AUG 11 SIT EC y POL
ZERO HEDGE
Global
Markets Turmoil After China Extends Currency War To 2nd Day - Devalues Yuan To
4 Year Lows. Submitted by Tyler
Durden on 08/11/2015
Despite claiming yesterday's devaluation was a
"one-off", The PBOC has devalued the Yuan Fix dramatically for
the 2nd day in a row - now 22 handles weaker than Monday's Fix.
Offshore Yuan is trading at 4 year lows against the USD. The carnage
from this dramatic shift is just beginning as global equity markets (US
futures to China cash) are tumbling, US Treasury bond yields are crashing, gold
is up, China credit risk is at 2 year highs, and China implied vol has exploded
to 4 year highs. Ironically, China's government mouthpeiece Xinhua explains "China
is not waging a currency war; merely fixing a discrepancy."
[ El desenganche de China con el fraude financiero neoliberal
va en serio. .. Van hacia un modelo de Mercado donde el Estado es tan gestor en
economía como lo es el complejo anarquista de las grandes corporaciones del
oeste … Esto dejo de ser funcional para la coexistencia pacífica del conjunto
global ]
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Mapping
1083 People Killed By Cops In The Last Year. Submitted by Tyler
Durden on 08/11/2015
One year ago, an 18-year old black man was fatally shot
in Ferguson, Missouri by a police officer. Michael Brown’s death ignited a
country-wide debate about the excessive amount of violence that occurs at the
hand of police – particularly to African-Americans. Since then, at least
1,083 people have been killed by police in America...
[ Lo que hay que “mapping”
son los encuentros pacificos entre la comunidad negra y la policia .. hoy mas
que nunca necesitamos unir Estado y Sociedad de forma que todos quepan en ella.
De hecho que hay y hubo encuentros fraternos entre la población negra y la policía
.. eso es lo que hay que incentivar y desarrollar al máximo.. se requiere
creatividad para tejer puentes sociales .. a esto debemos apuntar .. Este mapping
es fácil hacerlo, pero solo genera división y mayor resentimiento ]
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An
Economic Earthquake Is Rumbling. Submitted by Tyler
Durden on 08/11/2015
Printing-press money is fertile ground for expanding
world crisis. Crisis is excellent cover for national and international
chicanery. How can anyone who is paying attention not recognize these
tremors for what they are?
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How
Much More Faith In Central Banks Is Left?. Submitted by Tyler
Durden on 08/11/2015
Twice in 8 months is enough to shake anyone's faith in
central bank omnipotence, but as Ben Hunt noted, potentially more crucial to
the 'faith-based' investing of today, the Common Knowledge about Chinese
growth – what everyone thinks that everyone thinks about Chinese growth – is
dramatically changed for the worse today, and it’s a change that will
accelerate unless the Narrative shifts.
[ Otra vez Andrez con la
misma estupidez… CENTRAL BANK IS NOT THE PROBLEM (si lo es, lo es solo para los potentados anarcoides
.. esos que quiere tener control privado del Banco Central.. Lo que buscan un mero cambio de manos). .. El problema
es que función le damos al Banco Central = los intereses de quienes se busca servir
con el Banco Central .. Si solo es para imprimir dinero de la nada y salvar con
ello a las grandes empresas mafiosas en quiebra - los bailouts- si es para eso,
que cierren esa Banca Central y que se cree una que sirva los intereses de toda
la nación .. para esto si queremos una Banca Nacional .. de toda la nación ]
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The
Fed Is Out Of Options, "QE Is All It Can Do Here" Art Cashin Predicts.
by Tyler Durden on 08/11/15
"...they're in a kind of silly loop where
they did QE expecting a reaction... didn't get it.. and then they did QE
again because it didn't live up to their expectations... but I think they
have no other options, if things get negative on the economy, QE is all they
can do."
[ Detras
del “silly loop” estan los banqueros regionales que quieren desintegrar la
Federacion para servir mejor su greed e intereses mesquinos ]
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The
Cable Industry's Scariest Chart. Submitted by Tyler
Durden on 08/11/2015
Recent price volatility in the media sector got us
wondering: is “Cord cutting” the home cable box in favor of online
entertainment really hitting critical mass?
[ We don’t need cable.. what we need is a cord to connect the
Internet to a big TV.. What we really need is to put dawn the monopoly of Comcast
on internet .. They charge a lot for their blast that is nothing comparing the
new tech used in Europe, Japan and Russia.. we need to introduce competition in
this market .. the monopoly is illegal.. It is time to get new tech for
internet
]
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"It's
A Friggin' Mess": The Pentagon Sums Up Syria Fight. Submitted by Tyler
Durden on 08/11/2015
The violence in Turkey has escalated meaningfully over the
past 48 hours as the country's crackdown on "terrorists" gathers
steam and as Washington and Ankara ready a "comprehensive" plan to
take the fight to ISIS in Syria. Meanwhile, Saudi Arabia's foreign minister met
with his Russian counterpart in Moscow where the two argued about the fate of
Bashar al-Assad, while al-Qaeda refused to back the US and Turkey's
"ISIS-free zone" because they believe it serves only to advance
Ankara's narrow political interests. In short: "It's a friggin'
mess."
[ Mess?? We are helping the
genocide on the civilian population of Syria .. that is not mess, is a war
crime and crime against humanity.. The result will be similar to the crisis we
create in Libya .. the one that make Mrs Clinton to laugh.. this time signatures
are collected to put the case in the ICC ]
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Families
Of 9/11 Victims On Verge Of Proving Government Cover-Up In Court. Submitted
by Tyler Durden on 08/11/2015 [It was about time ]
For many years, rumors have circulated regarding the U.S. government’s
involvement in an active cover-up of a sinister connection between Saudi Arabia
and the terrorist attacks of 9/11. Now, thanks to a federal lawsuit in a
Manhattan court, there may be a light at the end of the tunnel.
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How
Economic Growth Fails. Submitted by Tyler
Durden on 08/11/2015
The economy operates within a finite world, so at some
point, a problem of diminishing returns develops. In other words, it
takes more and more effort (human labor and use of resources) to produce a
given quantity of oil or food, or fresh water, or other desirable products. The
problem of slowing economic growth is very closely related to the question: How
can the limits we are reaching be expected to play out in a finite world? Many
people imagine that we will “run out” of some necessary resource, such as
oil, but we see the situation differently. Here are a few issues that may not
be obvious.
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John
Kerry Warns "Dollar Will Cease To Be The Reserve Currency Of The
World" If Iran Deal Rejected.
Submitted by Tyler Durden on 08/11/2015 Scaremongery... or Happy Jack-ed-ness? You decide...
[ Whatever .. The case in this art is that it doesn’t correlate
IRAN with dethroning the king dollar .. Kerry instead provide an obscure macro
context for it to happens .. but not as direct result of the US-IRAN deal ..
Kerry mentioned trades & Pacts with China, Ukraine, India .. in that
context Iran could be the last drop in a glass full of dirty US poison
liquids.. We gona lost the currency war, he suggested (as part of his hidden
agenda). Anyway, this art gives INFO on how the dethroning of the king dollar is happening at economic level and worldwide.. Read it !! ]
….
Here some extracts of
the art:
There are few truisms about the world economy, but for
decades, one has been the role of the United States dollar as the world’s
reserve currency. It’s a core principle of American economic policy. After all,
who wouldn’t want their currency to be the one that foreign banks and
governments want to hold in reserve?
But new research reveals that what was once a privilege
is now a burden, undermining job growth, pumping up budget and trade deficits
and inflating financial bubbles. To get the American economy on track, the
government needs to drop its commitment to maintaining the dollar’s
reserve-currency status.
The reasons are best articulated by Kenneth Austin, a Treasury Department economist, in the latest
issue of The Journal of Post Keynesian Economics .. allow me to summarize.
It is widely recognized that various countries, including
China, Singapore and South Korea, suppress the value of their currency relative
to the dollar to boost their exports to the United States and reduce its
exports to them. They buy lots of dollars, which increases the dollar’s value
relative to their own currencies, thus making their exports to us cheaper and
our exports to them more expensive.
In 2013, America’s trade deficit was
about $475 billion. Its deficit with China alone was $318 billion.
Though Mr. Austin doesn’t say it explicitly, his work shows
that, far from being a victim of managed trade, the United States is a willing
participant through its efforts to keep the dollar as the world’s most
prominent reserve currency.
When a country wants to boost its exports by making them
cheaper using the aforementioned process, its central bank accumulates currency
from countries that issue reserves. To support this process, these countries
suppress their consumption and boost their national savings. Since global
accounts must balance, when “currency accumulators” save more and consume less
than they produce, other countries — “currency issuers,” like the United States
— must save less and consume more than they produce (i.e., run trade deficits).
This means that Americans alone do not determine their
rates of savings and consumption. Think of an open, global economy as
having one huge, aggregated amount of income that must all be consumed, saved
or invested. That means individual countries must adjust to one another. If
trade-surplus countries suppress their own consumption and use their excess
savings to accumulate dollars, trade-deficit countries must absorb those excess
savings to finance their excess consumption or investment.
Note that as long as the dollar is the reserve currency,
America’s trade deficit can worsen even when we’re not directly in on the
trade. Suppose South Korea runs a surplus with Brazil. By storing its
surplus export revenues in Treasury bonds, South Korea nudges up the relative
value of the dollar against our competitors’ currencies, and our trade deficit
increases, even though the original transaction had nothing to do with the
United States.
…
Dethroning “king dollar” would be easier than people
think. America could, for example, enforce rules to prevent other
countries from accumulating too much of our currency. In fact, others do just
that precisely to avoid exporting jobs. The most recent example is Japan’s
intervention to hold down the value of the yen when central banks in Asia and
Latin America started buying Japanese debt.
Others worry that higher import prices would increase
inflation. But consider the results when we “pay” to keep price growth so
low through artificially cheap exports and large trade deficits: weakened
manufacturing, wage stagnation (even with low inflation) and deficits and
bubbles to offset the imbalanced trade.
But while more balanced trade might raise prices,
there’s no reason it should persistently increase the inflation rate. We might
settle into a norm of 2 to 3 percent inflation, versus the current 1 to 2
percent. But that’s a price worth paying for more and higher-quality jobs, more
stable recoveries and a revitalized manufacturing sector. The privilege of
having the world’s reserve currency is one America can no longer afford.
* * *
In the global race to debase, Reserve currency status
is a curse!
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This
Is Not A Drill: India, Russia And Thailand Prepare For Currency War. by Tyler
Durden on 08/11/15
When China sneezes, the world catches a cold. Alternatively,
when China devalues, the rest of the (exporting) world scrambles to not be the
last (exporting) nation standing, and to do so next, before everyone else does.
We give Russia, Thailand and India (as well as the rest of the EM countries,
actually make that all countries, the US included) at least a few days (hours
may suffice) before they all realize that in a beggar-thy-neighbor global
currency war, where the ZIRP (or NIRP) liquidity trap is already stalking at
least half of the entire world, there really is no choice.
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Even
The Dumb Money Is Dumping Stocks Now. Submitted by Tyler
Durden on 08/11/2015
Late in June, BofAML noted that during the previous week
"sales [of US stocks] were the largest since January 2008, led by
institutional clients [whose] net sales were the largest in data history."
Whether that particular bout of smart money dumping was simply an effort to get
out ahead of what threatened to be a rather ugly conclusion to six months of
bailout negotiations between Greece and creditors we can't say, but what we
do know is that not only is the smart money (still) selling, but now even the
dumb money has joined the party.
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After
The Chinese Devaluation, Who's Next?. Submitted by Tyler
Durden on 08/11/2015
On a broader level, the devaluation signals eagerness to join the global currency wars. With
the competitive devaluation by various central banks gaining momentum but
global trade slowing, the latest devaluation could be seen as likely to force
other central banks to consider similar measures before long. One currency
that so far has successfully weathered the storm has been done... so far...
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Based on the front-month contract, Goldman Sachs warns
that there is "last ditch" support between $43.24 and $42.44 - a break below there
could lead to serious capitulation...
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Will
China Play The 'Gold Card'?. Submitted by Tyler
Durden on 08/11/2015
The era of the Dollar as reserve currency of the world,
would have ended. However, another horrible scenario is possible:
the US, run by those who insist on maintaining the plan for world domination
through endless war, may decide to go to war
with China and with Russia, too, for good measure.
[ Nuke war is not an
option to save the US .. that will be instead the fastest way to destroy
America ]
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Americans
Who See Economic Deterioration Outnumber Optimists By 50%. Submitted by
Tyler
Durden on 08/11/2015
Almost 50% more Americans believe the US economy is
getting worse than are optimistic about the future. Gallup's latest
economic survey shows the economic outlook among Americans at its weakest since
September 2014.
[ It is easy to lie with Stats .. all depends on selecting the
sample.. Gallup failed several times ]
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Rand
Paul Blasts Donald Trump, Calls Him A "Fake Conservative" &
Wannabe "King". Submitted by Tyler
Durden on 08/11/2015
It’s very important to call out people like Trump for the
man he is, so we don’t simply fawn and fall for a narcissist, strongman-type as
a way to deal with our societal pain and frustration... "I was there at
the first Tea Party in 2007 and I’ll be damned if I’m going to stand
passively by and watch the movement destroyed by a fake conservative."
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From
Currency Wars To Oil Wars - OPEC Ups Production To 3 Year Highs As Iran Output
Surges. Submitted by Tyler
Durden on 08/11/2015
As China takes the currency wars to the next level, so OPEC,
not to be outdone, rotates the oil war volume to 11. As Bloomberg reports,
OPEC pumped the most crude last month in more than three years as Iran restored
output to the highest level since international sanctions were strengthened in
2012. The response - as one would expect - is a plunge in crude prices,
erasing all the ridiculous algo-driven gains of yesterday, pushing WTI back on
the verge of a $42 handle.
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Recession
Imminent As Wholesale Inventories Surge, Sales Disappoint; Autos Worst Since
2009. Submitted by Tyler Durden on 08/11/2015
The ratio of wholesale inventories-to-sales pushed back
up to 1.3 - its highest since the recession and is flashing an enormous red
flag for an imminent recesion in America, with the automOtive industry
the biggest factor in this. A bigger-than-expeted 0.9% surge in
inventories (biggest since April 2014) was accompanied by a considerably slower
than expected 0.1% growth in sales (weakest since March) suggest that 'field of
dreams' corporate planning remains in place. Most crucially, as The Atlanta Fed
warns, "lower inventory investment will subtract 1.7ppt from Q3 real GDP
growth." The higher Q2 'build' the worst Q3 will be - though we are
sure economists will extrapolate Q2 growth no matter what...
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Markets
Turmoil After China Devaluation - Surveying The Damage. S- by Tyler
Durden on 08/11/2015
US equity markets have given up almost all of yesterday's
irrational exuberance ramp gains in a perfect echo of last week's
Wednesday/Thursday debacle. Bond yields are plunging - also retracing all of
yesterday's losses (with 2Y -5bps since Friday now). Europe is suffering
most as EUR strengthens (as it was the most popular carry trade
against China), driving USD weakness and sending European stocks lower (DAX is
dumping almost 3%). And finally commodities are seeing Crude and copper crushed
as PMs bounce...
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China
Enters Currency War - Devalues Yuan By Most On Record. S- by Tyler
Durden on 08/11/2015
As we first
warned in March, and as became abundantly clear over the weekend Beijing
had no choice but to join the global currency wars, as the yuan's dollar
peg will ultimately prove to be too painful going forward. And sure enough this
evening the PBOC weakens the Yuan fix by the most on record.
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Why
Bond Yields Are Sliding: Thank China. Submitted by Tyler
Durden on 08/11/2015
The entire US Treasury complex has seen yields plunge
following last night's
"surprise-that-everyone-except-Wall-Street-economists-saw-coming"
Yuan devaluation. While there are numerous factors driving the rally in bonds,
RanSquawk notes two crucial ones... that will likely persist...
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Third
Time's The Charm? Greece Agrees To Bailout Amid Rampant Skepticism. Submitted
by Tyler Durden on 08/11/2015
After what were described as "marathon"
negotiations, Greece and its creditors have agreed to the terms of the
country’s third bailout program. Although some remain optimistic, the general
consensus seems to be that, as Finnish Foreign Minister Timo Soini said over
the weekend, "we should just admit that this isn't going to work."
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Submitted by Tyler
Durden on 08/11/2015 - 07:29
- 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)
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China's
Historic Devaluation Sends Equity Futures, Oil, Bond Yields Sliding, Gold
Spikes. Submitted by Tyler
Durden on 08/11/2015
If yesterday it was the turn of the upside stop hunting
algos to crush anyone who was even modestly bearishly positioned in what ended
up being the biggest short squeeze of 2015, then today it is the downside
trailing stops that are about to be taken out in what remains the most vicious
rangebound market in years, in the aftermath of the Chinese currency
devaluation which weakened the CNY reference rate against the USD by the most
on record, in what some have said was an attempt by China to spark its flailing
SDR inclusion chances, but what was really a long overdue reaction by an
exporter country having pegged to the strongest currency in the world in the
past year.
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Almost exactly seven months ago, on January 15, the Swiss
National Bank shocked the world when
it admitted defeat in a long-standing war to keep the Swiss Franc artificially
weak, and after a desperate 3 year-long gamble, which included loading up
the SNB's balance sheet with enough EUR-denominated garbage to almost equal the
Swiss GDP, it finally gave up and on one cold, shocking January morning the
EURCHF imploded, crushing countless carry-trade surfers. Fast forward to the
morning of August 11 when in a virtually identical stunner, the PBOC itself
admitted defeat in the currency battle, only unlike the SNB, the Chinese
central bank had struggled to keep the Yuan propped up, at the cost of nearly
$1 billion in daily foreign reserve outflows, which as this website noted first
months ago, also included the dumping of a record amount of US government
treasurys.
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Who
Could Have Possibly Foreseen China's Shocking Devaluation?. Submitted by Tyler Durden on 08/11/2015
Well, pretty much anyone who is not an economist or Wall
Street "strategist" because a mercantilist, export-dominated nation
pegged to a currency that has appreciated by an unprecedented amount in the
past year, is grounds for nothing short of disaster, or using the parlance of
our times, a "hard-landing." Case in point: this is what we said just
two days ago when the news of China's dramatic trade collapse hit in a post
titled: "Chinese
Trade Crashes, And Why A Yuan Devaluation Is Now Just A Matter Of Time"...
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NOTICIAS IN SPANISH
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Siria. El plan del Instituto Brookings para
despedazar Siria. Mike Whitney
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