Not To Be Left Out, China Announces Its Own Bank And Stock Market Bail Out
To anyone still believing that capital markets around the world express something other than government policy, the latest news out of China may come as a surprise: "Beijing will buy more shares in China’s biggest banks, in an expression of support for the beleaguered stock market and most concrete state action to date to shore up confidence in the slowing economy." The FT reports further: "Central Huijin, the domestic arm of China’s sovereign wealth fund, will buy the shares to help stabilise the pillars of the country’s financial system, the official Xinhua news agency said on Monday. Coming as the Chinese stock market closed at a 30-month low, the move was the strongest sign that Beijing wants to engineer a restoration of confidence in share prices and the economy. It paid instant dividends with a rally in the final minutes of trading on Monday." And there you have it: stocks are now nothing more than a means for governments to validate their "success" in something, since they have no more control left over either employment or inflation, or public expression of affection with capitalism as per #OWS. So why not ramp up the DJIA to 36,000? Granted that will happen as all global currencies get terminally davalued against gold, but so what - after all that only thing that matters now is whose stock market is the biggest.
More:
Although Chinese growth has so far held up well, the European debt crisis and the risk of a double-dip recession in the US have cast a shadow over the country’s economy. With inflation running near three-year highs and debt levels swollen by heavy spending, economists doubt that Beijing could launch the kind of stimulus it did when the global financial crisis struck in 2008.
Sensing vulnerability, investors have turned against China, driving down commodity prices, betting on the chances of a government default and selling shares in the banks that are the economy’s lifeblood.
The government, through Huijin, is already the majority shareholder in all of the country’s major banks. While the announcement gave no details about how much more it intends to buy, it was unabashed in declaring that it aimed to halt the roughly 30 per cent slide in bank stocks in recent months.
In a rebuff to traders who have been betting that the renminbi will weaken as the Chinese economy slows, Beijing also allowed the currency to record its biggest one-day gain in years on Monday, letting it rise 0.6 per cent against the dollar.
The motivation for that also appeared to be diplomatic, with the US Senate set to vote on Tuesday on legislation that would punish China for keeping its currency undervalued.
And so on.
We could say "we told you so" but so what - at this point only the biggest idiots don't realize that is the last ditch desperation manoeuvre to preserve social stability by keeping stock markets at a level that will prevent all out panic. Yes, someone will have to pay the piper at the end of the day because not even Keynes could have envisioned this kind of wholesale lunacy, but by then it will be "someone else's problem." For now - it is time to buy, buy, buy and, to those who listen to Berlusconi, create some market volatility.
h/t Mario
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Global keynesian brain damage syndrome
maybe big pharma will deem a new disease called "keynesian sickness".....long pharmas
After a depressing morning watching the euro soar through all manner of resistance a nice thought occured to me, maybe the Slovaks will ratify the bailout and then the markets will turn and stop their climb.
Really, financials are up 3.7% today, really?
I see we've gone full on slapstick comedy today. WTF??
Up 286 on shit for volume? Man, I 'coulda been a contender.
BURN CHINA! BURN!!!
Ponzi on.
Yup. So much for the markets being wiped out today. Its nothing short of mind-boggling.
This market has the memory of a goldfish. How many times have we done this now? Here we are slamming against the ceiling at S&P 1190, but everybody's still absolutely convinced it's a real rallly. The presses are rolling! Europe's saved! Game on!
(Just doubled my puts. market 180 time. see you at 1080 when everyone will be screaming, "there's no bottom to this, there's no bottom!!!)
heeheehee, morons.
bailouts lead to more, etc. esentually, it's a domino effect leading to global poverty.
part of the lemming effect, more shorting to come.
http://expose2.wordpress.com
At least we know who owns who in China.
Or indeed and, more to the point, who owns Hu.
And more importantly, Hu Flung Pu.
Hulu?
Governments only do what Banksters tell them to do.................
not in china bro. the govt is the bank
This is actually quite humorous from an Oriental mindset....theyre NOT 'bailing out' anything....they just threw a trump card in Europes face!
You talk about bailing out...OK we bail out too, negating you, SUCKERS!!
cocksucka!
http://www.youtube.com/watch?v=nOrxhvAVVRw
waited all day for China and Putin
I was just predciting this on the last thread: China will join the US and ECB in printing Trillions.
So they keep moving the decimal point to the right....so what? Means nothing to anyone but the top .001%.
Long term holders of physical gold at least have some comfort in the non-destruction of their real wealth. In that sense, meaning is present here. I think I share the opinion of the most of us who are correctly prepared in not wishing what's coming to actually occur. It's a slow motion train wreck, and stupidity is entertaining to a point, but this is starting to get dangerously close to actually breaking down, and that is frankly a grim, if unavoidable, thought.
Most of the Chinese would be satified with this. It's far better than baiting out US treasury bonds
the Dow will go to 36,000 just give it time....and please continue your negative articles coming...theres nothing like freaking out people to dump so you can pick it up on the cheap...
It won't matter with the DXY @ 40.
+55
DOW at 35,000 means gas at $20, and no economy, jobs, law and order, etc.
But the elites will have their crappy sovereign debt reallocated to taxpayer backed stock prices.
I really hope you don't manage anyone's money. Using an internet blog as a contrarian indicator is pure idiocy.
DOW 36,000 also means gas $40 a gallon and trip to the store for the week costs around $12,000....OK bring it on whatever!
With the DOW at 36,000 one USD would be worth a teaspoon of dog shit. Enjoy cashing in your 'wealth' in pounds of dog shit.
We are all socialists now.
And here come the flippers.
Banks are the easiest problem to solve in China. They're going to need trillions more as the economy totters especially in second-tier cities (which are huge) and smaller cities (lots of them). And the Fed is still doing Pomos, Obama and Congress will announce trillion+ stimuli imminently, ECB needs trillions to bail its own governments out so they can bail out their banks and their citizens.....we gonna need a bigger printing press
'So they can bail out the banks, and their citizens'....LOL no ones bailing out their CITIZENS at all!
DJIA up 900+ points off its intraday lows in the last 5 trading sessions. Nothing like a pump job based upon rumors of bailouts.
FUBAR market.
I just got a friggin' margin call! First ever.
I got a one of those about 10 years ago when I used to trade stocks. I even got a few phone calls from my broker telling me to sell stock or deposit cash ASAP or they would liquidate my other position(s) until I was whole again. Scary when it happens. Alas, I no longer trade stocks. The little guys are seriously outgunned these days, and the SEC doesn't give a damn.
Well, it was just an email (for now), and not that much money, but completely related to the 5% run in high beta momos that I'm shorting. This market is completely insane.
I seems obvious that Central Banks are establishing policy with the intention of pumping markets. What a joke. Governments don't know how to solve REAL problems like high unemployment and massive deficit spending, so Central Banks create more fiat currency and goose the stock markets. No wonder so many people are cynical.
This explains the very brief mention of an upcoming extraordinary share holders meeting of Industrial Commercial bank of China where they plan to discuss new share issuance AND short term bond generation on the Chinese english speaking media today.
I have a smallish investment in China and because I knew that this was going to happen sooner or later, my investment profits get changed to gold at the end of each month.
I was not comfortable with heaps of RMBs just sitting there waiting for me.
edit: yes, this means that I actually have a small side-income that comes in gold! I feel so barbarian!
Good luck just trying to keep even, be nimble...VERY nimble!
i did better than keep even. As of a few weeks ago, it's already paid me back what i had invested.
Yield in cocaine nowadays? ;)
Very high according to the Mexican drug cartels.
Right Ball.
Left Ball.
Dick in the Middle.
Why not?
If that's accurate I gotta see a doctor!! I wondered what all the pointing and laughing was about...
"To anyone still believing that capital markets around the world express something other than government industrial policy"
fixed it.
This is a corpocracy after all (fascism)
Did these banks pass the initial stress test too?
hmmm...I was supposed to have crossed out the world government
...another mistake...signing off...sorry all. Good luck out there
Strikethrough doesn't work from the menu or through html.
I think the problems in the shadow banking sector have come as a shock to the central planners. This is nothing more than a bailout... Greate article from today's FT..
"The sustained haemorrhage of state bank deposits has swelled the unregulated shadow banking system to such a size that it now supplies more credit to the economy each month than the formal banks do, according to China Confidential, a research service at the Financial Times. "
"Indeed, it is a telling insight into the atrophied condition of the state-regulated financial system that the most profitable activity by state-owned banks in the first half of this year was not lending to businesses but funding trusts and underground banks, bank financial reports show."
http://www.ft.com/cms/s/0/a83e5cf4-f02c-11e0-977b-00144feab49a.html#ixzz1aOJ61MEA
The system is broken? We're shocked! Shocked, I tell you!!!
LOL
This is the plan! Destroy the old system, and remake it in a new image. One with a Police State. One with total control of the masses. One where the middle class is once again a population of serfs.
One where the Power Hungry once again rule as Kings, as they did before the American Revolution. This is the reason why the Federal Reserve Bank, through proxie of the Major Banking Houses of Morgan, Rockefeller, Delano, Pierce, etc, took the gold backing from the Dollar, and made it worht nothing. They knew that by having the American currencie in default they would be able to bankrupt the Republic. Their goal from day zero.
We have always been at war with Brittain. Since we won, they have planned revenge. The Power Hungry remember how Atlantis was built, and they want to have it for themselves. They must rid the world of its money. They have done this by creating the fiat ponzi. The Dollar is worth nothing. The system is worth nothing.
But go ahead, play the game. Invest in your 401ks. Think that someday someone will buy your house for what you think it is valued. Live the dream, with your head in the tree of money. All the while the policy makers create a witches brew that will change the structure to their advantage; bankrupt Nation States and bankrpt people will go begging to the IMF/World Bank/BIS for loans. What will their collateral be?
GOLD
...not dollars...not euros....not paper.....
GOLD
QE 3.0 to the tenth power. The Bernanke is vindicated.
This reminds me of Sept 19, 2008.
From Wickipedia
Financial crisis of 2007–2010
How come none of the gurus here ever see these things coming? Why didn't the gurus see that Merkozy and Sarkerkel were going to say something that would send stocks soaring today??
Disclaimer: I am not a guru nor have I ever claimed to be one.
Actually if you pay attention here and to DailyFx and to Ilian Yotov, all predicted it was time for a correction. Ilian predicts it could go to previously established S/R levels higher than here. EURUSD has many of them and nothing has fundamentally improved in the Eurozone. In other words, this is a false rally and needs to be taken advantage of.
Yeah cuz the Fed printing press ain't humming? Things AND policy has changed in US politics? China just did a bailout. England just did a bailout. Europe is planning a plan to do a bailout, but so is the US. ALL FALLS DOWN! You can not stop the fiat ponzi from getting vaporised, and what is the underlying "asset" of the ponzi? THE DOLLAR.
LOL You are all on the wrong side of the trade and it is fun to watch.
The guys they let on TV without making fun of never saw it coming. They still think the stock market is rising due to something other than money creation and inflation. But Schiff has been calling it right the whole time.
This can only be seen as a golden opportunity to short from higher levels. EURUSD is still on the way to 1.30 near term. We have just been handed a 3-400 pip bonus in the process.
What are you using as the basis for that 1.30 call? TA or fundamental?
Global QE! Actually, worse than QE. It is just straight up nutso printing.
Theyre not printing anything, doing that WOULD bankrupt all of them totaly just due to paper and ink costs....no what theyre doing is moving a decimal point to the right. Means nothing real at all.
If we can get over Marx as a revolutionary, and consider him as a prophet, then his connection to God is unmistakeable. Who'dathunk that Communist China would be part of Capitalism's self-destruction? Marx, that's who!
When the ComMan goes on about the mechanization of capital, pay attention. That mechanizing is powered by fossil fuel, and we have not so much of it left. What happens to an ever-expanding economy (it ever-expands due to usury) when it runs out of gas?
Well, now we know.
Marx was a bag of shit who couldn't even support his family ! Quit tryin' to lionize the mouse ! Monedas 2011 Comedy Jihad Revisionist Humour
You seem quite confused Sir. Much like Capitalism in the USA hastened the demise of Communism within the former USSR, Capitalism in China has hastened the demise of Facism within the USA.
hyperinflation Bitchez!
Everybody talks abt "restoring CONfidence" and how important that is. CONfidence this, CONfidence that, bla bla bla. In other words, blatant manipulation of asset prices by insolvent gubbmints and/or central banks instead of actually trying to solve the big issues behind the loss of CONfidence.
Yea like we're all fuckin stupid and will be more 'CONfident' if we're shown the DOW up +300. What a clownshow.
The whole country is a fuckin clown show. Courrption, lieing, cheating, fraud and manipulation replaced hardwork, integrity, discipline and investing. The new America under Hussien Obama, this is what hope and change means in communist terms.
owebama was/is the product of America , he was never change or hope, any that fell for that showed they are just another stupid clown follower.
Those that bring it up as a failure don't understand the country they are in.
Yeah, let's hang it all on Obama. None of this shit happend before he arrived did it? Put down the ideological crack pipe.
Even though there will be a disaster down the line,I think you have to go long equities. Adjusted for the ensuing massive global hyper-inflation, they are cheap.
The play is equities + gold/silver + build a bug out location.
YOU go long equities, nothing stopping you go for it damn sellout sheep I hope you get assraped doing it play the game but say theyre hedged with a bugout location? Go fuck yourself.
Selling out to what, beating inflation? That's all I am looking to do since I have savings to protect.
If printing more money and propping up stocks is how society has decided we're going to beat inflation, you only lose by going against it. It doesn't mean I agree with it, but I am not stupid enough to let cash sit in a bank while the printing presses fire up.
Those who don't get into metal or equities will get killed by hyper-inflation.
There will be a time to get out and exchange equity profits for gold. Probably the middle of next year.
Go ahead and buy your equities, keep playing THEIR game Mr Survival bugout man...yea 'beat inflation' long stocks while the dollar collapses an equal amount today....yea and dont forget the fees and taxes!
'Hyperinflation' LOL everyone except the top .05% is totaly bankrupt and without a job! WHO is going to pay for hyperinflation! Huh? What is everyone going to do, take out more loans so they can pay $10 a gallon and $10,000 for avg grocery store trip??
Meanwhile, YOU keep buying your stocks and enabling it all to continue there Bear Grylls!
You and I are going to pay for hyper-inflation. You should probably look into "hidden inflation", since we're going to see it in that form this time around.
If you're too lazy to do that, the gist of it is that you'll pay the same/equal money for less product.
Why are you talking like a crazy person? "Sell out"? Are you 12 years old? I'm an adult with assets to protect, so I'll do that as best I can. It is purely logic, nothing more.
As a fellow adult with assets to protect (specifically, my family), allow me to echo the sell-out label. If you actually gave a shit about the future of our kids, you'd be pulling all of your money out of the markets and buying actual assets, not paper "assets". Being ass raped is one thing, accepting the lube just makes you that much more of a bitch.
You are deranged.
Yea sure we'll see!
Go long something of value not stocks that are being held up on stimulus money. Raw materials, food, gold and Silver, forget equities they are junk like the dollar.
I am long gold/silver.
If equities outperform PMs, I will trade in the profits for more gold/silver.
the bank is china and china is the bank...? how can it bail itself out...LOL!
Up the dosage on your blue pills.
How exactly are they planning on buying these shares? Will they pay with freshly printed Yuan, or with some of their stockpiled dollars, of collected taxyuan?
What do you think? The Chinese have printers just like the Americans. Good Yankee Dogs! Keep driving gold price down. China have last laugh. So solly, Cholly. And now back to your regularly scheduled hopium fest, ie the Market...Happy Columbus day!
'Printers'? LOL dream on! If there had been actual PRINTING going on over the last 3 years, there wouldnt be a single tree left on the planet!
You know it's kind of humorous, in a sad way.
Most people bought PM's for various reasons, a lot buy/bought in case if THEIR Gub currencies going to hell, and they could always sell their PM's to /for another countries stable currency.
Then exchange for NEW currency in their country,after the storms were over (having ,hoping, to have preserved their value,and wealth).
I would expect a lot of folks here( when told to get out of the dollar,into other currencies did so,NOW to only see that NONE are ultimately going to be worth a crap).
So,intended, or unintended, you are now only able to hold PM's for any hope of insurance,or wealth preservation.
I figured there would at least be two or three stable ports of storm left, 2yrs ago, I must admit, I did not see the entire world enter the SHIT STORM we are in, and headed for.(not many did).
This has definitely changed my attitude, and outlook on THIS life, and all things I once held near and dear, and sacrosanct.
Anyone else feel the same way?. Totally violated, almost like a rape victim would likely feel.
I don't know if it is like rape. I was told back in 2004 that we were headed for a collapse. One thing that happened that was not expected was the massive bailouts that followed. I assumed at the time, bankruptcy then reorganization would occur. It appears failure will never be purged and the bailouts will continue till they can't be. The people that caused it will not be held to account and the system will not be purged. There is no fix if the people that caused the problem are going to try to be the solution. All they are doing is covering up their tracks.