China CPI Comes Hotter Than Expected At 6.5%: Highest Since June 2008

Tyler Durden's picture

Following hotter than expected Chinese CPI, futures have taken another major, with ES now down 1.7%, same as the DJIA, and NQ down 1.8%. The reason: Chinese July CPI which came at 6.5%, hotter than the consensus 6.4%, and indicative that contrary to expectations, the politburo is still focusing purely on dealing with Bernanke's exported inflation. It also means that there will be no joy in Mudville and China will not serve as the much needed growth dynamo to push the entire world out of the re-depression. The breakdown in component shows that food inflation jumped 14.8% versus non-food inflation rising 2.9%. Elsewhere PPI came in line with expectations at 7.5%. "China’s rising inflation is likely short lived given falling food prices, especially pork," Bloomberg economist Michael McDonough says. True, however the much needed panacea for the overnight malaise that has gripped the world market is not forthcoming, and the ball is now squarely in the Chairsatan's court.

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trav7777's picture

the severity of the recent moves mandates some kind of intervention tomorrow...this is looking eerily reminiscent of 07

bankrupt JPM buy silver's picture

Oil looking gooooood, at this rate I'll fill up for .43 cents a/gal by the weekend. $76 down 7% after hours.  Cramer what?!

trav7777's picture

oil is getting totally crushed...we'll see how low it goes and for how long.

If you were an interventionist looking for a man-on-the-street inflation metric to aim for, it'd be oil.  You'd let gold go its merry way.

Gold is either pricing monetary blitz or sovereign collapse.  Oil is pricing severe and sudden contraction.  Brent still at 99, however.  Seems like the Brent price in excess of 120 leads to full stop conditions.

CrashisOptimistic's picture

This is my read, at least approximately.

Oil decides everything.  It has crushed the world with 120 Brent.  Now the world, crushed, won't buy oil until it can get started again, and when it does, Brent will smash it again, only lower, increasingly worse.  The down sloping sawtooth pattern.

This is a key reality.  Oil can NEVER EVER go to $500/barrel.  It destroys the world before it gets there, and with a destroyed world not burning oil, the price can't rise.

This leg down will generate riots.  Clearly already in the UK.  But when America starts to rock and roll, bullets will go through skulls.  

There will be no recovery from that.

TruthInSunshine's picture

OT (sorry trav, tyler):

Thanks to Atomizer for this find:



The Bernank's Key Advisers Have Officially Now ALL Quit Their Posts.

I Repeat; The Bernank Is Being Bailed On By Even His Former Man-Servants & Lackeys.

Black Flag Color Code Is Now In Affect. I Repeat; Black Flag Color Code Is Now In Affect.

God Save The Amerikranski & Global Ponzi Scheme. The Amerikranski & Global Ponzi Scheme Is Dead. Long Live The Amerikranski & Global Ponzi Scheme!


Federal Reserve's Sheets Quits as Bernanke's Chief International Economic Adviser
The departure means all three of Bernanke’s top staff advisers have left their positions or announced their departures in the last 13 months. Brian Madigan, former director of the Division of Monetary Affairs, retired last year, while the Fed said in May that David Stockton, director of the Division of Research and Statistics, is retiring Sept. 30.



TonyV's picture


Correct, but it will be hard to justify any sort of "quantitative easing"

navy62802's picture

Heard rumblings on Reuters that the Fed will announce no QE3 tomorrow. Brace for shock.

CrashisOptimistic's picture

Yes, this has also been a puzzle to me, why so many clamor for it.

Q1's 0.4% GDP was right smack dab in the middle of QE2.  QE2 did not help GDP.  It hurt it.  Unemployment ROSE while QE2 was underway.

Why would they do more?  What parameter says it's a good idea?  The two paramaters of their mandate don't say it helps.  Inflation rose all spring long and Unemployment did too.

Their dual mandate should say no QE3.

Cdad's picture

Indeed...transitory...the ES action, I mean.  I suspect they will rally that scalded chimp deep out of the hole in the middle of America's night so that no one can challenge it on the way back the Bernank's statement...which will be empty and useless.

RSI on ES is @ 20 on this selloff all the way down from 1345.  The MACD is lower than I have ever seen that indicator on index futures.  

It's the handiwork of bankers.  More derivatives!  It's called "investing."

My guess one will be happy with the market action tomorrow.

Deepskyy's picture

Welcome back old man, been hiding down the rabbit hole have ya?

chump666's picture

haha "Chairsatan" I love that term.


Alienated Serf's picture

china cpi just got kosdaq to suspend trading....

DonnieD's picture

Fed Charmin, Ben Bernanke, will eventually print. He is nothing if not a counterfeiter.

mynhair's picture

Communist Purchasing Index still has meaning? Who'd a thunk.

FunkyMonkeyBoy's picture

The Bernank will be especially pleased to hear of falling pork prices.

Id fight Gandhi's picture

Your avatar is bill hicks right?

Global Hunter's picture

he witnessed Waykoh, that really struck me.  Way ahead of his time, saw what was happening longgggggggggggg before I ever did.

PaperBugsBurn's picture



No QE3 or HSBC gets kicked out of the biggest gold market on earth and Forbes 500 corps (most belonging to the banksters) too.

mynhair's picture

Oh, and go gold! May the miners follow.

Id fight Gandhi's picture

Meh, not a gold digger. Rather have the bling in hand.

TruthInSunshine's picture

Now I ain't sayin' The Bernank's a gold digger.


Gold Digger
augie's picture

/es is loving it 1085 last print. 

KennyG09's picture

"Traditionally this will only be transitory. As my Jackson hole is tightening, I would kindly ask all you doomers to eat your Ipads and stop reading ZH" - Chairsatan Bernankenstein

mynhair's picture

We need more Libs in office. Plenty of more wars to get into.
Ecuador feels soooo lonely....

Bobbyrib's picture

Yeah, I remember when Bush and the Republicans voted against the Invasion of Iraq after Saddam masterminded September 11th. /sarcasm

breezer1's picture

$1740. all bets are off.

LoneStarHog's picture

If I hear that BITCH on CNBS say one more time "trading is light" to justify the plummeting in the futures, oil, etc. I am going to reach through the screen and tear out her fucking vocal chords.

slaughterer's picture

Oh yes, those CNBS newscasters do have a naive way of reacting to economic catastrophe that incites fury in the viewer.  

Id fight Gandhi's picture

They got new gloomy music. All scary goth like...

How many of these 8pm doom shows are they gonna run?

trav7777's picture

oil is just getting woodshedded.  This would seem to give some cover to QE, but if they were gonna QE3 tomorrow, it'd already have been leaked and manifested into the markets.

Maybe we are going to see a return to those emergency Fed announcements like late 07 thru early 08.  Where the shit was LLD and you are like they simply have to announce a discount rate cut today.

The severity of the forex moves is also noteworthy

11b40's picture

"if they were gonna QE3 tomorrow, it'd already have been leaked and manifested into the markets."

I think you are right....sort of like the leaked S&P downgrade last week. 

There is nothing but uncertainty in every immediate direction, but over the horizon, the only direction is down for the economies of the world.  It feels like the universal bubble is about to blow.  we have become so intertwined, we truly live in a "House of Cards" world.

fuu's picture

The crackheads on Bloomberg are demanding QE3 from the Fed as the only hope.

Jim Cramer's picture

I guess it would be dumb to suggest looking at volume on light versus tonight's trading?????

gwar5's picture


Don't look now, but gold is over $1740 already.


slaughterer's picture

By the time the Chairsatan announces QE 3, Gold will be over 1800.

navy62802's picture

Does the Hang Seng have a breaker like the US indices? Because they're getting awfully close to a 10% drop in the first 10 minutes of trading!

buzzsaw99's picture

ot - god i'm enjoying watching the fly cry like a bitchezTM:

The game plan going forward entails lots of finger crossing. I am fairly scared to death that this market can plunge 10%+ in a day. I am putting all of my emotional capital in The Fed, which is a future mistake yet to be revealed. I can see myself making mistakes in real time and it shocks me. We’re all waiting for respite, some semblance of normalcy in order to reduce risk. However, when markets are this oversold and sentiment is at the point of panic, markets crash. Granted, we’ve crashed over the past 12 days, down more than 17%. But if confidence isn’t buoyed ASAP, we’re gonna crash some more. Sadly, this time around, I don’t see our leaders doing anything. I mean, these fuckers aren’t even trying. It the midst of a global meltdown, our fucking President is hosting $15,000 per plate fundraisers. Something is wrong. It’s as if they’ve resigned themselves to let this thing just play out. The consequences of their inaction will be devastating for this country, and more specifically me...

trav7777's picture

everyone long must be looking for a bounce to GTFO.  This is reminding me more of 08 than anything else.  However, those countertrend rallies were vicious.

At least Nero was playing a musical instrument instead of duffing it up on the golf course...

buzzsaw99's picture

one of the authors on zh said something about "if bernanke had said something today we might have gotten a bounce..." I thought it an odd thing to say as in what good is a short term bounce? Now I know, many are hoping/praying for a bounce to sell into. They better hope they get it tomorrow or else it could be a real bloodbath.

slaughterer's picture

The magnitude of bounces that are quantitatively possible after such a violent sell-off are enormous, much more than any Fibonacci retracement might lead you to believe, given the pervasiveness of HFT throughout.  

Librarian's picture

By comparison, the "Berlusconi Bounce" was more of Babbling Bust.

It's difficult to imagine what Bernanke could say or do at this point that would have any lasting effect.  He's like the little E-Trade baby who has cried "Goose!" a few too many times already.

In fact, for him even to move gold down 50 points for even 12 hours at this point he would have to appear on television wearing a Greenspan mask while riding a unicycle and juggling copies of Friedman, Schumpeter and Keynes' books.

Yes, Bad Mental Picture, I know...

argentinian serial defaulter's picture

oh,at last,the world is becaming a giant argentina,im so happy!now you`ll all have the chance to know this strange experience.

YC2's picture

I was there with dollar denominated student loan money.  I must say, it was awesome until it was very sad.