China

Between commodity-backed financing deals and the centrally-planned mal-investment boom-driven excess capacity, China has a lot of 'liquidation' to do to normalize from a credit-fueled smoke-and-mirrors world to a painful reality. As Bloomberg notes, there’s no let-up in the onslaught of commodities from China. While the country's total exports are slowing in dollar terms (as we noted last night), shipments of steel, oil products and aluminum are reaching for new highs, flooding the world with unwanted inventories. China's de-glutting is now the rest of the world's problem as the deflationary tsunami grows ever higher. This is not going to end well. Not for anybody. Other than the arms lobby. What it will do is change geopolitics forever, and a lot.

Chinese Producer Prices have now fallen YoY for 45 consecutive months and November's 5.9% YoY drop is the largest since the crisis in 2009. Following weak trade data overnight (and with The IMF having blessed any and all currency movements), it appears Chinese authorities have decided to do something about and continue the slowest, quietest, stealthiest currency war in the world. With today's Yuan fix, PBOC has weakened the Yuan back below the August devaluation lows, back to its weakest against the USD since August 2011. Judging by Offshore Yuan, there is a lot more weakening to come.

At 1815ET, after trading in a very narrow $1 range for hours, Bitcoin suddenly exploded $17 higher on very heavy volume. Normally this wouldn't warrant an explicit mention, but this time... something odd happened in Chinese currency markets...

Send a Million Troops From All Over the World Pouring Into Raqqa

Oil tanker rates soared to the highest in seven years amid an acceleration in the number of bookings and signs that the ships are being delayed when unloading due to a lack of space in on-land storage tanks. This means that day rates for 2 million-barrel carrying ships sailing to Japan from Saudi Arabia, the industry’s benchmark route, surged to $111,359, the highest since July 2008,

With the oil price collapse accelerating (Brent just dropped below $40 for the first time since Feb 2009), the currencies of major oil-exporting nations - such as the Canadian dollar and Norwegian crown - are plunging...

Sales of American Eagle gold coins at the U.S. Mint surged in November, with gold demand nearly tripling month-over-month. China's gold reserves rose by another 21 tonnes in November, the biggest bout of gold buying since China began disclosing monthly data on it's gold reserves in June

Despite these very high levels of demand, gold prices fell sharply in November - from $1,141/oz to $1,070/oz or 6.6%.

The last week has seen Small Caps first drop into negative territory for the year (joining Dow Transports). Yesterday The Dow joined the un-party. And today, following growth concerns from China trade data, The S&P 500 has tumbled to open in the red for the year...

If you're in the commodities business, this is “not the time for courage” (to borrow a classic Gartman-ism). In the latest example of just how bad things have gotten, Anglo American - the world’s fifth largest miner - just kitchen sink-ed it, announcing a sweeping restructuring, a massive round of layoffs, and a dividend cut. The company will reduce its assets by some 60% while headcount will be cut by a whopping 85,000 or, nearly two thirds.

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Over the weekend, in its latest quarterly presentation, the Bank of International Settlements made what may have been a very premature assessment that China is now contained. Judging by events in the past 24 hours, the reality is anything but.

Just a week after Beijing's major literally had his head saved, thanks to a cold front which swept away some of the worst pollution ever, the city has raised the alarm once again.. but this time to a record level. For the first time ever, the municipal government has issued a so-called red pollution alert - imposed car bans and suspending schools - after acrid-smelling haze returned to the Chinese capital.

With just nine days until The Fed - which has prepared the world, apparently - will raise rates for the first time in years (and potentialy suck up to $800 billion of liquidity from the global collateral chains of shadow stability), it appears China is doing its best to start some destabilizing efforts (which worked last time). None of this is helped by the collapse in China trade (with imports down YoY for a record 13th month, and exports falling for 5 straight months).

Less than two weeks after Guotai chief Yim Fung went "missing" amid Beijing's reinvigorated crackdown on market "manipulators," Citic Securities - China's largest broker - says it cannot find two of its most prominent investment bankers. Considering recent events, you don't have to be a detective to make an educated guess as to what might have happened to Jianlin Yan and Jun Chen.