CRISIS OVER: European Shares Trade Higher; U.S. Futures Surge

China closed their markets down another 5% and Europe grabbed their balls and bought the dip.

It looks like turn around Monday is all but a certainty. The DAX is up nearly 1%, leading the trash from Europe inexorably higher.

Here stateside, SPY futures are tripping over themselves, fixing to force Zerohedge to retire from blogging.

China is getting smoked out, with the Shanghai down 5% and Shenzen off by a mere 6.5%.

The selling worsened after the HIBOR spiked to a new record high, giving the plebeian Chinese farmer one more reason to sell down their overly margined, bullshit, brokerage accounts.

The Hang Seng is off by 2.4%, Brent is off by 2.65% and U.S. futures have reversed lower, now down by 10 on the Spy.

Uwe Parpart (wtf sort of name is that anyway?) tries to weasel his way out of questioning, decrying the U.S. Fed as the sole evil in the world and how China has done nothing wrong, with regard to fucking the entire world over 100x–building ghost cities and wantonly manipulating every aspect of their bullshit economy.

Meanwhile, HIBOR spiked by 939 bps, to 13.4%– new record highs.

HIBOR is like the LIBOR, but without any semblance of dignity. The rate is set by the 20 banks that are authorized by the government to do so. The rate is used for Hong Kong’s absurdly overpriced real estate, valued in the trillions of Hong Kong dollars. The renminbi based HIBOR spread is indicative of CNH illiquidity in Hong Kong, creating an arbitrage. The net net result has been the PBOC intervening to prop up CNH, which is trading at a wide discount to mainland CNY–which has a tightening effect on the economy.

This all sounds really fucked up, like it’s not going to end well. Plus, look at the body language for the China apologist, very sweaty and jittery.

So much for socialism. When China was booming, so many people praised the “command economy” of China as a model to strive for. People cited the bogged down ways of American capitalism as something too bureaucratic, especially when compared to the dog eating ways of the Great Walled ones of the orient.

Well, well, well: what do we have here?

Privately held Chinese enterprises are poleaxing state owned companies by 100% over the past 5 years, and 40% over the past year.

Chinese markets continue to soften, inspite of a stronger Yuan. Most people think China will need to devalue the Yuan further, so this two day winning streak is simply another ploy by the devil’s people republic to buoy markets. It’s too bad that 90% of stakeholders are farmers with dirt in their eyes.

NASDAQ futures have turned higher. But oil is still weak down 1.8%.

Dow futures are off by 150. Asian markets are set to drop by 2%. Chinese markets are capable of going all the way, losing 5,10 even 30% of its value in a single session. Keep in mind, 90% of Chinese investors are retail.

Oil is off by 2% and the yen is at 4 month highs v the dollar. The fucking world is ending.

I’m expecting a gap lower and reversal of misfortune tomorrow, leading to a joyous respite to an otherwise apocalyptic start to 2016.

What sort of person, following Wall Street’s worst start to a New Year, sashays onto a stage to throw fireballs at Wall Street? Donald J. Trump is the donkey kong of Presidential candidates, ripping through populist topics like a fucking Reddit message board, appealing to the masses…of West Virginia.

“There’s a bubble,” Trump told his audience in southeastern Iowa, noting the nation’s high level of debt. “You see the stock market is starting to, you know, see what’s going on,” he said. “It’s starting to have some very bad weeks and some very bad numbers.”

“I’m really good at that stuff,” he said in Iowa. “I know Wall Street. I know the people on Wall Street. We’re going to have the greatest negotiators of the world, but at the same time I’m not going to let Wall Street get away with murder. Wall Street has caused tremendous problems for us. We’re going to tax Wall Street.”

Trump also highlighted his independence from campaign contributions. “I don’t care about the Wall Street guys,” he said. “I’m not taking any of their money.”

Truth be told, Trump appeals to my anarchistic side and I’d much rather have him in office than Hill of Beans Clinton. I’m bearish on stocks for a variety of reasons, none of which include a Donald Trump tax hike on Wall Street, which is brand new reason for concern.

Also, let’s not forget his position on China. He fucking hates them with all of his life force. Here’s Trump on trade, recorded just yesterday.

Back in the 30’s, The Thin Man series of movies was huge, sort of like our James Bond. Back in the 50’s, there was even a teevee series called The Thin Man, but with different actors.

There were 6 Thin Man movies in all, starring William Powell and Myran Loy. They are classic whodunnit stories, the first done in 1934.

It’s a thematic film, with the couple spending their days and night’s drinking martinis, trying to solve murder mysteries. What’s not to like?

That was some week, huh? I lit up the blogosphere, firing out 16 blogs per day, tossing bowling balls at your favorite bloggers from atop my citadel.

Brief and to the point: I am accepting 2 new bloggers to the iBC ranks in the Peanut Gallery. Show me some passion, God damn it, or nothing at all.

Email me: Flybroker at gmail.com.

Good day.

It was a jarring weak, one that resulted in a 6.3% loss for the market, even worse in the oil patch. I entered 2016 in cash and TLT–but have been legging into SPY as the market fell. As of the close of trade, I am fully invested in SPY, with a cost basis just above $197.

Do not fear for my hide lads, for I am prepared to initiate a Martingale investment strategy, delving into the degeneracy of leverage to accomplish my goals. Let’s be honest here, shall we? You’re all dicking around in commodity and tech stocks. I’m invested in SPY, immune to stock specific risk.

I still own a full position in TLT and will not sell it until the yield curve inverts.

In other news, billionaires got their clocks punched the fuck off for them, shedding nearly $200 billion in a week of tumult.

The world’s 400 richest people lost almost $194 billion this week as world stock markets began the year with a shudder on poor economic data in China and falling oil prices.

Forty-seven billionaires lost $1 billion or more during the worst week for U.S. stocks since 2011, according to the Bloomberg Billionaires Index. The combined drop was almost seven times the $29 billion lost in the first five trading days of 2015. The 400 people on the index had a combined $3.7 trillion at the end of the week, compared with more than $4 trillion a year ago.

If forced to make a call, I think markets are going full helicopter blades on shorts next week. Sentiment is do dreary and everyone is leaning bearish. I’ve been down this road too many times and know that whenever I congratulate my good friend, Zerohedge, more than 10 times in a week, it’s time for a little mean reversion.

I’m down less than 3% in my SPY position, up on TLT, in complete and total control of my destiny. “The Fly” wins all the time, especially when everyone else is in the streets with tinned cups.