WORST OPENING DAY SINCE 1932

I am waiting for locust swarms to swoop in and decimate my neighbors gardens.

Stocks are having their clocks thoroughly cleaned for them today, off by 450.

There are a few lads running about the prairies who feel this sell off is overdone. But there aren’t too many of them.

“A lot of it has to do with China and a lot of it is overdone,” said Art Hogan, chief market strategist at Wunderlich Securities.
“The China PMI hasn’t changed much. It’s not unusual to have an outsized reaction when you’ve got a base case that 2016 could be a tough year.”

“I think it’s very much global markets are in a risk-off mode. It’s very hard to step in the way of (that),” he said.

Things were a lot easier back in 1932. The economy was affirmed to be mired in a bit of a slump, unlike this ambiguous smoke and mirrors crap. There weren’t any hipsters. And CNBC wasn’t invented yet.

Ah, the good olde days of 1932.

How many times do we have to see this show? Gold is a piece of offal 361 days per annum. For that one really bad trading week, sans the Friday when people come to their senses and sell gold again, gold goes on a nice run.

During these 4 trading days of greatness, the gold bugs crawl out from their caves to declare martial law on equity markets. They order all women and children out of the markets and attempt to kill all men of military age.

As they chase these windmills, gold sets up to dump out again and again and again.

With the Dow off by 400, amidst panic and cataclysm, gold stocks are soaring.

BORING.

Everything is lower, but crude stocks. Go figure. We live in bizaaro land. But there are some interesting developments, as well as oil grabs, taking placed in Libya.

Four Islamic State militants and two petroleum guards were killed in the ongoing armed confrontations near Es Sider, al-Hasy said by phone. An oil storage tank was hit by a shell and caught fire, he said. The storage tank is close to the oil port of Ras Lanuf, Mohamed Elharari, spokesman of the state-run National Oil Corp., said by phone

“An oil storage tank caught fire and there was a big explosion,” Elharari said.

Islamic State militants previously tried to attack Es Sider in October, killing one guard, but were repelled at the gate of the terminal by the petroleum guards. Es Sider and Ras Lanuf terminals have been closed to oil exports since force majeure was declared in December 2014 when armed groups attacked the ports. Force majeure is a legal status protecting a party from liability if it can’t fulfill a contract for reasons beyond its control.

Libya, with Africa’s largest oil reserves, pumped about 1.6 million barrels a day of crude before the 2011 rebellion that ended Muammar Qaddafi’s 42-year rule. It’s now the smallest producer in the Organization of Petroleum Exporting Countries, producing 370,000 barrels a day in December, data compiled by Bloomberg show.

In response to ISIS fuckery, western nations, led by Britain, are deploying up to 6,000 soldiers to seize Libya’s top oil fields. No, that was not a typo.

SAS troops are understood to be preparing for an offensive involving 1,000 British soldiers to wrest back control of a dozen oil fields seized by the jihadists.

ISIS has taken advantage of the lawlessness since the 2011 ouster of Colonel Gaddafi to make large gains along the coastline, setting up its power base in the former dictator’s hometown of Sirte.

Mirroring its strategy in Iraq and Syria, the terror group has seized a number of revenue-boosting oil fields and are now targeting the Marsa al Brega refinery, the biggest in North Africa.

SAS troops are understood to be planning an offensive involving 1,000 British troops to seize back control of oil fields captured by the Islamic State in Libya after the country descended into chaos.

The operation will involve around 6,000 U.S. and European soldiers led by Italian forces, the SAS and military close observation experts from the Special Reconnaissance Regiment.
British experts will advise Libyan military commanders on so-called ‘battle-space management’ – tactics and skills needed to control the battlefield.

Don’t fuck with Rome’s oil.

This is the worst start to a New Year since 2001.

Futures are off by 300. European markets are swan diving into solid cylinders of cement. And all of Saudi Arabia’s friends are severing ties with Iran.

The world is ending, once again. When the world ends, people get nervous. They fear their money will lose value, or their investments go bust. In the past, gold would serve as a safe haven. Nowadays, the hipsters toss the tips they make from bar tending into Bitcoins. The small pleb can play it via ETF now. How splendid.

For real players, however, men of industry and property, U.S. Treasuries and Japanese Yen is where you want to be. For treasuries, people enjoy having their money in the strongest and the best country in the world. Our military apparatus can and will lay waste to all other armies in the world, combined. That’s the true backing of the U.S. Dollar, see. It isn’t based upon economics, but safety.

The Yen is more of a doomsday clock scenario playing out, where an aging Japanese society, saddled with absurd debt, loses control of the “Yen carry-trade”, which eventually leads to the complete annihilation of the Japanese people.

This, of course, never really happens, only in Kyle Bass’s sick, demented mind.

Nevertheless, when risk assets are under pressure, people assume the loans taken out in Yen to buy stocks in Europe or America will pressure that trade to end. As such, FXY rises and ultra-bearshitters reap the rewards.

As you know, I cleared the decks before the New Year’s and have a very large portion of my assets parked in TLT. Until Exodus gives me my first trade of 2016, I am more than comfortable waiting for things to settle down long U.S. Treasuries.

They say as January goes, so does the rest of the year. If that’s the case, we’re about to begin our journey into 2016, deep in the hole. Dow futures are off more than 250, after China’s idiotic stock exchange soiled itself–causing officials to just shut the damned thing down–losing about 7%.

Copper is down nearly 3% and European markets are wishing they has Chinese overlords around to just stop the bleeding and arrest the damned short sellers who keep pressuring the indices.

How important is January to markets? A down month has resulted in down years, 70% of the time.

Happy New Year’s!

Chinese markets broke through the floors boards, falling by 7%, causing officials to say “fuck it” and just shut the whole thing down.

Chinese stocks plunged Monday, spurring a trading halt for the rest of the session and leading stock markets in Asia Pacific lower after feeble manufacturing surveys revived concerns over the durability of the country’s economic recovery.

The Shanghai Composite tumbled 6.85 percent to 3296.66 and the Shenzhen Composite plunged 8.1 percent. The CSI 300 was down 6.98 percent; when that index rises or falls 7 percent, a trading halt in China’s markets is triggered for the rest of the session.

Circuit breakers are in effect. Other Asian markets are following them down the sewer drain. Dow futures are now off 158.

But it’s impossible, you see. According to the laws of economics, persons making $400 per mo, slaving away at a Foxconn suicide factory, to make lavish Apple products, cannot buy luxurious condos, unless of course the gov’t looks the other way when it comes to lending.

You know, just like we did from 2003-2007.

The move underscores Beijing’s concerns over a stock of some 1 billion square meters of vacant housing – around 13 million homes or enough to house the population of Australia – and the broader knock-on effect of any defaults by struggling property developers as the world’s second-largest economy grows at its slowest pace in a quarter of a century.

While encouraging migrants to buy homes in lower-tier cities seems like a remedy to boost demand, making money available to them will prove tougher. Many of China’s more than 270 million migrants earn below 3,000 yuan ($462) a month, less than half the cost per square meter needed for a home in a lower-tier city such as Changzhou, in eastern Jiangsu province.

“Conditions are not mature for migrant workers to buy unsold homes. You can’t count on a certificate for housing ownership to resolve everything,” said Jason Hu, head of research at Chinese property consultant Holdways in Beijing.

“Everyone wants to settle in the city, but where’s the money?” said Hu, adding other issues need to be resolved such as giving migrant workers equal access to social security and public services.

Authorities aim to get 100 million migrants to settle in cities by 2020, and officials in small-and medium-sized cities have pledged to give permanent resident status, or hukou, to more rural people, although access to welfare remains a concern.

Another potential obstacle is that more than 70 percent of migrant workers already living in cities prefer to rent, according to National Health and Family Planning Commission data.

“If I can earn enough I’d go back to the city near my hometown and buy a home there,” said a restaurant worker in Beijing who gave just his surname of Long. “Prices here are too high, it’s impossible for me to settle here,” added the 26-year-old who left his village in central Hunan province five years ago.
With home ownership still a distant dream for most low-income migrant workers, the challenge is to make homes more affordable.

“I’m not sure what the government could do to ‘encourage price cuts’ unless it’s going to subsidize them,” said Yin Chin Cheong, a Singapore-based analyst at CreditSights.
Some developers welcomed the move, saying the proposal is part and parcel of China’s urbanization process.

“It would stimulate demand for housing. But these are not temporary measures to run down inventory, they are part of a long-term urbanization,” said Fan Xiaochong, vice president of Sunshine 100, a developer focused on second- and third-tier cities.

While parallels have been drawn with the U.S. subprime crisis, which was also preceded by excess housing inventory, risky mortgages and aggressive lending, some experts shrugged off such a scenario.

“Mortgage penetration levels are lower and down-payments are higher compared with the U.S., and household debt is much lower. So it’s unlikely to snowball into a sub-prime like situation,” said Christopher Yip, Hong Kong-based analyst at Standard & Poor’s.

I love how they say proposals to get 100 million migrant workers, earning $400 per mo, doesn’t compare to the degeneracy of America’s subprime issues of 2007. What was the median income for subprime folks back then? I am sure it was a hell of a lot more than $400 per mo.

What can go wrong?

As the slowing economy cuts earnings, companies increasingly need fresh note offerings to pay off old obligations, according to China Securities Co., the top arranger of bond offerings from state-owned and listed firms. It forecasts issuance of corporate notes will jump at least 30 percent in 2016 to top 10 trillion yuan ($1.54 trillion), more than the annual economic output of Spain.

“It’s urgent to solve some companies’ liquidity problems, as profitability has worsened given the slowing economy,” said Ji Weijie, a bond analyst at Beijing-based China Securities. “If they can’t roll over their debt, there may be bigger default risks or even systemic risks.”

Chinese companies are being encouraged to tap foreign bond markets, aka greedy incompetent westerners, to bridge liquidity gaps. In other words, they are actively pursuing a policy to transfer systemic risk of their shit-filled companies from them to us.

I am sure this will end nicely.

Crude is up a little more than 2%, after Saudi Arabians embassy in Tehran was attacked and burned by “students.” As a result, the devils inside the House of Saud expelled Iranian diplomats, gave Obama the middle finger, and severed relations with Iran.

“The Saudi situation is, geopolitically, not good news,” said Kengo Suzuki, chief currency strategist at Mizuho Securities Co. in Tokyo. “Still, if oil prices stop falling, that may underpin commodity-related currencies and stocks. So we’re watching whether markets will be dominated by a risk-off or risk-on mood.”

More importantly, champagne sales hit a new record in 2015, surpassing the old record set in the go-go days of 2007, when homeless men refinanced the mortgages on their new Mcmansions and used some of the proceeds to buy the very best French bubbly.

Industry estimates gathered by Reuters showed that about 312 million bottles of the prestige sparkling wine will have been dispatched in 2015, a rise of between 2 and 3 percent from 2014.

Revenue has risen 4.4 percent to 4.7 billion euros in 2015.

In 2007, the record year so far, revenues reached 4.56 billion euros, before the global economic and financial crisis began weighing on the market a year later.

There are so many anecdotal warnings out there, it’s crazy.

Futures are marginally higher.

I am sure the plummeting price of oil only accentuates the love Iran and Saudi Arabia have for one another.

Just the other day, The House of Saud executed 47 people, most likely by decapitation or some other primitative, primordial method of death. One of those lads was a cleric who only wanted to lead a bunch of lunatics in Saudi Arabia to SECEED (lolz) from the Kingdom.

As you could imagine, this was unacceptable to the holy men who walk around in robes in Mecca.

Iran’s ambassador in the kingdom has 48 hours to leave the country, Saudi Foreign Minister Adel al-Jubeir said late on Sunday in Riyadh.

Iranian protesters armed with rocks and firebombs attacked the Saudi embassy in Tehran on Saturday and set parts of the building on fire after the execution of Nimr al-Nimr, a critic of the kingdom’s treatment of its Shiite minority. He was one of 47 men executed by Saudi Arabia for offenses that included terrorism and political activism.

Al-Nimr’s execution is the latest crisis to rock ties between Iran and Saudi Arabia, two regional powers vying for everything from political influence to oil market share.

The attack on the embassy is “a violation of all international treaties,” al-Jubeir said. “Iran’s history is full with negative interference in Arab affairs.”

Iran’s response was a very typical one: holy leader goes nuts, “students” raid embassy and burn it to the ground.

“The divine hand of revenge will take the Saudi politicians by the throat,” Khamenei, Iran’s highest authority, said on Sunday. Cleric Nimr al-Nimr “was neither encouraging people to armed protests, nor plotting secretly, all he did was to openly criticize,” said Khamenei, who frequently lashes out at Saudi rulers.