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Black Swan Watch: China Has Added Over $50 TRILLION in Financial Assets Since 2014
Black Swan Watch: China Has Added Over $50 TRILLION in Financial Assets Since 2014 The biggest black swan facing the financial system is China. China has been the primary driver of growth for the global economy since the 2008 Crisis. Despite only accounting for 15% of global GDP, China accounts for 25%-30% of GDP growth. […]
“A Daisy Chain Of Defaults”: How Debt Cross-Guarantees Could Spark China’s Next Crisis
“A Daisy Chain Of Defaults”: How Debt Cross-Guarantees Could Spark China’s Next Crisis On November 8, China shocked markets with its latest targeted stimulus in the form of an “unprecedented” lending directive ordering large banks to issue loans to private companies to at least one-third of new corporate lending. The announcement sparked a new round […]
Weekly Commentary: “Whatever They Want” Coming Home to Roost
Weekly Commentary: “Whatever They Want” Coming Home to Roost Let’s begin with global. China’s yuan (CNY) traded to 6.9644 to the dollar in early-Friday trading, almost matching the low (vs. dollar) from December 2016 (6.9649). CNY is basically trading at lows going back to 2008 – and has neared the key psychological 7.0 level. CNY […]
“The Central Bank Will Intervene”: PBOC Said To Sell Reserves If Yuan Drops Below 7.00
“The Central Bank Will Intervene”: PBOC Said To Sell Reserves If Yuan Drops Below 7.00 According to the latest data from China’s SAFE, net FX outflows from China picked up to US$21BN in September (vs. US$11BN in August) and the highest since mid-2017 with Goldman noting that “outflow might have increased moderately further in October, but […]
Has China Finally Lifted its Thumb off of Gold?
Has China Finally Lifted its Thumb off of Gold? There’s a lot of talk about the Yuan price of gold falling out of a price suppression channel. Both Zerohedge and Nomura have weighed in on this. The Yuan price of gold surged overnight to above CNY 8500 per ounce which is a major breakdown But […]
Chinese Verbal Intervention In The Market Fails As Stock Rout Accelerates
Chinese Verbal Intervention In The Market Fails As Stock Rout Accelerates This morning, when we reported that the latest flood of margin calls, resulting from $600 billion in shares pledged as collateral for loans and representing a whopping 11% of China’s market cap, sent the Shanghai Composite tumbling 3% to the lowest level since November […]
China Changes Definition Of Aggregate Financing To Disguise Sharp Credit Slowdown
China Changes Definition Of Aggregate Financing To Disguise Sharp Credit Slowdown With investor attention increasingly focused on China’s credit pipeline to see if the recent crackdown on shadow lending has unlocked other sources of debt in a country where growth is always and only a credit phenomenon, and where both the housing and auto sectors […]
Beijing Eases Policy, Yuan Slides Towards 10-Year Low
Beijing Eases Policy, Yuan Slides Towards 10-Year Low On Sunday, the Bank of China cut the level of cash that banks must hold as reserves. The Yuan continued its slide. Reuters reports China Set to Reopen After Beijing Eases Policy. Shares in Asia stumbled in early trade on Monday as investors waited with bated breath […]
China Cuts Reserve Ratio, Releases 1.2 Trillion Yuan Amid Rising Trade War, Record Defaults
China Cuts Reserve Ratio, Releases 1.2 Trillion Yuan Amid Rising Trade War, Record Defaults China’s central bank announced it would cut the Required Reserve Ratio (RRR) for most banks by 1.0% effective October 15 for the fourth time in 2018, a little over three months after the PBOC announced a similar cut on June 24, […]
“Something Has to Break” as China’s Onshore Defaults Hit a New Record
“Something Has to Break” as China’s Onshore Defaults Hit a New Record Recent news from China has been really ugly. But what can you expect? They’re trying to fight a trade war against the U.S. – deal with slowing growth – and survive against a stronger U.S. dollar. And because of these problems – China’s major […]
Weekly Commentary: “Periphery to Core Crisis Dynamics”
Weekly Commentary: “Periphery to Core Crisis Dynamics” The renminbi traded at 6.8935 in early-Friday trading, with intensified selling pushing the Chinese currency to its lowest level (vs. the $) since May 26, 2017. The People’s Bank of China (PBOC) was compelled to support their currency, imposing a 20% reserve requirement on foreign-exchange forward contracts (raising […]
China Caves: The Full Details Behind Beijing’s Launch Of Fiscal Easing
China Caves: The Full Details Behind Beijing’s Launch Of Fiscal Easing Last week we documented several instances of China’s most recent monetary easing, from the expanded usage of the Medium-Term Lending Facility to purchase China’s equivalent ot junk bonds, to the barely noticed 103bps cut in China’s 3-Month Treasury rate, even as the PBOC had […]
Has The PBOC Taken Control of The Gold “Market”?
Has The PBOC Taken Control of The Gold “Market”? The evidence is mounting, and we invite you to consider the implications. First, a few items of background information. Perhaps these are unrelated, perhaps they are not. In 2013, a major Chinese conglomerate called Fosun International purchased One Chase Manhattan Plaza from JP Morgan: https://money.cnn.com/2013/10/18/news/china-jpmorg… Why […]
China Threatened By “Vicious Circle Of Panic Selling” From Marketwide Margin Call
China Threatened By “Vicious Circle Of Panic Selling” From Marketwide Margin Call Two weeks ago, when commenting on the PBOC’s latest required reserve ratio cut, we pointed out that one of the more prominent risks facing the Chinese stock market, and potentially explaining why the Shanghai Composite simply can’t catch a bid during the recent […]
