Hong Kong

Overnight the world realized that there is much more devaluation to come,  which in turn led to a tidal move higher in the EURUSD as the European banks who had been short the EURCNH (probably the same ones that were long the EURCHF in January ahead of the SNB shocker) continued covering their exposure, and in turn pushed the EURUSD well above 1.11, while the CHF continued to tumble alongside the USD at least when it comes to Europe. In Asia, and local emergin markets, however, it was a different FX story enitrely.

To help remind readers of what happens when the entire world engages in wholesale currency war, here is a complete list of all the recent FX interventions, courtesy of Stone McCarthy.

• China Rattles Markets With Yuan Devaluation (BBG)
• China Move Sparks Wave of Yuan Selling (WSJ)
• China's devaluation raises currency war fear as Greece strikes deal (Reuters)
• Protests return to Ferguson streets, state of emergency declared (Reuters)
• Heavily armed 'Oath Keepers' inject new unease to riot-hit Ferguson (Reuters)
• Greece Secures Bailout Deal After All-Night Talks in Athens (BBG)
• U.S. Identifies Insider Trading Ring With Ukraine Hackers (BBG)

When China's tinderbox economy implodes, who will be left to bid up the world's surplus commodities and real estate?

• Grim China data keeps stimulus hopes alive (Reuters)
• Berkshire Hathaway to Buy Precision Castparts for About $37 Billion (BBG)
• Greece, lenders in final push to seal new bailout (Reuters)
• Quantitative Easing With Chinese Characteristics Takes Shape (BBG)
• Greece nears €86bn accord with creditors (FT)
• Oil Futures Signal Weak Prices Could Last Years (WSJ)
• Drop in long-term investment hinders eurozone recovery (FT)
• Two shot in Ferguson amid standoff between police, protesters (Reuters)

"The future is unknown and we are not dealing with markets that are free markets anymore...now we have government interventions everywhere. [But] in the last say twelve months, I have observed an increasing number of academics who are questioning monetary policies. That's why I think they will take the gold away and go back to some gold standard by revaluing the gold say from now $1000/oz to say $10,000 dollars. An individual should definitely own some physical gold. The bigger question is where should he store it? because... the failure of monetary policies will not be admitted by the professors that are at central banks, they will then go and blame someone else for it and then an easy target would be to blame it on people that own physical gold because - they can argue - well these are the ones that do take money out of circulation and then the velocity of money goes down - we have to take it away from them... That has happened in 1933 in the US."

A decline in the desire to own products conferring and announcing one’s high social status happens close to, or hand in hand with fairly severe economic downturns. People no longer want to stand out as rich when times are getting tough. This effect can be observed in numerous areas, even in the colors and shapes people choose when buying cars.

"The risk could be that brokers may not be able to execute forced liquidations in case of sharp declines in the overall stock market. It can be positive if they are using the funds to develop new businesses but negative for China’s financial market if they keep lending out for margin financing."

After 30 years of torrid expansion, perhaps the single most consequential factor in China’s economy is how much of it is a “black box”: a system with visible inputs and outputs whose internal workings are opaque. China’s recorded history stretches back thousands of years, but in terms of applicable financial and economic parallels to the current economy, there is no precedent. China’s leadership is truly in uncharted waters. This in itself heightens the risk of miscalculation and basing policies on faulty premises.

Overnight we got another acute reminder of just who is lying hunched over, comatose in the driver's seat of global commerce: the country whose July exports just crashed by 8.3% Y/Y (and down 3.6% from the month before) far greater than the consensus estimate of only a 1.5% drop, and the biggest drop in four months following the modest June rebound by 2.8%: China.

• July job gains may favor September interest rate rise (Reuters)
• It's all about Trump at raucous Republican debate (Reuters)
• The 5 Most Important Takeaways From the First Debate of 2016 (BBG)
• Republican presidential candidate Carly Fiorina wins the Web (Reuters)
• Hedge Fund Losses From Commodity Slump Sparking Investor Exodus (BBG)
• Winners and losers from the first Republican presidential debate (WaPo)
• Bush turns in workmanlike debate performance, but will it be enough? (Reuters)

Boeing, whose Chairman Jim McNerney says the demise of the Export Import bank amounts to "craziness", lost a contract worth several hundred million dollars last month, after the buyer backed out citing credit concers related to the expiration of the Depression-era institution's charter. Now, Boeing and GE alike are threatening to move American jobs overseas if Congress fails to renew the authorization for what some commentators call "a vast, well-funded network of consultants, lobbyists and big-government interest groups."  

• Unhappy Voters Shake Up Presidential Race (WSJ)
• China stock exchanges step up crackdown on short-selling (Reuters)
• China Dethroned as World’s Most Liquid Stock Market After Curbs (BBG)
• Xiaomi retakes the smartphone lead in China as Apple slips (Engadget)
• Impact of EPA’s Emissions Rule on Industry to Vary (WSJ)
• Citadel’s Ken Griffin Leaves 2008 Tumble Far Behind (WSJ)
• Greece says expects bailout deal by Aug 18 (Reuters)

We Americans need to be humble, not arrogant. We need to acknowledge that American living standards, except for the favored One Percent, are in long-term decline and have been for two decades. If life on earth is to continue, Americans need to understand that it is not Russia and China, any more than it was Saddam Hussein, Gaddafi, Assad, Yemen, Pakistan, and Somalia, that are threats to the US. The threat to the US resides entirely in the crazed neoconservative ideology of Washington’s hegemony over the world and over the American people. This arrogant goal commits the US and its vassal states to nuclear war.