End of the China bull?

[waterbottle]

http://tribune.com.pk/story/947338/audacious-move-china-scraps-loan-to-deposit-ratio-cap/

Let the loans floooowwwww

 

[skyQuake]

http://tribune.com.pk/story/947338/audacious-move-china-scraps-loan-to-deposit-ratio-cap/

Let the loans floooowwwww

Its fineeee

Was mooted in 2012, talked about again in Late Jun 2015


Plus the chinese banks went to some lengths to disguise their true LtDR such as regarding some loans as investments or off bal sheet

Besides... They're still quite a bit away from the CBA's healthy and safe LtDR @ 134%

 

[waterbottle]

China no longer ordering investment funds to purchase equities . Zerohedge is reporting that they have told brokerages to somehow support the market but there isn't a source.
Instead, they have decided to go after financial reporters for publishing bad news. They've also decided to relax their foreign property ownership laws but I would be hard pressed to find anyone interested

Meanwhile, the VP of the Fed is saying that a rate hike is still on the cards and he's being supported by Carney (BOE). And here is where the CNY is going to end up in Australia:

In Australia, where China this year surpassed the US as the biggest source of foreign property investment, officials are worried wealthy Chinese investors will pour more money into an already overheated market

Chinese investors are “looking for safe, stable, secure investments”, Treasurer Joe Hockey told The Wall Street Journal this week. “Australian real estate is very attractive for them in that *regard,” he said, singling out *“skittish Chinese investors”.

Mr Hockey said officials were monitoring overseas interest since the turmoil of recent days on global equity markets.

The government isn’t concerned with overseas purchases of newly built property. But officials believe many people, including from China and Southeast Asia, are abusing the system through loopholes to illegitimately buy existing homes and have recently began cracking down on them.

“Provided (the Chinese investment) goes into new real estate, creating the jobs in the construction industry that we want, that’s welcome,” Mr Hockey said.

Mercy, oh lord! ::

 

[notting]

WOW who'd have thought that one journalist could have so much power over the markets!

A financial journalist has "confessed" to causing "panic and disorder" on China's stock market and inflicting "huge losses on the country", the AFP has reported, citing official state media.

Wang Xiaolu, a journalist with Caijing magazine, was detained by Chinese authorities following China's recent stock market crash.
Wang "confessed" that his "false information" (educated opinion) had "caused panics and disorder at (the) stock market, seriously undermined the market confidence, and inflicted huge losses on the country and investors". (Say what the dictators tell you to say or this)

Wang wrote a story in July saying the securities regulator was studying plans for government funds to exit the market. How evil

and in the small print along side the big story - Xinhua reported that authorities had also detained an official from China's state owned securities watchdog and four senior executives of the country's major securities dealer for "stock market violations".

We're not sure what stock market violations are, but they are really bad - If they make the dictatorship look bad or if a scapegoat is required.

 

[notting]

While producer prices fell for the 42nd straight month in the latest sign that deflation remains a significant risk for the world's second-largest economy.
The consumer price index (CPI) rose 2.0 per cent, but much of the increase was due to soaring food prices - and mainly pork, which is heavily weighted in the index - not an improvement in economic activity.

Consumer prices are driven up by a small drop in the currency! Bit of a catch 22. Lower the currency to improve exports but that will starve out the people on food inflation if they take it much further.

So what to do? fellow brutalizes. Well if we drop interest rates we will have to spend a fortune keeping the currency from falling too far and making food affordable, so infrastructure build here we come!?

 

[Uncle Festivus]

In my opinion The shadow banking system in China has always been the turbo in the engine and has been the worlds biggest and ultimately free market - Totally raw - unregulated and just runs a like a wild animal, which actually does quiet well in the wild!

Until the leveraged debt can't be repaid with free cash flow, which has always been dodgy because they just get more loans ie ponzi. When the money supply increases by 20% a year it's got to go somewhere, or else! So the debt fueled gluts in everything from property to iron ore to steel etc are coming home to roost with global consequences.

 

[Uncle Festivus]

Plus the chinese banks went to some lengths to disguise their true LtDR such as regarding some loans as investments or off bal sheet

Besides... They're still quite a bit away from the CBA's healthy and safe LtDR @ 134%

It's the biggest Ponzi in the world, apart from the US dollar?

So where did you get that figure for CBA? How do the other banks compare? They are forcing me to gold, again!

 

[skyQuake]

It's the biggest Ponzi in the world, apart from the US dollar?

So where did you get that figure for CBA? How do the other banks compare? They are forcing me to gold, again!

https://www.commbank.com.au/about-us/group-funding/credit-ratings-and-research.html
Page 6 on the S&P one, Fitch has some historical stuff too.

In general, Aus banks have been above 100% (high vs peers) for post GFC (don't have data for pre GFC)

 

[Uncle Festivus]

https://www.commbank.com.au/about-us/group-funding/credit-ratings-and-research.html
Page 6 on the S&P one, Fitch has some historical stuff too.

In general, Aus banks have been above 100% (high vs peers) for post GFC (don't have data for pre GFC)

Something is going on here I think, and it is directly related to China? There have been reports of a crackdown on capital outflows from Chinese citizens already having an impact on the Aus property market in the last month?

The really interesting thing is that I got a call from the CBA last week asking if I felt all warm and fuzzy about being a customer and would I like to get a better interest rate on my accounts. I've never had this before as I've usually been the one to ask for a discretionary rate above the official rates. Naturally I said yes and so got another half percent just like that, at call. I also got her direct cba email to have cozy chats with - my own private banker?? WT?

I also handle my parents accounts and was able to get 3.5% at call with St George no problems.

I wonder if this means that unofficial rates will have to rise to attract bank capital in absence of the foreign depositors? Until that is, the local demand for housing finance drops off a precipice when the bubble finally bursts?

It will be interesting at the end off the month when I tell her I'm going to withdraw my money to another bank....are depositors finally having the last laugh?

 

[PennD]

https://mobile.twitter.com/alegrindal/status/644513263871492097

 

[Logique]

Unusual bearishness, given the hiding the Shanghai Composite has copped in recent months. My bolds.

Does Hong Kong's China options bear know something we don't? - November 2, 2015
SMH: http://www.smh.com.au/business/mark...ng-we-dont-20151029-gkme9s.html#ixzz3qHPO6bh2

There's a big China bear out there in the market and it's leaving some remarkably large and intriguing footprints in the Hong Kong options market.

In recent weeks some outsized bets have been placed in put options tied to three Hong Kong listed exchange traded funds that track Chinese A-shares indices: the CSOP China A50 ETF (ticker HK:2822), the iShares A50 ETF (HK:2823) and China AMC CSI 300 ETF (HK:3188).

The trades are positioned to make large profits from a fall in these indices, should they fall before the end of the month.

The puts in about 10 illiquid contracts have a value of about $US15 million ($21 million) but, such is the nature of options, sum to an effective exposure to the Chinese market of $US560 million.

The positions are unusual for three reasons. One is their enormous size, with open interest representing multiples of positions in related options in the same contract.

The other is the universally bearish positioning with action taking place in at-the-money or in-the-money put options that would profit from a decline in the underlying security.....

 

[Trembling Hand]

Unusual bearishness, given the hiding the Shanghai Composite has copped in recent months. My bolds.

Logique these type of articles are nothing more than clickbait. It is impossible to draw the conclusion that a large put trade is a large bet on a fall. They are just as likely (more likely in fact) to be part of a mandated downside protection for a massive upside bet or any of 100 other non-directional derivative plays.

 

[Logique]

I'm sure you're right. Without the full details of their trading plan we're not really to know.

They might just be playing a spread, with Calls on the other side of the trade.

 

[berrys]

Definitely the end, looks like China is looking at the economic collapse in 2016.

 

[notting]

Corporate indebtedness in China has ballooned from about 60 per cent of gross domestic product in 2008 to 157 per cent at the end of last year, according to research compiled by the bank. This compares with 92 per cent in Japan, 69 per cent in the US and 94 per cent for Europe.

In Brazil, a comparable emerging market, corporate indebtedness is worth just 64 per cent of GDP.

"What China will do is that it will have a low-amplitude credit event," says Mowat.

"The view is that having a very high-amplitude credit event, such as a Lehman's, is not considered a good idea at all.

"So we would see the Chinese banking system for a protracted time having high levels of provisions and a high level of write-offs," he said, "but all this will very much be controlled by the regulators."

A yes the old 'low-amplitude credit event.' Remember them. No? Oh.

Maybe they mean low volume.

 

[Logique]

The Chinese stock market looks to be consolidating to me.

 

[notting]

Counterfeiting is rampant in China with the country's own currency no exception, despite numerous crackdowns by authorities.

Police in the southern province of Guangdong announced in September that they seized piles of forged 100-yuan banknotes with a face value of 210 million yuan in a raid, according to reports.

Money counting machines are ubiquitous in Chinese shops, where customers making large purchases in cash need to use wads of notes to pay.

I've always said the Yuan wasn't worth the paper it was printed on and the Commi officials have always been the ones with the biggest printers.
The counting machine doesn't look at the notes too hard!!!!

 

[CanOz]

China banks turn blind eye to soaring overdue loans


Typical Chinese management behavior, hide the junk...

 

[DB008]

Very well worth a listen!

Skip to about 5 mins for interesting.

Big China blues​

Australia is now 'open for business' after the negotiation of a free trade deal with China.

The Chinese economy may have slowed down but the federal government says forget about the mining boom. It's now all about the dining boom. But what about all the stories of collapsing stock markets and trillion dollar debts?

China's economy is the second largest economy in the world, but it's in need of serious reform.

http://www.abc.net.au/radionational/programs/latenightlive/big-china-blues/6987246​

 

[notting]

http://www.cnbc.com/2015/12/03/you-should-fear-a-china-hard-landing.html

It's a given.