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The Thin Little China Thread---merged

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Some snippets from the Telegraph:

Business news and markets: live

08.18 Scary stuff from Patrick Chovanec, managing director and chief strategist at Silvercrest Asset Management. He reckons that unless the People's Bank of China injects emergency liquidity tonight or tomorrow, wealth management products will default en masse, which could lead to all-out bank failures.

08.13 We're hearing that the cash crunch is reaching fever pitch in China - there is so little liquidity available that banks have just stopped lending to one another.

Well-informed Beijing sources confirm China interbank market is basically frozen, rates are quoted but no transactions taking place.

We have a little local difficulty in China

Shibor is the Shanghai Interbank Offered Rate, a gauge of liquidity for the banking system.

Note the 175 basis point rise in three-month SHIBOR. Over half of the $2 trillion in wealth management products — described by Fitch as a second hidden second balance sheet of the banks — has ro be rolled over every three months.

The longer this goes on, the more serious it becomes for those swimming naked.

Fitch says China credit bubble unprecedented in modern world history (from a few days ago)

The agency said the scale of credit was so extreme that the country would find it very hard to grow its way out of the excesses as in past episodes, implying tougher times ahead.

...There is no transparency in the shadow banking system, and systemic risk is rising. We have no idea who the borrowers are, who the lenders are, and what the quality of assets is...

...Concerns are rising after a string of upsets in Quingdao, Ordos, Jilin and elsewhere, in so-called trust products, a $1.4 trillion (£0.9 trillion) segment of the shadow banking system...

...Bank Everbright defaulted on an interbank loan 10 days ago amid wild spikes in short-term "Shibor" borrowing rates, a sign that liquidity has suddenly dried up...

...The latest twist is sudden stress in the overnight lending markets. "We believe the series of policy tightening measures in the past three months have reached critical mass, such that deleveraging in the banking sector is happening. Liquidity tightening can be very damaging to a highly leveraged economy,"...

What does all this mean? Is this credit crunch mk II?

Edited by Goat

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t seems liquidity (or counterparty mistrust) is beginning to reach extreme levels in China as the nation's banking system is now quoting overnight repo transactions at 25%. The explosion in funding costs echoes the collapse in trust (and surge in TED spread) among US banks in the run-up to the Lehman bankruptcy. MSCI Asia-Pac stocks are down over 3% with China's Shanghai Composite -2.5% at seven-month lows.

  • China’s 1-day Repo Rate Climbs to Highest Since at Least 2006
  • MNI - CHINA OVERNIGHT REPO FIXING AT RECORD HIGH

China's bond market is also collapsing:

Yield on 3.1% govt bonds due January 2016 jumps 39 bps to 3.749%
, biggest rise since notes were issued in January
full article at Zerohedge..http://www.zerohedge.com/news/2013-06-19/china-interbank-market-freezes-overnight-repo-explodes-25

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From bloomberg:

http://www.businessweek.com/news/2013-06-19/asian-stocks-retreat-as-fed-signals-stimulus-cut-this-year

"Asian stocks slumped the most in almost two years amid concerns a credit crunch in China is worsening and the Federal Reserve will reduce stimulus should the U.S. economy continue to the improve."

Perhaps we wont have to wait long for the next leg down...suddenly all those rich Chinese buyers in London could disappear....

再见。很快再见。不是的。

P.S. Who'd have thunk you could uses google translate to convert to Chinese then display it on a forum. The internet is truly magical.

Edited by TheCountOfNowhere

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What does all this mean? Is this credit crunch mk II?

The thing is, China is a bit opaque. For years there have been rumblings of vast stocks of bad debt, pictures of empty cities, massive overcapacity, etc.. but they seem to keep going and keep growing. Honestly don't quite know what to believe..

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Oh FFS I'm off to China on Saturday for a 2 week business trip! <_<

Maybe I had better take 5 Krugerrands with me in case I need a safe passage out of the country :ph34r:

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再见。很快再见。不是的。

P.S. Who'd have thunk you could uses google translate to convert to Chinese then display it on a forum. The internet is truly magical.

Dishwasher safe? :unsure:

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Perhaps we wont have to wait long for the next leg down...suddenly all those rich Chinese buyers in London could disappear....

Or might financial possibly leading to political and social turmoil in China/Asia see even more of their elite fleeing to safe havens such as London?

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This thread might be needed !!!

http://www.itv.com/news/2013-06-20/chinas-credit-crunch-could-trigger-huge-social-change/

"What we're seeing is China's credit crunch"

"All this doom and gloom has an effect on the world; if sentiment about the Chinese economy is bad then expect world wide stock markets to reflect that negative feeling."

Edited by TheCountOfNowhere

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This thread might be needed !!!

http://www.itv.com/news/2013-06-20/chinas-credit-crunch-could-trigger-huge-social-change/

"What we're seeing is China's credit crunch"

"All this doom and gloom has an effect on the world; if sentiment about the Chinese economy is bad then expect world wide stock markets to reflect that negative feeling."

Cledit Clunch

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This thread might be needed !!!

http://www.itv.com/news/2013-06-20/chinas-credit-crunch-could-trigger-huge-social-change/

"What we're seeing is China's credit crunch"

"All this doom and gloom has an effect on the world; if sentiment about the Chinese economy is bad then expect world wide stock markets to reflect that negative feeling."

Iv always thought Chinese takeaways are great for watching inflation in action.My local one has about 10 lots of tape over the prices where they have increased them over the years.

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If the SHIBOR moves are real and sustained, this could turn into a big, fat Chinese thread pretty quickly. The credit bubble could be about to implode violently.

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I just want to get a post in in case this thread turns epic.

Does this mean China would cease being able to sell goods around the world somewhat too? As I guess the funny money is what's kept the Chinese currency low and made them like competitive and stuff? (or did I get that wrong).

As in, if China needs to stem inflation whatnot - and rates are going up - the chinese currency becomes dearer..no?

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再见。很快再见。不是的。

P.S. Who'd have thunk you could uses google translate to convert to Chinese then display it on a forum. The internet is truly magical.

You had better get yourself down to the tattoo parlour!!

The 'Dishwasher Safe' Count of Nowhere.

Cool ;)

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  • 238 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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