There can be few
fields of human endeavour in which history counts for so little as in the world
of finance. Past experience, to the extent that it is part of memory at all, is
dismissed as the primitive refuge of those who do not have the insight to
appreciate the incredible wonders of the present.
J. K. Galbraith.
Yesterday it was all about China and rigged stock markets everywhere. Even as Saudi Arabia and Iran seem to be heading for a new religious moslem v moslem war, the crash in China’s rigged stock markets spiralled from rigged stock markets from east to west. Welcome to the casinos that replaced stock markets after fallen former guru Greenspan panicked after the Black Monday crash of 1987.
This morning China has apparently moved the goalposts again. Last July’s selling moratorium that was due to be lifted this Friday is going to be extended, say the rumours. But for many the damage is irreparable. The losses already booked, irrecoverable. Welcome to the world of margin trading. Welcome to the world where the pledged collateral has already been sold out.
Below, all the latest news from the dying Chinese Ponzi Scheme. This is no way to run a casino, even if it is the final act of the Great Nixonian Error of fiat money, communist money, when leveraged financial gambling trumped investing.
China Said to Intervene in Stock Market After $590 Billion Rout
January 5, 2016 — 5:08 AM GMT
China moved to support its sinking stock market as state-controlled
funds bought equities and the securities regulator signaled a selling ban on
major investors will remain beyond this week’s expiration date, according to
people familiar with the matter.
Government funds purchased local stocks on Tuesday after a 7 percent
tumble in the CSI 300 Index on Monday triggered a market-wide trading halt,
said the people, who asked not to be identified because the buying wasn’t
publicly disclosed. The China Securities Regulatory Commission asked bourses
verbally to tell listed companies that the six-month sales ban on major
stockholders will remain valid beyond Jan. 8, the people said.
The moves suggest that policy makers, who took unprecedented measures to
prop up stocks during a summer rout, are stepping in once again to end a
selloff that erased $590 billion of value in the worst-ever start to a year for
the Chinese market. Authorities are trying to prevent volatility in financial
markets from eroding confidence in an economy set to grow at its weakest annual
pace since 1990.
The sales ban on major holders, introduced in July near the height of a
$5 trillion crash, will stay in effect until the introduction of a new rule
restricting sales, the people said. Listed companies were encouraged to issue
statements saying they’re willing to halt such sales, they said.
The CSRC didn’t immediately respond to a faxed request for comment.
Morehttp://www.bloomberg.com/news/articles/2016-01-05/china-said-to-intervene-in-stock-market-after-590-billion-rout
China's Seven-Minute Selling Frenzy That Shook Global Markets
January 4, 2016 — 12:07 PM GMT
The sell orders piled up fast on Monday at Shenwan Hongyuan Group,
China’s fifth-biggest brokerage by market value.
China’s CSI 300 Index had just tumbled 5 percent, triggering a 15-minute
trading halt, and stock investors were scrambling to exit before getting locked
in by a full-day suspension set to take effect at 7 percent. When the first
halt was lifted, the market reaction was swift: it took just seven minutes for
losses to reach the limit as volumes surged to their highs of the day.
“Investors rushed to the door during the level-one stage of the circuit
breaker as they fretted the market would go down further,” said William Wong,
the head of sales trading at Shenwan Hongyuan in Hong Kong.
Spiraling declines on the first day of China’s circuit breakers show how
measures meant to help restore calm to one of the world’s most volatile equity
markets risk doing just the opposite. The selloff could spur policy makers to
“fine tune” the new rules, according to Andrew Sullivan, managing director for
sales trading at Haitong International Securities Group Ltd. in Hong Kong.
Unlike similar circuit breakers in markets including the U.S., the threshold
for trading halts in China is low enough that they would have kicked in 20
times last summer alone.
Circuit
breakers are the latest effort by Chinese authorities to tame swings in a stock
market where the growing use of leverage by individual investors drove an
unprecedented boom -- followed by a $5 trillion bust -- in the span of just a
few months last year. The CSI 300 index of the nation’s biggest companies rose
or fell by 5 percent 20 times from the start of June through early September,
with daily moves exceeding 7 percent on half of those occasions.
Morehttp://www.bloomberg.com/news/articles/2016-01-04/china-s-seven-minute-selling-frenzy-shows-circuit-breaker-risks
China’s rigged markets could fall much further, much faster
Published: Jan 4, 2016 11:11 a.m. ET
Last year’s intervention catches up on China’s stock markets
HONG KONG (MarketWatch) — Those fearing that China is the big risk in the year ahead for global markets hope that the first trading day of 2016 does not set the tone for the rest of the year.Between a 7% fall in shares that triggered new circuit breakers on the Shanghai SHCOMP, -0.48% and Shenzhen stock exchanges 399100, -1.61% and accelerated weakness in the yuan, there is ample fodder for China bears.
The question being posed anew is whether 2016 will be the year Beijing finally throws in the towel on its attempts to coerce multiple asset markets upwards, while its economy continues to sink in a sea of debt.
While yet more weak industrial activity numbers from the Caixin China December PMI got the new year off to a flat start, the bigger concern is whether the leadership still has the will or the ability to continue holding up stock prices as its confronts ever more painful policy choices.
The black start to January trading had its roots in the controversial
government intervention last summer to rescue stocks from a rout, which wiped
over $4 trillion off share values and sent shock waves around global markets.
This appeared to have paid off after a subsequent partial market
rebound, yet it always left a worrying overhang both from resulting heavy state
ownership and the imposition of a six-month ban on major shareholders (over 5%)
from selling positions.
With that six-month moratorium ending this coming Friday, investors were
spooked that there could be an avalanche of pent-up selling.
And this time around will the government still be around to come in as
buyer of the last resort?
Morehttp://www.marketwatch.com/story/chinas-rigged-markets-could-fall-much-further-much-faster-2016-01-04?dist=tcountdown
China’s growth to drop below 5% in this ‘gray swan’ scenario
Published: Jan 4, 2016 3:43 p.m. ET
Timing is everything. On Monday, Byron Wien, vice chairman of multiasset investing at Blackstone, predicted China’s economic growth could slow to less than 5% this year, its banks will face a crisis on mounting bad debts and that Beijing will be forced to sharply devalue the yuan in a bid to rejuvenate exports.
“China barely avoids a hard landing and its soft economy fails to produce enough new jobs to satisfy its young people,” he projected in his list of 10 potential “surprises” for 2016.
Wien’s definition of a surprise is an event that the average investor would consider a long shot but which he believes has more than a 50% likelihood of occurring. Some of Wien’s surprises sound something like a “gray swan.” While not as wildly unpredictable as the “black swan” events popularized by Nassim Nicholas Taleb in his best-selling book, gray swans are seemingly unlikely events that pose significant risks to markets.
The fact that Wien’s prediction was issued on a day when trading on the Shanghai stock market was halted after the benchmark SHCOMP, -0.32% plunged nearly 7% could just give it additional mileage.
More
http://www.marketwatch.com/story/china-growth-to-drop-below-5-in-this-gray-swan-scenario-2016-01-04?dist=tcountdown
Safe On The Sidelines———475 Days And Still Counting
by David Stockman •
On December 28 we laid out the reason why the Wall Street casino should
be avoided at all hazards in a post entitled “Safe On the Sidelines—-405
Days And Counting.” We referred to the fact that the S&P 500 had first
crossed that day’s close at 2052 in November 2014, and had vibrated
sideways ever since.
We are still counting. After today’s carnage the number has risen
to 475 days, but our belief that the stock market casino has
just begun its descent has only been further reinforced.
We are now witnessing the collision of a lifetime. The Fed and
the other central banks are out of dry powder—-stranded on the zero bound
and impaled upon a $19 trillion/10X eruption of their collective balance
sheets. At the same time, after two decades of runaway credit expansion and
bubble finance speculation the inexorable global deflation is now
gathering visible steam.
On top of that the fundamental mechanic of the Fed’s phony bull market
is rapidly breaking down. That is, the buy-the-dip run of more than six
years is over and done.
The remaining Cool-Aid drinkers are getting punished time after
time as they buy the short lived spasms of a dying bull——-33 false
starts since the market stopped rising at the end of QE a year ago October.
Presently the flagellations will stop, however, as the fast money pivots
like it always does and stampedes to the sell side of the market.
Today the stock market had is worst annual open in decades, and for good
reason. Overnight there was one more indication that the great Red Ponzi of
China is heading for a crash landing.
Morehttp://davidstockmanscontracorner.com/safe-on-the-sidelines-475-days-and-still-counting/
"Indeed the temporary breaks in the market which preceded the crash were a serious trial for those who had declined fantasy. Early in 1928, in June, in December, and in February and March of 1929 it seemed that the end had come. On various of these occasions the [New York] Times happily reported the return to reality. And then the market took flight again. Only a durable sense of doom could survive such discouragement. The time was coming when the optimists would reap a rich harvest of discredit. But it has long since been forgotten that for many months those who resisted reassurance were similarly, if less permanently discredited.”
J. K. Galbraith. The Great Crash: 1929.
At the Comex silver depositories Monday
final figures were: Registered 36.78 Moz, Eligible 124.37 Moz, Total 161.15
Moz. The Saudi war scare seems to be
moving silver from deliverable Registered to the non-deliverable Eligible
category.
Crooks and Scoundrels Corner
The bent, the seriously bent, and the totally
doubled over.
Today Bloomberg covers the erupting Saudi Arabia v Iran oil war,
although the Saudis now seem to be trying to provoke a shooting war. This might
be a good time to cover oil shorts.Saudi Oil War Goes MAD
By David
Fickling Jan 4, 2016 5:14 AM EST
Saudi Arabia has often counted on having the oil market's equivalent of
a nuclear option.
When the kingdom grew tired of Opec members exceeding their quotas in
1986, it opened the spigots and crashed prices to below $10 a barrel, counting
on accumulated profits and low production costs to shore the country up against
the flood of excess crude. When Saudi wanted to snuff out U.S. shale oil
producers last year, it boosted daily output from 9.5 million barrels in
December 2014 to 10.6 million barrels by July. Prices fell 30 percent over the
course of the year.
Those expecting the same dynamics to be decisive in the current spat
with Iran, which sent oil futures in New York rising as
much as 3.5 percent today on news that Riyadh had expelled
Iranian diplomats, could be in for a shock: Tehran is well placed to fight off
the onslaught.The two countries, already fighting proxy wars in Yemen and Syria, are simultaneously competing for a share of Asia's oil market. For the past five years, Saudi Arabia has held the upper hand, thanks in part to the enhanced sanctions imposed on Iran in 2011 over its nuclear program:
With Tehran likely to meet the conditions needed to lift those sanctions as soon as next week, that's set to change. The government is promising to bring an extra million barrels of daily oil production into the market by mid-year, more than a third of its current output.
Saudi Arabia is unlikely to take that challenge lying down. Its vast reserves and low production costs have traditionally left it best positioned to survive an oil price war -- the ``good sweating" that John D. Rockefeller once recommended to knock out Standard Oil's higher-cost rivals. The problem in the current situation is that its rival across the Persian Gulf has already been toiling through four years of sanctions. Combine that with a far more diversified economy, and Iran has much less to lose from low oil prices than it had in the past.
More
Solar & Related Update.
With events
happening fast in the development of solar power and graphene, I’ve added this
new section. Updates as they get reported. Is converting sunlight to usable
cheap AC or DC energy mankind’s future from the 21st century onwards?
DC? A quantum computer next?
Today, the changing
technology of trams and trains.
Braking energy recovery on the Barcelona metro
18 Nov 2015
SPAIN: Ingeteam and Istem are to install an energy recovery system in a
traction substation of Line L9 of the Barcelona metro. According to Ingeteam,
this will be able to recover between 10% and 30% of braking energy.
Ingeteam has supplied the same technology to the metros in Málaga and
Bilbao, as well as the light rail network in Bielefeld. In Bilbao, 70% of the
energy recovered using the system installed in the Ripa substation is returned
to the grid, with the remainder used to power station lighting and escalators.
Bielefeld operator moBiel uses two 1 MW units fitted to substations on lines 1
and 4.
Commissioning of five converter and rectifier systems supplied by
Ingeteam is underway on Brussels metro Line 2.
London Underground energy recovery trial proves successful
04 Oct 2015
UK: Transport for London has announced that the ‘world first’
installation of Alstom's Harmonic & Energy Saving Optimiser inverting
substation energy recovery technology on a metro line has proved successful.
As well as feeding energy regenerated by braking trains back into the
traction power supply, HESOP can return power to the grid when it not required
by accelerating trains.
The HESOP equipment was installed at the Victoria Line’s Cloudesley Road
substation under a €1m contract awarded by UK Power Networks Services.
Following a five-week trial, TfL said the energy which was recovered in a week
was the equivalent of the power requirements of Holborn station for more than
two days.
HESOP is to remain in service following the trials. A wider roll-out of
the technology could be included as part of TfL’s New Tube for London programme
of rolling stock replacement and infrastructure modernisation on the
Piccadilly, Bakerloo, Central and Waterloo & City lines.
TfL envisages this could reduce London Underground’s energy costs by 5%,
as well as reducing the heat generated by trains braking in tunnels and thus
the energy required to operate cooling systems.
‘This state-of-the-art regenerative braking system has the potential to
transform how we power stations across the TfL network, unlocking massive power
savings and significantly reducing our energy bills,’ said Chris Tong, LU’s
Head of Power and Cooling. ‘We are committed to doing more to reduce our energy
use, and this technology – a world first for metro railways – is one of a
number of innovations we’re embracing to lower our environmental impact.’
Catenary-free tram arrives in Rio de Janeiro
09 Jul 2015
BRAZIL: The first Citadis tram for Rio de Janeiro has arrived in the
city after a 20 day journey from Alstom’s La Rochelle factory in France.
In 2013 the VLT Carioca consortium of Companhia de Concessoes
Rodoviarias, Odebrecht Transport, Invepar, Riopar, BRT and RATP Dev awarded
Alstom a €230m turnkey contract to build a catenary-free tram line. In addition
to the rolling stock, Alstom is supplying the power supply, signalling and telecoms.
To enable catenary-free operation along the whole route, Alstom’s APS
ground-level power supply will be installed. The 44 m long trams will also
be equipped with supercapacitors to store energy regenerated during braking.
The first five trams are being manufactured in La Rochelle. The
remaining 27 are to be produced at Taubaté in São Paulo state, where Alstom
inaugurated a factory earlier this year.
The first 14 km section of the line is expected to open in mid-2016
in time for the 2016 Olympic Games. When complete, the line will be 28 km
long with 37 stops.
http://www.railwaygazette.com/news/urban/single-view/view/catenary-free-tram-arrives-in-rio-de-janeiro.html
Flywheel delivered for DMU energy storage tests
12 Dec 2014
UK: Ricardo has delivered an evaluation prototype of its latest
generation of TorqStor carbon fibre flywheel to Artemis Intelligent Power,
which is leading a project to develop energy recovery technology which could
enable diesel-hydraulic multiple-units to reduce their energy consumption in a
way analogous to the use of regenerative braking on EMUs.
The DMU’s kinetic energy would be transferred to the compact
underfloor-mounted flywheel during braking, and then used during subsequent
acceleration. ‘Flywheels have the potential to be very energy dense’, according
to James Taylor, Senior Project Manager at Artemis which is working with
Ricardo and Bombardier Transportation on the DDFlyTrain project, backed by the
government’s Innovate UK scheme and the Rail Safety & Standards Board.
Since DDFlyTrain was first announced two years ago Artemis has modelled
the expected performance of a flywheel-equipped DMU, drawing on real-world data
from the monitoring systems on Bombardier Class 170 Turbostar DMUs operating on
the Edinburgh – Aberdeen route. Modelling predicts flywheel energy storage
could provide an energy saving of around 10%, with higher figures possible on
routes with more frequent stops.
The delivery of the flywheel will now enable the assembly of a test rig
for laboratory verification trials. Ricardo said its latest flywheel represents
a significant advance on products available two years ago, drawing on research
undertaken for Formula 1 cars. The flywheel spins in a permanent vacuum to
reduce energy losses, with transmission by a magnetic gear system which does
not require rotating seals or vacuum pumps The flywheel will be mated with
Artemis’ Digital Displacement hydraulic transmission technology, which combines
mechanical electric and software elements to facilitate efficient operation
despite the varying speeds and loadings of a rail environment.
The monthly Coppock Indicators finished December
DJIA: +18 Down. NASDAQ:
+110 Down. SP500: +36 Down.
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