KIM

Global Trade In Freefall: South Korea Exports Crash Most Since 2009

While the market's attention overnight was focused on China's crumbling manufacturing and service PMI, data which was already hinted in the flash PMI reports earlier in August, the real stunner came not from China but from South Korea, which last night reported an unprecedented 14.7% collapse in exports, far worse than the -5.9% consensus estimate, and more than 4 times worse than July's 3.4%. The number is critical because not only do exports account for about half of South Korea's GDP but because it also happens to be the first major exporting country to report monthly trade data. That makes it the perfect barometer of global trade flows, or as the case may be, the canary in the global trade coalmine. It also confirms what we reported just one week ago when we said that "Global Trade Is In Freefall."

Gold Surges Amid Asian Sea Of Red, China Strengthens Yuan By Most In 4 Months

Hong Kong's Hang Seng index is now down over 21% from the highs, having fallen over 9% in the last week, and Taiwan's TAIEX is down over 20% from April highs, joining Chinese stocks, both joining Chinese stocks in official bear markets. Japanese markets are down over 6% in the last few days (which Amari simply brushes off, blaming the global selloff stemming from China), a JGB trading volumes slump to a record low. Tensions in Korea are not helping. With all eyes on China's flash PMI (though why we are not sure since PBOC is already full liquidity-tard with CNY350bn this week alone), The PBOC fixed Yuan at 6.3864, up from yesterday's biggest strengthening in 3 months to 6.3915 (the biggest 2 day strengthening since April), and margin debt fell for the 3rd day. Gold is surging in the Asia session, near $1160.

North Korea Threatens To "Invade USA," Use Weapons "Unknown To The World"

If Washington does not cancel its planned military exercises with South Korea, North Korea has issued new nuclear threats and says it is ready to us its latest weapons, which "are unknown to the world." The drills, called Ulchi Freedom Guardian, are due to start Monday are designed to "protect the region and maintain stability on the Korean peninsula." However, as expected Pyongyang is not happy, "If [the] United States wants their mainland to be safe," said state TV, "then the Ulchi Freedom Guardian should stop immediately."

Weekend Reading: Chinese Food (For Thought)

The ongoing deterioration in fundamentals, economics and technicals suggest that risk currently outweighs the potential reward for now. With respect to the technical front, the ongoing deterioration in relative strength, momentum, and breadth, combined with a compression of price action, have only been witnessed at more important market peaks in the past. "Bull markets" do not die on their own. Their death is generally dictated by the onset of an unexpected catalyst that creates enough "panic selling" to spark a liquidation cycle. Does the current situation in China rise to such a level? Maybe. It is an issue we began discussing this past June, and there may be a danger in dismissing the issue too quickly.

Trump May Be Soaring In The Polls, But The Bookies Aren't So Sure

At 1000-to-1, Kim Kardashian is an outsider in the race to be the next US President but perhaps most notable in the odds that bookies are willing to offer is the 7th place that Donald Trump ranks (at 18-to-1 or just a 5% probability of winning), below GOP rivals such as Jeb Bush (23% probabiity) and Marco Rubio (11% probability). Trump even ranks below Bernie Sanders and Joe Biden according to where the money is being bet! Of course, Hillary remains the odds-on favorite at 10/11 (or 52% probability).

Should It Be A Crime To Shoot Down A Drone Over Your Property?

A Hillview man has been arrested after he shot down a drone flying over his property - but he's not making any apologies for it. "I just think you should have privacy in your own backyard," said William Merideth, 47, "I went and got my shotgun and I said, "I'm not going to do anything unless it's directly over my property."" That moment soon arrived, "within a minute or so, here it came... it was hovering over top of my property, and I shot it out of the sky." Merideth was arrested and charged with first degree criminal mischief and first degree wanton endangerment...

Even The Players Are Losing Faith In Their Own Shenanigans

What is on display more brightly and clearly than ever, though, is the utter fakery of international banking. The players have lost faith in their own shenanigans. They simply go through the motions now awaiting the political fallout, which is to say the revolt of the people who can still do arithmetic. The old refrain, “your check is in the mail” may not be so reassuring to folks who haven’t eaten for three days. Personally, I would expect the gasoline bombs to be flying around Syntagma Square before the middle of the week.