The Chinese Yuan Declines by 0.23% Over the Past 4 Days: Panic Ensues

The Japanese currency fluctuates 1-2% in any given day versus the dollar and Bloomberg’s army of 2,400 journalists don’t bother to even broach the subject. However, the Chinese yuan dropping for a fourth consecutive day, to the tumultuous tune of 0.23%, is headline news of the extreme varietal.

Why?

The yuan fell 0.08 percent to 6.5319 a dollar as of 10:24 a.m. in Shanghai, according to China Foreign Exchange Trade System prices. It dropped to 6.5326 earlier, the weakest level since Feb. 15, and has lost 0.23 percent in a four-day streak. The central bank cut the reference rate by 0.04 percent to 6.5302 following a 0.17 percent reduction on Tuesday.

“Sentiment hasn’t fully recovered, and there’s still depreciation pressure in the long run considering China’s fundamentals and capital outflows,” said Tommy Xie, a Singapore-based economist at Oversea-Chinese Banking Corp. “The PBOC will likely keep the yuan stable against a basket, leading to greater two-way volatility of the currency against the dollar, before the G-20.”

In fairness to the media establishment, the purposeful devaluation of the Chinese currency has been something of a trend for the better part of 2016, as the Chinese economy struggles to grow at the required rate to keep their people from storming the palace with their pitched forks.

World markets are falling again, with the NIKKEI off by 0.8% and the Hang Seng down by 1.7%. Crude oil is down 2.3%; hence, U.S. futures are down by 42.

JP Morgan chief, Jamie Dimon, said in a conference call today that he’d buy JP Morgan all day at $48, suggesting it was good for an annual 13% rate of return. He boasted about his companies performance and staying power, in an effort to firm up investor sentiment. Dimon recently reported a purchase of JPM, equal to one year’s salary or $26 million. He was bored.

JPM is down 14%, year to date.

What will all of you fatties do when a bag of sugar fetches for $100? With El Nino (is it me, or is every year plagued with El Nino?) rampaging throughout the Latin world and Brazil, stupidly, using sugar to produce ethanol, the price of sugar rampaged higher today, after ISO data suggests the doom for sugar lovers is not over, but only just now beginning.

“A statistical deficit is clearly supportive for world prices,” the ISO said. All other things being equal, prices “can be expected to trend generally higher in the remaining months of 2015/16.”

El Nino has already hurt plantings in Brazil the largest sugar grower, as well as India and Thailand, spurring price gains in the final months of 2015. But further heavy rainfall in Brazil has prompted forecasters to revise their numbers. Rabobank International said Tuesday it now expects a bigger deficit than the 4.7 million tons it previously saw. Last week, INTL FCStoneraised its deficit forecast to 7 million tons. Recent heavy rains in Sao Paulo province may delay the harvest that starts in April, according to MDA Weather Services.

The ISO data “reiterates that El Nino is not over — we still don’t have the final tallies on Thai and Indian crops,” Michael McDougall, a senior director at Societe Generale in New York, said by telephone. “Pressure is increasing as we move forward, things are getting tight.”

Raw-sugar futures for May delivery soared 8.9 percent to settle at 13.90 cents a pound by 1:04 p.m. on ICE Futures U.S. in New York, the biggest one-day gain for the most-active contract since at least March 1993. In London, white sugar for May delivery jumped 6.1 percent to $395.90 a ton on ICE Futures Europe.

It’s not just adverse weather that’s supporting prices. Brazilian mills are making more ethanol from sugar cane to meet surging domestic demand for the biofuel, adding extra pressure on sugar supplies.

The sugar ETF, SGG, is up 26% over the past 6 months.

This is the sort of shit I have to deal with, parsing through video clips of crazy men giving fucking trophies to global giants for having a great quarterly conference call.

We get it, Cramer. Home Depot is the best company ever conceptualized, readily assisting general contractors to rip off unsuspecting home owners with their shoddy work. Frankly, I don’t know why I even bothered to post this drivel, other than the indelible fact that many of you have a vested interest in hearing about Home Depot.

Say what you want about Dick Bove, the man knows his banks. He’s a repository of bank knowledge in both mechanism and historical precedent. During this interview, he made the two little ladies questioning him look like orangutangs, unable to ask a question possessing a modicum of intelligence, stuttering and stammering all the way to the end.

If forced to describe this interview with one word, I’d say ‘swag.’

Bove stunted on Kashkari’s communist manifesto to break up the banks, made the CNBC host sound and look ridiculous, and he even chastised  Jamie Dimon, equating his analogy offered to describe the difference between big banks and small as ‘childish.’

Boss.

I want the world to end, just like the next guy. But that doesn’t mean it’s going to happen tomorrow. Like a fine wine, good things get better with age. The longer we delay the apocalypse, the greater its spectacle will be.

That being said, stocks were hammered by 1% today, throwing the long only camp into a fury, unable to deal with the minor set back. Commodity related stocks were poleaxed by 5% and David Einhorn told you the commodity super cycle was over.

On the plus side were discount, carnivale type stores, whereby goods are bargained off for less than $1. Also, gold and bonds fared well. Let’s not forget department stores, such as M, DDS and even SHLD were all higher.

It’s entirely possible that the top has been reached and everyone here who is long will commence a period of draw-down that can only be described as dreadful. But, it’s also possible that you are reading too much into this and that stocks aren’t done pressing higher. The wall of worry is very tall indeed, which effectively makes it all the more alluring to climb.

Even though I’ve embarked on a campaign to do away with equity exposure until the next Exodus oversold signal, I am not bearish enough to consider short positions, at least not now. The time for betting against stocks was in January and will come again in May. There will be a period of time when your only hopes will be for a Federal Reserve emergency meeting to take place on a warm summer night.  But the weather is still cool and the Federal Reserve isn’t done inflicting their damage upon the global economies.

Don’t forget that tonight is the 2nd part of Jeff Macke’s boot camp. Our investor camp last through Friday. Don’t worry if you’ve signed up late. There are video archives available for late stragglers. The Option Addict is presenting on Wednesday and Thursday and finally RAUL on Friday.

Quick, hide the kids under the bed, or better yet, the closet. Fed’s George is out making a speech today, where she said this, in regard to the idea of hiking interest rates in March: “It absolutely should be on the table for consideration.”

Trust me when I tell you, the market hasn’t come to grips with this possibility.

She wants to move sooner rather than later, faster rather than slower. For the love of God, Esther George from the Federal Reserve of Kansas City (lolz), wants to destroy your common stock portfolio through the premature hiking of interest rates.

According to the alcoholic gamblers at the CME, the market thinks the chances of the Fed hike in March is just 10%.

If done, markets are going to reel lower, heavy kick to the chest into a sea filled with hungry sharks style.

I knew this news would stifle the lot of you, Hansel and Gretel, chocolate bar eating fools. Nevermind the stock market and subsequent losses that you will endure for relegating yourself to asinine money management plans, the Mars Bar company has received a formal complaint that a slither of plastic was present during the consumption of one of their products.

See?

Mars Netherlands said it decided to issue the voluntary recall as a “precautionary step” after receiving a consumer complaint about a piece of plastic found in one of their products.

Mars, Snickers and Milky Way bars with best before dates between June and October 2016 should not be eaten, the company said. Celebration and Variety candy packs are also being recalled.

It was only a mere slither, in which caused the billion dollar chocolate giant to undergo a recall on a massive scale, stretching around the globe twice, costing them countless millions of dollars.

But do not concern yourselves too gravely, it was only a petulant slither of plastic in a Snickers bar that has everyone in an uproar.

Nevertheless, if you value your lives and the lives of your children, DO NOT EAT CHOCOLATE PRODUCTS FROM THE MARS BAR CORPORATION, dated June through October 2016. Oops, that means Halloween chocolate that was already consumed. I am very sorry for your demise.

This is only precautionary steps and the Milky Way subsidiary has denied wanton rumors that consumption of their ‘bars’ causes humans to morph into brain eating zombies.

As you were.

We were never out of the trecherous black waters to begin with. The rallies we’ve enjoyed over the past week were nothing more than temporary respites in an otherwise invective climate for long only investors.

Whether you’re onboard or not, the ark sails. Government bonds are the preferred safe haven for intelligent investors everywhere.

Crude oil is determined to seek out lower prices, causing great injury to those sectors reliant upon it for cash flow. This, of course, is my principal cause for being bearish. It is my belief the analyst community is greatly underestimating the far reaching scale and scope of this crisis to come. It will begin to take on the characteristics of a systemic problem during the second half of 2016, in my estimation.

Stocks are merely servants to the price of crude oil. The demands by which it imposes upon them is unusual and cruel, often wrong. Nevertheless, this is what the market deems important now, the never ending fickle fashion show called the stock market.

European losses edged towards 2%. I doubt there is a rally left in this tape today. I’d still be a seller here, avoiding all commodity related names and banks like the plague.

Saudi Oil Minister, Al Naimi, is in Houston today, casting aspersions on those who suggest that his government was purposely seeking the complete and total annihilation of American shale oil. After all, why would his government want to bankrupt a bunch of inefficient, highly leveraged, high cost producers of shit oil?

The natural order of things will hash out the shale oil producers. Our good friends at the House of Saud are merely expediting the inevitable. For this, we owe them out sincerest gratitude.

“We have not declared war on shale or on production from any given country or company, contrary to all the rumors you hear and see,” he said.

“We are doing what every other independent representative in this room is doing. We are responding to geology and market conditions and seeking the best possible outcome in a highly competitive environment.”

The market will determine where on the cost curve the marginal oil production lies, he said. Drillers with higher costs must find ways to become more efficient, borrow cash, or liquidate, he added.

“The oil market is much bigger than OPEC. We tried hard to bring everyone together — OPEC and non-OPEC — to seek consensus. There was no appetite for sharing the burden, so we left it to the market as the most efficient way to rebalance supply and demand,” Naimi said.

“It was, it is, a simple case of letting the market work,” he added.

Unlike American and European bail out schemers and connivers, the Sauds are ‘letting the market work’, old school, Old Testament style.