Another Bloodbath: Markets Are Falling, Interest Rates Are Spiking Again, China’s Shanghai Composite Crashes, And S&P Futures Melt Down through Key Support Levels

US Traders Walk In To Another Bloodbath

zerohedge‏@zerohedge4 min
Italian bank halts starting early

A few weeks ago all the talk was about Japan.

Now the focus turns to China.

Last week we saw a surge in short-term interbank lending rates spark fears of a credit crisis.

Today: market crash.

The Shanghai Composite fell 5.3%, as the saddest index in the world continues to plummet. A big contributor to this was a message from the People’s Bank of China telling banks that their liquidity issues were their own problem, and that they needed to sort them out.

Elsewhere in Asia, the Nikkei, which had opened up 1.4%, ended down 1.36%.

Meanwhile in Europe, Italy is down 0.7%. US futures are red.

Also, interest rates on the US 10-year are up to 2.59%.

That at the Chinese decline will be today’s big story.

Read more:

Chinese stocks see worst one-day loss since 2009

Goldman Joins Bandwagon, Downgrades China

China’s alarming credit crunch

Here’s The Message From The People’s Bank Of China That Sent Stocks Cratering

Shanghai shares got crushed last night, and financials were really hard hit.

One culprit: The People’s Bank of China is showing that it’s very disinclined to step in and smoothe over tight liquidity conditions.

Instead it’s telling the banks to deal with their own mess.
Read more:


Inside the secret Chinese jails that strike fear into the Communist Party

For 24 hours, no one knew what had happened to Guan Shaofeng, a 50-year-old biologist who ran the inspection department at the city’s custom house.

Finally, after a series of frantic phone calls, his wife found him.

Like thousands of other cadres this year, Mr Guan had fallen into the maw of the Communist party’s nightmarish internal investigation department.

The Communist Party is notorious for the ruthlessness with which it pursues its opponents. But what is less well known is how viciously it sometimes treats its own members.

Companies haven’t even started posting second-quarter earnings results yet, but the early picture isn’t pretty.

Those who have been holding their breath until China joins the overnight market fireworks can finally exhale.

Following yesterday’s unprecedented formal announcement of epic capital misallocation, the PBOC tried to continue the damage control when a few hours ago it announced that Chinese banking system liquidity “is at a reasonable level”, but that banks must control liquidity risks from fast capital expansion, especially credit expansion, according to a statement on management of banks’ liquidity on website.

Article Continues Below

The implication: no easing any time soon, and sure enough no repo or reverse repo activity was logged in the overnight session meaning Chinese banks, for the time being, continue to be on their own, without any hope of the central bank stepping in to bail them out.

Crypto-Currency Conference

Bitcoin & The Future of Money October 5th, 2013 Atlanta

About the conference

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21 May 2013

S&P 500 in a bubble. 

Analysis by the FCO indicates that the US stock market index S&P 500 is growing at an unsustainable rate (8.3% gain in 4 weeks) and will soon correct.

China breaks silence on cash crunch

The People’s Bank of China (PBOC) allowed the nation’s lenders to approach crisis point this week as part of a crackdown on shadow finance, the government has indicated.

BIS fears fresh bank crisis from global bond spike

The Swiss-based institution said losses on US Treasury securities alone will reach $1 trillion if average yields rise by 300 basis points, with even greater damage in a string of other countries. The loss could range from 15pc to 35pc of GDP in France, Italy, Japan, and the UK. “Such a big upward move can happen relatively fast,” said the BIS in it’s annual report, citing the 1994 bond crash.

“Someone must ultimately hold the interest rate risk. As foreign and domestic banks would be among those experiencing the losses, interest rate increases pose risks to the stability of the financial system if not executed with great care.”

The warning comes after US Federal Reserve set off the most dramatic spike in US borrowing costs for over a decade last week with talk of early exit from quantitative easing (QE), sending tremors through the global system.

1994 Scenario: Market’s Worst Nightmare

China Bond Issues Have at Least 5 Delays, Cancellations Today

Impact of Fed’s tapering could be as powerful as the dynamics sparked by global financial crisis – Std Chartered

ES S&P futures have qualified TDST break of 60-MIN 1582 level tweeted 7h ago.

Day TDST sits at 1571…last trade 1569… = concerning

Dow futures down -119 pts.


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