Dow Dumps 250Pts, Nikkei Plunges 500Pts After China Credit Concerns, Kuroda Comment
It appears the world is ganging up on The Fed as following China's recent clear and present threat should the USD strengthen, BoJ's Kuroda warned that further QQE might threaten the bank's finances - implicitly demanding moar from Yellen because he knows he's out of bullets. Add to that the surge in China credit which merely extends the life of already zombified firms, thus spreading more deflationary stress to the world and stocks from China (SHCOMP -3%) to US (Dow -280 points from Bullard Bounce highs) are tumbling.
China’s broadest measure of new credit surged the most since June as companies increase borrowing on the corporate bond market, underscoring a shift away from reliance on state-backed banks for funding.
Aggregate financing rose to 1.82 trillion yuan ($276 billion) in December, according to a report from the People’s Bank of China on Friday, compared with the median forecast of 1.15 trillion yuan in a Bloomberg survey.
The data shows companies are turning to alternative sources for credit given banks’ reluctance to lend. It also adds to signs the economy is stabilizing, not slumping as its falling currency and plunging stock market seem to suggest.
"For the whole year of 2015, the biggest increment in aggregate financing came from the corporate financing via bond and stock markets," said Zhou Hao, an economist at Commerzbank AG in Singapore.
"It appears to us commercial banks have few incentives to provide loans directly to corporates, especially due to credit concerns over SMEs, but turn to capital markets to finance the corporate indirectly. This hints an ongoing structural change in China’s financing system."
In fact, as we noted previously, the bigger than expected increase in aggregate financing shows Chinese companies taking advantage of lower (bubble) bond yields to raise funds as commercial banks have refrained from providing loans to domestic companies because of the slow economic growth outlook.
Despite the massive supply, yields have collapsed...
As both "strong"
And "weak" balance sheet firms...
...take advantage of the credit bubble. However, there is one less than silver-lining:
Going by the official numbers, which are widely regarded as understated, bad loans rose to a seven-year high of 1.2 trillion yuan as of the end of September. In a sign of write-offs to come, policy makers are aiming for a clean-up of “zombie companies” that rely on government subsidies and bank loans to keep operating.
While that credit impulse would normally be seen as a positive in the new normal, it appears there has been a clear shift in recognition that enabling already-zombified companies to live longer merely exacerbates the over-invested, over-produced, mal-invested deflationary spiral that is rapidly spreading across the world.
Then Kuroda piled on, noting:
- *KURODA: NO PLANS AT THE MOMENT TO ADD TO MONETARY EASING
- *KURODA: JAPAN'S POTENTIAL GROWTH RATE IS AT OR BELOW 0.5%
- *KURODA: QQE POLICY HAS A RISK FOR BOJ'S FINANCES
Which sounds an aweful lot like a demand that The Fed step back up to the plate and "ease" the world's pain (or at least "un-tighten.")
And crushed Japanese Stocks... (Nikkei down over 500 points from the US session close)
And the result of that is an almost total reversal of all Fed's Bullard's good work during the US session. (Dow down over 250 points from Bullard's Bounce peaks)
So for now, Bullard appears to be firing blanks and "good" news is bad news once again.
Chinese stocks head for their longest weekly losing streak since October...
...and still the worst start to a year ever...
(11 votes)
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#BlackOlivesMatter, especially for Mediterranean agriculture export.
Mal la det. Very good Boris I shall make a Tee shirt with that.
https://www.youtube.com/watch?v=rUfYNQsr3h8
Everything is awesome
Everything is fiine!
https://www.youtube.com/watch?v=zDAmPIq29ro
I'm afraid I don't understand why this article thinks that companies with no prospects of growth or M&A activity and which need to borrow money from loan sharks is a sign of a stabilizing Chinese economy.
To me, it's a sign of trying to stay afloat until some rescue ship happens by.
Yes the Titanic has been alerted...enroute.
i read the same, only think it is worse. because of fucken liars. fucken liars. everybody is a liar. governme is the worst fucken liars. hidden agendas-fucken liars...
You see life through distorted eyes
You know you have to learn
The execution of your mind
You really had to turn
The race is run the book is read
The end begins to show
The truth is out, the lies are old
But you don't want to know
Nobody will ever let you know
When you ask the reason why
They just tell you that you're on your own
Fill your head all full of lies
The people who have crippled you
You want to see them burn
The gates of life have closed on you
And now there's just no return
You're wishing that the hand of doom
Could take your mind away
And you don't care if you don't see again
The light of day
Nobody will ever let you know
When you ask the reasons why
They just tell you that you're on your own
Fill your head all full of lies
Where can you run to
What more can you do
No more tomorrow
Life is killing you
Dreams turn to nightmares
Heaven turns to hell
Burned out confusion
Nothing more to tell
Everything around you
What's it coming to
God knows as your dog knows
Bog blast all of you
Sabbath bloody sabbath
Nothing more to do
Living just for dying
Dying just for you
Slayer.
Sabbath
Chopper dollars from the sky
A billion silver dollars high
uhh-yepper
Skeletons of Society. If you do not know look into it. Slayer.
When you are 20T in debt you don't really have allot of leverage, especially when the bills all come due at once.
When you have $20Trillion of debt, you have all the leverage in the world.
TBTF, Godzilla Style.
The FED saved the banks. Why?
If your ass was on fire would you try to put it out?
Lemme see if I got this right:
1. US exports inflation to other countries who use the USD
2. China exports deflation to the US
If so, Tyler, do we then have controlled deflation, stagflation, biflation? Or do we simply have the same as always: Theft-flation?
Crimeflation
we have a system the oxygen of which is debt. We have allowed sophists and imbeciles with degrees in "economics" to manage this system, by which is meant ensuring its perpetuation, by which is meant the means by which wealth {real assets} is transferred from work, from productive labor, to capital, to, in essence, usury.
The debts will never, ever be repaid. It is impossible for them to be.
The system is starving for its oxygen - but it is increasingly hard to create new debt that is either risky, or closely tied to the banking system and issuing power itself. Plenty of money in the system - too much - but it is highly concentrated away from where it would be of most benefit in an economy driven by consumption and small business growth.
So then - more printing, re-lowering of rates, fed buys more treasuries, oil prices go up, oil prices go way, way up, then another world war.
Of course, a novel approach would be for the next round of QE to go to small/community banks to lend to small businesses and dare I say it first time homebuyers at low rates. You could also tax financial transactions and the world's billionaires - but then someone might scream "socialist!" at you, preferring to be a rape-slave of banks and oligarchs than suffer the thought Mark Zuckerburg might have to toss in an additional small fraction of one of his billions to fix a road or {gasp!} school roof.
All of this assumes nothing, absolutely nothing, will cause the American people to demand that the issuing power be removed from the privately owned FRS and restored to the government, as provided by the Constitution and common goddamned sense.
Pretty good post, till you got to the part about the .gov taking over the printing press.
the French tried that, did not work so well., they printed the society into the Stone Age,.
The constitution gives congress the responsibility to mint coins. Big difference.
Fractional reserve banking is the problem. Not the Jews, not the Rothchilds, not the commies, not the neo cons.
Honest money fixes all. Knowledge and necessity will bring back honest money. always has. The question is , how much misery till. Then.
gold and Bitcoin, Bitches
I'm watching Bill Still's The Money Masters, again. I get more each time I watch it.
***
It is depressing to see how few views it has on You Boob. It should be required watching for every skrool studint.
start by cutting defense in half-then watch the economy implode(it would-do the math). that is why dr paul didn't have a chance in hell of becoming prez. half the defceit cut. tell isreal to fund there own folly. quite giving billions to other countries and meddling in their affairs. a start which will never happen.
oh audit the fed, defeated already. get the clear pic yet? we are fucked cause what should happen will never happens-just which/think cog dis bullshit.
see the ptb will keep us on this road to currency collapse til new powers to be, fill the vacuum.
so the race to financial injustice and ruin must run its course.
Random Central Bank market manipulator: 'we will do whatever it takes' (to destroy the financial system).
Putin's fault.
Obviously.
Notice how quiet the MSM is on Syria? Vlad must be kicking some ass along with the Syrians and Iranians.
The statement of Kuroda imples that Japan is officialy fucked because no more BoJ-QE. This going to be interesting...
no more QE would mean fucked in the short term. More QE means more fucked in the long term.
How long and at what rate can debt growth accelerating beyond the amount of money existing to pay it is required to "repair" an economy of goods and service exchanges where capital is repeatedly misallocated directly and indirectly by the very printing engendered to keep the debt growth growing, I ask you, Sir?
But they are fucked most of all by Strontium ions, at this point.
I agree, either in the short or long term they are fucked. However, he admits that he has no more straws left. That he implicitly admits it is what I consider interesting. Since when do politicians admit that their country is going to get fucked.
no more QE would mean fucked in the short term. More QE means more fucked in the long term.
TPTB will ALWAYS choose to kick the can down the road so that the big meltdown won't happen on their watch and they can blame whoever is in office when it does. The Feral Reserve will protect Obola's legacy at all costs. The average pleb still believes the stock market is the economy. That lie can't be sustained if people's 401Ks evaporate.
DOW grasping the last dangling root on the edge of Wile's cliff.
Dear Kurodasan,
there is one thing you can do to save some honor for yourself before your country erupts into chaos and violence as a result of your very disasterous and thoughtless policies.
hara-kiri
You truly deserve worse.
but but its options expiry day isn't it?
Opex today, which is just what the market needs, some extra volatility. We've been looking for a retest of the major weekly support level at 1855 on the ES, which held in late August and again in late September. Overnight the ES dropped sharply from yesterday's 15-minute resistance level of a setup which has a target of 1845. At some point we expect a happy-days-are-here-again bear-market bounce to resistance on the daily time frame, currently at 1990.75 and falling with every new low. A look at all of the above on a daily chart...
http://tos.mx/uueYMB
Forex Factory has a calendar that's very handy for keeping up with market-moving news. Potentially big movers on tap today, all at 8:30 am Eastern, are Core Retail Sales, PPI and Retail Sales. Mind your stops, and happy trading...
Next train soon coming into the station will be the crashing U.S. Dollar.
It's very late, but it will be coming. Can't come soon enough.
Look at Japan's interest payments, they are skyrocketing. The only way is to keep bond yields low via QE.
http://www.mof.go.jp/english/budget/budget/fy2016/02.pdf
Since QE started in Japan the REAL money has been switched for FAKE stuff !! This is going to be very very painful
Jim Willie says the dollar will keep going up because of the unwinding of petrodollar derivatives.
Maybe. He called the 25bps hike wrong, though.
How did he call it wrong; there has not been a 25 bps upward movement has there? Nope. The hike that hasn't occurred except in the mortgage and prime rates of course. When Yellen reverses, then there may be negative rates. We will have to wait and see.
https://www.youtube.com/watch?v=01k3bHSHRmM (Rob Kirby on fake rate hike - go to 2:37 mark)
https://www.youtube.com/watch?v=rhVahBlBFnY (Andy Hoffman)
0600 here, and Europe is straight down, as are futures...today may be interesting!
This means my miners will be up. At least today, ho ho.
Now 11am in London -- 15 handle on the DJ looking rather likely.
there shall be MOAR
Nothing to fear. Cramer is out with an article called "How I Knew to Buy Before the Big Rebound"
So obviously, the "rebound" is intact /s
And so your zirp, your zirp has failed
You've made the progress of a snail
Don't worry... [/Tiger Lillies, Crack of Doom]
Cramer should be called on a piece of carpet on camera at 0530 every morning on CNBC to explain his insane logic and crappy "bottom" picks. That would make me start watching again.
PPT arrived at 0630. Headed up from here. You are the proud owner of tens of thousands of S&P futures.
And Gold sits there saying " What? why you looking at me "
Pass me a plate... There's plenty of BBQ BullTard to go around.
Pass me a plate... There's plenty of BBQ BullTard to go around.