Yesterday, the FT triumphantly proclaimed: "Beijing abandons large-scale share purchases", and that instead of manipulating stocks directly as China did last week on Thursday and Friday, China would instead focus on punishing sellers, shorters, and various other entities. We snickered, especially after the Shanghai Composite opened down 2% and dropped as low as 4% overnight. Just a few hours later we found out that our cynical skepticism was again spot on: the moment the afternoon trading session opened, the "National Team's" favorite plunge protection trade, the SSE 50 index of biggest companies, went super-bid and ramped from a low of 2071 to close 140 points higher, ending trading with a last minute government-facilitated surge, and pushing the Composite just 0.8% lower after trading down as much as -4.0%.
...or else a rather blatant Fox News error may be about to start a revolution.
On Thursday this past week there were a few attempts at crisis management that should go into textbooks (as well as history books) everywhere in years to come as: Crisis Management 101.a – Lessons in Ineptitude. The responses as to settle the angst in an ever-more-skeptical, as well as frightened investing class was not only inane as demonstrated by the responses (or better yet; lack there of) given at the NYSE by way of “answering” as to why it halted its operation for nearly 4 hours. Was only outdone by what many view as the near insane when one views the steps taken in China to “calm” their markets. Is that how one instills confidence? It instills something – however the term isn’t anything resembling “confidence.”
Eurocrats have spent untold billions of other people’s money to save face, just so they wouldn’t have to admit that Project “Make Everyone Germany” has failed. But what they never acknowledged was that no matter how much they extend and pretend, the disease will always reach its crisis. And this financial disease is going to slay the patient. History is very clear on this point: debt kills.
As we await the final capitulation by the ECB, EU and IMF to provide Greece another bailout (or not), we have assembled a list of reading for you that has ABSOLUTELY NOTHING to do with Greece.
"You're cruisin' for a bruisin'." - Kenickie, Quote From "Grease"
"CNBC is an electronic shaman for investors... The situation resembles George Orwell’s Nineteen Eighty-Four, where the protagonist Winston Smith tuned out the massive telescreen on his apartment wall that issued endless streams of positive news."
"This market has a lot to be concerned about," warns Carl Icahn in an interview with FOX Business Network's Trish Regan, slamming Fed policy, "by keeping interest rates this low you are creating bubbles that you don’t even know about." While mainstream media pundits are instantly feverish over every bullish AAPL word the aging activist has to say (or tweet), it seems that when it comes to facing facts and reality of the broad market, few, if any, are willing to share his thoughts as he concludes, "it’s not just a question of it could be the beginning... It’s not will it happen. It’s when it will happen."
Twitter had a very bad last week when its stock tanked ~ 27% in 5 trading days.
“...we all know that sanctions don’t work, negotiations don’t work,... the only way the United States can have any effect in this region and turn the tide is start killing Russians...killing so many Russians that even Putin’s media can’t hide the fact that Russians are returning to their motherland in body bags.”
Chris Mayer: No Big Theme in US Stocks, Just “Special Situations and Quirky Opportunities” (Sprott’s Thoughts)Submitted by Sprott Money on 03/07/2015 07:16 -0400
There’s a big macro theme playing out in Europe – a once soft economic environment that allowed lots of inefficiency is becoming tougher and forcing companies to restructure, says Chris Mayer, author of Capital & Crisis and Mayer’s Special Situations.
The housing and mortgage evangelists on mainstream media are going to have to rewrite their “2015 is going to be a big year for housing!” meme. Nirvana it isn’t.
The fact that there is a debate about a quarter-point rate hike tells us that extraordinarily low interest rates have mostly failed to deliver a robust recovery. That people opposed to even the tiniest increase in rates are resorting to hyperbole tells us that they too know this. The thinking seems to be that six years into near-zero policy, the only reason it hasn’t worked is because it hasn’t been tried long enough. Meanwhile, the dangerous side effects of year after year of artificially low rates continue to grow.
It would appear the powers that be are getting nervous. Yesterday, Fed Governor Jerome Powell (and Fisher and Plosser) stepped up the central bank’s push against what he termed congressional efforts to extend political influence over monetary policy, calling them "misguided" and "in violent conflict with the facts." Today we have Senator Elizabeth Warren trying to sound supportive of transparency but proclaiming that she opposes Rand Paul's "Audit The Fed" Bill because it promotes "congressional meddling in the Fed’s monetary policy decisions," and has "dangerous implications for financial stability and the health of the global economy."
ECB's Jazbec: QE Could End Sooner Than Sept. 2016