Monday, January 04, 2016

Red China Crashs Its Fake Stock Market, Seeking To Take American & European Markets Down With It

by JASmius

There's something very familiar about all this....:

Financial markets are starting 2016 in turmoil as a rout in [Red] China rekindled concern that slowing growth there will spread, while tension between Saudi Arabia and Iran added to geopolitical unease.

Global equities crumbled toward the worst opening to a year in at least three decades. The Dow Jones Industrial Average sank more than three hundred fifty points as data showed U.S. manufacturing sank the fastest in six years, while European equities fell after German inflation unexpectedly slowed. Emerging markets slid the most since August as slowing manufacturing triggered a selloff that halted trading in Shanghai. Bonds jumped and the yen rallied on demand for haven assets.

“We’ve had a number of negatives out there in the U.S. throughout most of last year as investors battled to have a flat year and [Red] China is a reminder that there aren’t many things to bullish about going into this year,” Michael O’Rourke, chief market strategist at JonesTrading Institutional Services LLC in Greenwich, Connecticut, said by phone.

The slump in developing nations harks back to financial turmoil in August sparked by [Red] China’s devaluation of the yuan. It shows the pace of growth in the world’s largest economy will remain key for markets in 2016 after a slowdown last year dragged emerging markets lower and fueled a slump in commodities at the same time the Federal Reserve pulled stimulus. While rising tension in the Middle East is boosting oil prices, the biggest meltdown in relations in almost three decades raises the specter of region-wide turmoil.

Ah, yes, the last time the ChiComms crashed their fake markets to try and take ours, which we have so foolishly entangled with theirs, down with it.  So, happily, I can reprint now what I wrote then, because nothing has fundamentally changed aside from the situation being even worse than it was six months ago:

Yeah, I know, the ChiComms go to great lengths to create the appearance of having a kinda-sorta quasi-market economy, but when the ruling communist party can pull the plug on it any time they want, set the value of the yuan at any amount they want, and otherwise not-so-implicitly fiatize every aspect of said kinda-sorta quasi-market economy, can anybody really take any resultant economic statistics from it at anything close to face value?...

The question that ought to come instantly to everybody's mind is what purpose Beijing could have for crashing its own stock markets? Well, it occurs to me that currency manipulation to undercut the dollar and boost exports to the U.S. (thus exacerbating our trade deficit) under the guise of the ChiComm equivalent of "quantitative easing" could be part of it. It'd fit right in with Obama's Trans Pacific Partnership scheme, and if anybody on our side of the Pacific balks, what can we or any Western country say, since we made the exact same profligate mistake back in the fall of 2008?

If currency manipulation is a factor, though, it's a very small one. Consider this in the context of Beijing annexing the entire South China Sea and their long and lengthy preparations for war against the U.S. and its Asian allies. Explosively decompressing the Shanghai and Shenzhen Composites creates the sort of crisis atmosphere that ChiComm authorities could use to set their war plans in motion. And that scenario works even if this is just a long-overdue "correction" of a laughably overvalued Red Chinese market, in which case Beijing could simply activate already existing contingency plans to take advantage of it....

Whether this is a master plan or rank opportunism, all the pieces appear to be in place: Red Chinese stock market craters, ChiComm government accuses the U.S. of taking it down in a cyberattack (as retaliation for the "false" OPM strike - it was just the pretext for our own attack, dontcha know), calls it an "act of war," and mobilizes. Cruise missiles launch against our Western Pacific naval assets, space weapons deploy against our orbital assets, a full scale "retaliatory" cyberstrike cripples our electrical grid and other civil know the drill.

Indeed we do - and will.

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