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BACKDOC: THANKS AS ALWAYS TO THUNDERHAWK FOR THE PICS & DISCUSSIONS
SETTING THE TABLE
GOOD EVENING FAMILY I WANT TO UPDATE YOU ON MY STUDIES THE LAST FEW DAYS. OUR QUESTION ABOUT IRAN AND ITS RELEASE OF SANCTIONS FOR DECEMBER 31ST HAS IN MY OPINION BEEN ANSWERED.
MMMM HOW YOU ASK?

THE SILENCE IS DEAFENING!
BY NOW IF IRAN WOULD HAVE RUINED “THE DEAL”, THERE WOULD HAVE BEEN NOISE FROM THE U.N.,THE UK, THE IMF, OR THE SWISS, WHICH NONE HAVE SAID A WORD!
HEE HEE THEREFORE, IT’S GAME ON!
THE SILENCE WILL END SOON AND I BELIEVE WE WILL BE SMILING!
I BELIEVE A VERY WELL ORCHESTRATED THEATER EVENT IS HAPPENING IN THE MIDDLE EAST IN PART TO STEM THE TIDE OF FALLING OIL PRICES AS WE SAW TODAY BY AN ADDITIONAL 5.6%! HEE HEE! I
WARNED YOU THIS WAS COMING. UNLESS WE SEE A CATASTROPHIC EVENT, WE WILL SEE LOWER PRICES CONTINUE, JUST LIKE WE SAW YESTERDAY WHEN SAUDI ARABIA CUT PRICES TO THE U.K.!
ONCE THE TPP IS SIGNED ON FEBRUARY 4TH PRICES CAN BEGIN TO BE ALTERED BASED ON CONTRACT NOT SUPPLY VS. DEMAND! THEREFORE IS MAY BE A SLOW RECOVERY ON OIL PRICES UNLESS IRAN AND SAUDI ARABIA WORK TOGETHER PRODUCTION LEVELS!
REMEMBER A LITTLE WHILE BACK I MENTIONED THAT WE WOULD BE LOOKING FOR A NEW GLOBAL REALITY VALUE IN ASSET PRICES?
RIGHT! WELL, THE GREAT REPRICING I TOLD YOU WAS COMING HAS STARTED. NOW THIS WILL TAKE A MINUTE SO STICK WITH ME HERE.
SEVERAL WEEKS AGO CHINA HAD A SIGNIFICANT SELLOFF WHICH LED THEM TO DEVALUE THEIR CURRENCY. AS A RESULT THEY PICKED OUT 47% OF THEIR STOCKS AND HALTED TRADING ON THEM. MMMM
THOSE TRADING CURBS HAVE REMAINED IN PLACE IN SPITE OF THE FACT WE HAVE SEEN TWO DAYS THIS WEEK DROP THE MAXIMUM ALLOWED FOR THE DAY OF 7%.
ON FRIDAY CHINA IS SUPPOSED TO REMOVE THE CURBS ON THOSE 47% STOCKS THAT HAVE BEEN UNABLE TO SELL! MMMM
BASED ON THE SELLING THAT SEEMS TO BE OUT OF CONTROL WE WILL LIKELY SEE A MASSIVE DROP ON THEIR FRIDAY, IF THEY DROP THOSE CURBS! THEY JUST CALLED AN UNSCHEDULED EMERGENCY MTG.. WILL IT BE TO LET THE MARKET TRADE FREELY?MMMM TOMORROW WE WILL SEE!
FLASH!—- I JUST FOUND OUT AS I’M WRITING THIS THAT THEY WILL DISCUSS THE ISSUE OF CURBS AT THIS MTG! HEE HEE
IF THERE IS A HUGE DROP ALLOWED IT WILL ROLLOVER TO THE U.S.!
ANOTHER POSSIBLE SHOE TO DROP COULD BE A SIGNIFICANT YUAN DEVALUATION TO ACCOMPANY THE SELLOFF. THEY HAVE BEEN STEADILY ADJUSTING THE RATE LOWER BUT A MASSIVE SELLOFF MAY PROMPT THEM INTO A GREATER ACTION!
DON’T BE TOO HARSH ON THEM BECAUSE THIS IS THEIR FORM OF DOING QE LIKE WE DID ONLY A BIT MORE ABRUPT!
ONCE THE NEW REALITY VALUE IS ACHIEVED MARKETS AROUND THE WORLD WILL ADJUST TO IT!
WE WILL REVALUE STOCKS BASED ON BALANCE SHEET STRENGTH, ACCORDING CNBC. THEY ARE NOW STARTING TO TEACH THIS NEW NARRATIVE! HEE HEE NOW THAT IS JUST HILARIOUS!! BAA HAA REVALUE!
WE DINARIANS HAVE TO CHUCKLE ON THAT ONE! YES, LIKE I SAID STOCKS WILL HAVE TO FIND A NEW VALUE BASED ON THAT CRAZY TERM AGAIN “SECURITIZATION”! HEE HEE
YES, THE GREAT RE-PRICING HAS BEGUN AS I TAUGHT YOU!
I LIKE THE DISCUSSION IN IRAQ WELCOMING RECONCILIATION. IT’S INTERESTING THAT IRAQ HAS A HOLIDAY ON THURS. AND OF COURSE FRI. AND SAT. ARE TIED UP.
LET’S SEE IF WE HAVE A BIG ENOUGH DISTRACTION BY FRIDAY WITH MARKETS UNHINGING ,MIDDLE EAST THEATER,NORTH KOREA BOMB FEARS,AND GUN CONTROL DRAMA.
LETS SEE HOW THIS WEEK ENDS. IT PROVES TO BE INTERESTING FOR SURE.
BY THE WAY FRIDAY IS THE 8TH AGAIN. MMMM
DON’T TAKE WHAT I’M SAYING AS I’M PICKING ANY DATE OR RATE BUT I DO LIKE THE SETUP FOR NOW!
HOW LONG WILL THEY BE SILENT ABOUT IRAN? WE KNOW IRAQ IS READY!
COULD THIS BE A SETUP?
I LIKE THE FACT THAT VIETNAM PLAYED A HAND I WAS EXPECTING IN PREPARATION, BY LETTING THEIR CURRENCY FLOAT!
PERSONALLY, I THINK IT WILL BE THE SURPRISE NO ONE EXPECTS!
AS I FINISH MY THOUGHTS TONIGHT CHINA ENDED THEIR MEETING WITH NO DECISION OFFICIALLY!
HEE HEE WELL, THEY LIED BEFORE WILL THEY DO IT AGAIN? MMMM
I HAVE TO SAY THIS IS GETTING EXCITING! AND LIKE I SAID, NO NEWS IS GOOD NEWS!!
[email protected], DOC  IMO
Backdoc Alert:  US oil sheds 5.56%, posts worst settle since Dec. 2008
Oil prices hit their lowest in over 11 years on Wednesday, as the row between Saudi Arabia and Iran was seen making any cooperation between major exporters to cut output even more unlikely, and after a sharp rise in U.S. gasoline inventories.
Benchmark Brent crude futures were at $34.26 a barrel — down 5.93 percent — and at their lowest since early June 2004, having staged their largest one-day drop in percentage terms in nearly five weeks.
U.S. crude futures settled down $2, or 5.56 percent, at $33.97 a barrel — its worst settle since Dec. 19, 2008 — after already slipping 79 cents the previous day.
Last week, the U.S. added 10.1 million barrels of gasoline, the Energy Information Administration said. It added 900,000 the week before. However, U.S. crude inventories dropped by 5.1 million barrels last week.
“It’s the biggest increase in gasoline supply since 1993,” said John Kilduff, founding partner at Again Capital. “Gasoline prices are going to collapse”
RBOB gasoline futures fell about 7.5 percent.
Also, evidence of slowing economic growth in China and India has fueled fears that even strong demand elsewhere may not be enough to mop up the excess crude that has resulted from near-record production over the last year.
The furor over Saudi Arabia’s execution of a Shi’ite cleric has stripped nearly 8 percent off the price of oil in the last three trading days alone and has killed speculation that OPEC members might agree on production cuts to lift prices.
“There are rising stockpiles and the tension between Iran and Saudi Arabia make any deal on production unlikely,” said Michael Hewson, head of strategy at CMC Markets.
Oil has slumped from above $115 in June 2014 as shale oil from the United States has flooded the market, while falling prices have prompted some producers to pump even harder to compensate for lower revenues and to keep market share.
Adding to this oversupply, Iranian oil exports are widely expected to increase in 2016 as Western sanctions against Tehran for its alleged nuclear weapons program are likely to be lifted.
“Shale production and increasing capacity from countries like Russia who need to protect revenue combined with expectations of further Iranian supply mean actual production as well as expectations of future production are rising,” Hewson said.
Still, a senior Iranian oil official said the country could moderate oil export increases once the sanctions are lifted to avoid putting prices under further pressure.
Also feeding into broad market weakness, a survey showed that China’s services sector expanded at its slowest pace in 17 months in December, following on from weak factory data on Monday which also knocked markets globally.
The People’s Bank of China set a weaker midpoint for the yuan, prompting concerns that the economy of the world’s largest energy consumer could be in worse shape than believed.
In the United States, concerns over mounting oil stock levels persisted, with crude inventories likely to have risen by 439,000 barrels last week, according to a Reuters poll of eight analysts.
http://www.cnbc.com/2016/01/05/oil-pric … -lows.html
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Backdoc Alert:   George Soros Sees Crisis in Global Markets That Echoes 2008
Global markets are facing a crisis and investors need to be very cautious, billionaire George Soros told an economic forum in Sri Lanka on Thursday.
China is struggling to find a new growth model and its currency devaluation is transferring problems to the rest of the world, Soros said in Colombo. A return to positive interest rates is a challenge for the developing world, he said, adding that the current environment has similarities to 2008.
Global currency, stock and commodity markets are under fire in the first week of the new year, with a sinking yuan adding to concern about the strength of China’s economy as it shifts away from investment and manufacturing toward consumption and services. Almost $2.5 trillion was wiped from the value of global equities this year through Wednesday, and losses deepened in Asia on Thursday as a plunge in Chinese equities halted trade for the rest of the day.
“China has a major adjustment problem,” Soros said. “I would say it amounts to a crisis. When I look at the financial markets there is a serious challenge which reminds me of the crisis we had in 2008.”
Soros, whose hedge-fund firm gained about 20 percent a year on average from 1969 to 2011, has a net worth of about $27.3 billion, according to the Bloomberg Billionaires Index. He began his career in New York City in the 1950s and gained a reputation for his investing prowess in 1992 by netting $1 billion with a bet that the U.K. would be forced to devalue the pound.
Measures of volatility are surging this year. The Chicago Board Options Exchange Volatility Index, known as the fear gauge or the VIX, is up 13 percent. The Nikkei Stock Average Volatility Index, which measures the cost of protection on Japanese shares, has climbed 43 percent in 2016 and a Merrill Lynch index of anticipated price swings in Treasury bonds rose 5.7 percent.
Yuan Convertibility
China’s Communist Party has pledged to increase the yuan’s convertibility by 2020 and to gradually dismantle capital controls. Weakness in the world’s second-largest economy remains even after the People’s Bank of China has cut interest rates to record lows and authorities pumped hundreds of billions of dollars into the economy. Data this week reinforced a sluggish manufacturing sector.
http://www.bloomberg.com/news/articles/ … soros-says
Backdoc Alert:   China guides yuan sharply lower; jolts markets, offshore currency plunge
China’s central bank guided the yuan lower on Thursday at the fastest pace since its shock devaluation in August, prompting a shuttering of mainland stocks and roiling markets elsewhere.
The People’s Bank of China (PBOC) set the yuan reference rate at 6.5646 against the dollar, down 0.51 percent from Wednesday’s fix, and the lowest mid-point since 2011. That represents the largest daily change in the fix since August 13, according to Reuters data. The yuan had finished at 6.5554 on Wednesday.
China’s central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar, relative to the official fixing rate.
The currency moves have revived a litany of concerns in financial markets, from the health of the Chinese economy that is growing at its slowest pace since the financial crisis to the impact of a weaker yuan on capital outflows, which have accelerated in recent months.
The more stocks fall on cues from a lower yuan, the more investors may be encouraged to yank funds out of China and park them overseas, in turn exerting further pressure on the yuan.
“The PBOC said the fix will be based on the previous day’s close and a softer fix is therefore not inconsistent with market forces,” said Vishnu Varathan, head of economics and markets strategy at Mizuho Bank’s Singapore office.
“There is a sense in the market that the offshore market is getting carried away though and the PBOC would want to rein in excessively aggressive one-way bets,” he said.
Thursday’s fix jolted markets, with the more freely-traded offshore yuan plunging to a record low of 6.7511 against the dollar before recovering to 6.6910 on suspected intervention. The onshore yuan rate fell to as much as 6.5932, a five-year low, before .
Emerging market currencies also dived, with analysts expecting China’s export rivals to let their currencies weaken to maintain competitiveness. The malaise wasn’t restricted to just developing countries either. Australia, a big beneficiary of Chinese demand for commodities, also saw a fall in its currency.
Equity markets in the region tumbled, with Chinese stocks closing for the day after the CSI 300 index fell more than 7 percent, triggering a circuit breaker.
Economists believe that Thursday’s fix largely reflects the willingness of the central bank to establish a more flexible exchange rate regime, although there are also benefits from a weaker currency.
“From a macroeconomic perspective, a weaker exchange rate is also consistent with monetary policy easing,” ANZ economists Li-Gang Liu and Raymond Yeung said in a research note.
“A weaker exchange rate can help induce some import inflation as the down trend of crude prices intensifies. China is the largest net oil importer,” they said.
Currency exchange yuan dollars
Tyrone Siu | Reuters
China’s central bank guided the yuan lower on Thursday at the fastest pace since its shock devaluation in August, prompting a shuttering of mainland stocks and roiling markets elsewhere.
The People’s Bank of China (PBOC) set the yuan reference rate at 6.5646 against the dollar, down 0.51 percent from Wednesday’s fix, and the lowest mid-point since 2011. That represents the largest daily change in the fix since August 13, according to Reuters data. The yuan had finished at 6.5554 on Wednesday.
China’s central bank lets the yuan spot rate rise or fall a maximum of 2 percent against the dollar, relative to the official fixing rate.
The currency moves have revived a litany of concerns in financial markets, from the health of the Chinese economy that is growing at its slowest pace since the financial crisis to the impact of a weaker yuan on capital outflows, which have accelerated in recent months.
The more stocks fall on cues from a lower yuan, the more investors may be encouraged to yank funds out of China and park them overseas, in turn exerting further pressure on the yuan.
“The PBOC said the fix will be based on the previous day’s close and a softer fix is therefore not inconsistent with market forces,” said Vishnu Varathan, head of economics and markets strategy at Mizuho Bank’s Singapore office.
“There is a sense in the market that the offshore market is getting carried away though and the PBOC would want to rein in excessively aggressive one-way bets,” he said.
Piyush Gupta, chief executive officer of DBS Group
DBS CEO: Yuan, not PMI, is the big China risk
Thursday’s fix jolted markets, with the more freely-traded offshore yuan plunging to a record low of 6.7511 against the dollar before recovering to 6.6910 on suspected intervention. The onshore yuan rate fell to as much as 6.5932, a five-year low, before .
Emerging market currencies also dived, with analysts expecting China’s export rivals to let their currencies weaken to maintain competitiveness. The malaise wasn’t restricted to just developing countries either. Australia, a big beneficiary of Chinese demand for commodities, also saw a fall in its currency.
Equity markets in the region tumbled, with Chinese stocks closing for the day after the CSI 300 index fell more than 7 percent, triggering a circuit breaker.
Economists believe that Thursday’s fix largely reflects the willingness of the central bank to establish a more flexible exchange rate regime, although there are also benefits from a weaker currency.
“From a macroeconomic perspective, a weaker exchange rate is also consistent with monetary policy easing,” ANZ economists Li-Gang Liu and Raymond Yeung said in a research note.
“A weaker exchange rate can help induce some import inflation as the down trend of crude prices intensifies. China is the largest net oil importer,” they said.
Given some of the drivers of the yuan’s weakness—strong capital outflows as well as strength in the dollar, which has gained following an interest rate increase from the U.S. Federal Reserve—are still play, the currency looks poised for further falls, although the PBOC is expected to cushion the drop.
“The PBOC is unlikely to allow uncontrolled yuan depreciation and they have the firepower to manage the pace and magnitude of weakness, but it is clear that a more flexible and market determined exchange rate regime is quickly evolving,” said Jason Daw, head of Asian foreign exchange strategy at Societe Generale.
Daw expects the onshore dollar-yuan rate to reach 6.80 by the final quarter of 2016.
http://www.cnbc.com/2016/01/06/china-gu … unges.html