Bits Bucket for July 3, 2015
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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Are China’s stock markets in the grip of panic?
China’s Stocks Decline in Biggest Three-Week Plunge Since 1992
by Kyoungwha Kim
July 2, 2015 — 6:47 PM PDT Updated on July 3, 2015 — 12:03 AM PDT
Bloomberg
The Shanghai Composite Index capped its steepest three-week decline since 1992 as measures to shore up Chinese equities failed to stop margin traders from unwinding positions at a record pace.
The benchmark equity measure fell 5.8 percent to 3,686.92 at the close, after losing as much as 7.2 percent and rising 0.4 percent. Chinese shares have erased more than $2.8 trillion of value in three weeks, marking an abrupt end to the longest bull market in the nation’s history.
Executives of at least 28 companies on the ChiNext index of smaller firms said Friday they would take measures such as buying equities or halting new share sales to support prices, after regulators pledged to investigate market manipulation. Steps to boost equities have so far been overshadowed by concern that leveraged traders will keep liquidating bullish bets after equity valuations exceeded levels during the country’s stock-market bubble in 2007.
“For now, the mood is verging on panic, and it is extremely hard to calm a bear who is in a rage,” said Bernard Aw, a strategist at IG Asia Pte. in Singapore. “Chinese brokers may still be looking at reducing their risk exposure by closing more margin debt.”
…
crashes are healthy to prevent to much risk taking.
Not healthy for folks who decide to end it all due to financially ruinous losses…
I don’t get it when young people do it. It’s not like you don’t have time to start over, unless if in China they send you to debtor’s prison or something like that.
I am still young enough to remember how I thought and felt as a young adult. When things go wrong in a young person’s life, they can seem so permanent, and this perceived permanence be painfully visceral. For me, at least, the circumspect recognition that bad situations are not necessarily forever and can be turned around only came with the wisdom of age and experience, both good and bad.
And panics tend to happen at the bottom of markets not the top.
Panics help find the bottom. But sometimes it’s a long way down.
Well, it didn’t work that way in Wall Street’s Great Crash that began on Black Tuesday, October 24, 1929. Like China in the present episode, Wall Street was rife with speculators buying stock on margin. Like China’s crash underway, government and private banking intervention came into play but was not sufficient to turn around the situation. A couple of days with 10%+ losses on Wall Street turned the direction of the entire global economy around for over the next decade to follow.
This was the onset of the Great Depression of the 1930s.
Another instance where things did not work out as you suggest as typical was in the case of the Japanese stock market crash of the early 1990s, when the Nikkei Index dropped by 2/3rds from a peak level of around 39,000 to levels below 13,000, where it remained for over two decades while deflation took hold in the Japanese economy and land prices headed south in synch with the stock market. This led to the so-called Lost Decade of Japanese economic growth, which some commentators have recently and awkwardly renamed the Lost Two Decades.
A third case is the U.S. Dotcom Bubble crash of 2000 which morphed into the Great Housing Bubble and Bust of 2007-2008, and remains a simmering crisis fifteen years afte the onset, but we have covered this subject here in great depth and I know you read all the articles that are posted to the HBB so I won’t go into the details.
I’m sure it’s different this time in China, and that you will provide all the reasons!
Don’t take it from Danny Boy, take it from the IMF: Panics and crashes normally usher in lengthy periods of economic malaise.
When Bubbles Burst — 2003
Warning: .pdf
Really what about 1987 in this country?
Oh, it’s year 7. Batten down yer hatches!
From Wikipedia and you know what its impact was on the general economy virtually none, although many pundits were predicting a second depression:
In finance, Black Monday refers to Monday, October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1738.74 (22.61%).[1] In Australia and New Zealand the 1987 crash is also referred to as Black Tuesday because of the timezone difference
“Really what about 1987 in this country?”
Exception to the rule, when Alan Greenspan was able to surprise the markets with plunge protection measures in the day following Black Monday.
Nowadays everyone expects central banking intervention and invests to capture their share of the liquidity-fueled stock market gains.
when Alan Greenspan was able to surprise the markets with plunge protection measures in the day following Black Monday.
That makes no sense. If you think Greenspan can impact our market more than the Chinese can impact their market, you are living in an alternative reality.
“That makes no sense.”
It does make sense if you have studied economics and understand the Theory of Rational Expectations.
But based on your flawed analysis of oil price futures, I can understand your confusion.
‘$2.8 trillion of value in three weeks’
Was the value ever there to begin with?
“…marking an abrupt end to the longest bull market in the nation’s history.”
Is it safe to say that many market observers remain in a state of stunned denial on this point, including one of the HBB’s most prolific posters?
The China bull’s back is broken. Get over it.
“China’s Stocks Decline in Biggest Three-Week Plunge Since 1992″
Attention, everyone is ordered to tune their AM Radio to… Oops, this is China, not the Japanese.
The Strait Times
China shares plunge over 7% as traders say ‘panic is setting in’
Stock investors sit in front of an electronic screen at a brokerage firm in Beijing, China, on June 30, 2015. Stock investors sit in front of an electronic screen at a brokerage firm in Beijing, China, on June 30, 2015.
PHOTO: EPA
Published
5 hours ago
Updated
4 hours ago
SHANGHAI (AFP, BLOOMBERG) - Shanghai shares accelerated their plunges of recent weeks on Friday, tumbling more than seven per cent within an hour of the market opening as analysts said panic was setting in.
The benchmark Shanghai Composite Index tumbled 7.13 per cent, or 278.96 points, to 3,633.81. The Shenzhen Composite Index, which tracks stocks on China’s second exchange, dived 6.96 per cent, or 154.26 points, to 2,061.55.
Chinese markets were among the world’s best performers earlier this year, with Shanghai rising more than 150 per cent over 12 months in a spectacular borrowing-fuelled bull run until it peaked on June 12.
But it has since lost 30 per cent of its value, putting it firmly in bear market territory, with the losses largely attributed to fears stocks were overvalued, profit-taking and margin traders unwinding their positions.
Margin investors only need to deposit a small proportion of the value of their trade, potentially generating bigger profits but also exposing themselves to bigger losses.
…
As China stocks sink, some accuse Morgan Stanley, other foreign forces
By Laura He
Published: July 3, 2015 1:04 a.m. ET
Reuters
HONG KONG (MarketWatch) — The recent, drastic stock-market meltdown in China seems to have freaked out the country’s government and central bank, as their repeated efforts to stabilize the markets have failed, at least so far.
And now, some segments of Chinese society are now raising the possibility that “evil” market forces going short to ruin the economy, and even suspecting investment “predators” of lurking behind the turmoil, with Morgan Stanley among the names mentioned.
Mainland China’s benchmark Shanghai Composite Index (SHCOMP, -5.77%) had plunged more than 24% from its June 12 peak as of Thursday’s close, despite a raft of stimulative measures by authorities, including rate cuts, reduction in stock-transaction fees, and an easing of margin rules.
At the same time, China’s stock regulators said Friday they would look into possible “market manipulation” helping fuel the move lower.
Against this backdrop, the Financial News, a newspaper run by the People’s Bank of China, said in an editorial Friday that predatory forces were playing up the risks for the Chinese markets, specifically mentioning Morgan Stanley for having withdrawn a previously bullish forecast for the Shanghai Composite Index after a sharp drop for the benchmark on June 26.
The newspaper cited Morgan Stanley as suggesting that the Shanghai Composite may have topped out at the beginning of June, and it accused the U.S. investment bank or either making “a malicious remark carelessly” or harboring “ulterior motives.”
The editorial also said other banks which had similarly soured on Chinese equities were seeking to “go short on China on purpose and disturb China’s economic reforms.”
…
Greed and panic move the herd. First the Greater Fools piled into the bubble. Now that the unsustainable bubble is bursting, panic has set in. Got popcorn?
Jiffy Pop!
Barbecued crow on the July 4th menu?
China stock rout worsens as watchdog opens probe
CNBC.com with Reuters
1 Hour Ago
CNBC.com
The bloodbath in Chinese equities extended into Friday, with the benchmark Shanghai Composite plunging as much as 7 percent amid reports that the securities market regulator has launched a probe into suspected market manipulation.
The China Securities Regulatory Commission (CSRC) had set up a team to look at “clues of illegal manipulation across markets,” spokesman Zhang Xiaojun said in comments on the CSRC’s official Weibo microblog late on Thursday.
“Cases that meet legal standards will be immediately investigated, seriously cracked down upon according to law, and those suspected of a crime will be resolutely transferred to the police for investigation,” he said. Meanwhile, the China Financial Futures Exchange has suspended 19 accounts in the past month for short-selling, sources told Reuters.
The market is now down about 28 percent from its June 12 peak, firmly in bear market territory, despite intensifying efforts by authorities to shore up investor confidence. The market closed down 5.8 percent lower on Friday.
Over the weekend, the People’s Bank of China unveiled a bigger-than-expected monetary easing package, cutting both interest rates and the reserve requirement ratio (RRR) for banks. A few days later, the CSRC eased regulations on using borrowed money to speculate on stock markets, canceling a rule that required investors to make additional guarantees if their margin ratio reached 130 percent or else face forced liquidation of their shares.
Regulators also revealed plans to allow pension funds managed by local governments to invest in the stock market for the first time.
“The correction that we’re seeing in stocks is fascinating and the fact that the authorities are clearly nervous should make markets nervous,” said Bill Blain, a strategist at Mint Partners in London.
…
Looks like we were told 100% wrong about the China Stock Market. Soaring? Oh Danny!
I said that a 20 to 30% correction was very possible, we are at 29%, and I documented that this week check my posts.
I believe you said if the ridiculous happened, and it fell to here, you’d be a buyer.
I said that I would consider buying at these levels but I do not believe I ever said it would be ridiculous for it to happen. But right now we have not even hit the 30% correction.
This is what I said on the 19th after the market had been in correction for a week, if you go back to the 28th of June you can also read my April post so where did I use the word ridiculous? Many on this board just love to say I said things I never said. Actually, we are only 29% from the 12th and I said I would buy after a 20 to 30% from the 19th and it already had started to fall, but I do not feel like quibbling we are not there by either measure.
Comment by Albuquerquedan
2015-06-28 10:14:40
And I said this and it does not matter since China does not need a bull market to achieve 7% growth:
Comment by Albuquerquedan
2015-06-19 06:23:35
P.S. by the way I never said the Chinese market would not correct, in fact I said the opposite, it would correct but it would be dangerous to try to time it and I would avoid the market at these levels. Now, if you want to make a bet on how far it will fall, I will say this, when the dust settles on the correction the market(s) will still be significantly higher than it was last summer although an ugly thirty to forty percent correction certainly cannot be ruled out. That number includes the amount it has already fallen so it would be twenty to thirty percent from here. On the other hand the Chinese government could announce no further tightening of margin requirements and it could be up big Monday. The reason I want nothing to do with that market.
Sure, and the market was indicative of a “soaring” economy. You can say things both ways, but in the end you cannot have things both ways.
The fact that it is still up 100% and in the beginning it does seem to be based on the fact that the Chinese economy would recover. However, it went too far but now it has corrected.
The China Bull is on life support but certainly isn’t dead yet, as dips are buying!
Who shot down China bull? Regulator says hunt is on; Shanghai ends 6% down, slips 30% in 3 weeks; what experts say
By Economictimes.com and Agencies | 3 Jul, 2015, 03.28PM IST
Chris Wood
The country’s major stock indices tumbled over 7 per cent in trade on Friday, following reports by official media that China’s securities regulator was preparing to investigate possible market manipulation.
SSE Composite Index closed at 3,686.92 on Friday, down 5.7 per cent. It’s a three-month low.
China’s securities market regulator has opened an investigation into suspected market manipulation, in the latest in Beijing’s increasingly desperate attempts to head off a potential stock market crash that could damage an already slowing economy.
The China Securities Regulatory Commission (CSRC) has set up a team to look at “clues of illegal manipulation across markets”. The China Daily newspaper said on Friday the CSRC was probing investors who used stock index futures to short the market.
China is due to release second-quarter gross domestic product data on July 15 and many economists expect growth to dip below 7 per cent, which would be the weakest performance since the global financial crisis.
Executives at 11 Shenzhen-listed companies announced plans on Friday to increase equity holdings in their own firms, the latest efforts among corporates to stem a nearly 30-percent decline in Chinese stock prices over the past three weeks.
The announcements followed a proposal earlier in the day by 28 firms on Shenzhen’s ChiNext board for quick-growing enterprises, urging all publicly traded firms to act “to maintain capital market stability and prosperity”.
Stock prices on China’s main exchanges in Shenzhen and Shanghai have been volatile since the government last month announced a crackdown on leveraged share trading. The extent of the price decline has raised the prospect of a stock market crash, threatening financial stability and economic recovery.
To help avert a crash, executives have started buying shares in their companies in an apparent show of confidence. On Thursday, 12 listed firms said major shareholders or top managers recently increased holdings.
…
What we are seeing here is a panic.
Given that China is a top U.S. trading partner, I’m surprised how little spillover effect China’s stock market crash has had on Wall Street share prices.
Panic sets in as Shanghai Composite drops 30pc, $3.7 trillion wiped of China share market despite crackdown
PM
By business reporter Sue Lannin
Updated about 7 hours ago
Investors looks at stock results in China
Photo: The value of Chinese stocks has plunged by at least $US2.8 trillion ($3.7 trillion) since the middle of June. (Reuters: China Daily)
Related Story: Australian stocks fall steeply on Greek worries, China share crash
Panic has set in on China’s share markets as traders call in investors’ margins loans.
The main index, the Shanghai Composite, has plunged by 30 per cent since its peak in the middle of June, the biggest three-week fall in more than 20 years.
The value of Chinese stocks has plunged by at least $US2.8 trillion ($3.7 trillion).
A new crackdown on market manipulation and mis-selling of investment products by the securities regulator has failed to stop the falls.
That has prompted fears of a share market crash in China but analysts in Australia are playing down the risks.
The Shanghai Composite Index has dropped by a third since the middle of June after rising around 150 per cent over the past year.
It plunged by nearly 6 per cent on Friday in another volatile day of trade.
But AMP Capital chief economist Shane Oliver is optimistic and described it as correction, not a crash.
“We’ve already had quite a sharp fall, I don’t think we’ll see a crash in the Chinese share market,” Mr Oliver told PM.
…
“…in the end you cannot have things both ways.”
ft dot com
MarketsEuropean stocks clock biggest drop in two months
an hour ago
European stocks have recorded their worst weekly loss in two months after the Greek government’s referendum curve ball knocked markets.
The FTSE Eurofirst 300 index fell 3.5 per cent, or 55.71 points, on the week, to 1,518.37 - its biggest weekly decline in point terms since the first week of May, according to Bloomberg data.
The 3.5 per cent drop is the biggest decline for an index made up of Europe’s 300 largest listed companies the week ending December 12, when it dropped 5.9 per cent.
Tumbleweed blew through European markets on Friday - the FTSE Eurofirst 300 index fell 0.64 per cent on the day - but equities took a hit on Monday, the first day investors were able to react to a shock move by the Syriza-led government in Greece late on Friday to call a referendum on the final bailout offer by the country’s creditors.
Despite this week’s performance, market strategists point out that the reaction has been relatively contained as the risks of contagion to other economies in the euro area have diminished substantially since the last Greek debt crisis.
…
ft dot com
Asia-Pacific Equities
Last updated: July 3, 2015 8:24 am
Chinese authorities move to prop up market as rout deepens
Gabriel Wildau in Shanghai
An investors checks share prices in a stock firm in Fuyang, east China’s Anhui province on June 29, 2015. Chinese shares plunged in morning trading on June 29, extending losses from the past two weeks despite a surprise interest rate cut at the weekend. AFP PHOTO CHINA OUT (Photo credit should read STR/AFP/Getty Images)
©AFP
China’s authorities targeted short sellers and market manipulators in a fresh attempt to arrest the slump in Chinese stocks, as the Shanghai Composite index capped its steepest three-week decline since 1992.
The market rout deepened on Friday, with the Shanghai index falling 5.8 per cent and the Shenzhen Composite shedding 5.4 per cent. The two indices have now fallen nearly 30 per cent since mid-June, despite frenetic attempts by Beijing to stave off a crash.
The stock market turmoil has become a concern for global investors who fear it could destabilise China’s economy at a time when it is already showing signs of a slowdown.
Friday’s declines came as the China Securities Regulatory Commission announced it had opened a probe into market manipulation, “based on reports of unusual movements” in securities and futures markets.
The investigation is likely to focus on short selling, amid reports on Friday that the futures exchange was urging traders not to short the market.
The CSRC’s move is the latest in a flurry of initiatives by authorities to arrest the stock market slide. The regulator has also relaxed rules on margin lending, cut trading fees and on Friday said it would slow the pace of initial public offerings.
Many investors have complained that the large volume of new share issues in recent weeks has siphoned off demand for existing stocks. IPOs were halted for 15 months between 2012 and 2014 in an effort to boost the flagging market.
Meanwhile, the regulator has made a series of late-night announcements aimed at restoring confidence, and China’s central bank last weekend lowered interest rates and eased reserve requirements.
But so far the measures have had little effect. The Shanghai Composite has now fallen 12.1 per cent since Monday, its third consecutive week of double-digit losses since hitting a seven-year high on June 12.
The Shanghai index is firmly in bear market territory, down 28.6 per cent since the June peak, while the tech-heavy Shenzhen Composite has fallen 33.2 per cent.
There were also signs on Friday that the stock market turmoil is beginning to reverberate beyond China. The Australian dollar, often traded as a proxy for China growth, is down 1.2 per cent to a six-year low of US$0.7539.
The 21st Century Business Herald, a Chinese daily newspaper, on Friday quoted multiple futures traders as saying they had received phone calls from the China Financial Futures Exchange instructing them not to short the market. Stock index futures are the main tool for placing bearish bets on mainland stocks, as short selling of individual shares is difficult.
The frenzied rise of the Shanghai stock market in recent months has been fuelled by a rise in margin lending.
Analysts say any effort to discourage short selling is probably coming from regulators, with exchange officials simply carrying out orders. The futures and stock exchanges are state-owned companies with close links to financial regulators.
Most market participants question whether illegal market manipulation is behind the market’s fall. Instead, they say investors are using index futures to hedge long positions in small and mid-cap stocks.
“In the futures market we have quantitative traders, algorithmic traders and short sellers. Everyone is there. And of course there are hedgers, too. The whole purpose of futures is for risk management,” said a trader at a major futures company in Shanghai. “After the big drop, what the market lacks most is confidence.”
The futures exchange on Thursday denied rumours that foreign investors including Goldman Sachs were using futures to place big bearish bets on mainland stocks, known as A shares.
The exchange said foreign investors with access to the futures market via the Qualified Foreign Institutional Investor (QFII) programme were only permitted to use futures for hedging operations and are not allowed to make directional bets. All recent trades by QFIIs complied with regulations, it said.
Small and mid-cap shares have been the biggest losers in the recent downturn, as investors have sought the relative safety of large-caps amid the turmoil. An index of large mainland-listed banks has fallen 15.1 per cent since June 12 compared with more than 28.6 per cent for the Shanghai Composite.
…
Is there a panic to buy homes in Shanghai:
http://www.shanghaidaily.com/business/Shanghai-existing-property-market-remains-heated-in-June/shdaily.shtml
We know where this leads.
Exhibit A: Chinese stock market investor suicides due to psychological inability to cope with ruinous financial losses.
Housing markets turn over far more slowly than stock markets. So it may be some time before we read of similar tragic endings to the lives of investors in China’s housing glut.
Property sales are up in Shanghai almost three times from last year that is where it seems to have led.
I’m talking about the future, when China’s housing situation catches up to the stock market.
The Chinese housing market has already corrected now it is moving up. The decline in the stock market has been healthy and sorry only in a nanny state would a few suicides cause a government to prevent any corrections due to the possibility that someone who was overextended might commit suicide.
‘would a few suicides cause a government to prevent any corrections due to the possibility that someone who was overextended might commit suicide’
That’s a nice little story. The truth is the Chinese government created this stock bubble to buy a bit of time for their failed state owned enterprises and debt burdened corporations. That they would throw the population under the bus while they are laundering billions out of the country suggests a modern-day horror story, graphically symbolized by the brains of young people splattered on the floors of their gleaming malls.
Textile jobs going to Chinese owned factories in Vietnam and Cambodia and aerospace jobs going to China:
http://www.shanghaidaily.com/business/Airbus-invests-further-in-Tianjin/shdaily.shtml
BTW Ben, why did the World Bank up its estimates of Chinese growth for this year to 7.1% from 7%. The first half will be the slow period for China probably will be 6.85%, 7% first quarter and 6.7% for second quarter.
More empty cities?
China has five year plans will they be empty five years from now? You consistently try to apply US norms to a hybrid economy that plans five and ten years out. As the Bakken oil fields show we do not construct housing prior to workers arriving, China does. It is legitimate to argue about which system is superior it is not legitimate to ignore the differences.
“It is legitimate to argue about which system is superior”
Which system do you think is superior?
I think free enterprise is superior however we are trying to be a planned economy too under Obama we just are not doing a very good job of it.
“China has five year plans will they be empty five years from now?”
Are China’s central planners somehow better at Five Year Plans than the defunct Soviet Union’s central planners were?
Oddfellow, I think green energy is a classic example. I support robust government R and D in the area but it has morphed into crony capitalism. What if the lithium battery is a dead end technology. The governments of the U.S. and California have provided billions in rebates to GM and Tesla. But lithium is highly toxic, a rare metal and easily catches fire and provides limited range in a battery. Korean and Japanese companies have been developing fuel cell cars. They can be refueled within ten minutes and provide more range already. Just this week great progress was announced using solar to produce hydrogen. I could easily see Hyundai creating a fuel cell vehicle making Tesla’s cars obsolete before its mass produced car even begins to roll of the assembly line. Then all the billions of government money has just been wasted.
Professor Bear has the stronger argument and wins this debate.
Like I would think one of the most partisan Obama supporters on this board would be a fair judge.
I am a Libertarian, not an Obama support, just a defender of the truth and reality. Namaste.
As the one guy on this board that has been to China, recently….
I give the win to Professor Bear and Ben Jones!
Nuff said.
I am a
LibertarianLIEeral.Fixt for ya.
1. Lithium is not rare
Studies have suggested there is enough for 1 billion cars and, it can easily be recycled and there are other battery technologies.
2. Fire hazard - You already played this card, Tesla is one of the safest cars on the planet, there are fewer fires per mile driven than gas cars and they are slow to develop.
3. Fill time doesn’t matter - I drive to work then home, plug in and I’m ready to go. It takes me 3 seconds to move the plug to the car each day. With gas you have to find a gas station often drive out of your way, stand there in the heat or cold or wind or rain filling your car. In the morning every winter I get into a toasty car ready to go. Can’t start the gas cars in the garage to heat them.
4. Who here would take the fugly Toyota fuel cell car that goes 0-60 in 9.5 seconds and has a handful of hydrogen stations to fuel up at for 60k vs a 4wd tesla 0-60 in half that time down to 3.1 sec, that you can fill each night at home for a fraction of the cost. If power providers stick it to you there are a lot of ways to generate electricity.
5. Gov didn’t support lithium technology they supported electric cars, at this point lithium is the best.
6. Hydrogen is hard to store, it’s much much more flammable than lithium, it costs much more to run a car on hydrogen and takes more energy to make it.
Excerpt:
SHANGHAI’S existing property market remained heated in June despite a moderate retreat in sales with prices continuing to head north at a faster pace.
About 35,500 units of existing properties, most of which homes, were sold across the city last month, a fall of 8.5 percent from May, Shanghai Deovolente Realty Co said in a report released today. That, however, represented a 171 percent surge from same period a year ago.
“The monthly transaction volume of existing properties remained above the 35,000-unit threshold for the third consecutive month, indicating robust sentiment among local buyers,” said Lu Qilin, a researcher at Deovolente. “However, the withdrawal, though not so significant, might suggest the beginning of a cool-down in the next couple of months which should be a natural correction while July and August are also traditionally low season for property sales due to the hot weather.”
The strong sentiment was also reflected in housing price.
The city’s existing housing index, which monitors month-over-month price changes, rose 2.14 percent, or 64 points, to 2,996 last month, a separate report released recently by Shanghai Existing House Index Office showed. That accelerated from a 0.52 percent gain in May.
Citywide, the prices of existing houses rose in 108 of the 130 areas tracked by the office and fell in 8. Prices remained unchanged in the rest 14, the report said.
Did you ever notice how the word ‘escrow ‘ contains the word ‘crow’?
Just sayin’
Is there a “panic” in China to buy IPOs:
http://www.shanghaidaily.com/business/finance/Chinas-bourses-set-for-IPOs-of-US48b/shdaily.shtml
Yes. In fact, if you actually read the articles recently posted here, you would come across the quote of an aging CCP member / investor who wants the government to cap the number of new IPOs, as she holds these responsible for the losses on stocks she already owns.
Apparently there is only so much dumb money to go around.
The government did cap IPOs just today because for some reason that I do not understand the government allows $100 of capital to be tied up to fund $1 of an IPO. It is very inefficient and did cause the initial correction.
BEIJING, July 3 (Xinhua) — The number of new shares hitting the stock market in early July will be reduced to 10, the China Securities Regulatory Commission (CSRC) said on Friday, following a 5.8-percent daily fall in the stock market.
China’s stock market has been in the doghouse for three weeks, losing around 29 percent since a peak of 5,178.19 points on June 12. A steady drumroll of government easing policies including interest rates cuts and a reduction of securities transaction fees has failed to reverse the losing trend.
The CSRC decided in April to approve two batches of IPO applications instead of one. Forty-five new shares were listed in May and 47 in June, causing concerns of a shares glut.
Guotai Junan Securities Co., which was listed in June, became the biggest IPO in five years. More than three trillion yuan (490 billion U.S. dollars) from investors was frozen during its the IPO subscription.
The CSRC also said that it would guide more long-term funds to invest in the stock market. An official draft guideline on Monday gave pension funds the nod to invest in the stock market.
Excerpt and it is strange, the IPO bull market continues to rage during the 30% correction which is now at the bottom of my predicted rage of a 20 to 30% correction from around June 12th levels:
THE Shanghai and Shenzhen stock markets are set to raise 300 billion yuan (US$48 billion) via initial public offerings this year after they led the global IPO market in the first half, PricewaterhouseCoopers predicted yesterday.
The two stock exchanges led the global IPO market in the number of new share sales and amount of funds raised in the first half of 2015. During the period, 187 companies listed on the two bourses, up 260 percent year on year. They raised a total of 146.1 billion yuan, a year-on-year surge of 314 percent.
“Both the number of IPOs and funds raised in the first half of 2015 surpassed the total number of the whole of 2014,” said Frank Lyn, PwC China’s mainland and Hong Kong markets leader. “The strong growth of the IPO market was the inevitable result of favorable policies issued by regulatory authorities and market reforms.”
PwC said that despite the recent rout of the A-share market, it is confident of its forecast.
“We foresee more activity in the IPO market in the second half of the year, with 400 IPOs in the Shanghai and Shenzhen stock exchanges raising about 300 billion yuan in total,,” Lyn said.
The IPOs will be launched by SMEs in the industrial product, information technology, financial services and consumer goods sectors.
The CCP is knee capping the IPOs and banning short sellers Mr. C.
Is there any official tally of China stock market investor suicides, or is such information purely anecdotal?
Oil production is not simply proportional to rig count. Ignore technological change at peril of bad future price predictions.
Marketwatch dot com
Futures Movers
Oil prices fall on strong shale supply
By Eric Yep
Published: July 3, 2015 7:14 a.m. ET
Greece, Iran still in focus
Bloomberg
Oil prices fell on Friday, in response to concerns over resilient U.S. crude production.
The number of U.S. oil-drilling rigs rose by 12 to 640 in the past week, snapping 29 straight weeks of decline, data from Baker Hughes showed late on Thursday. The rig-count, which some investors see as a proxy for activity in the oil industry, has fallen sharply since oil prices headed south last year. U.S. oil output, however, has remained strong and continued to pressure oil prices.
Brent crude (LCOQ5, -0.72%) the global oil benchmark, fell 0.7% to $61.62 a barrel on London’s ICE Futures exchange. In a shortened trading session because of the U.S. Independence Day holiday, U.S. crude futures (CLQ5, -0.76%) were trading down 0.7% at $56.55 a barrel on the New York Mercantile Exchange.
“The pickup in activity might be illustrative of the competitiveness of the U.S. shale industry which, thanks to cutting costs, might have become comfortable with producing oil at prices around $60 per barrel,” said Norbert Ruecker, head of commodities research at Julius Baer.
“The U.S. shale industry has become the oil market’s swing producer and its responsiveness to prices will shape the market for the years to come, paving the way for lower prices for longer,” he said.
Though this is the first increase since 2014, there are still about 60% fewer rigs working since a peak of 1,609 in October.
“One swallow doesn’t make a summer,” said analysts at Commerzbank. But the bank noted if other new oil rigs were to be added in the coming weeks, that would cast doubt over the expected decline in U.S. shale oil production.
“Yet precisely such a decrease is necessary so that the oversupply on the global oil market can be reduced and oil prices can further recover,” Commerzbank said.
According to analysts at Deutsche Bank, U.S. shale oil production will decline over coming months, likely into early 2016. However, it said that the decline would prove relatively shallow, owing to the continued benefits of productivity gains.
That would leave the oil market materially oversupplied in the first half of next year, by an average of 2.3 million barrels a day. Currently, the market is oversupplied by between 1.5 million and 2 million barrels a day, according to analysts’ estimates.
…
Yet gasoline prices were up two cents a gallon in the oil markets yesterday. Brent hardly moved this week and it sets gasoline prices, WTI did move down and it opened a better than five dollar difference between the two. Better technology cannot offset worsening geology and the accurate North Dakota data supports my view. The EIA “estimates” will have to be revised to show what is really happening to oil production in this country and it is not pretty. However the EIA will give Goldman as much time as it can to get out of its short positions.
Brent has been sliding down for two months now Mr. C.
I think flat is far more accurate. So where is this oil in the twenties that this board and the lame stream media keeps talking about?
So we are all lame and you are the only one who sees clearly around here.
http://www.nasdaq.com/markets/crude-oil-brent.aspx
So Blue you said over the last two months, and your chart shows oil at $59 dollars at the beginning of May and now it shows it at $62. So just how does this show me to be wrong? If you would have said it has dropped from its peak, you would be right but if you would have said that I would not have disagreed with you.
BTW, when it did hit $68 the oil companies began to frack the wells that they drilled but had not fracked. However, right now we are not drilling anywhere near the wells we need to maintain production. For example, you need 110-120 wells drilled per month in the Bakkens we are probably drilling 90.
“oil at $59 dollars at the beginning of May and now it shows it at $62″
You might be wrong. $68 at the beginning of May. $62 now. Two months is May and June.
$68 looks like it occurred around May 15th to me.
May 15 is May 2015. Go to the six month view and it should be clear.
This actually gives the days it shows May 1st at 64.13 it did not update to July 3 but it was around $62 yesterday, slightly up but I stand by my statement that flat is much more accurate.
http://ycharts.com/indicators/brent_crude_oil_spot_price
Slightly up means it was slightly above where it is right now.
And down 40% in the last 12 months.
So, just to be clear, if it was above where it is now, is that up or down?
Government trolls are using psychology based influence techniques
http://www.zerohedge.com/news/2015-07-02/government-trolls-are-using-psychology-based-influence-techniques-youtube-facebook-a
Not just youtube, twitter, facebook, but elsewhere as well.
I do think we have at least a couple of these on this blog. Like the one who says “Lame Zero Hedge article”.
http://www.theburningplatform.com/2015/07/03/it-could-never-happen-here/
I was watching the 6 o’clock news and saw images of closed banks in Greece and people lined up at ATMs. I’m sure you did, too.
This must seem surreal to most people because it seems so remote. But put yourself in these people’s shoes for a second. You have money in the bank. Suddenly you can’t get to it. After standing in long lines, you can only get 60 euros at a time, which isn’t going to last you very long.
What if you didn’t plan adequately and haven’t stashed away any cash?
The banks will be closed for a while. What happens?
How do you pay for rent? Or food?
How does your employer pay you?
Do you go homeless? Or hungry?
Do you get really angry, take to the streets, blame someone or something (probably the wrong thing), break stuff, set things on fire?
Except it DID happen here, during the Depression, you know, one of those bits of history that don’t mean anything, because diversity!
The thing is, I did put myself in the shoes of those people and experienced a mix of fear, grief and anger for a moment. I thought to myself “this is what these basturds have done, ruin and degrade populations, reduce them to beggars”.
It’s really easy to blame “The Greeks” and label them as lazy, greedy people who deserve it. Sure, there are some like that, but the majority are not.
The thing is, I did put myself in the shoes of those people and experienced a mix of fear, grief and anger for a moment. I thought to myself “this is what these basturds have done, ruin and degrade populations, reduce them to beggars”.
“Those people” caused their own plight by voting, decade after decade, for corrupt/socialist politicians who promised something for nothing. ‘Muricans are doing the same. I feel no sympathy whatsoever. People get the governments they deserve.
150 years of European socialism led to one of their own ending in default. No surprises. I too, blame voting for other people’s money.
Debt destroyed the Ottoman Empire not that long ago, and I don’t think they were so much socialist.
U.S. National Debt Clock : Real Time
http://www.usdebtclock.org/ - 248k -
Ron Paul: It’s All Coming Apart
“The day of reckoning is at hand,” he said
by Kit Daniels | Infowars.com | July 2, 2015
The United States will likely suffer a Greek-style economic collapse soon because, like Greece, it’s impossible for the U.S. to pay its debt, according to former congressman Dr. Ron Paul.
Dr. Paul pointed out that the U.S. is currently facing several financial bubbles of the same size and scope as the housing bubble which caused the Great Recession.
“We still have another stock market bubble and another housing bubble going on, but the big bubble I think is in the bond bubble,” he said Thursday on the Alex Jones Show. “It’s been going on for 35 years, taking interest rates from 21% down to actually negative.”
“[Central banks] have been getting away with it, so this means distortion, and not only is there money involved, but it also distorted all the investments made during this time.”
And the biggest distortion this encouraged, Dr. Paul added, is debt.
“It encouraged debt for a lot of people, but in particular government,” he continued. “As long as our government is able to print the reserve currency [the U.S. dollar], it’s going to limp along, even though our economy is limping along, but that will come to an end.”
“Right now we’re starting to see the whole thing coming apart; I mean we look at Detroit as an example, we see what’s happening in Greece, they’re worrying about what’s going to happen after Greece is actually recognized as totally bankrupt and there will be other countries.”
Dr. Paul also warned that the central banks will keep trying to delay the inevitable by printing and spending even more money.
“But that’s coming to an end,” he said. “The day of reckoning is at hand.”
Yup, it’s gonna happen. Got yer 3G’s?
I got precious metals, cash, and crypto currency that will last me three years.
“Documents leaked by Snowden also reveal that government agents have been conducting denial-of-service attacks, flooding social media websites with thinly veiled propaganda and have been purposely attempting to warp public discourse online.”
Clearly written by a racist member of the Tea Party who is a conspiracy theorist climate-change denier.
Yep. I’ve seen that happen here. Saw Oddie single you out as a “racist”, despite the fact that I have yet to see anything that even approaches racism in your posts. However, given that you do post things about the deep state that might alert people, you are a very “dangerous” person to the status quo. So you’ve got to be selected out from the pack of posters and given a label that will make others cower to be associated by replying to one of your posts.
Say it often enough, it sticks, I guess. So I wanted to know why Oddie was singling you out. I don’t think I ever got an answer, but above will suffice.
I have to say, this little group of people who post here who clearly have little or no agreement with the points of view of the posters here, and little or no interest in the basic premise of the blog, has puzzled me, but not any more. It’s kind of cool, when you think of it. One measure of how dangerous one is to the status quo is the effort people go to in attempts to suppress.
Whatever people may think of Trump, there is no more perfect illustration of the corporatocracy in action to suppress dissent. The latest entry, Serta, gave me a good laugh, since I’ve had two of their crappy mattresses in the past and was beginning to think I needed back surgery. Switched to Simmons, problem solved.
To Serta, the same words I’ve had for NBC and Macy’s:
McDonald’s. I’m lovin’ it.
I have to say, this little group of people who post here who clearly have little or no agreement with the points of view of the posters here, and little or no interest in the basic premise of the blog, has puzzled me, but not any more.
Sounds like you want all of the liberals to leave and turn HBB into a right wing echo chamber.
Guess who else trolls the internet, in a massive way?
Palmy’s man-crush Putin. How ironic.
Salutin’ Putin: inside a Russian troll house
Former workers tell how hundreds of bloggers are paid to flood forums and social networks at home and abroad with anti-western and pro-Kremlin comments
http://www.theguardian.com/world/2015/apr/02/putin-kremlin-inside-russian-troll-house
Dang, right on schedule, the Ayatrollah of Rock and Rollah!
And right in line with the neo-goobermint narrative that Putin is the boogeyman!
Ya can’t make this stuff up!
… and then there was the accusation that you and I are the same person posting under different names. It’s not true. We should produce our paystubs to prove you and I aren’t even on the same payroll, LOL…
“the neo-goobermint narrative that Putin is the boogeyman!
Ya can’t make this stuff up!”
Just quoting the Guardian, Snowden’s favorite newspaper.
In June 2013 [the Guardian] broke news of the secret collection of Verizon telephone records held by Barack Obama’s administration in June 2013,[12] and subsequently revealed the existence of the PRISM surveillance program after it was leaked to the paper by former NSA contractor Edward Snowden.[13]
wikipedia
“We should produce our paystubs to prove you and I aren’t even on the same payroll”
No doubt. Unlike you, I can’t even get direct deposit to work with mine.
” flooding social media websites with thinly veiled propaganda and have been purposely attempting to warp public discourse online.”
How dare they? That’s your job.
Good article, thanks for posting. It’s just icing on the cake for what I felt was happening for a long time. Saw many instances of that on this blog but in not one case did it change my mind or value system.
So some governments are using the same technique that the Koch brothers use, employing paid posters on discussion forums. I’ve wondered if some the posters here are paid.
I can smell the flop sweat from here.
“I can smell the flop sweat from here.”
Now that is funny.
https://ca.news.yahoo.com/struggle-stem-market-rout-china-hunts-manipulators-010544254–sector.html
Money quote: “The government must rescue the market, not with empty words, but with real silver and gold,” said Fu Xuejun, strategist at Huarong Securities Co, before the CSRC and PBOC announcements, adding that a market crash would hurt banks, consumption, companies and even trigger social instability. “It’s a disaster. If it’s not, what is it?”
It is not yet a reckoning, but it is leaning in that direction.
Sorry Mr. Xuejun, the market is FuBAR.
The latest jobs data was an unmitigated disaster, despite the “Everything is awesome” spin by the usual controlled-media mouthpieces.
http://investmentresearchdynamics.com/government-jobs-data-defining-deviance-downward/
Yes, we agree.
http://www.independent.co.uk/news/business/news/chinese-stock-market-has-lost-15-trillion-in-the-last-three-weeks-10364066.html
The Chinese stock market has endured a torrid three weeks in which it lost value equivalent to £1.5 trillion — that’s 10 times the size of Greece’s annual GDP.
The Shanghai Composite, an index of all stocks traded on the Chinese stock exchange, has fallen 30 per cent since its peak on June 12 following a record-breaking eight-month growth period. It’s been the market’s worst three weeks since 1992.
In its third straight ‘Black Friday,’ the market crashed by 3.25 per cent, falling below 4,000 for the first time since April.
While I do invest in emerging market funds, I hardly noticed the Chinese correction.
As you know, for investors who avoid leveraged gambles and use DCA, this looks like a great buying opportunity.
VEMAX has a reasonable yield above 2%, which makes DCA even more fun. And VGSIX, the REIT has a reasonable yield of 3.6%.
Just was out to my mailbox on a 76 degree afternoon in my part of the OC. Trees are nice a green, sky is blue, and I was just thinking that renting is the nice feeling of freedom!
The camel’s nose
Oregon launches program to tax drivers by the mile
Dan Springer
By Dan SpringerPublished July 03, 2015
http://www.foxnews.com/…/2015/07/02/oregon-launches-program-to-tax-drivers-by-mile/ - 302k -
First they taxed the taxi drivers, but I did not protest because I was not a taxi driver….
Why would this incident be investigated as a homicide? Seems like self-defense to me.
http://www.chron.com/news/crime/article/Motel-intruder-killed-by-ex-CNN-reporter-6364864.php
I thought Clinton News Network employees are anti gun.
Apparently he was ex special forces from what I heard on a local report.
CNN as a network is pathologically anti-Second Amendment. They’d probably prefer to have employees killed at the hands of maruaders than use lethal force, i.e. firearms - and HANDGUNS no less - to defend themselves from thugs, er, Obamacare recipients.
I think that the article is poorly written and it leaves a false impression. It would be investigated as a homicide since someone did die. It does not mean that they do not think it was justified but that needs to be investigated.
Homicide means an intentional killing of another person and could be murder OR self defense…
http://legal-dictionary.thefreedictionary.com/homicide
And if it is self defense it is a justified homicide.
HuffPo, al-Jazeera and others are carrying stories that the Greek crisis is being made worse on purpose by the EU to try to force regime change. It seems the more conservative ECB banksters do not like the socialist, anti-establishment Syriza party and are trying to force them out:
“But this narrative misses the elephant in the middle of the negotiating table: While the Greek government cannot do anything to replace its negotiating partners with people more to their liking, the European officials on the other side seem to believe they can do exactly that. And it is becoming increasingly clear that this is their current strategy.
The idea is to do enough damage to the Greek economy during the negotiating process to undermine support for the current government, and ultimately replace it. The destabilization actually began before the Jan. 25 election, when officials from the then-ruling New Democracy Party announced that if Syriza won the election, Greece would leave the euro and people would not be able to get money from their bank accounts. In a nasty breach of protocol, they were supported by important European officials.”
http://america.aljazeera.com/opinions/2015/4/european-officials-may-be-pushing-regime-change-in-greece.html
The “center-right” establishlishment parties that Syriza replaced, much like the sleazy, corrupt Establishment GOP, were in bed with the banksters and crony capitalists who got Greece into its present predicament. Now wonder the Troika wants them back, so its neo-liberal looting can continue apace.
Since palmetto has the made the accusation that liberals posting here don’t care about the premise of the blog, I’ve decided this post should be directly related to the housing market:
=====
Climate change will see parts of cities under water - Robinson
“A 4 degree temperature rise means ‘cyclones beyond belief’, cities like Miami submerged”
“Many people living along the coast of cities could find their homes under water with even a moderate sea-level change, former president Mary Robinson has warned. “We are talking about the fact that an awful lot of people live on the coast in parts of cities will be under water if sea levels rise by even a fairly moderate amount. And the prediction with the 4-degree world will be three times that.”” (source: Irish Times)
=====
If climate change continues abated, it will have a profound effect on the value and equity of all homes at or near sea level. Coastal dwellers will be underwater twice: underwater when the sea invades, and underwater when their homes are worthless and have negative equity. Climate change foreclosures and relocations inland will be a new negative force on the real estate market.
We are increasing temperatures by around .04 per decade at that rate it will be a thousand years before we see 4 degrees.
Well, an almost unanimous consensus of scientists says the 0.04 per decade figure is far too low. The only source of data disputing climate change is a highly manipulated satellite data set by a biased group in Huntsville, Alabama — a deep red state. Very much like accepting tobacco health data in the 1960’s from North Carolina.
Satellite data is the most accurate it is not like he controls the satellites.
The Ayatrollah of Rock and Rollah!
drew the lightnin’ for ya, phony.
Now WPA, Now Oddie, Now WPA, Now Oddie! Vulcan mind-meld, lol.
It is the unholy trinity, Pal.
What, no endorsement of JEB!?
“Since palmetto has the made the accusation that liberals posting here”
I’ve known some liberals, and YOU are no liberal. Neoliberal,maybe.
No, I’m not a neoliberal — those are liberals who try to blend in free market philosophies. I’m more of a Krugman/Keynes lib who thinks a strong government is needed to counterbalance the oligarchs, that a strong economy trickles up from the middle class, not trickle down. Like Krugman, I think the Fed and Congress should be more focused on wages than on inflation. I don’t have much interest in some of the far left causes like extreme feminism, GMO, gun control, etc.
From today’s desk clearing post:
“Hedge funds that once dominated the South Florida housing landcape are pulling back on purchases, the RealtyTrac data show. With investor demand waning, home price increases have slowed across the region. The transition back to mortgage financing comes as lenders loosen underwriting standards. While requirements are still strict, particularly on mortgages backed by government-run companies Fannie Mae and Freddie Mac, more small banks and private lenders are entering the picture to give buyers options, mortgage brokers and real estate agents say.”
“‘Slowly but surely, creativity is coming back into the market,’ said Jim Flood, regional manager of Supreme Lending in Plantation.”
Maybe you should pay a little more attention to the housing bubble. I have been following these events and it looks to me like the average buyer is being loaned into a dangerous place. Where is Senator Warren? Wasn’t she told about foaming the runway for banks, right to her face?
With the way housing demand is collapsing and prices falling, we’re going to see a bunch more creativity in the coming months and years.
Ben: Maybe you should pay a little more attention to the housing bubble. I have been following these events and it looks to me like the average buyer is being loaned into a dangerous place.
I see little evidence of a true bubble in housing, except in certain geographical areas like LA or SF. Few of the ingredients of 2005 are here: no huge sales volumes, no high inventory, there’s no popular mania, no “liar loans,” no reverse amortization loans, etc. The market is priced high and is due for a pullback, yes. There’s more of a bubble in renting as rents continue to ramp up and the volumes/popular interest in renting is much higher than homebuying.
Considering rental rates are half the cost of buying irrespective of location, current asking prices are 250% higher than long term trend, its an unprecedented bubble.
See greece for results
Lots of gov and gov unions
Eu=pu
100% surge in Gold and Silver Coin Sales - U.S. Mint:
http://www.kitco.com/news/2015-07-02/100-Surge-In-Gold-Silver-Coin-Sales-U-S-Mint.html
As the second quarter came to an end, and metals prices remain range-bound, gold and silver coin sales have seen a surge this past month, up over 100% in June after dismal May sales, says one bank.
“Sales of gold coins by the U.S. Mint have now risen by 150% m/m for the four weeks of June,” said analysts from Barclays in the bank’s Gold Delta report released Monday.
“Total sales have now turned positive for a y/y basis, rising by 20%,” they added.
Based on sales data released by the U.S. Mint, 76,000 ounces of the gold 2015 American Eagle bullion coins were sold in June alone, compared to 21,500 ounces sold in May. This represents an increase in sales for the mint of over 253%.
From the end of May to the end of June, Comex August gold prices dropped roughly 1.5%, with the metal ranging from a low of $1,168.50 to a high of $1,205.70.
For the first half of 2015, sales of the same coin amounted to 273,000 ounces, up from 266,000 ounces during 2014’s comparative period.
American Buffalo gold coin sales also saw a surge in June, although sales were much lower for the first half of this year.
The mint said June sales of the Buffalo coin reached 21,000 ounces, compared to 9,500 ounces in May, a rise of roughly 121% month over month.
However, for the first half of the year, sales were lower compared to last year. According to the mint’s data, H1 sales reached 96,500 ounces in 2015, while sales were reported higher at 111,500 ounces over the same period last year.
On the silver front, the mint reported weaker sales of its American Eagle silver coins, which reached sales of roughly 21.8 million ounces so far this year. During the same period in 2014, sales had reached about 24.13 million.
However, it is not all bad for silver coin sales as purchasers seemed to be interested in silver coins much more in June than in May.
In June, the mint reported sales of 4.84 million ounces of its American Eagle silver coins, while sales only reached 2.02 million ounces in May. This amounts to roughly a 139% rise in sales month over month.
From the end of May to the end of June, silver prices dropped roughly by 6.9%, hitting a monthly high of $17.205 and a low of $15.44.
Ordered more PMs today before the herd in preparation for my next boating mishap.
Interesting the prices of metals are depressed compared to U.S. stocks. As a follower of market cycle theory, it only means these are good buys. Same thing goes for international stocks. They are depressed relative to the U.S. In light of that, the US is no more solvent this year than a year ago.
PMs, Bitcoin, Litecoin, Fiat under the mattress, Oh my!
http://www.zerohedge.com/news/2015-07-03/greeks-turn-bitcoin-dodge-capital-controls
There is at least one legal way to get your euros out of Greece these days, to guard against the prospect that they might be devalued into drachmas: convert them into bitcoin. As Reuters reports, although absolute figures are hard to come by, Greek interest has surged in the online “cryptocurrency”, as new customers depositing at least 50 euros with BTCGreece, the only Greece-based bitcoin exchange, open only to Greeks, rose by 400% between May and June.
As Reuters reports,
Using bitcoin could allow Greeks to do one of the things that capital controls were put in place this week to prevent: transfer money out of their bank accounts and, if they wish, out of the country.
“When people are trying to move money out of the country and the state is stopping that from taking place, bitcoin is the only way to move any value,” said Adam Vaziri, a board member of the UK Digital Currency Association.
“There aren’t any other options unless you buy diamonds, and that’s very difficult to move.”
But Marinos said the bitcoin buyers’ main aim was to shield their money against the prospect that Greece might leave the euro zone and convert all the deposits in Greek banks into a greatly devalued national currency. If voters reject the demands of international creditors in a referendum on Sunday, this becomes much more likely.
“A lot of people are keeping all the bitcoins they buy on our platform, until they understand what to do with them,” Marinos said. “In their eyes, now they have bitcoins, they’re safe.”
* * *
With Bitcoin having surged from $238 to $268 in the last few days since Greek PM Tsipras announced Greferendum, it is clear it’s not just the Greeks that are losing faith in faith-based fiat currencies.
Had some beers at Yard House in one of the Orange County communities earlier in the week at happy hour with a 20-something friend, a software engineer. He was mentioning that he was earning only $69,000 per year while some of his contemporaries were getting jobs paying $90,000. In my own department most of the young people left for other departments and are getting 5% to 10% raises. Some totally left the company for other companies.
The wage inflation is happening baby! I don’t buy the deflation argument anymore in the USA. Maybe for the older ones such as myself, but the young professionals are getting pay raises right and left.
I can see justification for interest rate increases. And the wage inflation is a freight train that will be very hard to stop. The bonds, stocks and real estate sectors are going to be for “loosers!” - they will be in a depression for a few years. 2016 could be a repeat of 2008.
Maybe for the older ones such as myself, but the young professionals are getting pay raises right and left.
Maybe in Orange County. I’m seeing plenty of wage stagnation out here for everyone, young and old.
in the OC and Silicon Valley, but the COL is nuts so $90k is not enough to feel successful, especially when you work 60 hrs a wk for it and sit in traffic 10 hrs a week. Quality of life matters.
Sounds like price fixing is destroying the regional economy.
Oh well. Not my funeral.
not really, more like supply and demand
Well…. Not really. Not at all with demand for housing at near 30 year lows and a moribund economy.
The wage inflation is happening baby! Good, bring it on. Nothing is healthier for the economy than moderately rising inflation and moderately rising wages.
Sure there is.
Now do you really believe wages will magically triple to meet grossly inflated prices?
Of course not.
Prices will continue falling to dramatically lower and more affordable levels to meet wages. That’s how the world works my friend.
Remember….. Nothing accelerates the economy like falling prices to dramatically lower and more affordable levels.
And I would be saving every penny of that increase until we are through the possible specter of 2015-16.
Is the Greece crisis close to a resolution at this point?
Greek debt crisis: Prime minister Alexis Tsipras demands debt write-off, ‘grace period’ for repayments
Updated about 2 hours ago
A TV grab shows Greek prime minister Alexis Tsipras
Greece’s prime minister Alexis Tsipras has demanded creditors forgive a third of the country’s debt and asked for delayed repayments for the rest.
In a televised statement Mr Tsipras also defended tomorrow’s referendum, which he hopes will reset bailout negotiations with his European creditors.
The vote is “a time of responsibility and democracy meant to silence the sirens of destruction,” he said.
Mr Tsipris called for creditors to accept “a 30 per cent haircut” on the country’s massive mountain of debt and wants a 20-year “grace period” on repaying the remainder.
He rejected EU leaders’ assertions that his decision last week to curtail debt talks with the creditors — the International Monetary Fund, the European Commission and the European Central Bank — and call the vote risked Greece’s eurozone or EU membership.
…
Does anyone have handy the figure on China’s government debt to GDP ratio?
Greek debt crisis: IMF says another 52 billion euros in funding required
By correspondent Martin Cuddihy and business reporter Michael Janda
Updated yesterday at 5:17pm
The International Monetary Fund has warned that Greece will probably need an extra 52 billion euros in bailout loans over the next three years.
Earlier this week, Greece became the first developed economy to fall in arrears to the IMF when it missed a 1.5 billion euro loan repayment.
Now an IMF staff report has warned that Greece has fallen so far behind on its previous bailout commitments under a program agreed in 2012 that it will need over 50 billion euros ($73 billion) in concessional financing from international and European agencies between October 2015 and October 2018.
Using existing arrangements as a guide, around two-thirds of that would need to come from euro area states, who are reluctant to extend Greece further funding without more austerity on the part of the Greeks.
Even with such concessional loans, the IMF has warned that Greece will remain very vulnerable to economic and financial shocks, with government debt hardly easing, from nearly 180 per cent of GDP now to an estimated 150 per cent in 2020 and 140 per cent in 2022.
As a comparison, Australia’s government debt to GDP ratio is around 30 per cent.
…
Is it something like 282% of GDP?
Opinion Review & Outlook
China’s Debt Bomb
Stock volatility is the latest sign of the economy’s excessive leverage.
An investor observes stock market at a stock exchange hall on June 26 in Fuyang, Anhui province of China.
Photo: ChinaFotoPress/Getty Images
June 28, 2015 5:07 p.m. ET
The spectacular volatility in Chinese stocks the past two weeks is a reminder that, for all its size, China remains a developing economy with an immature financial system. As stock prices soared more than 100% in the past year, so did margin lending, estimated at $238.5 billion last week. That debt probably added to the price swings, with the Shanghai Composite Index down 19% since June 12 and 7.4% on Friday.
Property developers, local governments and state-owned enterprises are also broadly overleveraged. Despite Beijing’s attempts to rebalance the economy from investment to consumption, inefficient borrowing continues to expand. So how concerned should the world be about Chinese debt?
A recent McKinsey Global Institute report put total borrowing—by individuals, companies and government—at 282% of GDP in 2014. That’s extraordinarily high for a developing economy, and up from 158% of GDP as recently as 2007. After the 2008 financial crisis, Beijing encouraged Chinese banks to lend to local governments and state-owned companies.
The cheap credit with few controls often financed projects with a low or negative rate of return. The wasteful investment is reflected in China’s falling incremental capital output ratio, one measure of how efficiently borrowing translates into economic activity. In the five years before the 2008 panic, it took an increase of less than 3% in investment to add 1% of GDP. By 2012 it took 4.9%. China’s debt figures are reminiscent of Korea, Indonesia and Thailand in the runup to the 1997 Asian financial crisis.
Beijing is trying to defuse the problem, though some of its steps may make it worse in the long-term. The People’s Bank of China (PBOC) is bailing out local governments responsible for bridges to nowhere and palatial buildings. Provincial governments will retire bank debt by issuing $419 billion in bonds to be bought by state banks, which will swap them with the central bank for reserves to lend.
This repeats the bank recapitalization of the late 1990s, when bad loans were warehoused and largely forgotten. By failing to liquidate bankrupt borrowers, the government creates a moral hazard in which neither loan officers nor local officials face the consequences of bad decisions.
Meanwhile, Beijing has encouraged the rising stock market as a way to boost the slowing economy. This allows new companies to list shares and brings down business leverage. But some managers have taken the opportunity to borrow more on the back of their higher market value. Combine that with margin lending to speculators, and the bull market may have increased systemic risk.
…
Try its federal debt is around 20% I have posted it many times.
The distinction between “federal”, local, bank, business in China is meaningless.
It’s a $28 Trillion dollar debt bubble.
I misspoke. The 282% of GDP is all Chinese debt as a share of GDP, not just government debt.
Hence there is no need for concern.
Do you know what the total debt for the U.S. is? Hint it is higher than China’s and unlike China we do not owe virtually all of it to ourselves.
http://www.mckinsey.com/insights/economic_studies/debt_and_not_much_deleveraging
“China’s debt has quadrupled since 2007. Fueled by real estate and shadow banking, China’s total debt has nearly quadrupled, rising to $28 trillion by mid-2014, from $7 trillion in 2007. At 282 percent of GDP, China’s debt as a share of GDP, while manageable, is larger than that of the United States or Germany. Three developments are potentially worrisome: half of all loans are linked, directly or indirectly, to China’s overheated real-estate market; unregulated shadow banking accounts for nearly half of new lending; and the debt of many local governments is probably unsustainable. However, MGI calculates that China’s government has the capacity to bail out the financial sector should a property-related debt crisis develop. The challenge will be to contain future debt increases and reduce the risks of such a crisis, without putting the brakes on economic growth.”
Under 23% and dropping but don’t let the facts get in your way, you never do:
http://www.usdebtclock.org/world-debt-clock.html
“…don’t let the facts get in your way, you never do…”
Talking about yourself again, I see.
China’s external debt is around 6.5% of its GDP and dropping the United States’ debt is around 98% and rising, it is not difficult which country resembles Greece more, thanks Obama.
I wish Obama never started the war with Iraq that will end up costing $60 trillion by 2053. ( Google it).
Jeb will fix everything. lol
The china miracle is collapsing.
http://www.reuters.com/article/2013/03/14/us-iraq-war-anniversary-idUSBRE92D0PG20130314
Obama said the Afghanistan war was justified. The Iraqi war cost about 2.5 trillion and most of the war reflected in Ws deficits, Obama ran up that much debt in two years of office. And instead of leaving an Iraq that is somewhat stable he is leaving a FUBAR state.
http://www.businessinsider.com/iraq-war-facts-numbers-stats-total-2013-3
ft dot com > World >
Europe
Last updated: July 3, 2015 5:51 pm
Greek court rejects appeal to block referendum
Poster depicting German Finance Minister Wolfgang Schaeuble reading ”For five years he is drinking your blood, now tell him NO” is seen over another one reading ”Yes to Greece, Yes to Euro” referring to the upcoming referendum in Athens, Friday, July 3, 2015. The brief but intense campaign in Greece’s critical bailout referendum ends Friday, with simultaneous rallies in Athens supporting “yes” and “no” answers to a murky question in what an opinion poll suggests could be a very close vote.
(AP Photo/Thanassis Stavrakis)
©AP
Greece’s highest legal authority has rejected an appeal by two citizens asking for Greece’s critical referendum on austerity to be ruled unconstitutional.
The two men had appealed to the court on the grounds that Greece’s constitution bars popular votes on fiscal issues. Greek voters are being asked to vote on Sunday on whether to accept international creditors’ demands for more austerity in return for bailout loans.
Court president Nikos Sakellariou said on Friday “the referendum will proceed normally”.
The reasoning behind the decision was expected to be issued later in the day.
Because Greece does not have a constitutional court, Friday’s hearing took place before the 50-member council of state formed of senior judges whose normal job is to issue rulings on administrative rather than political matters.
Earlier on Friday, Greek prime minister Alexis Tsipras seized on a report from the International Monetary Fund, saying Greece’s debt was unsustainable as he pressed for a No vote in the referendum.
Mr Tsipras said the IMF’s latest analysis of Greece’s debt burden justified his government’s rejection of a bailout extension proposal that included no plans for debt relief.
“Yesterday an event of major political importance happened,” Mr Tsipras said. “The IMF published a report on Greece’s economy which is a great vindication for the Greek government as it confirms the obvious — that Greek debt is not sustainable.”
He urged Greeks to vote “no to ultimatums, divisions and fear”.
…
Not generally a fan of WND. However, the fact that more and more people are waking up to the fact that our political parties and processes have been captured by a corrupt, venal oligarchy, is a good thing.
In 2008 and 2012, 95% of the electorate bent over and grabbed their ankles for said oligarchy by voting for its water carriers, Obama, McCain, and Romney. Now there are signs of an incipient awakening among the more intelligent portion of the population, such as the rejection of the corporate media’s annointing of HillaryJeb as our approved “choice” in 2016, and growing support for candidates other than those backed by Soros or the Koch Brothers or Sheldon Adelson.
Wake up, ‘Muricans! You’re losing your country.
http://www.wnd.com/2015/07/top-sheriff-america-now-ruled-by-oligarchy/
Some people just deserve a good beating with a selfie stick.
Since I’m related to Murphy I buy gold to guarantee the price WON’T rise.
Miami Condos Seek Chinese Buyers
By Alyssa Abkowitz
July 2, 2015 9:47 a.m. ET
Meanwhile, Chinese buyers are beginning to take a closer look at the city. “The Chinese are coming along very strong,” said Simon Henry, co-founder of Juwai.com, a China-based website that connects wealthy Chinese with overseas properties. “Miami looks relatively cheap compared with some of the big cities like San Francisco and New York.” Juwai says the average budget for Chinese buyers shopping for overseas properties on its site is $2.3 million.
Karen Xu, a Shanghai resident, is looking at one-bedroom condos in the U.S. as an investment. She says she didn’t consider Miami until she saw a marketing table at the Juwai Agent Summit in Shanghai in May for Brickell Flatiron, a downtown Miami development where one-bedroom condos cost $500,000 to $750,000.
The deputy director of a boutique investment firm, Ms. Xu, age 35, was initially interested in a Manhattan home, but said she’s priced out. “Two to three years ago, prices were OK,” she said. “Now people are saying, ‘Buy in Brooklyn.’ I don’t want Brooklyn.”
http://www.wsj.com/articles/miami-condos-seek-chinese-buyers-1435777452
People should have loaded up on the Chinese stock market long ago to be rich like the young Chinese.
Most California natives cannot afford to live in California and the Chinese investors are bidding up purchase prices as well as rents. My sister up in San Rafael pays almost the same as I do for two apartment rents - one in California and one in Arizona. I know she could probably transfer to a hospital in Irvine to work at. Same corporation.
A holiday message from Clubber:
White progressives, including secular Jews (The majority of bankers) are the biggest threat to the survival of this great Republic. A greater threat than Jihad, which they (white progressives) support and defend.
Sic semper tyrannis!
The FBI has noted your contribution.
‘The sheer quantity of communications that XKEYSCORE processes, filters and queries is stunning. Around the world, when a person gets online to do anything — write an email, post to a social network, browse the web or play a video game — there’s a decent chance that the Internet traffic her device sends and receives is getting collected and processed by one of XKEYSCORE’s hundreds of servers scattered across the globe.’
https://firstlook.org/theintercept/2015/07/02/look-under-hood-xkeyscore/
Mandatory Crowdfunding = Bail In.
How about a 30% one-time all inclusive money grab? Even of those who did not work in Greek government ever or have a government pension?
http://www.zerohedge.com/news/2015-07-03/greek-banks-considering-30-haircut-deposits-over-%E2%82%AC8000-ft-reports
Last week in “For Greeks, The Nightmare Is Just Beginning: Here Come The Depositor Haircuts,” we warned that a Cyprus-style bail-in of Greek depositors may be imminent given the acute cash crunch that has brought the Greek banking sector to its knees and forced the Greek government to implement capital controls in a futile attempt to stem the flow.
The depositor “haircut” would be a function of the staggered ELA haircut that the ECB could impose to escalate the rhetoric between the two sides, and could take place with as little as a 10% increase in the ELA collateral haircut from its current 50% level.
Unfortunately for Greeks, the ECB has frozen the ELA cap, meaning that as of last Sunday, Greek banks were no longer able to meet deposit outflows by tapping emergency liquidity from the Bank of Greece.
Now, with ATM liquidity expected to run out by Monday and with the country’s future in the Eurozone still undecided, it appears as though Alexis Tsipras’ promise that “deposits are safe” may be proven wrong.
According to FT, Greek banks are considering a depositor bail-in that could see deposits above €8,000 haircut by “at least” 30%.
Via FT:
Greek banks are preparing contingency plans for a possible “bail-in” of depositors amid fears
The plans, which call for a “haircut” of at least 30 per cent on deposits above €8,000, sketch out an increasingly likely scenario for at least one bank, the sources said.
A Greek bail-in could resemble the rescue plan agreed by Cyprus in 2013, when customers’ funds were seized to shore up the banks, with a haircut imposed on uninsured deposits over €100,000.
It would be implemented as part of a recapitalisation of Greek banks that would be agreed with the country’s creditors — the European Commission, International Monetary Fund and European Central Bank.
“It [the haircut] would take place in the context of an overall restructuring of the bank sector once Greece is back in a bailout programme,” said one person following the issue. “This is not something that is going to happen immediately.”
Greek deposits are guaranteed up to €100,000, in line with EU banking directives, but the country’s deposit insurance fund amounts to only €3bn, which would not be enough to cover demand in case of a bank collapse.
With few deposits over €100,000 left in the banks after six months of capital flight, “it makes sense for the banks to consider imposing a haircut on small depositors as part of a recapitalisation. . . It could even be flagged as a one-off tax,” said one analyst.
“It cannot happen here” - was the word on the street in Athens while they watched news footage about Cyprus’s 10% bail-in.
“It cannot happen here” - was the word in Barcelona and Rome as they watched the news footage of Greece’s 30% bail-in.
“It cannot happen here” was the word in the streets of every city in America as they watched the bail-ins of Portugal, Spain, Italy.
Not a fan of The Donald’s gratuitous Mexican-bashing. That said, his blunt comments on the issue are a stark contrast with the hear-no-evil, open borders stance of HillaryJeb.
http://www.dailymail.co.uk/news/article-3147942/Woman-randomly-shot-death-popular-San-Francisco-pier.html
Another 5-time deportee murders yet another American citizen, while the Republicrats turn a blind eye.
Q
and A?
M
Crater.