Thursday, January 7, 2016

More China DOOOOOM news

In case you're still reading idiot bloggers screaming about how there's a domestic foundation to the present US share weakness:

WaPo - what's important about China's stock market hijinx. Quote:
China's markets are dominated by mom-and-pop traders who are prone to fits of fear, greed and even more fear, sometimes all within the space of an hour. So it's not unusual for stocks to be up 3 percent one minute, down 2 percent the next, and then finish the day up 4 percent. That'd actually be a pretty tame day by Shanghai's standard.

The authorities, though, have had enough of this kind of extreme volatility — at least on the way down — and have circuit breakers in place this past week. The way it works is that the market takes a 15-minute break if it's ever down 5 percent on the day, at which point trading resumes — unless stocks fall an additional 2 percent. Then the market closes for the day. What's the problem? Well, anytime stocks start getting close to that first level, say down 4 percent, people race to sell anything they might want to out of fear that they won't be able to if they wait a little longer. That, of course, sends stocks down to the 5 percent threshold, which then gives them 15 minutes to figure out how to sell everything else before the next circuit breaker.

In other words, the rush to beat the circuit breakers made the market more likely to hit them.
Well, if that's the problem, why not get rid of the circuit breakers?

FT Alphaville - China just got rid of the circuit breakers. (With an illustration of how bad Google Translate is at Chinese, and how pathetic the Financial Times is that they can't find a fluent speaker in their office to spend 5 minutes hand-translating this. Not as if China's an important country to the world of finance.) Well, now you've got rid of the circuit breakers, that's your problem fixed then, right?

Sinocism - the problem hasn't even remotely been fixed. Man, his tone has sure changed now that he's living in the beltway, instead of in Beijing around the corner from the lot where the execution vans get parked at night, eh?

CNBC - sources say China wants a short, sharp currency decline. That along with the Shanghai panic makes Whitey freak out. So how much is Whitey freaking out, you ask?

FT Alphaville - BofAML says go long cash and volatility, that's how much. Includes this idiotic shart:
Which notes that the ISM is as low as it was back in 1995, the last time the US Fed began a tightening cycle after a long recovery from a bust, with oil in a bear market. Oh, wait, apparently it doesn't: BofAML interprets this chart instead as proof we're about to fall into a recession. Because they want to prove they can be as fucking retarded as anyone else. And the upshot?

Bespoke - five month low in bullish sentiment. And bearish sentiment has spiked. Now's about the time Gary Wordsalad should start predicting a new US bear market.

WSJ China Realtime - chicken little China predictions. Oh shush, you! Can't you see we're dooming?

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