SOUTH KOREA TO HOLD EMERGENCY MEETING ON JAN. 26 TO DISCUSS MARKETS - South Korea Vice Finance Minister Choo Kyung Ho will host an emergency meeting tomorrow at 11 a.m. with counterparts from Bank of Korea and financial regulators to discuss market instabilities in emerging economies including Argentina ... Looking at the three day chart from the Financial Times , south Korea is probably more concerned with moves on the Kospi Index from January 23rd and 24th , rather than a 4 percent decline on the US S&P Index ..... FX for basically all of the emrgin markets have been in turmoil - the point being is this is not simply a US stock movement issue !

Stocks Drop 4% From Their All Time Highs And This Happens....

Submitted by Tyler Durden on 01/25/2014 19:32 -0500

• Janet Yellen
 
• Market Crash

inShare1

 

One couldn't make this up:

• S.KOREA TO HOLD EMERGENCY MEETING ON JAN. 26 TO DISCUSS MARKETS

Bloomberg has the details: South Korea Vice Finance Minister Choo Kyung Ho will host an emergency meeting tomorrow at 11 a.m. with counterparts from Bank of Korea and financial regulators to discuss market instabilities in emerging economies including Argentina, ministry says in text message.

So what happens if there is a, gasp, 5% drop from all time S&P500 highs - Janet Yellen shows up on every TV channel and tells broke viewers now is the time to buy stocks and pay for them in 4 easy installments using their favorite EBT card. What about a 10% correction: the army gets mobilized? And should the unthinkable happens and the centrally-planned "market" crash by 20% then nothing short of DefCon 1 and a 24/7 curfew would be acceptable.

We joke, but this is what happens in a time when the "confidence" of the entire world is defined by the daily move straight line higher in the S&P, and the tiniest derivation from this path results in sheer panic.

Korea KOSPI IndexKSPI:KSC

1,940.56	7.03 / 0.36 %	279.24k	1.22 %
LATEST PRICE IN KRW	TODAY'S CHANGE	SHARES TRADED	1 YEAR CHANGE

As of Jan 24 2014 09:03 GMT.Data delayed by at least 20 minutes.

• Summary
• Constituents

Period

• 1D
• 3D
• 5D
• 10D
• 1M
• 3M
• 6M
• 1Y
• 3Y
• 5Y

Comparisons

Currency watch......

Turkey....

Turkish Lira sinks below 2.3 against US dollar despite Central Bank action

ISTANBUL - Agence France-Presse

Print PageSend to friend »

• Share

 

A clerk counts US dollars at a currency exchange office in Istanbul on Jan 23. AFP photo

The Turkish Lira dived through the key barrier of 2.3 to the dollar on Jan. 24 despite massive central bank intervention on foreign exchange markets the day before.

The currency sank to a low of 2.3360 against the greenback before recovering slightly to 2.3274 in mid-afternoon trade, and hit 3.2069 to the euro before clambering back to 3.18622.

The further declines came just a day after the Central Bank ploughed at least $2 billion into the foreign exchange markets to try to prop up the lira.

The Turkish currency has been hitting record lows almost daily this year, under pressure from an escalating political crisis and concerns about the economy.

It has lost over 10 percent since mid-December in turmoil not seen since the 2000-2001 financial meltdown, and economists forecast that further falls are on the cards.

Finansbank in Istanbul said the central bank may try to contain further pressure on the currency by resorting to its foreign currency war-chest.

But that it was unlikely to be sustainable and instead called for a "proper" rate hike. The bank shied away this week from raising interest rates at its monthly policy meeting, with the government keen not to dampen economic growth further or risk higher inflation.

January/24/2014

Turkish currency tumble raises fears in energy sector

ISTANBUL/KONYA

Print PageSend to friend »

• Share

 

Turkish Energy Minister Taner Yıldız admitted on Jan. 25 that the graft probe has ramped up the costs in the energy sector and interrupted thermal power plant tenders. CİHAN photo

Turkey is likely to face more struggles to fund its already-mounting energy bill due to the political problems that have emerged with a corruption investigation that has driven Turkish currency to record lows.

The country, which is heavily dependent on foreign energy resources that cost up to $60 billion every year, has been grappling with the sliding Turkish Lira against the U.S. dollar since the Federal Reserve’s decision to cut its stimulus program. The weakening currency hit the skids in the wake of a Dec. 17, 2013, corruption and bribery investigation that kindled a massive political crisis at state institutions, falling to a historical low of $2.3 to the dollar. 

In a meeting held on Jan. 25, Turkish Energy Minister Taner Yıldız also admitted that the graft probe, which he has been constantly dubbing as “a plot against the government,” has ramped up the costs in the energy sector and interrupted thermal power plant tenders.

“It [corruption operation] has bred results that raised costs in our energy sector,” Yıldız said during an “Energy Efficiency Industry Project” presentation meeting in the Central Anatolian province of Konya.

“Where we are standing now is that the dollar parity is at 2.32, the euro is at around 3.12, the crude oil barrel price is at around $107 and our costs have risen,” he said, adding that “those that caused [the rise] should be called to account.”

“The measurable damage they caused is $127 billion, while there are more [side effects that are] immeasurable,” he said.

The weakening of the lira has led to fears of an energy price hike and funding problems for power generation privatization tenders.

The minister also blamed “those behind the probe” for causing the postponement of the privatization of four thermal power plants.

“The Privatization Administration has launched a tender for the Yatağan, Kemerköy, Yeniköy and Çatalağzı thermal power plants, and 20 companies had acquired the tender file. However, 19 of them said ‘now there are tough winter conditions in politics, I should look into this again in spring’ and asked for two to three months’ break,” Yıldız said.

The administration announced Jan. 20 that it had postponed the tenders scheduled for February to April, after Finance Minister Mehmet Şimşek had also hinted that the investors’ requests may lead to a delay.

The much-anticipated National Lottery privatization planned for Feb. 13 is also expected to be rescheduled for a later time.

“Normally, we get tender offer in all tenders we launch. Who is going to pay for the income that would be earned from here?” he asked.

January/26/2014

Argentina......

http://www.bloomberg.com/news/2014-01-23/argentina-s-peso-plunges-17-as-central-bank-scales-back-support.html

Argentina devalued the peso the most in 12 years after the central bank scaled back its intervention in a bid to preserve international reserves that have fallen to a seven-year low.

The peso has plunged 12.7 percent over the last two days to 7.8825 per dollar at 3:45 p.m. in Buenos Aires, after falling to as low as 8.2435, according to data compiled by Bloomberg. The decline in the peso marks a policy turn for Argentina, which had been selling dollars in the market to manage the foreign-exchange rate since abandoning a one-to-one peg with the U.S. dollar in 2002.

President Cristina Fernandez de Kirchner, who said May 6 that the government wouldn’t devalue the peso, is struggling to hold onto dollar reserves which have fallen 31 percent to $29.4 billion amid annual inflation of more than 28 percent. Reserves are the government’s only source to pay foreign creditors. Since changing her economy minister, cabinet chief and the head of the central bank on Nov. 18, the peso has fallen 25 percent, the most in the world, according to data compiled by Bloomberg.

Your Front Row Seat To Argentina's (Latest) Currency Collapse

Submitted by Tyler Durden on 01/23/2014 13:30 -0500

• Central Banks
 
• Citigroup
 
• Trade Balance
 
• Twitter
• Twitter

inShare2

 

UPDATE: The Argentine Trade Balance missed surplus expectations by the most in 3 years (and 2nd most on record).

As those who follow Zero Hedge on twitter know, we have recently shown a keen interest in the collapse of the Argentine currency reserves - most recently at $29.4 billion - which have been declining at a steady pace of $100 million per day over the past week, as the central bank desperately struggles to keep its currency stable. Actually, make that struggled. Here is what we said just yesterday:

zerohedge @zerohedge

Follow

The decline continues: ARGENTINA'S RESERVES FELL $80M TODAY TO $29.4B: CENTRAL BANK

6:21 PM - 22 Jan 2014

As of today it is not just the collapse in the Latin American country's reserves, but its entire currency, when this morning we woke to learn that the Argentina Peso (with the accurate identifier ARS), had its biggest one day collapse since the 2002 financial crisis, after the central bank stopped intervening in currency markets. The reason: precisely to offset the countdown we had started several days back, namely "an effort to preserve foreign exchange reserves that have fallen by almost a third over the last year" as FT reported.

As the chart below shows, the official exchange rate cratered by over 17% when the USDARS soared from 6.8 to somewhere north of 8.

But as most readers know, just like in Venezuela, where the official exchange rate is anywhere between 6.40 and 11, and theunofficial is 78.85, so in Argentina the real transactions occur on the black market, where they track the so-called Dolar Blue, which as of this writing just hit an all time high of 12.90 and rising fast.

What happens next? Nothing good. "The risk of capital flight is rising by the minute. This will be very hard to control,” wrote Dirk Willer, strategist at Citigroup, adding that liquidity had "largely disappeared" with a risk of Venezuela-style capital controls. Ah Venezuela - that socialist paradise with a soaring stock market... even if food or toilet paper are about to become a thing of the past.

Some other perspectives via the FT:

Siobhan Morden of Jeffries said: “This is not an administration that respects or understands market pressure. They have been in the early stages of currency crisis since December, and yet their main strategy has been to pay off arrears and try to attract foreign direct investment.”

Luis Secco, Buenos Aires economist, said "It is hard to figure out what is the logic behind the authorities decision to let the peso so abruptly, without any other accompanying macroeconomic policy. It’s possible that the authorities would rather see a strong rise in the dollar, than lose, again, a large quantity of reserves."

“It is a potentially dangerous situation...not least because it could give the impression that the authorities don’t have a very clear idea of how to manage the situation.”

Ricardo Delgado, Buenos Aires economist, said on Wednesday: “The government faces a dilemma. It wants to stop reserves from falling. But that means less imports and thus lower growth, as the economy is very dependent on imports. So the question is: do you want more growth, or higher foreign reserves.“

However, with the "currency run" having once again begun, absent a wholesale bailout and/or backstop by "solvent" central banks of Argentina, a country which has hardly been on good speaking terms with the western central banks, there is little that the nation can do.

So for all those morbidly curious individuals who are curious what the slow-motion train wrecked death of yet another currency will look like, below is a link to the DolarBlue website, aka the front row seats where the true level of the Argentina currency can be seen in real time. If and when this number takes off parabolically, that's when the panic really begins - first in Argentina, then elsewhere.

Of course, it's not just Argentina - most of the world's emerging market FX is getting hammered year-to-date...