It has been another choppy, illiquid, volatile overnight session, which started with weakness out of China, whose Shanghai Composite dropped 20% into another bear market in early trading, then further slammed by news of a terrorist attack in Jakarta, only to rebound back over 3000 as the Chinese National Team decided to intrevene again, this time in the ChiNext small cap index, pushing it higher by 5.6%.
On Tuesday, we weren’t surprised to learn that some banks in Shanghai and Beijing were apparently running short of physical dollar bills.
According to Ming Pao, Shanghai residents were lined up at local banks in a frantic effort to sell RMB for USD amid China’s ongoing yuan deval.
EM debt bubble... emaciated, FX Carry... crucified, Crude...crushed, High yield bonds... burst, Chinese equities... blown, Trannies... trounced, Small Caps... slammed, Biotechs... busted, and FANGs finally FUBAR! But there is one big (very big) bubble left in the world that no one is talking about, and a rather large liquidity-busting pin beckons...
Submitted by Jeffrey Snider via Alhambra Investment Partners,
While Chinese New Year seasonals are undoubtedly one factor in last night's "surprisingly good" Chinese trade data, the following chart shows the level of "bullshit factor" was extreme by anyone's measure.