Here We Go Again: China Halts Trading For The Entire Day After Another 7% Crash
*CHINA STOCKS HALTED FOR REST OF DAY AFTER CSI 300 TUMBLES 7%
Chinese traders unsure what to do for the rest of the day pic.twitter.com/iZ3Vo17bAa
— zerohedge (@zerohedge) January 7, 2016
"I won't short the CSI 300 again I promise" pic.twitter.com/OfxIqvFfEo
— Stalingrad & Poorski (@Stalingrad_Poor) January 7, 2016
Happy New Year...
Chinese traders are unhappy:
- Circuit breaker may be triggering “herd effect” and intensifying panic, investors may accelerate selling after 1st trading halt as they seek liquidity: Galaxy Sec. strategist Sun Jianbo
- “There seems to be considerable anxiety in the mkt with investors selling as a preventive measure,” Shenwan Hongyuan Group director Gerry Alfonso
- Investor confidence is on “shaky ground” due to negative factors incl. sharp depreciation in yuan, oil price slump and overnight losses in overseas equity mkts: Central China Sec. strategist Zhang Gang
- Threshold being hit too easily in China, adding “liquidity fears” in mkt: Catherine Cheung, Head of Investment Strategy & Portfolio Advisory at Citibank Global Consumer Banking
Crude crashes to a $32 Handle...
Gold just surged to $1100...
The entire Chinese stock market has been halted on half the trading days in 2016
The punishment will continue until The Fed unleashes QE4!!
* * *
*CHINA STOCK SLUMP TRIGGERS TRADING HALT AS CSI 300 FALLS 5%
US Equity markets are tumbling...
And USDJPY is in free-fall...
Someone just stepped into support the Offshore Yuan...
As we detailed earlier:
Following the collapse of offshore Yuan to 5 year lows and decompression to record spreads to onshore Yuan, The PBOC has stepped in and dramatically devalued the Yuan fix by 0.5% to 6.5646. This is the biggest devaluation since the August collapse. Offshore Yuan has erased what modest bounce gains it achieved intraday and is heading significantly lower once again. Dow futures are down 100 points on the news.
PBOC fixes Yuan at its weakest since March 2011... with the biggest devaluation since August
And Offshore Yuan collapses...
This all has a worrisome sense of deja vu all over again... We have seen this pattern of money flow chaos before... Outflows surge from China, send liquidity needs spiking, which bleeds over into Saudi stress (petrodollar?), causing unwinds in major equity markets (thanks to deleveraging of carry trades) in China and then US stocks...
Chinese stocks are opening down hard:
- *SHANGHAI COMPOSITE INDEX FALLS 4.01%
- *SHANGHAI COMPOSITE EXTENDS DROP TO 10% BELOW DECEMBER HIGH
- *HANG SENG CHINA ENTERPRISES INDEX FALLS 3.03%
- *CHINA CSI 300 INDEX FALLS 4.05%
Hold your breath. Dow futures plunged 100 points on the news...
(39 votes)
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They're causing panic by having such short circuit breakers because it seems like they're afraid there are no buyers. At any price.
Hmmmmm...
I feel another 1000 pt drop Thursday mornin.. Could be wrong.
But you know Cramer will just have some stooge on to say they love China.
There is a chinese saying: "Paper cannot wrap fire". Stop halting and face the fate.
I blame capitalism!!!
#feelthebern.
This is exactly what happened during the great depression, oil down and gold up.
They are letting the Yuan goes and kicking the can down the road on their internal debts/malinvestments. Forget about their consumption to save the global economy. The People have generations of experience to hoard savings. The Party is forced to the corner with one overriding objective to keep employment up to mute massive social upheaveals. It will be a long landing akin to Japan. Enjoy their subsidised export of deflation and the meltdowns of SE Asian economies. Most of their neighbours (ex Japan - a special cals of malaise) have no balance sheets to withstand the onslaughts.
If only the Commie Chinks had printed more money says our Commie Heebs.
Chinese New Year is on February 8, it might have some effect on the market too.
Lots of money move around during Chinese New Year (work bonuses, pay debts, celebrations, gifts...). They are right now in their "a month away for Christmas".
I am so happy I invested all of my money in Bitchcoins because no matter what happens, my money is safe!
I can never tell when people are being sarcastic.
Just because some unknown stranger says your money is safe doesn't make it so.
What happens to your money if the grid goes down?
What happens if shit taste like butter
You can spread it on your toast
I guess you need somebody to tell you that shit doesn't taste like butter
You'd know.
That the best you got
Let me tell you if the grid goes down you got a hell of a lot more to worry about then what your currency is in
And remember nothing not a damn thing has intrinsic value value is subjective if everybody had a pocket full of gold it wouldn't keep the supply lines running so I hope you got goats and chickens
No matter what happens, my shitcoins are safe...... Oh, except for a power failure, but that would never happen.
Since almost all transactions are done electronically it doesn't matter what you have if the power goes out
Not even if you have a shiny metal.
You do realize that for most of human history there was no electricity?
(you went to school - right?)
(sigh)
(reversion to the mean)
(which means maybe your bitcoins won't be so convenient)
(or ... you can believe in Ray Kurzweil unicorn-fart tech ... which apparently you do)
(ok)
(have fun with that during the blackouts)
(coming soon)
http://iamsully.com/?page_id=10095
Ouch, a shit opening in Europe is not helping, German DAX is down over 3% with most European averages down between 2-3%.
S&P Futures hanging in about down -5O points at 1936.
Not much of a recovery in the pre-market so far. Yea, this is going to be an ugly opening and a rather interesting day.
The most "unloved" bull market. How can a public love a market that is so manipulated by the use of currency debasement, debt monetization, and full-on hubris, on the backs of the decimated middle class. Let's hope Yellen, Bernanke, and Greenspan, all have seats next to Satan when they burn in hell for what they have done.
All the Fed cares about is it's banks and Wall Street. It could care less about mainstreet.
A fractional reserve system based on smoke and mirrors.
Lies and peception is all their financial model is based on.
The markets don't want your love.
They want your money.
Ooh, the DAX is down 3% now, FTSE 2.7 and broke 6000.
Interesting times. Still nothing worth buying yet. Another 30% maybe.
WTF SILVER ????
Bids $15.14 / Ask $14.22
WTF????
What goes up quickly goes down quickly.
Quite a few Chinese assets are way over-inflated.
Just like the US Fed forced many people to over-inflate many US assets.
Dow Futures down 365
Groundhog Day?
http://youtu.be/HYAx9RX1OmY
Seems to me my collection of Fishing rod and reels will be a very nice asset....I've been saying for years guns/ammo and fishing equipment is a must for everyone....
muh muh muh my kuroda sez usa much more liquid and so japanese investments in usa stocks can't lose.
According to Macquarie Research:
https://app.box.com/s/5a4c8phvhb3p8cfp7x2zv01u1mqx0sao
China choices – narrowing
Between a rock and a hard place
Policy decisions are being made on the run...
- China seems to be increasingly making decisions on the run. As discussed in our prior reviews (here and here), China is between a rock and a hard place. It is facing an irreconcilable set of choices, with structural reforms and desire to place the country on a sound long-term footing clashing violently with short-term objectives of stability and reduction in excessive levels of volatility.
- Opening capital account and liberalization are in conflict with the country’s persistent objective of controlling both quantity and prices (an impossible feat but China is constantly attempting to do both). Liberalization and de-regulation (including SOE and public sector reforms) threaten to undermine hoarding of labour force and place greater pressures on wages, but hold out a long-term promise of significant competitive and structural benefits. Capital market reforms, whilst improving long-term capital allocation and supporting consumer re-balancing, expose large parts of the economy to disruptive changes. It is truly a dilemma from hell without any obvious exits.
...due to failure to re-balance & challenging global outlook
- Most of these challenges stem from China’s persistently high saving rates (~48% of GDP) which forces the country to continue investing (~45% of GDP) whilst exporting the balance to other countries. As discussed here, we believe China is starting to run into a number of natural constraints (such as declining ROE/ROIC; rapidly rising debts; diminishing capacity of other countries to absorb China’s surpluses). The easiest and the least painful solutions are not available (i.e. spontaneous rise in consumption at a higher rate than increase in investment and robust recovery in global economy and trade). Hence, China is facing a multitude of sub-optimal decisions and choices, such as significant rise in public sector spending; transferring value from corporates to households; devaluing Rmb; and/or blunt administrative directives.
- The problem with each of these choices is that addressing one area causes significant disruption in another. Lowering Rmb helps with competitiveness and releases some of the pressure, but at the cost of lower domestic liquidity and potential for significant capital flight. Given that China can no longer deleverage, it must ensure that liquidity constantly rises and that there are always ‘bubbles’ to support further leveraging. Unlike the Fed, China seems to be uncomfortable with the idea of perpetual leveraging, even though it does not have an alternative. Hence, confusing signals between reforms and administrative actions. Whilst in the last eight years most governments have been using direct intervention, administrative measures work best when they are relatively consistent rather than rapidly changing in the mid-stream.
Lowering China weighting; adding to India, Phil and Mal
- Although we maintain that China has a broad range of instruments and low degree of external vulnerability, we believe the current confusion is inviting much larger capital outflows whilst unnecessarily prolonging the agony of high volatilities. Unless China abandons reforms (such as introduction of capital control), it has no choice but to further lower currency; embark on fully-fledged QE and embrace non-capital market reforms. It is decision time and risks are rising. We are lowering our position in China, adding to our existing overweight in India and the Phil whilst also raising Mal to neutral weight.