Cervantes

Hoy es el día más hermoso de nuestra vida, querido Sancho; los obstáculos más grandes, nuestras propias indecisiones; nuestro enemigo más fuerte, el miedo al poderoso y a nosotros mismos; la cosa más fácil, equivocarnos; la más destructiva, la mentira y el egoísmo; la peor derrota, el desaliento; los defectos más peligrosos, la soberbia y el rencor; las sensaciones más gratas, la buena conciencia, el esfuerzo para ser mejores sin ser perfectos, y sobretodo, la disposición para hacer el bien y combatir la injusticia dondequiera que esté.

MIGUEL DE CERVANTES
Don Quijote de la Mancha.

31 de agosto de 2015

China's President Xi Solidifies Power with Overhaul of Military

  • Switch to U.S.-style joint command to better fight modern war
  • Coming shake-up would be army's biggest since at least 1980s
President Xi Jinping will as soon as this month announce the most sweeping overhaul of the Chinese military in at least three decades, moving it closer to a U.S.-style joint command structure, people familiar with the matter said.
The blueprint would unify the army, navy, air force and strategic missile corps under one command, said the people, who asked not to be identified because the proposal hasn’t been released. The plans call for thinning the ranks of officers and traditional ground forces, helping elevate the role of the navy and air force, to better project force in a modern conflict, they said.
It would also consolidate the country’s seven military regions to as few as four, one of the people said.
Xi is preparing to unveil the proposal in the wake of Thursday’s World War II anniversary parade in Beijing, which will showcase his authority over the People’s Liberation Army and China’s growing clout in the region. The plan to mold the military into a force that meets Xi’s goal of being “able to fight and win a modern war” has been delayed for months as anti-graft investigators swept up dozens of current and retired generals, referring the PLA’s former top general to prosecutors in July.
Xi “mainly employed the anti-corruption campaign in the military to form his absolute command over the army, so that his military restructuring plan can press ahead after being initially stalled,” said Yue Gang, a retired colonel in the PLA’s General Staff Department. “Now, his authority in the army is solid enough for him to flesh out his vision to transform the military and set it on a path to emulate the U.S.”
The Ministry of National Defense did not immediately respond to a faxed request for comment.

Unified Command

The plan would set out the details of the Communist Party’s endorsement of a joint military command in November 2013. The new system -- which includes a joint command at both the regional and national level -- would replace the region-based structure that emphasizes the army and predates the country’s founding in 1949 at a time Communist soldiers were clashing with Japanese invaders and Nationalist troops.
Such a command system is seen as necessary to improve communications and coordinate modern forces across the various arms of the military. The organizational changes would aid China’s shift from a land-based military to one able to project force far from its coastline.

Maritime Reach

The effort to adopt a U.S.-inspired command comes as China extends its maritime reach and the world’s two largest economies face increasing friction from the shipping lanes of East Asia to cyberspace. The Obama administration is considering cyber retaliation against China or other countries it believes have sponsored hacking attacks on corporate or government computers in the U.S., people familiar with the matter said.
Chinese military jets fly over the city during a rehearsal ahead of the September 3 military parade to mark the 70th anniversary of the victory of the Chinese People's War of Resistance Against Japanese Aggression.
Chinese military jets fly over the city during a rehearsal ahead of the September 3 military parade to mark the 70th anniversary of the victory of the Chinese People's War of Resistance Against Japanese Aggression.
Photographer: ChinaFotoPress via Getty Images
The PLA’s last major overhaul -- carried out under Deng Xiaoping in 1985 -- reduced the number of military regions to seven from 11 and resulted in the dismissal of some 1 million soldiers. In its annual report to the U.S. Congress in May, the Pentagon said the current overhaul “would be the most significant changes to the PLA’s command organization since 1949.”
The changes would include merging the General Logistics and General Armaments departments, the people said. The defense ministry’s focus would be directed more toward administrative and diplomatic matters while the number of non-combat personnel and institutions would be scaled back, they said.

Nationwide Drills

The PLA began practicing the use of a joint-command system during a series of nationwide military exercises that began last month. It had an army of 850,000, compared with 398,000 people in the air force and 235,000 in the navy, according to figures released in 2013, the first time China confirmed the relative size of the branches.
A member of the People's Liberation Army (PLA) jumps through a fire ring during an demonstration in Hong Kong.
A member of the People's Liberation Army (PLA) jumps through a fire ring during an demonstration in Hong Kong.
Photographer: Justin Chin/Bloomberg
In July the party expelled Guo Boxiong-- the PLA’s retired top general -- on suspicion he abused power and took bribes either directly or through family members. It was the highest-profile case bought against top brass since Xi took power in 2012, with generals accused of everything from embezzling public funds to selling ranks.
Phillip Saunders, director of the Center for the Study of Chinese Military Affairs at the U.S. National Defense University in Washington, said the difficulty in integrating the various forces is a weakness for the PLA now in conducting combat operations.
“Setting up joint command and control mechanisms is intended to fix that,” he said. “However, it took the U.S. military years to really learn how to communicate between the services and conduct real joint operations. It will likely take the PLA even longer.”

Samsung Loses $44 Billion of Value in Worst Streak Since 1983


Tepid demand for Samsung Electronics Co.’s newest Galaxy smartphones triggered a fifth straight monthly decline for the electronics maker, wiping out about $44 billion in market value since April.
Shares of the world’s biggest smartphone vendor slumped 8.1 percent this month, extending their longest losing streak since December 1983. Samsung dropped almost $12 billion of value in August alone as the South Korean company surrendered market share to Apple Inc. and Chinese competitors.
Samsung’s decision to steal a march on Apple and advance the release of new Galaxy smartphones failed to dispel pessimism about its second-half earnings. Apple is expected to take the wraps off a new iPhone on Sept. 9 and release it in time for the crucial end-of-year holiday shopping season.
“We all know its smartphone business isn’t doing well,” said Lee Seung Woo, an analyst at IBK Securities Co. in Seoul. “I can’t really figure out when the stock will stop declining. The fundamentals look problematic.”
The stock has been the biggest drag on the 758-member Kospi index in the past six months, leading the benchmark 2.2 percent lower in the period. It ended Friday at 1,089,000 won.
The drop in market capitalization is almost equivalent to the value of General Motors Co.

Misreading Market

Samsung profit has fallen five straight quarters, and third-quarter net income is estimated at 5.33 trillion won ($4.5 billion), down from 5.63 trillion won in the three months ended June, according to data compiled by Bloomberg.
Samsung’s global smartphone market share fell more than 3 percentage points in the second quarter, and it no longer is the top seller in China, the world’s biggest mobile-phone market.
It is being undercut at the high end by Apple’s bigger iPhones and at the mid-range and low end of the market by devices from Xiaomi Corp., Lenovo Group Ltd. and Huawei Technologies Co.
Samsung misread demand for the S6 models released in April, failing to produce enough three-sided screens for the Edge while the regular version struggled against the iPhone.
One of its latest models, the Galaxy Note 5, was criticized by reviewers and customers this month as the company acknowledged that the device can break if the stylus is inserted backward into the storage slot.
“Foreign selling of shares is adding pressure on the stock, which now seems attractive value-wise,” said Greg Roh, an anlayst at HMC Investment Securities Co. in Seoul. “The smartphone business isn’t going to worsen further from here, but any rebound seems highly unlikely.”

Global Stocks Cap Worst Month Since May 2012; Crude Oil Surges

Updated on
  • Dow sinks most in August since 2010 amid China growth angst
  • Oil surges into bull market with best three days since 1990
U.S. stocks joined a renewed selloff that sent global equities to their worst monthly slump in more than three years, as confidence waned that China will be able to prop up its markets.
Concern that slowing Chinese growth will hamper global expansion reemerged as Federal Reserve officials signaled they are prepared to raise interest rates as soon as next month. The Standard & Poor’s 500 Index added to its August decline, while the Dow Jones Industrial Average capped its biggest monthly drop in five years and Chinese shares capped their worst selloff since 2008.
Oil surged into a bull market amid the biggest three-day rally since 1990, adding 27 percent to ease concern about persistently low inflation. Treasuries fell since faster price increases erode the value of long-term debt.
“It seems that the uncertainty from China’s roller coaster is not over yet,” said Guillermo Hernandez Sampere, who helps manage the equivalent of $167 million as head of trading at MPPM EK in Eppstein, Germany. “Any panic created out of this high volatility keeps investors out of the market. There’s still no clear message” on when the Fed will raise rates, he said.
The S&P 500 dropped 0.8 percent by 4 p.m. in New York, bringing its August slide to 6.3 percent, the most since May 2012. The MSCI All-Country World Index lost 0.7 percent, while European shares capped the worst month in four years. U.S. oil jumped 8.8 percent, stoking speculation that inflation may pick up, while the yen strengthened for the first time in five days.
The rout in global equities this month erased more than $5 trillion from the value of shares as Chinese policy makers tried to bolster their market amid growing concern that its economy may be in worse shape than analysts had estimated. Morgan Stanley reduced its forecast for world growth this year and next on Monday, citing weakening industrial activity in China.
Trading in U.S. equities has been volatile. Last week alone, the S&P 500 plunged the most since 2011 to enter a correction before rallying more than 6 percent over two days for its best back-to-back gains since the beginning of the bull market in 2009.

Emotional Times

The gauge tumbled out of the gates Monday, sliding as much as 1.2 percent in early trading before cutting the drop to 0.1 percent as oil rallied. The S&P 500 resumed declines in afternoon trading. The Chicago Board Options Exchange Volatility Index rose 9.1 percent, putting its monthly surge at 135 percent, the most since the data began in 1990.
“People are happy to tiptoe this week,” Steve Bombardiere, an equity trader at Conifer Securities LLC in New York, said by phone. “There’s so much emotion right now and in this environment you can come in any morning and have something out of Europe or Asia crossing us and that’s what causes us to move. True there were a lot of people who wanted to buy a correction but after last week they paused and are thinking about how long it is going to last.”
Yields on two-year Treasury notes capped a fifth month of gains after Fed Vice Chairman Stanley Fischer kept speculation alive that U.S. rates could be increased next month. The last time the yields advanced for that long was in 2006, which was also the last time the Fed boosted borrowing costs.
Bets on a September increase climbed after Fischer said over the weekend there is “good reason” to believe inflation will accelerate and that the Fed should not wait until it hits its inflation goal to act. Investor attention will focus this week on the government’s August jobs report, due Friday, as the last major data point before the Fed’s meeting on Sept. 16-17.

Bearish Bets

China’s stocks capped their biggest two-month slide since 2008 as bearish bets in the options market climbed and Goldman Sachs Group Inc. cut its forecast for Chinese growth. The Shanghai Composite Index fell 0.8 percent, taking its slump in August to 12 percent after a 14 percent drop in July. Hong Kong’s Hang Seng China Enterprises Index also lost 12 percent in the month.
Stocks fell even as people familiar with the matter said China’s securities regulator had asked brokerages to step up their support for share prices by contributing 100 billion yuan ($15.7 billion) to the nation’s market rescue fund and increasing stock buybacks.
The cost of options contracts betting on declines in the China 50 exchange-traded fund has surged to the highest level versus bullish ones since they started trading in Shanghai six months ago.
The yen rose against 15 of its 16 major peers Monday, with the biggest gains coming versus Taiwan’s currency and the New Zealand dollar. The Japanese currency appreciated 0.4 percent to 121.23 per dollar, while the euro added 0.2 percent to $1.1211.
West Texas Intermediate crude surged to $49.20 a barrel, the highest settlement since July 21. Oil fell below $40 a barrel this month, the lowest level since February 2009, on concern slowing demand in the U.S. and China will leave the global markets oversupplied.
The Energy Information Administration on Monday trimmed its U.S. production forecast by as much as 130,000 barrels a day for the first five months of the year as it switches to a new survey, the agency said on its website.
The Bloomberg Commodity Index jumped 1.8 percent Monday, bringing its three-day gain to 6.8 percent as oil led other raw materials higher. Metals trading was muted with trading in London closed for a U.K. holiday.

If the Options Market Is Right, China's Stock Rescue Is Doomed

Updated on
  • Cost of bearish contracts on China A-share ETFs reaches record
  • Median stock valuation is the highest among 10 largest markets
Options traders have never been so pessimistic on China’s stock market, betting the government’s renewed effort to prop up share prices is doomed to fail.
The cost of bearish contracts on the China 50 exchange-traded fund has surged to the highest level versus bullish ones since they started trading in Shanghai six months ago. The so-called skew also climbed to a record for a similar ETF in the U.S., even as government buying drove China’s benchmark index to a 10 percent rally in the final two days of last week.
While policy makers are trying to bolster the market before President Xi Jinping takes the stage in a World War II victory parade this week, bears argue that valuations are too high for the rally to last. Chinese investors have about 5 trillion yuan ($783 billion) of borrowed money riding on stocks, and many of them are looking for a chance to exit, according to Bank of America Corp.
“More and more people are not convinced about A shares,” said Tony Chu, a Hong Kong-based money manager at RS Investment Management Co., which oversees about $20 billion. “Ultimately, the government needs to reduce intervention and let more de-leveraging happen.”
The Shanghai Composite Index dropped 0.8 percent to 3,205.99 on Monday, closing near its highest level of the day for the third straight session amid speculation state-backed funds are using afternoon share purchases to bolster the market. The China 50 ETF rose 1.9 percent, erasing an earlier loss of 4.2 percent.
Puts that pay out on a 10 percent retreat in the fund cost 9.7 points more on Monday than calls betting on a 10 percent gain, according to implied volatility data on one-month contracts. As recently as Aug. 24, the bullish contracts were more expensive. For the U.S.-listed Deutsche X-trackers Harvest CSI 300 China A-Shares ETF, the skew reached a record 38 points on Aug. 27 and closed the week at 28 points. The fund slipped 0.4 percent at 9:39 a.m. in New York on Monday.
Chinese policy actions last week suggest authorities are intent on putting a floor under share prices. On Tuesday, the central bank announced its fifth interest-rate cut since November and reduced the amount of cash banks must set aside for reserves. State buying on Thursday propelled the Shanghai Composite to a rally of more than 5 percent in the final hour of trading, according to people familiar with the matter, an advance that extended into a 4.8 percent gain on Friday.
China’s intervention is part of a broader effort to ensure nothing detracts from the Sept. 3 parade, an event the government will use to demonstrate its rising military and political might. Authorities have also closed thousands of factories to curb pollution and ordered some vehicles off the road.
For BofA strategist David Cui, equity valuations and earnings growth aren’t appealing enough to support the market in the absence of government buying.

Margin Debt

Equities on mainland bourses traded at a median of 53 times reported earnings last week. That’s the most among the 10 largest markets and more than twice the 19 multiple for the Standard & Poor’s 500 Index. The Shanghai Composite, where low-priced banks have some of the biggest weightings, trades at 16 times reported earnings.
Analysts have cut their 2015 profit estimates for Shanghai Composite companies by 8.8 percent this year, according to data compiled by Bloomberg.
Cui is also worried about the impact of selling by leveraged investors. Margin loans tracked by Chinese exchanges have dropped by half from their June peak to about 1.1 trillion yuan, a figure that doesn’t take into account equity-backed debt extended by trust companies and other lenders.
“That’s a very unstable situation,” said Cui, who estimates the Shanghai Composite needs to fall another 35 percent before shares become attractive. “The government will not support the market forever.”
The $5 trillion tumble in share prices from mid-June through last Wednesday has damaged confidence so much that state buying isn’t enough to lure back investors, according to Kenny Tang, chief executive officer of Jun Yang Securities Co. in Hong Kong. It may take further cuts to borrowing costs and reserve requirements to convince funds to return, he said.
The Deutsche X-trackers Harvest ETF ended last week down 6.2 percent at $32.70 in New York, extending its loss from a June record to more than 40 percent.
“The market sentiment is still quite volatile,” Tang said. “People are worried that after the rebound there will be some selling pressure.”

Oil Caps Biggest Three-Day Gain Since 1990 as OPEC Ready to Talk

Updated on
  • OPEC see "no quick fix" to crude oil market instability
  • EIA cuts U.S. crude production estimates based on new survey
Oil capped the biggest three-day gain in 25 years after OPEC said it’s ready to talk to other global producers to achieve ‘fair prices’ and the U.S. government reduced its crude output estimates.
Crude traded in New York surged 27 percent in three days, the most since August 1990 when Iraq invaded Kuwait. Both West Texas Intermediate and Brent benchmarks have climbed more than 20 percent from their closing low on Aug. 24, meeting the common definition of a bull market. The Organization of Petroleum Exporting Countries, responsible for about 40 percent of the world’s supply, said in a monthly publication it’s willing to talk, “but this has to be on a level playing field.”
Prices erased last week’s drop to a six-year low as the OPEC comments and signs that the U.S. shale boom is fading faster provided optimism that a global supply glut will evaporate sooner than estimated. A measure of oil-price fluctuations rose to a five-month high as traders sought protection from market swings.
“The market turned around on two pieces of news,” Phil Flynn, senior market analyst for Price Futures Group Inc. in Chicago, said by phone. "The EIA cut its U.S. output estimates and OPEC says its ready to talk to others about cutting output."

Surging Volume

WTI for October delivery surged $3.98, or 8.8 percent, to close at $49.20 a barrel on the New York Mercantile Exchange. It was the highest settlement since July 21. Prices slipped as much as $1.62 to $43.60 earlier. Volume was almost double the 100-day average.
Brent for October settlement rose $4.10, or 8.2 percent, to end the session at $54.15 a barrel on the London-based ICE Futures Europe exchange. It was the highest close since July 24. Prices have climbed 26 percent in three days, also the most since August 1990. The European benchmark crude closed at a $4.95 premium to WTI.
"It’s a bungee cord market," Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts, said by phone. "This shows that there were some bears waiting for any reason to jump back in."

Burden Sharing

OPEC won’t agree to carry the burden alone in propping up oil prices by cutting supply; non-member nations would have to share the burden, according to the group’s publication. If demand forecasts are correct, "then it is just a case of riding out the storm" and waiting for the market to balance.
"The market is reading way too much into this," Mike Wittner, head of oil-market research at Societe Generale SA in New York, said by phone. "The OPEC Bulletin isn’t an important publication and this isn’t how they would make a key announcement."
OPEC has been boosting supply as it seeks to force higher-cost producers to cut output. The group has exceeded its target of 30 million barrels a day for a year, data compiled by Bloomberg show. Saudi Arabia, OPEC’s top producer, pumped 10.57 million barrels a day in July, the most in monthly Bloomberg data going back to 1989.

Saudi Arabia

"The non-Gulf members screamed in the fourth quarter of 2014 because of falling prices, were quiet in the second quarter because they rose, and are now at it again," Wittner said. "Until Saudi Arabia says something this is all meaningless. Why would the Saudis change their logic and waste all they have already done."
OPEC crude output increased by 108,000 barrels to 32.316 million a day in August, according to a Bloomberg survey of oil companies, producers and analysts.
Russian President Vladimir Putin and Venezuelan counterpart Nicolas Maduro will discuss oil prices and cooperation between Russia and OPEC, Kremlin aide Yuri Ushakov told reporters in Moscow.
The Energy Information Administration trimmed its U.S. production forecast for the first five months of the year as it switches to a new survey, the agency said. The U.S. pumped about 9.44 million barrels of crude a day during the period, down from a previous estimate of an average 9.53 million.

Oil's Three Big Days Wipe Out a Month of Losses


OPEC signaled that it might cut production in the future and the U.S. lowered output estimates, propelling oil back into a bull market less than a week after hitting a six-year low.
Prices surged 8.8 percent Monday in New York, capping the biggest three-day gain in 25 years.
The Energy Information Administration changed the way it calculates how much oil comes out of the ground, using a survey of producers in key states instead of relying on data from state agencies and computer models. As a result, 13.2 million barrels of oil production vanished with a government blog post.
The Organization of Petroleum Exporting Countries, producer of about 40 percent of the world’s oil, renewed its commitment to talk to other crude exporters to achieve “fair and reasonable prices,” according to the group’s monthly magazine. OPEC won’t prop up oil prices by cutting supply unless non-member nations agree to share the burden, according to the bulletin.
So is the glut over? Depends on who you ask.
Phil Verleger, president of the economic consulting company PKVerleger LLC, said the global market could be rebalanced as soon as early next year after the U.S. revisions.
The bullish headlines, combined with money managers holding bearish bets that are nearly triple the average over the past 10 years, led to what could be a short-lived rally, warned Ed Morse, the head of global commodity research at Citigroup Inc.
It’s too early to fully trust the EIA’s new data, he said in a research note, and there’s no reason to believe any non-OPEC countries will work with the group to cut production. Russian production has remained high because the weak ruble has lowered costs there, while Mexico is trying to increase output amid a historic energy reform.
For some analysts, it all comes down to Saudi Arabia, OPEC’s biggest producer. The Saudis led the way in maintaining production levels in order to preserve market share, even as prices sank by more than half since the middle of last year.
“Until Saudi Arabia says something this is all meaningless,” Mike Wittner, head of oil-market research at Societe Generale SA in New York, said by phone. “Why would the Saudis change their logic and waste all they have already done.”

El Mundo ve estupefacto tres mega huracanes simultáneos en el Océano Pacífico

agosto 30, 2015  /  Autor:   /  Mundo  /  Sin Comentarios
San José, 30 ago (elmundo.cr) – Un evento nunca antes registrado se desarrolla en estos momentos en el Océano Pacífico y tiene consternados a los especialistas de todo el globo: tres huracanes de categoría cuatro se encuentran recorriendo las aguas del océano más grande del Mundo, influencias por el fenómeno de El Niño.
El Dr. Phil Klotzbach de la Universidad de Colorado afirmó que esta es la primera vez que se presenta un fenómeno de esta naturaleza en el Océano Pacífico. Inclusive, es la primera vez que dos mega huracanes están tan relativamente cerca uno del otro.
three-cat-4s
Foto de la NASA. En orden de derecha a izquierda, Kilo, Ignacio y Jimena.
A las 11 pm hora del este del sábado, el huracán Kilo tenía vientos sostenidos de 135 millas por hora y se localizaba al suroeste de las islas Hawaianas, seguido del huracán Ignacio con vientos sostenidos de 140 millas por hora al este de Hawai y el huracán Jimena con vientos de 140 millas por hora más al este del Pacífico.
Kilo fue el último de los huracanes en alcanzar la categoría cuatro durante la tarde del sábado, a solo un paso de alcanzar la máxima categoría en la escala que mide la fuerza de los huracanes.
Kilo pasó sin afectar a las Hawainas e Ignacio podría seguir ese mismo camino, pero desviándose hacia el norte. Los especialistas ponen ahora su vista en Jimena, que estaría en ruta de choque con Hawai.
El NOAA de los Estados Unidos advirtió que la intensidad del fenómeno El Niño estaría aumentando la intensidad y número de huracanes que se desarrollen en el Pacífico, mientras que en el Atlántico la tendencia es la contraria.
El Niño es una anomalía atmosférica periódica que consiste en el calentamiento de las aguas del Océano Pacífico en el este y la parte central. El fenómeno se extiende por hasta 18 meses y se presenta en intervalos de 2 a 7 años.

Le Venezuela lance la campagne des législatives


Ce village est un terrible résumé de ce que fut et de ce qu’est encore aujourd’hui, la Colombie d’Alvaro Uribe. Sauf qu’il se trouve du côté vénézuélien, à 300 mètres de la frontière et qu’il est ironiquement baptisé “La Invasión”. « Je fuyais les paramilitaires et je panique car ici je retrouve mes bourreaux » raconte un réfugié colombien. Avec ses caves secrètes pour cacher les victimes d’enlèvement, ses bordels où étaient violées des centaines de fillettes, “La  Invasión” est aussi une des nombreuses bases de la “para-économie” qui a phagocyté les  2.219 km de frontière entre les deux pays.
Depuis des années les réseaux de contrebandiers extraient chaque jour 30 % des produits subventionnés par le gouvernement bolivarien pour les revendre en Colombie au décuple, au centuple, avec la complicité de nombreux fonctionnaires des deux pays, militaires comme civils. Des millions de litres d’essence (alors que le Venezuela n’exporte pas de carburant en Colombie), des milliers de tonnes d’aliments, de médicaments, de véhicules et de pièces de rechange… jusqu’aux billets de banque vénézuéliens eux-mêmes, vendus au-delà de leur valeur pour repartir acheter dans le pays voisin tout ce qui peut faire du bénéfice en Colombie. Un député colombien a dénoncé que des hôpitaux de Bogota font main basse sur les médicaments à bas prix destinés aux patients vénézuéliens, pour les revendre à leurs patients au prix du marché. 70 % des habitants de Cucuta, ville-frontière avec le Venezuela, vivent à temps plein de la manne du socialisme bolivarien, avec un bénéfice mensuel estimé à 9 milliards de dollars. (1)
“Non, ne me filme pas le visage !”. Depuis la fermeture de la frontière par le Venezuela, la population locale commence à peine à rêver à la fin de la terreur paramilitaire. Photo: Telesur
“Non, ne me filme pas le visage !”. Depuis la fermeture de la frontière, la population vivant du côté vénézuélien commence à peine à rêver à la fin de la terreur paramilitaire. Photo: Telesur

Trafic de billets de 100 bolivars vénézuéliens. Le nord de la Colombie abrite une mafia composée de centaines de maisons de change, autorisées depuis 2000 par la Banque de Colombie et de banquiers corrompus ayant fui la justice du Venezuela et qui, à travers le site Dólar Today, fixe artificiellement la valeur du dollar parallèle, facteur d’inflation au Venezuela.
Trafic de billets de 100 et 50 bolivars vénézuéliens. Le nord de la Colombie abrite une mafia composée de centaines de maisons de change, autorisées depuis 2000 par la Banque de Colombie, et de banquiers corrompus ayant fui la justice du Venezuela. A travers le site Dólar Today, ce réseau fixe la valeur du dollar parallèle, facteur d’inflation au Venezuela.

prix comparatifs Venezuela Colombie 

La fermeture partielle de la frontière

C’est après que des paramilitaires ont fait feu sur les soldats vénézuéliens qui allaient les arrêter, le 19 août dernier, que le président Maduro a ordonné le démantèlement de “La invasión” et fait fermer la frontière de l’État du Táchira avec la Colombie. L’objectif est de libérer la population de la terreur paramilitaire et de construire un territoire de paix : “nous considérerons les cas des familles exploitées qui auraient besoin de logements sociaux. Nous rouvrirons la frontière quand le gouvernement colombien fera cesser l’extraction illégale de nos produits vers son territoire et les attaques à notre monnaie”.
Il y a un an nous avons dénoncé le danger de l’intromission des paramilitaires colombiens au Venezuela. Aujourd’hui il se confirme que c’est une réalité” a twitté Ernesto Samper, Secrétaire général de l’Union des Nations Sud-Américaines (Unasur) et ex-président de la Colombie. (2)
Ces 9 dernières années, près de six millions de colombien(ne)s ont fui leur pays pour chercher la paix et un travail au Venezuela. Le dernier exode a eu lieu lors de la grève paysanne de 2013 : quelques 150 personnes parmi lesquelles des femmes, des enfants et des vieillards fuirent au Venezuela par crainte des attaques continuelles de la Force Publique contre les paysans. De tous ces sans terre, déplacé(e)s, persécuté(e)s fuyant la misère, les massacres, les fosses communes, les “faux positifs” et les extorsions des paramilitaires, beaucoup furent légalisés sur l’initiative de Hugo Chavez pour qu’ils puissent bénéficier des programmes sociaux, du Droit du travail, de l’accès aux études supérieures. Profitant de cette politique, des milliers de paramilitaires se sont infiltrés dans le pays d’accueil, allant jusqu’à chasser des familles vénézuéliennes de leurs logements sociaux pour y monter des bases du trafic de drogue et de contrebande vers la Colombie. De temps à autre, ces “cellules dormantes” reçoivent les instructions d’Alvaro Uribe pour épauler les violences de l’extrême droite locale (que les médias occidentaux transforment en “révoltes populaires”) ou pour commettre des assassinats sélectifs (tel ceux de dirigeants communaux dans l’État de Lara ou du jeune député bolivarien Robert Serra et de sa compagne). (3)
Depuis la fermeture de la frontière, les forces armées du Venezuela ont arrêté une dizaine de chefs paramilitaires, remis aux autorités colombiennes. Les assassinats ont cessé (on en comptait vingt par jour dans l’état de Tachira). Les pompes à essence et les supermarchés ont rouvert, et les files d’attente se résorbent malgré les menaces persistantes de la mafia contre les commerçants vénézuéliens. C’est à Cucuta (Colombie) que les pénuries se sont déplacées avec les premières files d’attente d’automobilistes et l’envol des prix des denrées de base. Forte de son monopole médiatique, l’oligarchie colombienne répond par une campagne “nationaliste” contre “le dictateur Maduro qui piétine nos droits comme colombiens”.

Où est passée la droite vénézuélienne ?

Alors qu’elle comptait sur la guerre économique et l’internationale médiatique pour mettre à genoux le gouvernement bolivarien et remporter haut la main les élections législatives du 6 décembre prochain, la droite vénézuélienne vit les pires heures de son existence, en proie aux divisions, proche de l’implosion. Les révélations sur ses liens avec la mafia uribiste n’ont rien fait pour améliorer son image (4). Mais c’est sa mise à l’écart de la nouvelle génération, sa misogynie et son racisme persistants, ses nominations autoritaires d’entrepreneurs blancs comme candidats aux législatives, qui ont fait se révolter une partie de sa base et fait voler en éclats l’unité de ses partis. Ses manifestations se vident de militants et certains députés ont fait défection comme Ricardo Sánchez qui se présentera aux élections de décembre sous l’étiquette bolivarienne. (5)

Une guerre économique à double tranchant

Pa’lante queda lejos pero par’atrás queda más lejos aún” : “aller de l’avant, c’est loin mais retourner en arrière c’est encore plus loin”. Ce graffiti de Caracas parle de ce qui reste la seule voie raisonnable pour une majorité. Si le socialisme bolivarien reste en tête des intentions de vote dans les sondages de firmes privées, le salut de la droite ne peut venir que de l’abstention massive de secteurs populaires poussés à bout par la guerre économique. 80 % des médias et de l’économie restent aux mains du secteur privé et à mesure que le temps passe, le mécontentement populaire face à des prix hors de contrôle grandit mais s’adresse autant aux mafias d’un secteur privé dominant qu’au gouvernement, aux incapacités et aux lenteurs de son action. Les gens savent que ce n’est pas Nicolas Maduro qui organise les pénuries, fait monter l’inflation ou le dollar parallèle mais veulent une réaction forte et une solution rapide de la part de l’État. Les mesures décidées récemment par le président comme la fermeture partielle de la frontière avec la Colombie, l’opération d’envergure lancée le 13 juillet pour démanteler les cellules paramilitaires, avec la restitution de logements sociaux aux familles dépossédées, l’organisation d’alternatives économiques avec les communes et l’accélération des investissements productifs, recueillent l’approbation d’une majorité de sondés. (6)

Comment faire rentrer la population vénézuélienne dans le  storytelling?

Bien sûr il ne faut pas sous-estimer la contre-offensive de la droite latino-américaine toujours à la recherche de nouveaux relais (courant droitier du mouvement indigène en Équateur (7), “ONGs écologistes” opposées au canal interocéanique au Nicaragua, para-maras au Salvador, secteurs populaires déçus au Brésil, etc..). Mais le fait qu’elle doive jouer les cartes de la violence et la déstabilisation médiatique révèle l’absence de projet politique et la faiblesse sociale à long terme. D’où la nervosité des médias occidentaux qui de CNN au Monde n‘hésitent plus à sortir du bois pour réaliser leurs désirs : “pillages au Venezuela”, “chute imminente de Dilma Roussef” ou “forte mobilisation contre Rafael Correa”.

Le réel suivra-t-il les médias ? (8)

Le Parti Socialiste Unifié du Venezuela (PSUV) fut lui-même surpris, en juin dernier, par la forte mobilisation de ses propres partisans – en pleine guerre économique – pour une simple élection primaire en vue de désigner leurs candidats, en majorité des femmes et des jeunes, au scrutin qui renouvellera l’assemblée nationale en décembre prochain.
Le sociologue Franco Vielma explique que “le pouvoir ancien s’était fait une spécialité d’éviter l’implosion des classes populaires, en démontant tout catalyseur qui nous mènerait au changement politique. La nature du pouvoir institué fut précisément cela : se préserver, tout préserver. C’est ce qui a changé au Venezuela. Les institutions ont accouché d’un Venezuela qui explose tous les jours. (..) Tous les jours il y a des escarmouches entre le pouvoir institué et le pouvoir émergent. Au Venezuela depuis deux ans la relation entre “entrepreneurs et consommateurs” a cessé d’être « harmonieuse » (comme on nous l’affirmait jadis).” (9)
Il faut prendre en compte, aussi, l’étape nouvelle que représente la présidence de Nicolas Maduro. Hugo Chávez était pris par le vertige d’une transformation rapide, passionné par sa vision d’un Venezuela enfin réuni avec ses frères latino-américains, souverain, sans pauvreté, économiquement puissant, au point qu’il voulait être de toutes les batailles à la fois, et faire vite. Cette énergie très personnelle (qui servit aux médias à fabriquer l’image d’un “caudillo”) et ce volontarisme paradoxal dans le désir d’accélérer la participation populaire, contrastent avec la méthode de Maduro.
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Dès son élection à la présidence en avril 2013, celui-ci a dû assumer tous les fronts à la fois : insécurité, corruption, inflation, guerre économique, improductivité nationale, déstabilisation tous azimuts d’une droite excitée par la mort de Chávez. Mais dans sa recherche d’une réponse structurelle, le président a forgé sa méthode : mettre la population face à ses responsabilités, donner un rang présidentiel aux conseils de mouvements sociaux, attendre que ceux-ci formulent leurs propositions pour prendre les décisions “de commun accord” (10). Cet espace nouveau – que certains critiquent comme “faiblesse” de Maduro – implique une responsabilité plus collective, où les femmes et les jeunes en particulier, le monde du travail en général, ont leur place à prendre. Après les fulgurantes étapes de montagne des années Chávez a commencé la marche en terrain plat, réputée plus difficile.

Thierry Deronne, Caracas, 30 août 2015

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Marche populaire contre le paramilitarisme et pour la paix à Caracas le 27 août 2015. Nicolas Maduro était présent, à quelques heures de s’envoler vers le Vietnam et la Chine pour un renforcement du partenariat économique. Pour déminer la xénophobie anti-colombienne qui se nourrit des exactions des paramilitaires, le président vénézuélien a brandi les drapeaux des deux nations, invité un musicien colombien à ouvrir le meeting et répondu à l’oligarchie de Bogota : “Nous ne sommes pas anti-colombiens. Nous sommes anti-mafia et anti-paramilitaires”.
Marche populaire contre le paramilitarisme et pour la paix à Caracas le 27 août 2015. Nicolas Maduro était présent, à quelques heures de s’envoler vers le Vietnam et la Chine pour un renforcement du partenariat économique. Pour déminer la xénophobie anti-colombienne qui se nourrit des exactions des paramilitaires, le président vénézuélien a brandi les drapeaux des deux nations, invité un musicien colombien à ouvrir le meeting et répondu à l’oligarchie de Bogota : “Nous ne sommes pas anti-colombiens. Nous sommes anti-mafia et anti-paramilitaires”.
Notes :
  1. Tout ce que vous avez toujours voulu savoir sur les files d’attente au Venezuela sans jamais oser le demander http://wp.me/p2ahp2-1J7 , et sur les caractéristiques de la contrebande locale : http://www.rnv.gob.ve/tras-la-medida-vendidos-1-millon-de-litros-menos-de-gasolina-en-tachira/ ; http://www.correodelorinoco.gob.ve/nacionales/cucuta-venden-billetes-bs-100-aplicando-operacion-tres-patas/
  2. http://www.conelmazodando.com.ve/ernesto-samper-incursion-de-paramilitares-colombianos-en-venezuela-es-una-realidad/
  3. Les clefs de la mort d’un jeune député bolivarien et de sa compagne, http://wp.me/p2ahp2-1Fu ; http://www.noticias24.com/venezuela/noticia/292237/los-alcances-del-paramilitarismo-la-mano-colombiana-detras-de-los-crimenes-en-venezuela/
  4. “Venezuela : la presse française lâchée par sa source ?”, http://wp.me/p2ahp2-20J ; Voir aussi http://www.noticias24.com/venezuela/noticia/292237/los-alcances-del-paramilitarismo-la-mano-colombiana-detras-de-los-crimenes-en-venezuela/
  5. Démocratisation des élections : la lutte entre l’ancien et le nouveau au Venezuela http://wp.me/p2ahp2-1TS et La misogynie de l’opposition vénézuéliennehttp://wp.me/p2ahp2-1ZO Sur la faible affluence aux manifestations de la droite : http://www.prensa-latina.cu/index.php?option=com_content&task=view&idioma=1&id=4076391&Itemid=1 , http://www.correodelorinoco.gob.ve/nacionales/mud-admitio-escasa-asistencia-a-marcha-realizada-caracas/ ; Sur les divisions internes : http://www.ultimasnoticias.com.ve/noticias/actualidad/politica/gomez-sigala-en-la-mud-se-repartieron-el-botin-de-.aspx , http://www.avn.info.ve/contenido/entre-divisiones-seis-partidos-pol%C3%ADticos-se-desligan-mud-cara-parlamentarias , http://www.avn.info.ve/contenido/partidos-opositores-dejan-sola-mud-para-elecciones-parlamentarias ; Sur l’absence de projethttp://www.celag.org/economia-en-venezuela-la-oposicion-y-su-vuelta-al-pasado-por-alfredo-serrano-mancilla/#sthash.rHcP0QPW.dpuf
  6. Sur le soutien de la population vénézuélienne aux opérations anti-paramilitaires : http://www.avn.info.ve/contenido/hinterlaces-87-poblaci%C3%B3n-respalda-operativo-liberaci%C3%B3n-y-protecci%C3%B3n-al-pueblo et la récupération de logements sociaux : http://www.aporrea.org/poderpopular/n275828.html ; Sur les mesures alternatives économiques : http://www.avn.info.ve/contenido/venezuela-se-afianza-poder-comunal-para-construir-econom%C3%ADa-productiva-y-vencer-guerra-econ et http://www.avn.info.ve/contenido/gobierno-dise%C3%B1ar%C3%A1-plan-especial-abastecimiento-productos-y-defensa-precios-justos
  7. Sur le soutien de la CONAIE indigène par les partis néo-libéraux en Équateur, lire la récente analyse de Romain Migus:  http://www.romainmigus.com/2015/08/tentatives-de-destabilisation-en.html
  8. Sur les désirs frustrés des médias occidentaux : http://albaciudad.org/wp/index.php/2015/08/cnn-en-espanol-reconoce-haber-mentido-sobre-supuestos-saqueos-en-venezuela/ Traduction en français: http://cubasifranceprovence.over-blog.com/2015/08/venezuela-cnn-reconnait-avoir-menti-sur-les-pillages-au-venezuela.html
  9. Article de Franco Vielmahttp://misionverdad.com/la-guerra-en-venezuela/habra-un-estallido-social-en-venezuela
  10. « La commune, coprésidente du Venezuela »http://wp.me/p2ahp2-1ev

URL de cet article : http://wp.me/p2ahp2-21z

Sebin detuvo a un alcalde del estado Bolívar por presuntos hechos de corrupción

Publicado el 29 de agosto de 2015
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La noche de este viernes funcionarios del Servicio Bolivariano de Inteligencia (SEBIN) realizaron la detención de José Ramón Rondón López, actual alcalde del municipio Caroní, en Ciudad Guayana, estado Bolívar.
La aprehención se realizó mientras se investigan presuntos hechos de corrupción en los que podría estar implicado el burgomaestre, quien había solicitado permiso al Consejo Municipal para atender asuntos de salud y le fue concedido, dejando a cargo a Eriberto Aguilera.
Los funcionarios del Sebin hicieron la detención de forma preventiva, pues a partir del permiso concedido por el Consejo Municipal se presumió que tuviera intenciones de salir del país.
Hasta el momento el Servicio de Intelegencia no ha emitido un pronunciamiento oficial de lo acontecido, sin embargo se espera que las declaraciones se produzcan en las próximas horas.
José Andara Rivas
Redacción www.ddiariorepublica.com

Gold Isn't the Safe Haven Investors Thought It Would Be

Updated on
  • Biggest weekly price drop in month defies bet on gains
  • Bullion volatility jumps in tandem with equity turbulence
Gold bulls piled into the metal in hopes that the turmoil sweeping financial markets would finally help revive prices. They were wrong.
Instead of a rally, futures in New York fell for four straight sessions even as global equities plunged to a two-year low. Rather than providing a refuge from the meltdown, gold’s volatility rose right along with a measure of equity turbulence, diminishing its appeal as a haven. As stocks started to recover, the metal kept falling because of reports that signaled gains for the U.S. economy.
It’s been a tough two years for investors in gold, which first fell into a bear market in April 2013. More than $52 billion has been wiped from the value of physical bullion funds since then. Money managers last week raised their net-long position to the highest since June just before futures capped the worst slump in a month. Stubbornly low inflation along with the prospect of tighter U.S. monetary policy has kept a lid on the metal, which doesn’t pay interest or offer returns, unlike competing assets.
“A good test for gold was the latest round of volatility, and gold did not do much, since it has become unattractive as a safe haven,” said Atul Lele, who helps oversee $5.1 billion as the chief investment officer at Nassau, Bahamas-based Deltec International Group.

Price Slump

Futures fell 2.2 percent last week to $1,134 an ounce on the Comex, the biggest drop since July 24. The MSCI All-Country World Index of equities rose 0.5 percent, while the Bloomberg Dollar Spot Index advanced 0.7 percent. The Bloomberg Commodity Index jumped 1.8 percent. Bullion for December delivery was little changed at $1,134.10 an ounce by 2:35 p.m. in Seoul.
Speculators more than tripled their net-bullish position to 44,271 futures and option contracts in the week ended Aug. 25, according to Commodity Futures Trading Commission data released three days later. Long holdings rose for a third straight week, the longest run since January.
The Federal Reserve will probably push ahead to raise interest rates this year even after China’s surprise yuan devaluation this month that triggered global growth concerns and a selloff in equities, RBC Capital Markets’ Stephen Walker said in an Aug. 23 report. Walker, the most-accurate gold forecaster last quarter in rankings compiled by Bloomberg, expects prices to remain weak in 2015 and cut his forecast for the second half of this year by 13 percent to $1,125.
Even as the U.S. economy has proven to be resilient, Fed policy makers will have to contend with a weaker global-growth scenario. The world equity rout has lowered expectations for a quick rate rise, with traders as of Friday pricing in a 38 percent chance that policy makers will tighten at their September meeting. That compares with 48 percent two weeks earlier. The metal climbed 70 percent from December 2008 to June 2011 as the U.S. central bank fanned inflation fears as it bought debt and held borrowing costs near zero in a bid to shore up growth.

‘Buyers Return’

"Gold will probably see some buyers return after investors realize there will probably be one rate hike this year, and that too, not a very big one," said Dan Denbow, a portfolio manager at the $820 million USAA Precious Metals & Minerals Fund in San Antonio.
Still, gold demand is waning. Holdings in exchange-traded funds backed by the metal have dropped 12 percent over the past year and on Aug. 11 shrunk to the smallest since 2009.
With U.S. inflation languishing below the Fed’s 2 percent target, there’s little interest in buying gold to hedge against rising consumer prices. A slump in crude oil, which has tumbled more than 50 percent over the past 12 months, has raised concerns that inflation will stay subdued.
“With global growth concerns reemerging, we are seeing fears of deflation everywhere, and gold cannot do well in that kind of scenario,” said Jim Russell, a Cincinnati-based portfolio manager at Bahl & Gaynor Inc., which has about $14 billion under management and advisement. “Lack of follow through in gold given the price action in other assets did strike me as a big surprise. As for now, we are staying away from gold.”

China's Stocks Cap Biggest Selloff Since 2008 on Rescue Doubts

Updated on
  • Shanghai Composite Index declines 12% in month of August
  • Brokerages drop on executive detentions, stock-fund orders
China’s stocks fell, capping the benchmark index’s biggest two-month tumble since 2008, amid concern that government intervention to prop up the market will fail.
The Shanghai Composite Index dropped 0.8 percent to 3,205.99 at the close. The gauge lost 12 percent this month after sliding 14 percent in July. The SSE 50 Index of the nation’s biggest stocks rebounded 6.7 percent from its intraday low. Citic Securities Co. slid 5 percent after Xinhua News Agency said executives were detained on suspicion of insider trading and the securities regulator was said to order the brokerage industry to boost its contribution to the nation’s market rescue. Bearish bets in the options market climbed as traders weighed the level of state support before a World War II victory parade this week.
The Shanghai Composite closed near its highest level of the day for the third straight session amid speculation state-backed funds are using afternoon share purchases to bolster the market before the parade, which the government will use to demonstrate its rising military and political might. Swings in Chinese markets this month have rattled investors worldwide as they struggle to anticipate policy actions in the world’s second-largest economy.

Limited Disclosures

“There is a lot of confusion about purchases of stocks by state-linked funds,” said Gerry Alfonso, a sales trader at Shenwan Hongyuan Group Co. in Shanghai. “Disclosures are very limited so it is impossible to know what they are doing with certainty.”
The CSI 300 Index rose 0.7 percent after slumping as much as 4.1 percent earlier. Hong Kong’s Hang Seng China Enterprises Index fell 0.1 percent. The Hang Seng Index rose 0.3 percent.
The government revived its intervention in equities on Thursday to halt the biggest selloff since 1996. The effort to support markets was part of a broader push to ensure nothing detracts from the parade. China’s financial markets will be shut Thursday and Friday to commemorate the event. Hong Kong’s bourse will be closed on Thursday.
“It look like that the government is buying shares today,” said Li Jingyuan, general manager of the securities investment department at Shanghai Zhaoyi Asset Management. “They still want to stabilize the market at this level.”
The Shanghai gauge will stabilize in a range between 2,700 and 3,000, David Gaud, senior fund manager at Edmond de Rothschild Asset Management, wrote in an e-mail. Forced intervention amid the market sell-off in July now looks counter-productive, he wrote.

Stock Support

China’s securities regulator asked brokerages to step up their support for share prices by contributing 100 billion yuan ($15.7 billion) to the nation’s market rescue fund and increasing stock buybacks, according to people familiar with the matter. The China Securities Regulatory Commission gave the order at a meeting with representatives of 50 brokerages on Saturday, which CSRC Chairman Xiao Gang also attended, said the people who asked not to be identified because the meeting hasn’t been made public.
Four executives of Citic Securities, the nation’s largest brokerage, a journalist at business magazine Caijing and a staff member at the CSRC all confessed to alleged stock-related crimes, Xinhua said.
Haitong Securities Co. declined 5.4 percent, while Western Securities Co. slumped 5.2 percent.
Stocks also fell on concern the economic slowdown is hurting earnings. Gree Electric Appliances Inc., China’s largest manufacturer of air-conditioners, dropped 5.4 percent after saying its first-half net income rose 0.05 percent from a year earlier. Gauges tracking consumer, material and technology companies slid at least 1.1 percent on the CSI 300.
The statistics bureau is due to release an official manufacturing index for August on Tuesday. The gauge, known as the Purchasing Managers’ Index, probably fell to 49.7 from 50 in July, according to the median estimate of a Bloomberg survey. A reading below 50 indicates contraction.
Investor sentiment is getting increasingly pessimistic. Puts that pay out on a 10 percent drop in the China 50 exchange-traded fund cost 9.3 points more on Monday than calls betting on a 10 percent gain, according to implied volatility data on one-month contracts. As recently as Aug. 24, the bullish contracts were more expensive. For the U.S.-listed Deutsche X-trackers Harvest CSI 300 China A-Shares ETF, the skew reached a record 38 points on Aug. 27 and closed the week at 28 points.

China Asks Brokerages to Boost Market and Buy Back Shares

China’s securities regulator asked brokerages to step up their support for share prices by contributing 100 billion yuan ($15.7 billion) to the nation’s market rescue fund and increasing stock buybacks, according to people familiar with the matter.
The China Securities Regulatory Commission gave the order on rescue-fund contributions at a meeting with representatives of 50 brokerages on Saturday, which CSRC Chairman Xiao Gang also attended, said the people, who asked not to be identified because the meeting hasn’t been made public. The regulator encouraged listed brokerages to buy back shares worth as much as 10 percent of their total market value, the people said.
China revived its stock-market rescue program on Aug. 27 after the government’s absence from the market earlier in the week contributed to the biggest two-day selloff since 1996. Policy makers are trying to bolster shares before President Xi Jinping takes the stage in a World War II victory parade this week.
The CSRC meeting was reported earlier by Cailian. The regulator didn’t immediately respond to a faxed request for comment.
China’s Shanghai Composite Index dropped 2.8 percent at 10:28 a.m. local time.

30-Minute VIX Frenzy Exposes Obsession With Volatility Hedging

  • On Aug. 24, the VIX didn't open for almost a half hour
  • The gauge jumped as much as 90 percent for a record increase
Among the many scary things traders witnessed as stocks plunged last Monday, one of the most harrowing was the sight of the VIX, an index designed to measure investor fear, briefly going dark.
For almost 30 minutes as hundreds of billions of dollars were erased from equities, no signals were sent by the world’s most popular sentiment gauge as options prices turned erratic. When it switched on, the VIX jerked higher faster than anyone had ever seen, rising 82 percent on its first tick to 51, a level not reached since the financial crisis.
“Seeing the VIX at 50 was just chaotic,” said Michael Antonelli, an institutional equity sales trader and managing director at Robert W. Baird & Co. in Milwaukee. “It’s not like there was a headline that a bank had filed for bankruptcy or a major corporation was teetering on the brink. Why did it move that much?”
Nothing could’ve kept the Chicago Board Options Exchange Volatility Index from jumping Monday morning: global markets were buckling, China’s stocks had plunged 8 percent and companies like General Electric Co. were in free fall. And nobody’s saying the VIX broke or acted in a way that wasn’t predictable, given the array of forces that act in the markets it reflects.

Wild Ride

According to options traders and analysts, though, a wild ride was made even wilder by pressure flowing from a network of interconnected volatility markets, some of which barely existed as recently as five years ago.
According to its overseer, CBOE Holdings Inc., it was simply fear in the market that drove the surge, reflected through higher prices in Standard & Poor’s 500 Index options, especially as stock futures reached daily limits.
“I’m not sure that the VIX at 50 was completely outrageous,” said Bill Speth, vice president of research at CBOE. “Market makers or people who trade S&P 500 options are going to demand far much higher for that protection when the market is down 1,000 points.”
Derived from the price of options on the S&P 500 and the benchmark for a hodgepodge of futures and derivatives, the VIX is a tool for professionals and amateurs alike to measure nervousness in equities. Its basic ingredients are puts and calls on the S&P 500, which appreciate in value when fear is in the air. Stocks gyrate and the VIX rises, the result of dealers charging more to bet on price swings.
The VIX is also an asset unto itself, with futures tied to its price traded virtually around the clock by hedge funds and other speculators. Those contracts are, in turn, the basis for some of the most heavily traded exchange-traded products in America, things like the iPath S&P 500 VIX Short-Term Futures ETN. Once obscure, now they’re huge, with combined volume in the hundreds of millions of shares each day.

Intensifying Turbulence

Why would anyone need to own such things? To hedge, primarily. If you’re worried stocks will plunge, buy a VIX future or ETP, whose price goes up as turbulence intensifies. On Monday morning, turbulence was intensifying. Equities around the world were down 5 percent or more as orders piled up in the U.S. market to sell.
“As U.S. traders were hitting their desks, they were probably taking a shot going long volatility,” said Yousef Abbasi, the global market strategist at JonesTrading Institutional Services LLC in New York. “Volatility has been so cheap for so long that a lot of people have potentially been waiting for that spike to happen. They saw that opportunity and boom, there it was.”
What ensued, traders and analysts said, was a snowball effect, a feedback loop in volatility derivatives worsened by diminishing liquidity and an options expiration the prior week. The tumble in S&P 500 futures, which reached the 5 percent daily limit just before exchanges opened, wreaked havoc on options prices, pushing spreads as much as 16 times wider than normal.
Besides the VIX going dark, the most visible manifestation of the deluge was volume in futures tied to the VIX. In the hour before the market opened Monday, traders exchanged 78,000 of the September contracts, more than four times the average at that time in the 20 days prior, Bloomberg data show.
Traders were nervous, naturally. Some had to cover short positions in VIX futures, essentially bets on a rising stock market that had worked for years. Hedge-fund managers were net long more than 16,000 of these VIX contracts through Tuesday, as opposed to a net short 55,000 positions on Aug. 18, according to U.S. Commodity Futures Trading Commission data.

ETN Buying

Another reason, analysts and traders said, was a crush of buying in volatility exchange-traded notes and funds, which buy VIX futures to keep up with demand. Shares outstanding in the notes overseen by iPath and two others reached a record Friday as $1.5 billion of fresh cash flowed into the products this year.
In all, volatility ETPs hold $4.3 billion in assets, according to Bloomberg data. About $12 billion in shares were traded on Monday, the highest daily value on record, the data show.
“These products do drive up volatility of volatility, and they did help volatility reach higher peaks this time around,” said Rocky Fishman, an equity derivatives strategist at Deutsche Bank AG. “When volatility is going up, they buy more VIX futures, which ups volatility more. We have seen a large re-balancing in those volatility products over the last few days.”
Volatility has hovered around historically low levels over the past few years, which shows surging VIX futures demand hasn’t swayed the gauge, the CBOE’s Speth said. Up until August, the VIX averaged 15 on a closing basis this year, five points below its all-time average of 20.
“The idea that VIX futures are driving volatility in the market just seems unlikely to me,” Speth said. “Yes, we traded a lot of VIX futures on Monday, but it was in response to market moves. It didn’t cause market moves.”

Friday Expiration

Another factor: options listed in the U.S. on securities from the S&P 500 to single stocks expired Aug. 21. That means any outstanding monthly options set to expire this month were swapped for shares, causing the contracts’ holders to adjust their portfolios accordingly.
As traders watched stock-index futures tumble Friday morning, they played catch-up by selling more equity futures and buying up futures on the VIX into the open. These speculators also rushed to add S&P 500 options in lower strike prices, according to Scott Fullman at Revere Securities LLC.
“People were hedging as the market was coming down and that was exacerbated by expiration on Friday,” said Fullman, managing director and chief strategist at Revere Securities in New York. He publishes options market analysis. “It turned around and cascaded into other products in sectors and inversed and leveraged products. You had all of this happening at one time.”
Tightening regulations that have crimped the market-making role of big U.S. banks in options trading could have added to the quick run-up in options prices. Much of the Volcker Rule, a 2010 regulation that restricts banks’ ability to trade with their own money, came into force July 21.
“We’re seeing the results of the reduction in liquidity on the hedging side through the VIX significantly outpacing the equity market,” said Justin Golden, a New York-based partner at Lake Hill Capital Management LLC. His firm trades options on equity indexes and commodities. “Everyone who needs to hedge will trade or buy options at any price, but the supply side of hedging has been significantly reduced.”

Leveling Out

It took about an hour for markets to level out after the deluge of selling. By 10:30, the S&P 500 had gained back more than half its losses, eventually closing down 3.9 percent. The VIX pared its jump to a 45 percent gain, almost equivalent to its 46 percent rise the previous Friday.
Since last Monday, the volatility gauge has dropped another 36 percent as American equities have rallied back 5 percent. While most of the VIX’s jump has been erased, the memory of the event remains.
“We haven’t seen an explosion of volatility like that in a while,” said Dan Deming, a Chicago-based manager at KKM Financial LLC. Deming was a trader on the CBOE floor for 26 years. “It was a significant day. Days like that have lasting repercussions. It cracked the foundation of the stock market.”

Stocks Extend Worst Month Since 2012 as Fed, China Woes Collide

Updated on
  • Chinese shares defy support measures as bearish bets rise
  • Crude oil drags ruble lower on China slowdown, glut concern
U.S. stock-index futures fell, commodities declined and the yen strengthened as sentiment toward China soured while Federal Reserve officials signaled they’re prepared to raise interest rates.
A gauge of global equities extended the biggest monthly slump in more than three years on renewed concern China’s efforts to prop up its markets will fail. The yen strengthened for the first time in five days and U.S. Treasuries rose. Russia’s ruble slid as oil declined.
More than $5 trillion has been erased from the value of shares worldwide this month as China’s surprise devaluation of the yuan on Aug. 11 sparked concern the world’s second-biggest economy may be in worse shape than analysts had estimated. Bets on a September Fed rate increase climbed after Vice Chairman Stanley Fischer said over the weekend there is “good reason” to believe inflation will accelerate.
“The markets are still digesting the China news and it seems that the uncertainty from China’s rollercoaster is not over yet,” said Guillermo Hernandez Sampere, who helps manage the equivalent of $167 million as head of trading at MPPM EK in Eppstein, Germany. “Any panic created out of this high volatility keeps investors out of the market. There’s still no clear message” on when the Fed will raise rates, he said.
Standard & Poor’s 500 Index futures dropped 1 percent at 8:43 a.m. in New York. The MSCI All-Country World Index slid 0.3 percent, heading for a 6.6 percent decline in August, the biggest such slump since May 2012. The Stoxx Europe 600 Index slipped 0.4 percent, with trading volumes 64 percent below the 30-day average as London markets were closed for a holiday.
Fischer stopped short of providing a clear signal on whether the Federal Open Market Committee will start to tighten policy at its next scheduled meeting Sept. 16-17, saying “we will need to consider all the available information” before coming to a judgment.

Bearish Bets

China’s stocks capped the biggest two-month slide since 2008 as bearish bets in the options market climbed. The Shanghai Composite Index sank 0.8 percent, taking its loss in August to 12 percent after a 14 percent drop in July. Hong Kong’s Hang Seng China Enterprises Index fell 0.1 percent, also down 12 percent in the month.
Stocks fell even as people familiar with the matter said China’s securities regulator asked brokerages to step up their support for share prices by contributing 100 billion yuan ($15.7 billion) to the nation’s market rescue fund and increasing stock buybacks.
The cost of options contracts betting on declines in the China 50 exchange-traded fund has surged to the highest level versus bullish ones since they started trading in Shanghai six months ago.
Russia’s ruble slid 2.1 percent to 66.80 against the dollar, leaving it 7.7 percent weaker this month. A Bloomberg gauge of 20 emerging-market currencies dropped 3.5 percent in August, its fourth monthly decline.

Haven Demand

The yen rose against all of its 16 major peers, with the biggest gains coming versus Taiwan’s dollar and South Korea’s won. It appreciated 0.4 percent to 121.27 per dollar, while the euro added 0.3 percent to $1.1221. The Aussie weakened 0.6 percent, approaching a six-year low.
Treasuries rose, with the yield on 10-year notes falling three basis points to 2.15 percent.
The euro area’s inflation rate held steady in August, with consumer prices rising an annual 0.2 percent. While that’s more than the median analyst forecast for a 0.1 percent increase, it’s less than the European Central Bank’s goal of just under 2 percent. The ECB is set to give a policy decision on Thursday.
Copper futures due in December slipped 1.2 percent on the Comex. The London Metal Exchange is closed Monday.
West Texas Intermediate crude dropped 2.6 percent to $44.04 a barrel. Oil fell below $40 a barrel this month, the lowest since February 2009, on concern slowing demand in the U.S. and China will leave the global market oversupplied.
Egypt’s EGX 30 Index climbed 2.8 percent, the most worldwide, as investors speculated an offshore natural gas discovery would end a domestic supply shortage and boost exports. Eni SpA said yesterday it discovered a natural gas field in the country’s Mediterranean waters that may hold 30 trillion cubic feet of the fuel.
(An earlier version of this story misstated the timing of Fischer’s remarks.)

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