Markets Spooked After China Central Bank Announces More Rate Liberalization, Yuan Internationalization
As quick primer on China: the more something is "liberalized", the worse it is for local - and global - risk assets since all risk "assets" in China are so grotesquely manipulated, the resulting price discovery is always violent and spills over to the rest of the world as 2016 has so far demonstrated; alternatively, the more the government intervenes to stabilize any given asset, the better it is for local - and global - risk assets, as it means the distortion in price levels and capital allocation will continue at least a little longer, i.e., the proverbial can kicking, even if it means the hangover will be that much worse.
Which is probably why the catalyst for the futures swoon experienced moments ago, which brought the S&P futures back down to unchanged since China's FX announcement last night, was a Reuters story according to which China's PBOC is preparing to further liberalize interest rates while further internationalizing the Yuan, translated: even more devaluation + even less intervention = bad for risk.
- U.S. STOCK INDEX FUTURES PAIR GAINS SLIGHTLY AFTER CHINA'S CENTRAL BANK SAYS IT WILL FURTHER LIBERALIZE INTEREST RATES - RTRS
More:
- CHINA CENTRAL BANK: TO FURTHER LIBERALISE INTEREST RATES
- CHINA CENTRAL BANK: TO MAKE YUAN MORE INTERNATIONAL
- CHINA CENTRAL BANK: TO MAINTAIN PRUDENT MONETARY POLICY
- CHINA CENTRAL BANK: TO FLEXIBLY USE MONETARY POLICY TOOLS TO KEEP ADEQUATE LIQUIDITY IN BANKING SYSTEM
- CHINA CENTRAL BANK: TO KEEP USING MLF, PSL AND CREDIT POLICIES TO SUPPORT KEY AREAS IN THE ECONOMY
- CHINA CENTRAL BANK: TO FURTHER IMPROVE CURRENCY FORMATION MECHANISM
- CHINA CENTRAL BANK: TO KEEP YUAN BASICALLY STABLE
- CHINA CENTRAL BANK: TO DEEPEN REFORM OF FX MANAGEMENT SYSTEM AND FINANCIAL INSTITUTIONS
The full statement can be found here, and the full story from Reuters:
China's central bank said it would further liberalise interest rates, according to a statement posted on the People's Bank of China website on Friday.
The central bank also said it would make the yuan more international, keep the currency basically stable, further improve the currency formation mechanism and deepen reforms of the foreign exchange management system and financial institutions.
The central bank will use medium-term loans, and pledged supplementary loans and credit policies to support key areas of the economy.
The central bank also said it would maintain prudent monetary policy and flexibly use monetary policy tools to keep adequate liquidity in the banking system.
We wonder how long until the PBOC "retracts" this story following the adverse futures reaction. After all, if this week has taught us anything it is that when it comes to policy, in China everything is now dictated by market.
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Are spooked and schlonged synonyms in this headline?
Today’s pulling the Shanghai Composite back up into the green cost the Communist Party an equivalent of:
10 million Spring Rolls
50 million Fortune Cookies
I ain’t no arithmetic professor, but they can do it for at least 4,000 years EVERY SINGLE DAY. ;-)
Looney
It's all China's fault. We would be doing super if it wasn't for those damn red commies. /sarc
hey, they let Nixon in their country. I repeat, they let Nixon in and even talked to him ;-)
Yeah, but they drew the line at Obama. They can't be all that stupid.
When you see some guy walking out of the back of the bank with big bundles of Yuan.......you know the end is near.
If a Bityuan tree falls in the woods....
Yeah I know. Bloomberg Tv was pushing that agenda for the last two days, it's insanity. Calling the Chinese markets fake, manipulated etc. As if the pot isn't calling the kettle black. Schlongtards
I like that: Schlongtards verses Fucktards. I could use that.
http://40.media.tumblr.com/2e841281aafd25a3643e642b3085b821/tumblr_o0hud...
H/T: Tinky
Spring rolls and fortune cookies are Western inventions. When was the last time you saw a fortune cookie in China? You ain't no Arithmetic professor ... and no expert on food and culture evidently.
Stick to "Tea and Rice" in your trivia.
Fortune cookies were likely invented by a Japanese American. That is hardly
enough to make them Western.
As for Spring Rolls, what are you saying? Marco Polo intoduced them to China?
So, maybe you should stickee to you rice and Chai.
I've never seen a spring roll or fortune cookie in China. I've seen a lot of steamed dumplings though.
China back up in the green as well as U.S. Futures.
Hooray for the Ho Li Fuk - Wei Tu Lo Plunge Protection Team in China.
Go back to bed. Enjoy the weekend. They're cooking the crooked casinos up today.
**yawn** ok. nitey nite
We're going to stay up and watch the cartoons (markets). We have a sneaky suspicion the PPT is going to slip on a banana peel, then stand up and receive an anvil on the head.
https://www.youtube.com/watch?v=nXXpqMSNevE
Only if you are schlonged .... by a spook ?
What.....like the Kardashian women ?
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I'm too fat and hairy to be a cam girl.
Face for radio?
Niche marketing, baby.
DOW futures still up over 100 points....hmmmm
Dear coast,
Thanks for noticing our herculean efforts.
Signed,
Your Friendly Neighborhood Plunge Protection Team
Abenomics 2.0
excellent primer and article
"After all, if this week has taught us anything it is that when it comes to policy, in China everything is now dictated by market"
the market, a child that cries and throws tantrums, and daddy the Chinese Communist Party trying to keep it quiet?
yes, a market that is suddently allowed to find prices does it violently. problem is, we have currently global markets that have other forces that cause violent swings
as a reminder, the whole point of free markets is that they work more efficiently. compared to central planning, straight, financial and non-financial
that boon of improved efficiency, though, is not there when markets are having fits, in the same way as a crowd is not composed of intelligent, rational beings when panicking. then, it's a mob
there are limits to everything, something often lost on extremists, and yes, even limits to the magic of markets, where and when allowed to function
Like a drowning persons focuses on getting some air.
Aren't you glad they got the Yuan in the SDR basket before starting the devaluation cycle? I'm sure that was purely coincidental.
possibly, but that was in the cards for ages. I mean everybody in the whole frigging world was in agreement about that with the sole exception of the US Congress. I'd say that watching the UK jump as the very first into the AIIB band-wagon did the job. And why Cameron was so quick takes a bit longer to explain...
Its now time to devalue the international and onshore USD.
engage fully in the buggar thy neighbor contest...
now that's scary. frigging scary. one of possible future uses of those EBT cards in the US and the UK is exactly that: the creation of an "internal" currency... for the poor
of course no seafood with EBT, and no sin-related expenses like strippers, and so on
because business is business, Brits have always understood that
it's always the continentals that likes to think there's something more than just business at the end of the day
"Aren't you glad they got the Yuan in the SDR basket..."
Complete clownshow over there
(crackle)
"Abort ABORT! Pull up! That's not the runway, that's an interstate!"
"That's no moon.....it's a SPACE STATION"
Crap...it's a Death Star....where the hell did they get that?
OT so downvove me at will --- I deserve it, but at least here what I have to say will actually be published.
I was a member of facetribe - sorry I mean facebook until recently. Occasionally putting up political posts but rarely getting involved in it.
There is group that trades anything and everything, based on something that is not cash. Someone posted wanting a jew hat (yawlmuk or whatever they are called) for a circumcision and I said "what one? a clean one or the one where the Rabbi (cough) pedo sucks the cock of the new born child to draw out the blood after biting of the foreskin?" I was initially questioned.. by one who actually in his own words said "Most of the tribe live North of the river" (the richer area) and then later "You have your facts wrong about Jews".
I posted links such as http://abcnews.go.com/Health/baby-dies-herpes-virus-ritual-circumcision-... (sorry to pissed off to shorten it) and after 2 mins my post was deleted. I've also now been banned from facefuck. Fuck em all.
You do know the main guy there is named Zuckerberg right?
And in most places you have the freedom to say whatever you want, as long as you do not say anything upsetting to those who run it.
Think of it as a blessing. The more people banned, the faster fakebook dies, and the sooner people come to grips that their lives really do suck, and then they might start wondering why.
pods
I'm no one to talk .... but, maybe .... you were just banned .... for bad taste and general weirdness ?
Heh yeah - it probably appears like that from what I wrote above, but the thread went on for a long time - I tried to condense it because I was pissed off and if I could post screen caps I would (I'm always prepared for this shit, but in all honesty never thought I'd see it happen). The initial poster actually used the words "The tribe"..
Pods - I know mate, but when you see it happen in front of your face all of a sudden it becomes real. I was banned from the group initially and then facebook itself. I've been given the means to justify myself to reinstate my account but to be frank I only used it to post political stuff.
Upvote for not being a drive-by commenter ?
They should simply rename their policy as "Buzz Lightyear". "To Infinity and Beyond!!!"
Cream of sum yung guy coming right up!
Your comment falls short .... of the "redeeming social merit" test .... but, it passed the "gay pedo" test .... with flying colors ?
This is all turning around ...
Fixed ... or close to.
Shorts will be buried ... (for now)
(but does anyone believe this shit can go on - forever)
(and how long is less than that? - 10 years ... 5 ... a year?)
https://www.youtube.com/watch?v=Pe4xoMCjOOQ
Here.....have a tube of glue.....it's brand new!
Has anybody thought about the PPT members putting their own bets on the side and how much money their making.
Now that's capitalism at work!
I wasn't aware of the Orthodox oral circumcision .... but, it might be safer .... than a scalpel .... how about 1st grade rounded point scissors ?