China Contagion Spills Over To Hong Kong Banks As HIBOR Explodes To Record High, Stocks Tumble
Chinese stocks are trading at the lows of the day after Overnight HIBOR rates (Hong Kong's interbank borrowing rate) exploded a stunning 939bps to a record high 13.4%. It is clear that banks are utterly desperate for liquidity and/or are extremely concerned about one another's counterparty risk. This has dragged HSCEI down 5% (to its lowest since Oct 2011).
Something just snapped...
Evidently the pressure between On- and Off-shore Yuan was too much for banks to bear...
Smashing Hang Seng China Enterprise Index down 5% to its lowest since October 2011
But US equities are being bid by an invisible hand once China closed for lunch...
Chinese Default/Devaluation risk just jumpe dback above 120bps (highest since August collapse)
As we explained earlier, as Asian markets opened (ahead of the Yuan fix), they were in turmoil with FX markets crashing (JPY rallying as carry trades unwound), equity markets tumbling (Dow, Nikkei, and China A50), commodity carnage (crude and copper carnage) as Gold and bonds were bid. With offshore Yuan sliding ahead of the fix (and Onshore Yuan 3 handles cheap to Friday's fix), CFETS RMB Index dropping below 100 for the first time, and following Friday's 'token' stability, The PBOC decided to hold Yuan Fix practically unchanged for the second day. USDJPY and equity markets jumped on the news, then quickly faded.
We have seen this "stability" before...
Asian stocks collapse to lowest since October 2011...
Chinese media is pushing rumors of rate cuts and urging people that they do not need USD (despite the lines we noted earlier) demanding theyhave more patience... (via People's Daily)
More patience is needed for the Chinese economy which is in a transition period, as it transfers from old to new economic growth drivers while also facing a backdrop of a slowing global economy, the People's Daily reports citing academics. It would be too opinionated to judge that the Chinese economy would suffer a hard landing based on short-term fluctuations as many factors have had an impact on the yuan's recent depreciation and the stock market's falls.
"The fundamentals of many economic crises is the psychological panic problem, and we need to take good care of the market and foster new drivers; conclusions on the Chinese economy can't be made in a rush based on the short-term or partial changes," said Zhang Tiegang, professor at the Central University of Finance and Economics.
Yeah - all psychological.
Offshore Yuan was tumbling before the Fix...
As were Chinese stocks:
- *FTSE CHINA A50 JANUARY FUTURES SLIDE 3%
Of course, The Keynesian have a solution for all this...
- *STIGLITZ: RECENT CHINA MARKET VOLATILITY ISN'T CATACLYSMIC
- *STIGLITZ: CHINA NEEDS DEMAND BOOST TO AVOID DEEPER DOWNTURN
It's that simple eh?!
The reaction to PBOC "stability" is not good:
- *MSCI ASIA PACIFIC EX-JAPAN INDEX DROPS 1.7%, EXTENDING LOSS
- *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 1.7% TO 3,131.85
And Dow futures jumped 80 point and then dumped 100...
Chinese stocks are tumbling...
And ChiNext is now down over 21% YTD...
* * *
As we detailed earlier, markets were turmoiling into the China Fix...
China ripples may be turning into tsunamis. As FX markets creep open, something serious must have snapped. The South African Rand just crashed 10% - the biggest single-day drop since Lehman - to new record lows. At the same time, carry trades are being unwound en masse, smashing USDJPY down to 116.75 (strongest Yen in a year). Somebody do something!!!
The South African Rand crashed 10% to a record low against the USD of 17.9169. This 10% collapse is the largest on record outside of the immediate post-Lehman move...
Don't forget - As goes the South African Rand, so goes The World?
Korean Won plunges to its lowest since July 2010...
And Yen is surging...
Smashing Nikkei futures down over 500 points from Japan's close....
As USDJPY tumbles so US Equity markets are slumping...
And crude is carnaging...
Copper flash-crashed at the open and is now retesting...
It appears people were expecting some Chinese intervention over the weekend... and so far have been disappointed.
For now, Gold is bid as a safe haven...
Charts: Bloomberg
(43 votes)
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15 week genius
c'mon, everybody starts their account sometime. besides, many of us lurked here for years before making an account to add $0.02 worth.....
Splat?
Amateur ! In bitcoin land it's the same values times 10 !!!
ES, is trading [3] standard deviations under VWAP on the 50 day<> 4 hour chart.
DOW futures down 134 as of 7:07pm EST
My popcorn is popping in the microwave as I type this. Long popcorn!
ow crap... I am long FANG.
P.S. Just kidding. I have got puts on almost al those bitches. Hahaha
Rand fiat down 10% - Kruggerands - NOT!
i get 'moments ago' and 'snapped' and 'dramatic' and all that (se dice clickbait, amigo?'); but seriously, all anyone has to do is look at their fave gold supplier for premium over spot; if its flat or not up 'dramatically', its just noize . . . .
Fingers crossed you are right. I'm moving some paper around for a better position. Only the inside traders can make things happen in seconds or minutes. Regular schlepps get slowed down to a couple of weeks.
Where's the entry on oil, $8.00 a barrel?
$200.00 when Iran closes the straits
Minor tremors in the Farce.
The stage is being set for the next massive(er) wealth transfer from the debt slaves to the masters. Just like 2008. And, the countries that do not want to participate, BOOM BOOM!
"Paging Hank Paulson to the white courtesy phone."
I don't understand...TWO HUNDRED & NINETY TWO THOUSAND jobs were just created!...lol.
Jobs 'created' indeed.
11K and a nice fat bogus 'seasonal adjustment' to bring us to 292K...
We checked the math on that. Turns out 3 zeros were inadvertantly added. Sorry for any confusion.
I doubt the PPT will allow the market to drop below that support line.
and if you think this can be bailed, remember this:
China has never done this before and they are kind of like the rogue trader trying to catch up to its trades.......on the nation level
Burn mutherfucker burn!
I believe that stock ownership is part of the American dream. So go home and invest your money in stocks and be a good American citizen.
P.S. Sound familiar?
I'm still in 'The American Dream' trying to wake the fuck up!!
Your American dream is gonna be a nightmare. (with kind regards Obamma, hihi).
Wait....that IS the American Dream.
Anything that does not include the fucking progressives and their ideology
dunno
Obama is going to have to fly to Beijing and walk barefoot in the snow under Xi's window for a couple of days.
It worked for King Henry IV (German) a thousand years ago.
This must be another false report, because according to the high priests of the shiny-shit cult, the USD is worthless, and it is going to be replaced by the chinese or russian currency because they have accumulated big piles of magic shiny shit.
just checked at Sears and Lowes......nail guns are bidding up.
Guns? Did somebody say guns?
I'll get the band set up. That should calm the passengers.
Do you guys know 'Hotel California' or 'Bobby McGee'?
No, but we can do one heck of a job on Patsy Cline's FALL TO PIECES!
Do something? I am doing all I can.
I am enjoying a Ninkasi India-style red ale. Excellent.
i would buy you one with a one ounce silver unit if i was there!!
I raise a toast in your Honor, my absent friend.
Mr. Durden, I think you should add "Shadow Stats" to your recommended reads. (IMHO)
http://www.shadowstats.com/
What is the real unemployment rate on a historical basis?
this was discussed about 7.5 years ago. Thanks for joining
Was global deflation any question in coming? Should have happened in 2008. Central banks be damned, the chickens always come home to roost.
Sung to the tune of I'm only human- I'm only fiat, born to make mistakes
SHORT USDTRY, it will be one hell of a year.
We all saw this coming! That little Fed rate increase is all it took to set the world on fire. We said it before the Fed raised, that is they did, the world financial system would begin to crack. Believe it, the world can not handle even a fraction of a rate increase in the world center of money printing. The USA.
Saw what coming Jack.....what difference is a rate hike when no one is planning on paying the interest, let alone principal back...they'll just tap out a few more digits on a keyboard and extend and pretend. This motherfucker has a long way to go before we're at maximum retard. Just wait. The Fed shitshow starts after daybreak....
Kyle Bass - Margin call on line 2 didn't he get seal team 6 training... Watch where and what you are flying in ....
Moby 'Extreme Ways' - Official video
http://www.youtube.com/watch?v=nBB2bPwKWVg (3:29)
Moby is so early 2000's...
What is called for is some major Mad Max Fury Road flame throwing guitar and massive drums!!
https://www.youtube.com/watch?v=1DcqnkzGEFQ
We just need more cowbell.
https://www.youtube.com/watch?v=u1NxH9BdO1M
Aren't all markets Psychological? "somebody pull the ripcord!" We have "God on earth"(so says CNN) in the white house.....can't he do something? Maybe attack Mexico or make it rain for a few days.
I still have a mental picture of a nude Merkel swinging from a lamp post. Some of the posters here are really clever.
It appears we could have an absolute world financial collapse at any moment. A panic will do it. You can buy freeze dried beef in a nitrogen atmosphere that they say is good for 25+ years. I think if the container stays intact it might be good into infinity....at Walmart. I bought some yesterday. I don't see myself as a prepper ...I just see it as common sense. A guy who went thru the Bosnian war said cigarette lighters were a fantastic thing to have at the time. Everybody needed them and they were probably the best bartering item there was. It's hard to want gold when your starving to death.
It's hard to want a lighter when you're starving to death.