REPORT: Chinese Controlled State Funds Propping Up Markets Tonight

Well, well, well: what do we have here? Bloomberg just reported from a source who declined to be identified that Chinese controlled state funds were sopping up shares of large cap stocks to create a facade, a fiction of sorts, to make their damned markets trade up.

Chinese policy makers used purchases by government-linked funds to prop up shares over the summer as the CSI 300 plunged 43 percent from its June high. State funds probably spent $236 billion on equities in the three months through August, according to Goldman Sachs Group Inc. The China Securities Regulatory Commission didn’t immediately respond to a faxed request for comment.

Bear in mind, the United Steaks have been rumored to partake in a little wanton manipulation for years. The New World Order, in conjunction with the Grande Recursive Order of the Knights of the Lambda Calculus, alongside The Order of the Cinncinatus, The Holland Society of NYC– and a sundry of other private, well meaning organizations–have a desire to keep equity prices aloft. There is little to gain from a crash scenario playing out. Therefore, take out your best top hats and canes and prepare to enter the markets, using a Martingale strategy to take back your winnings.

A rally is coming and when it does, it’s going to rip the faces clean off the clowns–down to the skeletons– who closed out the day heavily short into the hole.

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There’s a lot of shit being spewed across the internets. Men more fit for prison than financial news, wearing black hair nets, discussing the day’s events with a dark sense of perversion–wish-casting for equities to plunge lower. These are the sort of people, if elected President, I’d immediately kill. For the greater good of the nation and its legacy, I’d immediately declare heinous acts of murder to be thrusted upon the bearshitter class.

I realize I’ve been reporting on a lot of negative events. “The Fly” is a man of the people. I give them what they want, not what I think they want.

Let’s discuss facts and seasonality and precedent. Yes it’s true, stocks have never quite been fucked like this during the first week of January. But, lucky for us, its been fucked plenty of times during the entire month of January. So let’s look at some of the really bad years– when January went down 4% or more to look for clues of what to expect in February.

SPY performance

2000: -4.87%
next month: -7.1%

Okay, that really sucked. Let’s look at another one, shall we?

2008: -4.83%
next month: -2.19%

Ouch. I’m feeling lucky. The next one will be better. I just know it.

2009: -8.34%
next month: -11.21%

Holy fucking shit. We’re doomed.

2014: -5.19%
next month: +4.28%

Ah, see, it’s not all fire and brimstone. Let’s hope for a repeat of 2014. In summary, down 5% in a month led to two collapses, one -2% month and one strong month. Sounds like fun.

This is a staggering statistic, especially for the people who tell us the market is doing just fine. Over the past 6 months, the median return for stocks with market caps under $1 billion is -24%.

This encompasses over 2,000 equities.

On the large cap front, the median return for stocks with caps over $1 billion is -9.7%.

Again, this data set accounts for over 2,000 stocks.

In other words, the small cap degeneracy class is mired in a horrifically bad bear market–a real kick to the nuts type of tape. The larger cap varietal is in correction mode, smashing old men like accordions–fleecing them for all of their dividend gains.

data provided by Exodus

Hilarious stuff out of the mentally ill Marc Faber.

He thinks stocks are going to rally from here, saying we might’ve put the lows in for the month. HOWEVER, U.S. equities will trade lower by as much as 40% in 2016, and have nothing to do with China. He points to homebuilder stocks and lack of wealth creation, in real estate and stocks, as a reason for stocks to trade lower, as the economy languishes into the pits of hades.

The wealth effect theory is a self fulfilling prophecy and hasn’t really done much, other than help the 1% get into the 0.5%, over the past 5 years. The economy is in the tank because confidence is waning. Confidence is waning due to lack of leadership. Period. End of Story.

This is standard operating procedure in the great satanic republic of China. Without a doubt, should I ever find myself within its border, I too would go missing.

The billionaire founder of Metersbonwe, one of China’s best-known fashion brands, has gone missing, the latest in a series of Chinese business people and financiers apparently ensnared in the country’s anti-corruption campaign.

Metersbonwe suspended trading in its shares on the Shenzhen stock exchange on Thursday while the company said it was investigating reports in the Chinese media that Zhou Chengjian, its chairman, had been picked up by police.

The company is a household name on the Chinese high street and Mr Zhou was China’s 65th-richest man last year, according to the Hurun Rich list, with a fortune of Rmb26.5bn ($4.01bn)

I think this is the 7th of 20th occurrence in recent months. China isn’t fucking around, clearly. Mess around in red China; find yourself in the back of a
mobile execution van.

The Chinese government, with its FX reserves of $3.4 trillion, announced it intervened to buoy its currency. They’ve been trying to stem losses in the Yuan since the summer, allocating more than $100 bill per mo in the process.

“State-owned banks were offering dollar liquidity around 6.59, suspected to be on behalf of the central bank,” said a trader at a European bank in Shanghai. “This happened both today and yesterday.”

The Yuan was rallying v the dollar for the first time in 9 days. But now it’s about flat. The question is: can it hold?

Dow futures are higher by 126.

China is up 1.6%.

Oil is up 1.3%.

All of this is fine and dandy; but there’s an underlying uneasiness to this tape. It’s suspect.

These are the sort of “squalls” I’ve read about in the best investment book ever written, 28 Years in Wall Street, by Henry Clews. This day and age, we all act like robber barons, pillaging one another, so we might as well get markets like them.

The Dow is down a thousand points this week.

How extensive is the damage to individual stocks? Take a look at this median year to date carnage.

Some of the highlights include: Shippers down 15%, Auto Dealerships down 14.4%, Oil and Gas down 12%, Biotech down 11.4%. The only sector that has evaded the market’s wrath is gold, +10%.

The best performing ETFs for the year are LABD (+40%), UVXY (+33%), DWTI (+33%).

Mega cap underperformers of note are AAPL (-8%), MSFT (-5.3%), AMZN (-10%), WFC (-7.5%), JPM (-7.5%), BABA (-10%), CX (-16.4%), BHP (-12%), VLKPY (-14%).

Side note: This is the worst start to the S&P 500 ever.

The Gross man is right. The Fed had a window of opportunity to hike rates and squandered it. Instead, we are stuck with fucking assholes thinking the market is primed for a 100 bps hike into the teeth of a global equity collapse. If it wasn’t so god damned funny, it’d be sad.

The open looked promising, with the Dow halving its losses and people generally giddy about the specter that it’d close green.

Not gonna happen.

By the grace of the Devil himself, markets are now plunging to new lows, down over 400 points. There is wild speculation regarding China, as they’ve taken measures to completely annihilate themselves. They’ve suspended circuit breakers and now will enjoy the full panic of an investor class better fit for a hoe, than a brokerage account. And that’s the farm tool, you ignoramus.

I expect the Chinese market to fall good and hard tonight, emulating, and ironically copying, previous market crashes held here, right in America. The Chinese and their piracy ways will now feel the wrath of investor enmity.

Municipal bond yields are plunging, as well as sovereign bond yields of western nations. These are safe havens and will continue to do well, as we sink to lower levels.

Aside from my SPY position, I will continue to hold TLT until the yield curve inverts.

I’ve searched far and wide for an elixir to cure the every day bear market crash/cataclysm, and I’ve found it.

BEHOLD in the glory of all of its proven oil reserves: The Royal family of the House of Saud bestows upon you, its subjects, shares of ARAMCO!

Sell your Chevron and Exxon Mobile and make room in your portfolios for one more oil stock. The House of Saud, a family we’ve all come to intimately love and endure, are showing UNPARALLELED generosity by permitting us to give them some of our dollars–in exchange for non-voting shares of their most prized possession.

ARAMCO.