a modest rise after the core reading came in unchanged at +0.9% yoy in December (vs. +1.0% expected), with an estimate for the headline at +0.2% yoy. Italian CPI (-0.1% mom vs. +0.2% expected) also missed to the downside, while Germany’s unemployment rate held steady at 6.3% in December as expected. Meanwhile in the US we saw the ISM NY print rise 1.3pts in December to 62.0, while the total vehicle sales reading for last month showed a slightly disappointing pullback in sales to 17.2m on an annualized basis (from 18.1m).

It’s set to be a busy day ahead with a packed calendar for us to get through. This morning in Europe will be all about the PMI’s with the final services and composite prints due for the Euro area, Germany and France as well as indicators out of the UK, Italy and Spain. French consumer confidence data and Euro area PPI is also due out in the European session this morning. The US session kicks off firstly with the December ADP employment change print, followed closely by the November trade balance. The final December services and composite PMI’s follow this before we get the all-important ISM non-manufacturing where market expectations are currently sitting for little change at 56.0, although our US economists are less optimistic and expect a drop to 54.0 (from 55.9). November factory orders data along with the final revisions to durable and capital goods orders are also due out before we get the aforementioned FOMC minutes at 7pm GMT.

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joga bonito's picture

sweet 16? Winter is coming...

VinceFostersGhost's picture

 

 

A lot of crap is coming....all at once.

Dr. Spin's picture

...and all .gov can think about is disarming everybody.

Yup, this is going to end well...

 

NoDebt's picture

Obama's coming unhinged.  Mr. "No Drama Obama" is looking like it's getting to him.  Alternating between tears and obvious personal anger at the "lies" of the gun lobby, I think he's literally starting to lose it.  You can see he's taking all this personally now.  Nobody's ever told him 'no' in his life and he just doesn't know how to deal with that.  Expect more "volatility" out of the WH this final year.  By June he'll be going off-teleprompter and screaming into the mic.

Me?  I can't wait to see who he pardons towards the end of his presidency.  For sure, Mumia Abu Jamal is getting out- that's a given.  What I'm hoping is that he pardons Hillary on his way out the door, making her look guilty as sin and blowing her campaign up.

Eventually these libs alway eat their own.  It's never about what's best, it's always about their own pwer, control and narcissism.  "Apres moi, le deluge" floats in ever one of their brains.

Pliskin's picture

'Nobody's ever told him 'no' in his life....'

That's not entirely true, NoDebt.

Barack:  "Can I play the role of the man tonight?"

Michelle:  "No."

 

 

 

Government needs you to pay taxes's picture

Dayum, will my 'Free Mumia' T-shirt become a collectors item when the White Housenigger springs his murderin' bruthuh?

Dr. Engali's picture

There you go again thinking his presidency is going to end. What did I tell you about that?

skinwalker's picture

I think he hates being president and can't wait to retire, play golf, and get paid a shitload in speaking fees. 

mayhem_korner's picture

 

 

That's what he's doing now.

lakecity55's picture

America is threatened by Donald Trump and I have discovered Hitlery blackmailed foreign leaders into putting money into her Foundation! I cannot let America fall into the hands of these unhinged candidates. I must remain in power for America's Safety!

BigJim's picture

ZH: "Gold surges"

FFS, Tyler; it's up 1%. Whoop-de-dooo.

gatorengineer's picture

I think he aspires to be the first "global" president, in about 10-15 years....  wait and watch.....  you heard it here first.  If Hitlery wins, I can pretty much guarantee he will be the UN embassador.

BarkingCat's picture

If Hillary wins he will be dead in a couple of years.

The Clintons are not constrained by any morals and always try to get revenge. 

Eyeroller's picture

He hates being president and can't wait for his term to be up so he can become Secretary General of the UN and complete his life-long ambition to destroy America.

overmedicatedundersexed's picture

 (his doc still is keeping the hiv undercontrol but his body is wasting, however the HIV dementia, that is not controlled.)

"Obama's coming unhinged."

deep under the white house, the war room,is where he sits late at night when the insomnia kicks really hard..look in his eyes: big time sleep depravation-

the staff knows he is insane..but none dare call it.

they hide the football (nuke codes) from him for sure.

 

brushhog's picture

The tears are just the set-up before the big executive orders to further strip gun rights. It's to give the impression of the magnatude of a problem, to justify the extreme response. It's all prearranged and rehearsed.

lakecity55's picture

He put pepper spray on his fingers. Watch the video. He only teared up after he touched his eyes.

Fake.

crossroaddemon's picture

You really think there is any part of his public persona that is not scripted? It doesn't matter anyway because he doesn't do a fucking thing his handlers don't tell him to. I think you seriously underestimate the deep state. 

MFL8240's picture

The man is a criminal sociopath.  Thats were the dicussion needs to start and end.

crossroaddemon's picture

No, because you are addressing effects instead of causes. He's just a puppet. Start aiming your hatred at the real criminals... the ones who give him his ordrrs.

lakecity55's picture

Well, disarming everyone except our new Middle Eastern "guests."

NoDebt's picture

10 year back under 2.20.  Somebody's getting nervous.

Dr. Engali's picture

Well, since I've been loaded up on treasuries waiting for the ten year to dip under a 1% yield it's certainly not me.

AssN9's picture

Speaking of which, has anyone seen Boris lately? I miss his technical analysis.

tc06rtw's picture

   
      …  and  his witty prose.
  

waterwitch's picture

Where's Boris? ( sorry didn't see the post above mine). We miss you Boris!

nmewn's picture

(Ding)

"This is your captain speaking. We've hit an air pocket so once you peel yourself off the ceiling please return to your seats and fasten your safety belts."

mygameon's picture

STFR-sell the fucking rally

new game's picture

stfs -sell the fucking surge

Dragon HAwk's picture

Buy the Fucking Crevice....

NoPension's picture

By Friday, the market will be up 200 on the week.

It's la la land. You all know it's true.

mayhem_korner's picture

 

 

Not sure about that one.  Remember what happened in August when the Yuan was "surprisingly" pegged...

Will be tough to make up 800 pts with the mental ward patient testing H-Bombs, Brent hugging a $35 handle, and a bunch of new year's resolutions not to continue the corporate buyback binge.

ParkAveFlasher's picture

Prepare for a festive groping!

Zero-Hegemon's picture

As long as it's done in the spirit of things...

cherry picker's picture

There was an article somewhere recently that the National Parks had record numbers of visitors this year.  It costs money to travel and sight see.

People are not buying 'stuff' as who needs constant replacement?  I walked through a middle class community with nice homes six months ago.  Their past time on weekends seem to be garage sales, getting rid of stuff taking space.

I think to myself the markets and the financial mumbo jumbo along with fear tactics are mostly to keep a certain segment employed or making money as there seems to be not enough demand for production capabilities on this planet.

Early Retirement's picture

The spectacular (and long-overdue) collapse of the obscenity that was American Christmas has helped curb excess consumption.

gatorengineer's picture

As surprising as it sounds I beleive this was an all time record shopping year.  I dont understand it either.

Ghordius's picture

imho that's cherry picking, cherry picker

the issue of the production capabilities on this planet does not depend from American's capabilities in buying more "stuff", particularly the middle class

it is way more relevant on how the middle classes of countries like China or India, etc. develop in their capabilities of buying their first car, their first RE, etc.

example, a bit elliptic: I was reading somewhere that Iran recently imported some 100'000 "luxury" cars, a demand that was stifled by embargos

new game's picture

the word is deflation caused by way too much debt bringing fwd over capacity all courtesy of da fed and keynsians that are focused on duct tape and bailing wire type econimics. debt stimulates growth that will pay for it - don't cha know?

blown income's picture

traders ...investors...

 

degenerate gamblers>>>EVERY DAY GOING TO the Casino

_ConanTheLibertarian_'s picture

Who cares. There will be a reverse carnage at the end of the day.

css1971's picture

On a daily scale you get what is mostly noise. Almost completely random. To see what's going on, the signal in the noise you need to take a longer term perspective. 1 year absolute minimum.

I use 1,3,5, 9 years.

VinceFostersGhost's picture

 

 

There will be a reverse carnage at the end of the day.

 

How many times can we do that?

 

I guess we're gonna find out. The day that fails...that's when the real fun is gonna start.

kliguy38's picture

We have been in a Primary Bear for 8 months...and they no longer will get now sell the rips.....buying the dips is now a very dangerous proposition......the game is to sell the rips ie. short um

Takeaction2's picture

Exactly....They can try and ramp this thing into every close...but I feel the tidal wave is way too big.  WHen it goes...it is really gonna go.

mayhem_korner's picture

 

 

It was a lot easier to "ramp" when:

1) The TBTF "banks" were being spotted $20-$40B per month in QE Benbux (exchanged for off-loading toxic CDOs)

2) The powder keg for goosing up executive stock options via buybacks was "more fuller"

css1971's picture

The FTSE 5 year chart is screaming "RUN! RUN TO THE HILLS!"

Watch out below when 6000 fails.