August
3, 1934 Adolf Hitler merges the offices of German Chancellor
and President, declaring himself "Führer" (leader.)
As goes China so goes
the world hasn’t quite replaced as goes America so goes the world, yet. But it’s
getting uncomfortably close.
There’s no real
reason why US and European stock casinos should follow China’s casinos lower,
but large losses on Chinese proxy stocks traded in the US casinos will probably
set the mood for today.
Add in a probable Delta
Covid-19 vaccine breakthrough in Asia and possibly the USA and the summer silly
season isn’t the time to start chasing overpriced stocks, even with Fed Chairman
Powell saying he’s still covering all bullish bets.
I’ll bet he’s not
covering Chinese proxy share bets on Wall Street and why should he?
To this old dinosaur
market follower, it looks like the path of lowest resistance is downwards and the
safety of the side lines beckons until the China massacre looks like ending.
Chinese online gaming stocks
tumble after state media takes aim at industry; Asia-Pacific stocks slip
SINGAPORE — Stocks in Asia-Pacific fell in Tuesday trade,
with Hong Kong-listed shares of firms in the Chinese online gaming market
plummeting after the activity was described as a type of “opium” by Chinese
state media.
In Tuesday morning trade, shares of Tencent in Hong
Kong plunged more than 10% while Netease and Bilibili plummeted 12.71% and 13.24%, respectively. The
Hang Seng Tech index declined 3.19%.
The losses came after the Economic Information Daily,
affiliated with Chinese state media outlet Xinhua, published an article that
expressed concern over the amount of time spent by youths on online gaming.
MSCI’s broadest index of Asia-Pacific shares outside Japan
traded 0.73% lower.
Looking ahead, the Reserve Bank of
Australia is set to announce its interest rate decision at 12:30 p.m.
HK/SIN on Tuesday.
Overnight on Wall Street, the Dow Jones Industrial Average
declined 97.31 points to 34,838.16 while the S&P 500 slipped 0.18% to
4,387.16. The Nasdaq Composite edged fractionally higher to 14,681.07.
Concerns over Covid are weighing on investor sentiment. The
CDC
director said Monday that the seven-day average of daily coronavirus cases
in the U.S. surpassed the peak seen last summer, when the country didn’t have
an authorized Covid-19 vaccine.
Crackdown shows China’s ready to
do ‘whatever it takes’ when it sees social problems, major Asia bank says
Published Sun, Aug 1 2021 9:38 PM EDT
Updated 4 Hours Ago
China’s crackdown on private
education signals that Beijing is willing to take strong action when it perceives
socioeconomic problems — regardless of what investors may want, according to an
equity strategist at a major Asian bank.
“The government is ready to do
whatever it takes to rectify perceived social, economic issues,” DBS’ Dennis
Lam said during a webinar Thursday, pointing to the speed, efficiency and
strength of China’s new policy.
“Stock market volatility is not a
consideration at all,” according to Lam.
For
sectors that face high risk of regulation, including education, e-commerce,
internet and health care, it’s “prudent for the investor to basically expect
the worst,” he said.
But
he acknowledged that Chinese securities regulators tried to ease market fears
in a meeting with major investment banks Wednesday. The regulator did not make
a public statement but said Beijing will
continue to allow Chinese firms to list in the U.S., a
source familiar with the matter told CNBC.
---- There has been a “fundamental shift” in the
mentality of Chinese authorities, according to DBS Chief China Economist Chris
Leung.
He said the crackdown on private
education shows that the country’s policy design now takes social factors into
account, beyond financial and economic considerations. He explained the
government is trying to tackle high education costs, which discourage Chinese
couples from having more children.
Leung added that Beijing is “willing
to bite the bullet to serve long-term … socioeconomic goals,” even if it’s at
the expense of stock market prices.
Delta variant surge will crush
reopening stocks, longtime market bear David Rosenberg suggests
Published Sun, Aug 1 2021 5:14 PM EDT
Investors may want to start August by lightening up on the
reopening trades.
Longtime market bear David Rosenberg warns surging Covid-19
delta variant cases paired with the culmination of fiscal stimulus will crush
stocks tied to the economic recovery.
“We have to be prepared here for the economy to sputter in
the next several months,” the Rosenberg Research president told CNBC’s “Trading Nation” on Friday. “You
don’t have to basically abandon the stock market, but I definitely would not be
in the value reflation cyclical trade.”
His warning follows disappointing results on the gross
domestic product front. Last week, the Commerce Department reported second
quarter GDP grew 6.5%, which was short of the 8.4% Dow Jones estimate.
Rosenberg, who is known for serving as Merrill Lynch’s top
economist from 2002 to 2009, sees the GDP miss as a glaring red flag.
“Now we’ve got the delta variant which is a big unknown,”
he noted.
Yet, the market has been holding up. The S&P 500 and Dow are less than 1% from their
all-time highs while the tech-heavy Nasdaq
is 1% away.
“If you want to go out and be long stocks, you’ve done
great. Go ahead and do it. Just don’t come back and tell me that it had
anything to do with the economic outlook,” he added.
Rosenberg believes there’s a disconnect between the market
performance and the economy that’s being exacerbated by the retail investing
crowd.
“The stock market has actually, frankly, become a bit of a
casino in some sense,” he said. “We always rely on the beloved S&P 500. But
not every single index out there is following the mega caps, which by the way
are now starting to roll over. The small
cap stocks have been waving the yellow flag on the economic outlook for some
time now.”
According to Rosenberg, the market is operating in a
universe all its own.
Below, a warning
from the Bank for International Settlements. No one, it seems, likes Big Tech.
Least of all the banksters with a large bout of FOMO, fear of missing out.
Financial regulators urgently
need to get a grip on 'Big Tech' - BIS
August
2, 2021 11:16 AM
LONDON
(Reuters) - Central banks and financial regulators urgently need to get to
grips with the growing influence of ‘Big Tech’, according to top officials from
central bank umbrella group the Bank for International Settlements (BIS).
Global watchdogs are increasing wary
that the huge amounts of data controlled by groups such as Facebook, Google,
Amazon and Alibaba could allow them to reshape finance so rapidly that it
destabilises entire banking systems.
In a paper led by its head Agustin
Carstens, the BIS pointed to examples such as China where the two big tech
payment firms now account for 94% of the mobile payments market.
In many other jurisdictions, tech
firms are rapidly establishing footprints too, with some also lending to
individuals and small businesses as well as offering insurance and wealth management
services.
“The entry of big techs into
financial services gives rise to new challenges surrounding the concentration
of market power and data governance,” the BIS paper published on Monday said.
There was scope for “specific
entity-based rules” notably in the European Union, China and the United States,
it added.
“Any
impact on the integrity of the monetary system arising from the emergence of
dominant platforms ought to be a key concern for the central bank.”
Stablecoins - cryptocurrencies
pegged to existing currencies - and other Big Tech initiatives could be “a game
changer” for the monetary system, the paper added, if their entry leads to
closed-loop systems reinforced by network effects from data drawn from social
media or e-commerce platforms.
It could lead to a fragmentation of
payment infrastructures to the detriment of the public good. “Given the
potential for rapid change, the absence of currently dominant platforms should
not be a source of comfort for central banks,” the paper said.
Another shipping crisis strikes,
threatening delays to Black Friday shopping
The 2021 holiday shopping season could be marred by
out-of-stock goods and shipping delays as the recent
floods in Europe and China
exacerbate already strained global supply chains.
Western
Europe and China’s Henan province — a key transport hub and home to several
major businesses — are grappling with the aftermath of devastating floods.
The disasters have damaged railways used for the delivery
of goods and raw materials in both regions. Water rushed into industrial areas
extensively damaging facilities, machinery and warehouses, companies in the
supply chain industry told CNBC.
“Black Friday and the holiday season, for which products
(and raw materials) are being staged, will face the brunt of the impact,” Pawan
Joshi, executive vice president of supply chain software firm E2open told CNBC
in an email.
“Consumer electronics, dorm room furniture, clothing and
appliances will all continue to be in short supply as back-to-school shopping
starts up, and will trickle into the peak holiday shopping season,” he
said.
Delays from the distribution of raw materials needed to
produce goods will have a cascading effect and disrupt supply chains “for weeks
and months,” Joshi said.
Even if there are deals for the peak online shopping
season, Joshi said it’s likely there will be fewer and the discounts will
probably be smaller. Prices may also go up for some goods, he said.
Finally, in the USA, a hot summer is about to get a lot
hotter for some. Weren’t tax cheats offered an amnesty if they came in
voluntarily a couple of years back.I
suspect little mercy for any caught out by the current trawl.
Wealthy Americans Targeted by
U.S. in Panama Tax-Fraud Probe
Monday, Aug 02, 2021
U.S.
authorities obtained a court order allowing them to demand financial
information from banks and couriers about wealthy Americans suspected of using
a Panamanian law firm to evade taxes.
The Internal Revenue Service can now get information about
electronic fund transfers and courier deliveries between the firm, Panama
Offshore Legal Services, and its U.S. clients, the Justice Department said in a
statement Thursday. The IRS seeks to identify clients who used the law firm to
“create or control foreign assets and entities” to evade taxes, the department
said.
“We continue our joint efforts with the IRS to investigate tax evaders who use
foreign financial accounts and sham foreign entities to hide their assets,”
Manhattan U.S. Attorney Audrey Strauss said in the statement.
U.S. District Judge Gregory Woods modified an order Wednesday that authorized
the IRS to issue summonses to entities including the Federal Reserve Bank of
New York, the Clearing House Payments Co., HSBC Bank USA N.A., Citibank N.A.,
Wells Fargo N.A., Bank of America N.A., FedEx Corp., United Parcel Service Inc.
and DHL Express.
The order requires that they produce information about possible violations of
tax laws by people whose identities are unknown, according to the statement.
Woods authorized so-called John Doe summonses, which let authorities get names
of U.S. taxpayers, records and other information relating to those taxpayers.
The summonses are unrelated to the leak five years ago of more than 11 million
documents, known as the Panama Papers, involving offshore entities created by a
Panamanian law firm, Mossack Fonseca. The disclosures have led to criminal
convictions of at least two Americans.
Panama Offshore Legal Services, or POLS, used HSBC, Bank of America, Wells
Fargo and Citibank for U.S. correspondent accounts, according to a May 4
declaration by IRS Revenue Agent Katy Fuentes. The banks cleared
dollar-denominated transactions.
Given our Magic Money Tree central banksters and our
spendthrift politicians, inflation now needs an entire section of its own.
Is US inflation, especially employment inflation, about
to get some relief starting next month? Well maybe, but I expect District of
Crooks Democrats to move Heaven and Earth to try to avoid a Biden Bust.
Not to worry though, junior investment banker pay is
soaring. I wonder if at 71 I’m too old to become a junior investment banker?
But first this. More free money to chase a limited supply
of good and services.
IMF $650 billion reserves
distribution clears last hurdle, takes effect on Aug 23
Following the markets on both sides of the Atlantic since 1968. A dinosaur, who evolved with the financial system as it was perverted from capitalism to banksterism after the great Nixonian error of abandoning the dollar's link to gold instead of simply revaluing gold. Our money is too important to be left to probity challenged central banksters and crooked politicians.
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