China's Emergency Rescue Is Working: Chinese Futures At Session Highs

Tyler Durden's picture




 

Chinese stocks have retraced 50% of their overnight losses following the lifting of the circuit-breaker rule. China FTSE-A50 Futures trading on SIMEX are up over 250 points, trading at the highs of the day but for some context, the index is still down 14% from post-Christmas highs.

 

 

What happens when China opens? What would you do with a stock market trading at 64x P/E and as fragile as it has been proved to be?

4.857145
Your rating: None Average: 4.9 (7 votes)
 

- advertisements -

Comment viewing options

Select your preferred way to display the comments and click "Save settings" to activate your changes.
Thu, 01/07/2016 - 11:08 | 7011120 madbraz
madbraz's picture

i would call bill dudley and ask for a lift.  guy is everywhere, fearless of imprisonment.

Thu, 01/07/2016 - 11:11 | 7011139 Looney
Looney's picture

What happened to the old adage “When the U.S. sneezes, the rest of the world catches cold”?

Nowadays, it seems, “When China burps, the rest of the world starts puking”.  ;-)

Looney

Thu, 01/07/2016 - 11:21 | 7011199 tarabel
tarabel's picture

 

 

Oh, it's still us that get the sniffles and pass it on. Us and the EU.

China is catching malaria from our growing lack of interest in buying their simulated products. Their suppliers down the line are queuing up for free injections of ebola.

Pass the Theraflu, please.

Thu, 01/07/2016 - 11:42 | 7011348 Thought Processor
Thought Processor's picture

 

 

Come on Beijing, show a little back bone.  Why not just outlaw selling all together?  

Thu, 01/07/2016 - 11:52 | 7011436 thesonandheir
thesonandheir's picture

If you beieve the 'E' in P/E then quite frankly you are a mug.

Thu, 01/07/2016 - 11:54 | 7011454 SWRichmond
SWRichmond's picture

circuit breakers = "if you're going to panic, panic first".

Thu, 01/07/2016 - 11:25 | 7011225 KnuckleDragger-X
KnuckleDragger-X's picture

Gotta love futures. There's nothing like betting on promises of people who only care about themselves and hoping you won't be one of the sheep that gets sheared.......

Thu, 01/07/2016 - 11:16 | 7011179 Hitlery_4_Dictator
Hitlery_4_Dictator's picture

It's good to be king?

Thu, 01/07/2016 - 11:54 | 7011450 The Saint
The Saint's picture

Just ask Obama.

Thu, 01/07/2016 - 11:09 | 7011129 LawsofPhysics
LawsofPhysics's picture

Yes, the Chinese have their own PPT. probably much more efficient than America's...

Thu, 01/07/2016 - 11:14 | 7011149 firstdivision
firstdivision's picture

Sorry, but it's our PPT buying up everything and saving the globe.  Who do ut in that massive buy orderfor some paper printed copper at 10:15AM?

I'd like to give a shout-out to all the Taxpayers in America for the generious donations to the paper markets. 

Thu, 01/07/2016 - 11:15 | 7011170 LawsofPhysics
LawsofPhysics's picture

That isn't what the dollar:yuan ratio is saying. thank all the peasants and factory workers in China, for now...

Thu, 01/07/2016 - 11:23 | 7011209 herkomilchen
herkomilchen's picture

Yes, let's pause to thank everyone hard at work right now sweeping floors and creating new products for working an extra hour today for free in order to fund these government market distortions.  Really very generous of you.  Not that you had a choice of course.

Thu, 01/07/2016 - 11:52 | 7011438 Jethro
Jethro's picture

So, more of "Pick up that can citizen!"? Can't wait....

Thu, 01/07/2016 - 11:23 | 7011177 Ham-bone
Ham-bone's picture

China, like all nations, can make their "market" indicators do as they please...what they can't do is make their econonomy work.  Consider...

http://econimica.blogspot.com/2015/11/chinafictional-fairytale-vs-factual.html

but it's not just China...it's very global.

http://econimica.blogspot.com/2016/01/sources-of-growth-examined-and-found.html

The disconnect btw "markets" and economies is the real growth story of 2016

Thu, 01/07/2016 - 11:58 | 7011494 flyingpigg
flyingpigg's picture

The PPT in China is very effective: put a gun at the heads of the fund managers and hedgies and give the instruction to buy. (Short) selling will lead to disciplinary action. Fund will have to pay for bullet.

Thu, 01/07/2016 - 11:10 | 7011135 firstdivision
firstdivision's picture

If someone were to trip over Kevn's PC cord, unplugging it from the wall, would the markets collapse?

Thu, 01/07/2016 - 11:15 | 7011172 Winston Churchill
Winston Churchill's picture

His PC is the market,so no.

Thu, 01/07/2016 - 11:11 | 7011137 Jacksons Ghost
Jacksons Ghost's picture

LONG LIVE THE PPT!

Thu, 01/07/2016 - 11:41 | 7011347 asteroids
asteroids's picture

Quick, someone send that asshole Krrruuugmmannn over there to advise them on their next move.

Thu, 01/07/2016 - 12:34 | 7011785 NEOSERF
NEOSERF's picture

Exactly, if I wanted to "instill confidence" in the face of a rout, I would want to push futures as high as I could so that thoughts of selling evaporate hours before trading starts...won't work but it is a good idea.

Thu, 01/07/2016 - 11:11 | 7011138 waterwitch
waterwitch's picture

Is a melt up the same as an inverse China syndrome?

Thu, 01/07/2016 - 11:11 | 7011140 NoDebt
NoDebt's picture

Stock market gains grow from the barrel of a gun.

Thu, 01/07/2016 - 11:13 | 7011158 Dr. Engali
Dr. Engali's picture

You're really starting to piss me off today. ;->

Thu, 01/07/2016 - 11:30 | 7011269 NoDebt
NoDebt's picture

;)

Thu, 01/07/2016 - 11:11 | 7011143 Dr. Engali
Dr. Engali's picture

"What happens when China opens? What would you do with a stock market trading at 64x P/E and as fragile as it has been proved to be?"

 

Shoot those traitorous sellers. That's what you do.

Thu, 01/07/2016 - 11:14 | 7011162 spekulatn
spekulatn's picture

 

BTFcD.

That is all. Thank you very mooch.

:)

Thu, 01/07/2016 - 11:39 | 7011324 asteroids
asteroids's picture

Are you fucking kidding. The Chinese have been changing the rules at their casino almost every fucking day and shanghaiing their most prominent "investors" for a little "re-education" I'd be fucking running for my life with whatever gold I'd bought on sale these past few months.

Thu, 01/07/2016 - 11:11 | 7011147 RealistDuJour
RealistDuJour's picture

I think devaluing cash for 1.5 billion people has some impact on incentives to invest...

Thu, 01/07/2016 - 11:12 | 7011148 Jacksons Ghost
Jacksons Ghost's picture

Where do PP Teams get their cash?

Thu, 01/07/2016 - 11:14 | 7011164 SHEEPFUKKER
SHEEPFUKKER's picture

Out of thin air. Ain't life grand?

Thu, 01/07/2016 - 11:16 | 7011175 herkomilchen
herkomilchen's picture

Government printing press.  Corresponding wealth taken out of the hides of every holder of the currency.

Thu, 01/07/2016 - 11:20 | 7011201 marts321
marts321's picture

Does that mean the FED balance sheet grows every time they use the PPT? 

Thu, 01/07/2016 - 11:26 | 7011233 herkomilchen
herkomilchen's picture

Effectively yes, though they are shrewd enough to camouflage it with several steps of indirection, effectively laundering the money.

Thu, 01/07/2016 - 11:16 | 7011156 buzzsaw99
buzzsaw99's picture

could the chinese ppt be any more transparent in their effort to bolster confidence? and to try it on the cheap in the futures market is just fucking lame. let's see if i follow the logic they want me to use. now the market can drop faster so i'm supposed to believe that is a good thing and not sell while i can?

Thu, 01/07/2016 - 11:19 | 7011194 Mark Mywords
Mark Mywords's picture

Buy low, sell high. [Let markets plunge again.] Buy lower, sell high, just not as high. Wash, rinse, repeat.

Same as it ever was.

Thu, 01/07/2016 - 11:27 | 7011244 two hoots
two hoots's picture

Buyers will dry up.  Then the Fed goes NIRP to get the money back in play. The Fed don't want savers and definitely not $T's on the sidelines.  Look for break-the-buck with NIRP.

Thu, 01/07/2016 - 11:17 | 7011185 RozKo
RozKo's picture

I thought the Chinese circuit breaker was the firing squad?

Thu, 01/07/2016 - 11:29 | 7011256 Jethro
Jethro's picture

kangaroo court, then firing squad.

Thu, 01/07/2016 - 11:18 | 7011187 savedeposit
savedeposit's picture

It smells like FRAUD !

Thu, 01/07/2016 - 11:18 | 7011191 InsanityIsWinning
InsanityIsWinning's picture

There's going to lots of head fakes there and here. . . we are going down.

Thu, 01/07/2016 - 11:21 | 7011204 Buenaventura
Buenaventura's picture

What would you do with a stock market trading at 64x P/E and as fragile as it has been proved to be?

 

Buy Mortimer, buy!

Thu, 01/07/2016 - 11:23 | 7011213 Slowdrip
Slowdrip's picture

Wonderful news...

Thu, 01/07/2016 - 11:23 | 7011215 two hoots
two hoots's picture

There are no "free" markets, except flea markets (poor man's trading platform). 

Thu, 01/07/2016 - 11:47 | 7011238 Xatos
Xatos's picture

In other words, buy the dip to be higher in the next big sell?

Thu, 01/07/2016 - 11:30 | 7011259 Dollarmedes
Dollarmedes's picture

Let me get this straight:

People are worried they won't be able to make the exits, then China removes the circuit breakers and people are so relieved that they start buying stocks instead?!? Um, no.

Thu, 01/07/2016 - 11:34 | 7011291 rleet2
rleet2's picture

Look!

A big shiny hook without a worm on it.  They'll bite. They always bite.  doubtful.

Thu, 01/07/2016 - 11:43 | 7011354 Fuku Ben
Fuku Ben's picture

It's their best shot. Read the link in my comment below.

Thu, 01/07/2016 - 11:31 | 7011271 Fuku Ben
Fuku Ben's picture

Well so far so good. Let's see what happens at the open.

http://www.zerohedge.com/news/2016-01-07/china-suspends-circuit-breaker-...

Thu, 01/07/2016 - 11:31 | 7011275 polo007
polo007's picture

http://realmoney.thestreet.com/articles/01/07/2016/ah-ha-moment-might-fi...

The "Ah-Ha Moment" Might Finally Be at Hand

By Doug Kass

Jan 07, 2016 | 8:31 AM EST
  
It looks like we're finally witnessing the return of so-called "natural price discovery" to Wall Street.

Years of the Federal Reserve Zero's Interest Rate Policy and massive liquidity infusions have yielded a central-bank "put" on the markets, replacing natural price discovery with asset-price inflation.

But now, it looks like that movie is being run in reverse. That's because players are beginning to lose faith in the Fed and other central banks, or what I call the "Ah-Ha Moment."

We appear to now be at a place that I've been warning about for the past year. By inflating asset prices, central bankers have compressed risk like a coiled spring -- and money managers have all crowded into the same trade of being long on overvalued equities and other asset classes. But the past few days have shown what happens when many of these players want to exit the same trade at the same time.

How Do You Say 'Tora! Tora! Tora!' in Chinese?

Many of business TV's "talking heads" have been saying this week that investors should ignore China's woes, citing things like the fact that trade with the Asian nation represents just a small part of U.S. gross domestic product.

They're clueless!

I remain short on the iShares China Large-Cap ETF (FXI), and I issued another warning about China just two days ago in my column Don't Say We Didn't Warn You About China.

The Chinese markets are overleveraged, and after losing real estate/construction as an engine of growth, the government is devaluing China's currency in an attempt to resuscitate domestic economic growth.

Meanwhile, I've consistently argued that China's stock markets are much more broken than America's. Perhaps that's why the Chinese markets' circuit breakers -- which shut off trading early today for the second time this week -- are having the opposite effect of what the authorities intended.

Unfortunately, China's potential to "export" risk through capital flight and a devalued Chinese currency (one of the "surprises" I predicted for 2015) and could cause problems for Western markets as investors lose faith and unwind long positions.

In a world of tepid growth, the system's fragility and overvalued nature -- coupled with a loss of confidence in central bankers -- represents an outsized risk to our markets. So does the notion of America as an "oasis of prosperity" in a flat, interconnected and networked world.

Do NOT follow this link or you will be banned from the site!