Chinese Stocks Are Crashing; Yuan Devalues, Deposit Rate Spikes To Record High, Japan Denies "G7 Response" Planned

Following yesterday's bloodbath (and the continued carnage around the world), AsiaPac stocks are lower with Japan unable to mount any sustained bounce despite every effort to lift JPY. The propaganda-fest is in full swing as Amari claims JPY is safe-haven asset and Aso denies any coordinated G7 response is being planned (which means they are all feverishly trying to figure out how to 'save' the world again from a 4-day stock drop). China is ugly with stocks down hard in the pre-open (CSI-300 -4.3%) as offshore Yuan depo rates spike to 22.9% - a record high - as liquidity outflows must be accelerating (as PBOC adds another CBNY150bn liquidity). China devalues Yuan 0.2% - most in 11 days.

Carnage -

• *CHINA SHANGHAI COMPOSITE SET TO OPEN DOWN 6.4% TO 3,004.13
• *CHINA'S CSI 300 INDEX SET TO OPEN DOWN 6.3% TO 3,070.01

This is the 5th day of crashing Chinese stocks in a row...

Chinese Stocks are down 14% since Friday!!

So we await the coordinated response to the global vicious circle of carry unwinds and forced liquidations... but remember, RRR cuts so far have done absolutely nothing to hold back wave after wave of frenzied malicious Chinese sellers just wanting out of the ponzi.

The talk is not working as Chinese stocks are weak in the pre-open...

Some are converting yuan back into USD or HKD amid the devaluation,’’ says Lawrence Kung, head of deposits department at Wing Lung Bank in Hong Kong

*  *  *

Hope continues for a huge broad-based RRR cut but The PBOC - just as it said - remains fixed on small targeted liquidity injections. This will not please the 'people' or Jim Cramer... "they know nothing."

*  *  *

And finally, we could not have put it better than The Onion as they explain how the "Shoddy Chinese-Made Stock Market Collapses"...

Proving to be just as flimsy and precarious as many observers had previously warned, the Chinese-made Shanghai Composite index completely collapsed Monday, sources confirmed.

“Sure, it looked fine from the outside, but anybody who saw it up close knew that it was of such poor quality that it wasn’t built to last,” said Allen Sigman of the London School of Economics, adding that the stock market, which he described as a crude knockoff of Western versions, was practically slapped together overnight and featured countless obvious structural weak points.

“They pretty much ignored regulations, and inspections were a joke. The only surprise is that it didn’t fall apart sooner.” Sigman added that he just hopes there weren’t too many people who were hurt in the disaster.

Credit to Zero Hedge 

Iran’s Supreme Leader Urges Muslim Unity Against “Real Enemies” Israel and US

“For, lo, Thine enemies are in an uproar; and they that hate Thee have lifted up the head.” (Psalms 83:3)

Iranian Supreme Leader Ayatollah Ali Khamenei (Photo: Foundation of Holy Defence Values, Archives and Publications)

While US President Barack Obama touted the recently reached nuclear accord with Iran, the Islamic Republic’s Supreme Leader called for Muslim unity against the US and Israel. Speaking Saturday, Ayatollah Ali Khamenei accused the two countries of manipulating the Arab world.

Quoted by the Iranian Fars News Agency, which reported Khamenei’s accusations, the Ayatollah said the US had long sought to incite “third-party” states against Iran, but “such third parties are only deceived puppets.”

“The root cause of the problems returns to their real enemies, the US and Israel,” he said, calling them “world bullies.”

Israel and the US are conspiring “against the Quran and not Shiism and Iran, because they know that the Quran and Islam are the center of awakening nations.”

Iranians, he said, “have realized that their real stubborn enemy is the world arrogance and Zionism and that’s why they chant slogans against the US and Zionism.”

Addressing Iranian officials responsible for organizing the annual Hajj, a pilgrimage to Mecca which devout Muslims believe everyone capable must complete once in their lives, he encouraged them to use this opportunity to reach a wide Muslim audience.

“The world bullies are fully, seriously seeking to stir violence and discord under the name of Islam and are trying to disrepute the religion of Islam, foment internal fights among Islamic nations and even among the people of one nation to weaken the Muslim Ummah, and transferring the Iranian nation’s experience about unity and recognition of the enemy to other nations in the Hajj season can defuse these plots,” he said.

Since the nuclear agreement between Iran and the P5+1 powers was signed last month, Khamenei has lashed out repeatedly at Tehran’s main negotiating partners in Washington. Earlier this week he accused Washington of negotiating in bad faith, saying “their intention was to find a way to penetrate into the country.”

Khamenei has not publicly expressed final approval or disapproval of the deal, though he expressed support for the Iranian negotiators during the process. The Ayatollah has final say on all matters of state in Iran.

Credit to breakingisraelnews.com
Read more at http://www.breakingisraelnews.com/47488/khamenei-urges-muslim-unity-against-real-enemies-israel-us-middle-east/#pGT71OYFkmg7rps1.99

WORLD ECONOMIC COLLAPSE IS HERE

Central Banks Have Become A Corrupting Force

By Paul Craig Roberts and Dave Kranzler

Are we witnessing the corruption of central banks? Are we observing the money-creating powers of central banks being used to drive up prices in the stock market for the benefit of the mega-rich?

These questions came to mind when we learned that the central bank of Switzerland, the Swiss National Bank, purchased 3,300,000 shares of Apple stock in the first quarter of this year, adding 500,000 shares in the second quarter. Smart money would have been selling, not buying.

It turns out that the Swiss central bank, in addition to its Apple stock, holds very large equity positions, ranging from $250,000,000 to $637,000,000, in numerous US corporations — Exxon Mobil, Microsoft, Google, Johnson & Johnson, General Electric, Procter & Gamble, Verizon, AT&T, Pfizer, Chevron, Merck, Facebook, Pepsico, Coca Cola, Disney, Valeant, IBM, Gilead, Amazon.

Among this list of the Swiss central bank’s holdings are stocks which are responsible for more than 100% of the year-to-date rise in the S&P 500 prior to the latest sell-off.

What is going on here?

The purpose of central banks was to serve as a “lender of last resort” to commercial banks faced with a run on the bank by depositors demanding cash withdrawals of their deposits.

Banks would call in loans in an effort to raise cash to pay off depositors. Businesses would fail, and the banks would fail from their inability to pay depositors their money on demand.

As time passed, this rationale for a central bank was made redundant by government deposit insurance for bank depositors, and central banks found additional functions for their existence. The Federal Reserve, for example, under the Humphrey-Hawkins Act, is responsible for maintaining full employment and low inflation. By the time this legislation was passed, the worsening “Phillips Curve tradeoffs” between inflation and employment had made the goals inconsistent. The result was the introduction by the Reagan administration of the supply-side economic policy that cured the simultaneously rising inflation and unemployment.

Neither the Federal Reserve’s charter nor the Humphrey-Hawkins Act says that the Federal Reserve is supposed to stabilize the stock market by purchasing stocks. The Federal Reserve is supposed to buy and sell bonds in open market operations in order to encourage employment with lower interest rates or to restrict inflation with higher interest rates.

If central banks purchase stocks in order to support equity prices, what is the point of having a stock market? The central bank’s ability to create money to support stock prices negates the price discovery function of the stock market.

The problem with central banks is that humans are fallible, including the chairman of the Federal Reserve Board and all the board members and staff. Nobel prize-winner Milton Friedman and Anna Schwartz established that the Great Depression was the consequence of the failure of the Federal Reserve to expand monetary policy sufficiently to offset the restriction of the money supply due to bank failure. When a bank failed in the pre-deposit insurance era, the money supply would shrink by the amount of the bank’s deposits. During the Great Depression, thousands of banks failed, wiping out the purchasing power of millions of Americans and the credit creating power of thousands of banks.

The Fed is prohibited from buying equities by the Federal Reserve Act. But an amendment in 2010 – Section 13(3) – was enacted to permit the Fed to buy AIG’s insolvent Maiden Lane assets. This amendment also created a loophole which enables the Fed to lend money to entities that can use the funds to buy stocks. Thus, the Swiss central bank could be operating as an agent of the Federal Reserve.

If central banks cannot properly conduct monetary policy, how can they conduct an equity policy? Some astute observers believe that the Swiss National Bank is acting as an agent for the Federal Reserve and purchases large blocs of US equities at critical times to arrest stock market declines that would puncture the propagandized belief that all is fine here in the US economy.

We know that the US government has a “plunge protection team” consisting of the US Treasury and Federal Reserve. The purpose of this team is to prevent unwanted stock market crashes.

Is the stock market decline of August 20-21 welcome or unwelcome?

At this point we do not know. In order to keep the dollar up, the basis of US power, the Federal Reserve has promised to raise interest rates, but always in the future. The latest future is next month. The belief that a hike in interest rates is in the cards keeps the US dollar from losing exchange value in relation to other currencies, thus preventing a flight from the dollar that would reduce the Uni-power to Third World status.

The Federal Reserve can say that the stock market decline indicates that the recovery is in doubt and requires more stimulus. The prospect of more liquidity could drive the stock market back up. As asset bubbles are in the way of the Fed’s policy, a decline in stock prices removes the equity market bubble and enables the Fed to print more money and start the process up again.

On the other hand, the stock market decline last Thursday and Friday could indicate that the players in the market have comprehended that the stock market is an artificially inflated bubble that has no real basis. Once the psychology is destroyed, flight sets in.

If flight turns out to be the case, it will be interesting to see if central bank liquidity and purchases of stocks can stop the rout.

Paul Craig Roberts and Dave Kranzler

European markets close: Germany down 22%

On Black Monday Deutsche Bank Sums It Up "The Fragility Of This Artificially Manipulated Financial System Was Finally Exposed"

Today's dose of vile tinfoil hattery magick comes straight from the bank with the cool $55 trillion or so in derivatives, Deutsche Bank:

The fragility of this artificially manipulated financial system was exposed over the last couple of days of last week. It all ended with the S&P 500 falling -3.19% on Friday - its worst day since November 9th 2011.

* * * 

We've long felt that the only thing preventing another financial crisis has been extraordinary central bank liquidity and general interventions from the global authorities which we still expect to continue for a long while yet. So when policy changes, risks arise. The genesis of this recent sell-off has been the threat of the Fed raising rates next month, but China's confrontational move two weeks ago and the subsequent knock-on through EM have accelerated us towards something more serious. We always thought something would get in the way of the Fed raising rates in September and we're perhaps seeing this now. With 24 days to go until we find out, the probability of a hike has gone down to 34% from a 54% recent peak on August 9th. Having said we always thought something would come along to derail a Fed rate hike we probably should have gone underweight credit. However with trading liquidity poor and with a reasonably high desire to be long amongst investors there has to be a big move to justify the change in stance. Also with a strong possibility that the Fed will relent and that China could add more stimulus soon, there may be a small window to be short European credit. So at the moment this could be a dangerous time to sell. However if it wasn't for expected intervention and extraordinary central bank policy we would be very bearish as the global financial system remains an artificial construct reliant on the largesse of the authorities.

So 6 years after we first said what at the time was seen as heretical "tinfoil" conspiracy theory, now everyone admits it. Almost time to take a vacation maybe...

NYSE Invokes Rule 48 (Once Again) To Pre-Empt Panic-Selling Open

The status quo must be maintained...

NYSE granting "triple width opening quote relief in all option classes for August 24, 2015", Invokes Rule 48

The last time this was invoked was in Jan 2015 (during the blizzard), in June 2012 (amid a dramatic drop in pre-open futures) and in Sept 2011 amid the chaotic 400-point swings in The Dow. Funny they do not use this "Rule" when futures indicate massive upside opens?

Bloodbath: Emerging Market Assets Collapse As China Selloff Triggers Panic

On Sunday evening, this happened:

• BLOOMBERG COMMODITY INDEX SLIDES TO LOWEST LEVEL SINCE 1999

That’s right, Bloomberg’s commodity index cratered to its lowest level since 1999 or, said differently, the lowest level of the 21st century. That headline flashed just minutes after we highlighted Barclay’s take on the "long, slow, and painful" end of the commodities supercycle which is weighing heavily on emerging markets in the wake of China’s move to devalue the yuan. Here’s how we described the setup on Sunday evening:  

Emerging markets will remain in focus this week as the world watches anxiously to see if China’s move to devalue the yuan will ultimately transform an already precarious situation into an outright crisis.

Slowing demand from China has been the major concern for commodity exporters and indeed, wide open capital markets (thanks to ultra accommodative monetary policies across the globe) have served to keep struggling producers afloat, perpetuating a global deflationary supply glut.

Saudi Arabia’s attempt to squeeze the US shale complex has only exacerbated the problem, as persistently low crude prices put further pressure on the commodities space as well as on the FX reserves of oil producing countries. When China devalued the yuan,it validated the suspicions of those who had assumed that the country’s economy was in far worse shape than anyone at the NBS was willing to admit. Additionally, it marked a new escalation in the global currency wars and threatens to undermine the export competitiveness of many an emerging economy.

So that, in a nutshell, was where we stood going into the week and that rather abysmal backdrop (if you’re an EM) has prompted quite a few analysts and commentators to draw a comparison between what’s unfolding in EM FX markets and the Asian Financial Crisis of 1997/98. What’s amusing is that some of the same desks who rushed to make the comparison a week ago now look to be talking back their predictions, perhaps realizing that circulating such things might be adding fuel to the fire. 

But it is far too late for that - the genie is out of the bottle and indeed it was a bloodbath across EM overnight with currencies under continued pressure and the MSCI EM index falling 4.2% as Chinese stocks collapsed after the PBoC failed to slash RRR over the weekend.

Credit to Zero Hedge

Human Microchipping To Begin? NO BUYING WITHOUT IT, SAYS LAWMAKER

Finland may be moving quickly to require microchip implants for some of their citizens under the guise that money will not flow to Islamic State Muslims. A Finnish Party politician says welfare recipients should have identification microchips implanted so that the money cannot go to terrorists. “We don’t know in what situations people go abroad. It is possible that our social benefits are used to provide for a lavish lifestyle in a country with lower cost of living. I hope for a change to this,”Pasi Mäenranta of the nationalist Finns party wrote on his Facebook page. When pressed, Pasi Mäenranta added that implantation would be voluntary, but that payments should be suspended to those opting out of it. The chip would also help identify missing persons, he added. Mäenranta later commented for YLE broadcaster that an electronic bracelet could serve the same purpose and that he didn’t see such move as compromising privacy. “We are already being tracked through our mobile phones, Google and Facebook posts. I don’t think microchipping would be such a serious issue,” he said.
Credit  to Skywatchtv

Cataclysmic Events Putting Israel in Danger to Begin During Upcoming Jewish Holidays

“Also on the tenth day of this seventh month there shall be a day of atonement: it shall be an holy convocation unto you; and ye shall afflict your souls, and offer an offering made by fire unto the Lord… For whatsoever soul it be that shall not be afflicted in that same day, he shall be cut off from among his people. And whatsoever soul it be that doeth any work in that same day, the same soul will I destroy from among his people.”(Leviticus 23:26-29)

image: http://www.breakingisraelnews.com/wp-content/uploads/2015/08/shofar-temple-mount-rosh-hashana-tallit-prayer-jerusalem.jpg

(Photo: Yonatan Sindel/Flash90
)

You don’t need prophetic vision to know that the world is on the verge of a new period heralding in global changes unlike any ever seen before. The signs are obvious and the pieces are all in place. With the Jewish holiday’s fast approaching, God’s plan for change and redemption is unfolding before our very eyes with grave implications for the nation of Israel.

The Jewish New Year, Rosh Hashana, will begin on the evening of September 13 and end after sunset on September 15. According to Jewish tradition, Rosh Hashana is the day that God begins the process of judging the entire world.

This year’s Rosh Hashana is especially unique in that it will signal the end of the Shemittah year, the Sabbatical year which occurs in a seven year cycle. According to the Talmud, the written text explaining the oral Torah, the Messiah will come in the year following the Shemittah year.

As the second and final day of the holiday of Rosh Hashana ends on September 15, the 70th United Nations General Assembly will commence. The issue of the creation of a Palestinian state is expected to be decided by world representatives during the General Assembly. While not having yet happened, the upcoming session is already fraught with tension as it is unclear whether the US will continue to use its veto to prevent the Palestinians from unilaterally declaring a state.

Conflict over the Holy Land is prophesied to be part of the process of redemption. In Zechariah 12:6, the end times are described: “On that day I will make the clans of Judah like a flame that sets a woodpile ablaze or like a burning torch among sheaves of grain. They will burn up all the neighboring nations right and left, while the people living in Jerusalem remain secure.” In Amos 9:15, we are told that once the Jews are re-established in their land, “they will not again be rooted out from their land.”

After the Jewish holiday of Rosh Hashana is an interim period referred to as the Ten Days of Awe. It is during this period, on September 17, that the US Congress will vote on whether to reject or accept the nuclear deal negotiated by US President Barack Obama with Iran over their nuclear program.

Religious leaders have characterized the Iran deal as a cataclysmic and fiery conflict as part of the apocalyptic war of Gog and Magog. In Ezekiel, chapters 38 and 39, this was is described as involving several nations, none of whom border Israel. However Persia (Iran) is specifically mentioned as a main actor of the war.

It should be remembered that Israeli Prime Minister Benjamin Netanyahu gave his fateful address to Congress protesting the Iranian deal on March 3, the day before the Jewish holiday of Purim. Purim celebrates the Jewish victory over Haman, an officer in the Persian court, known today as Iran. Jewish holidays indeed play a significant role in the process of heavenly warning to the nations.

image: http://www.breakingisraelnews.com/wp-content/uploads/2014/05/pope-wall-micky-rosenfeld-twitter.jpg

Pope Francis praying at the Western Wall in Jerusalem. (Photo: @MickyRosenfeld/ Twitter)

Concluding the Days of Awe is the holiday of Yom Kippur, known as the Day of Atonement on which God seals his judgments. Yom Kippur is the holiest day of the year and falls on September 23. Oddly enough, September 23, Yom Kippur, is the day on which Obama has chosen to host Pope Francis at the White House on his first visit to the United States. Pope Francis, in his role as leader of the Catholic world, has chosen to involve himself in the Israeli-Palestinian conflict, recently recognizing the “State of Palestine.”

The weeklong Jewish Holiday of Sukkot, the Feast of Tabernacles, begins September 28, also the date for the last of the four blood moons in a special tetrad cycle. Previous lunar tetrad cycles have coincided with important historical events that impacted the nation and State of Israel. For example, four blood moons followed the establishment of the State of Israel in 1948. In 1967, before the Six Day War in which a divided Jerusalem was liberated and united by Israel, there was one blood moon with three following.

The upcoming blood moon will be clearly visible from Jerusalem and a similar pattern of eclipses happened just before and just after the destruction of the Jewish Temple by the Romans in 70 AD.

Credit to breakingisraelnews.com
Read more at http://www.breakingisraelnews.com/47435/upcoming-jewish-world-holidays-ushering-in-period-cataclysmic-events/#vpq2OQrL36hCEs1f.99

Gerald Celente-Gold Is The Safe Haven for Coming Collapes

Iran’s Ayatollah: America is the ‘Enemy.’ ‘We Will Confront Them With All Our Power’

Ayatollah Sayyid Ali Khamenei, the Supreme Leader of Iran, gave a speech on Aug. 17 in which he said that the United States of America was the “enemy” and that Iran would confront the United States with all its power.

"We will not allow the Americans to have economic or political influence in our country, nor will we allow them to have a political presence and cultural influence in our country," said the ayatollah. "We will confront them with all our power which is thankfully great in the present time.

In the same speech, which has been posted in English on the ayatollah’s official website, the ayatollah said that “it is not clear” whether the agreement designed to forestall Iran’s development of nuclear weapons will in fact be approve by either the United States or Iran.

Here are some key excerpts from the ayatollah’s speech as posted in English at Khamenei.ir:

“First, I will tell you that when we say, ‘the enemy’ we do not refer to an imaginary and fictional creature. By ‘enemy’ we mean global arrogance and arrogant powers: powers whose existence depends on dominating others, interfering in their affairs and possessing their financial and vital resources. These are arrogant powers or in other words, the leaders of global arrogance….

“If we want to give an example of who this enemy is in the outside world, we should refer to the regime of the United States of America. This regime is the epitome of global arrogance. Of course, others are part of global arrogance as well, but the clearest and the most obvious example is the regime of the United States of America. It knows nothing about human morality and it is not ashamed of committing any crime--of any nature. It covers these crimes, pressures and violent acts behind its smiles and its good and beautiful words. The manifestation of global arrogance is this regime. Therefore, when we say, "the enemy", it means this.

“This enemy's plan in the region is mainly based on two things. Of course, it has many branches, but these are the main two. One is creating discord and the second it exerting influence. …

“Of course, the English were the first experts of this measure. They have expertise in creating religious discord. The Americans have learned this from them and they are working on it today with all their power. …

“Today in the region, America does not enjoy the reputation that it did in the past and therefore, it wants to retrieve it. They have the same intention in our country. They have the same intention in Iran. They thought that they could use the nuclear negotiations to exert influence inside our country. Now, the fate of this nuclear agreement is not clear either in Iran or in America. It is not clear whether it will be approved or not in both countries. They wanted to use it as a means to exert influence in our country, but we blocked their path and we will definitely block their path in the future as well [audience chant "Allahu Akbar"].

"We will not allow the Americans to have economic or political influence in our country, nor will we allow them to have a political presence and cultural influence in our country. We will confront them with all our power which is thankfully great in the present time. The same is true of the region. In the region too, they want to exert influence, have an excuse to show their presence and pursue their goals. By Allah's favor and grace, we will do our best to prevent this. Our policies in the region are the exact opposite of the Americans.”

Credit to CNS

Michael Snyder-September, Economy, Urgent Call To Prayer!

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