The Asian Crisis

[Aman A.K.A. Ahamburger]

What was it that happened in 2008 after all the stuff on the last 10 posts or so happened.. Ah yes...

Bad Assets To Soar In China's Interbank Market

Last month, overnight lending in China’s interbank market rose 80% year-on-year.

This surge is the result of a general reluctance to lend for more than a few hours, an acknowledgement that bad assets are rapidly accumulating in that market. Perverse incentives are encouraging banks and nonbank financial institutions to take on risky investments, both on and off balance sheets. Concerns about exposure are unmistakable symptoms of financial stress.

The People’s Bank of China , the central bank, has kept short-term money cheap as a means of maintaining GDP growth in an economy that is relentlessly slowing. Almost all financial institutions are under pressure to boost returns as rates fall, so cash has found its way to dubious projects. High-risk lending, unfortunately, is increasingly common......

.....All banks have been bulking up on risky “shadow” assets. For instance, off-balance-sheet WMPs grew 64% last year at Industrial and Commercial Bank of China, the world’s largest bank as measured by assets. Smaller banks are even in deeper, using short-term lending to quickly build up the asset side of their balance sheets.

Participants in the interbank market bought up nearly a third of WMPs in 2015, up from 2% the year before.Off-balance-sheet WMPs grew almost 75% last year over 2014. WMPs accounted for about 40% of China’s total local-currency credit growth in 2015.

And what could be worse? Beijing opened the interbank market to less-than-sterling participants, so counterparty-risk is becoming a factor. As Anne Stevenson-Yang of the Beijing-based J Capital Research notes, even property developers and local government financing vehicles have found their way into the market.

[Aman A.K.A. Ahamburger]

Chinese banks sitting on $1.7 trillion debt time bomb

Chinese banks are looking down the barrel of a staggering RMB 8 trillion - or $1.7 trillion - worth of losses according to the French investment bank Societe Generale.

Disturbingly though, debt is not only not shrinking, it is accelerating, making the eventual reckoning far worse.

[Aman A.K.A. Ahamburger]

China bankruptcies surge as government targets zombie enterprises

Courts in China accepted 1,028 bankruptcy cases in the first quarter of 2016, up 52.5 per cent from a year earlier, according to the Supreme People’s Court. Just under 20,000 cases were accepted in total between 2008 and 2015.

And this is happening with...

Stealth China Stimulus Means Fiscal Gap Over 10%, Economists Say

The fiscal deficit when taking off-budget spending into account will exceed 10 percent of gross domestic product this year -- more than triple the government’s stated ratio of 3 percent, according to economists at UBS Group AG and JPMorgan Chase & Co.

Trillions in reserve seem like so much when China was going to take over the world...

[Aman A.K.A. Ahamburger]

, about those..

-Kyle Bass Says China’s Corporate Bond Market Is ‘Freezing Up
-This economist thinks China is headed for a 1929-style depression

[Aman A.K.A. Ahamburger]

Impossible! Yet, when you think about how much the commies fudge, one has to wonder how bad it really is...

The long-feared Chinese hard landing has become a reality in rustbelt Liaoning

[Aman A.K.A. Ahamburger]

It would appear that China's central government is setting the provinces up to take the fall for their debt issues. Makes sense from a dictators point of view, next step is to enhance central power. I mean, there is no way that anyone in their right mind would think that building enough ghost cities to house half the worlds population is the way to solve a debt issue cause by ghost cities...

Chinese Cities’ Expansion Plans Could House 3.4 Billion People

[Aman A.K.A. Ahamburger]

Nowhere are China's economic lies more exposed than in The Land of Genghis Khan, Who Is Having an Epic Economic Meltdown

See, that's the funny thing about economic numbers. When they are BS, the truth always comes out because an economy is actually a living organism. When it's dying or dead the stench spreads to others around you. It's worse when talking about a command economy; futher proving that the old world relic which we know as the government is the root of our issues.

It's just logic really. Less reliance on a central power means having to support yourself and others.

[Aman A.K.A. Ahamburger]

So, China's bs numbers account for 39% of world GDP this year...

As if there needed to be more evidence that negative interest rates are fraud...

Global growth depends upon successful Chinese makeover

[tyfighter3]

Aman, you got the picture right.

[Aman A.K.A. Ahamburger]

Thanks, my friend! Much appreciated.

[Aman A.K.A. Ahamburger]

From industry and now to banks.. but don't worry, the Chinese economy is stabilizing.. The commies say so...

Tens of Thousands of Jobs Go as China’s Biggest Banks Cut Costs

[Aman A.K.A. Ahamburger]

They built ghost cities on the premise that workers would eventually fill them all. The ghost cities are still everywhere, but because the war choked off global growth and China's "One Road" dream; the workers are being laid off, and what's left?

Warning Indicator for China Banking Stress Climbs to Record

Credit-to-GDP ‘gap’ exceeds all other nations in BIS study
China’s reading is its highest in data starting in 1995

[Aman A.K.A. Ahamburger]

But, but, but, the economy is stabilizing! Official commie numbers say so!!!

Loan Demand Weakens to Historic Low

[Aman A.K.A. Ahamburger]

Well, watching this slow motion plane crash has been fun, but it looks like it's time to throw in the towel. I have to commend the Chinese policy makers. At first it looked like they were going to blow their reserves trying to save face, but it would appear they have woken up to the fact their trillion dollar cushion is nothing more that a hill of beans compared to the fraudulent, debt fueled growth story. Stay

China gives green light to credit default swaps

China has given the go-ahead to the use of financial products that can protect investors against bond or loan defaults, signaling an increased willingness to let market forces deal with the rising number of companies that are not paying back debt.

The move means that Chinese investors will for the first time be able to buy products such as credit default swaps, known as CDS, which became controversial in the West during the global financial crisis because of the way in which their extensive use can build up hidden financial risks.

....

Chinese regulators are hoping that products like CDS, which pay out if the issuer of a bond or a loan defaults, will become popular among investors in the country's main $8.5 trillion bond market. In turn, that could lower the burden on Beijing to bail companies that get into financial difficulty.

Following years of rapid buildup of public- and private-sector debt, China's financial system is coming under increased strain. There have been 45 defaults totaling around 26.81 billion yuan ($4.02 billion) in China's domestic bond market this year, already exceeding the 20 defaults worth 12 billion yuan in all of 2015.

[Aman A.K.A. Ahamburger]

Staying on the commies good side, by saying he still thinks they can avoid the end game for every. single. last. bubble. ever..... including in your soda pop.

Chinese real estate is 'biggest bubble in history'

[Aman A.K.A. Ahamburger]

As was previously laid out in this thread; Japan had EU growth, good US economic growth, and China to help them kick the can. China has.....

Road to stagnation? China Inc gets a break from lenders

Profits at roughly a quarter of Chinese companies in a Reuters analysis were too low in the first half of this year to cover their debt servicing obligations, as earnings languish and loan burdens increase.

Corporate China sits on $18 trillion in debt, equivalent to about 169 percent of China's GDP, but few firms reported feeling the heat.

Instead, lenders are heeding Beijing's call to support the real economy and so are rolling over company debt or granting repayment waivers, sometimes for years, specialist lawyers and investors said.

This is evidence that China may be in for a long period of Japan-like stagnation rather than a single event triggering a crisis - what some economists call a "Lehman moment" after the collapse of Lehman Brothers in 2008, which touched off the global financial crisis.

[Aman A.K.A. Ahamburger]

China banks may need $1.7 trillion injection as credit quality worsens -S&P

The study sees little scope for improvement in 2017 amid worsening leverage and substantial excess capacity in almost all sectors

And into 2018 we go. Stay

[Aman A.K.A. Ahamburger]

Missed this article from the middle of October, S&P are now saying exactly what was already outlined here years ago, Standard and Poor's highlighted the "tough choice between supporting growth and controlling debt sustainability"

And trying to support that growth leads in the thread: Free Enterprises we (the people) win!..... China as Factory to World Mulls the Unthinkable: Price Hikes

And then, all the things organizations like S&P are ignoring: ie) economies around -China are the tell because of how the commies have taken control of the news, and how these debt for equity swaps that are being cheered right now are nothing but the recycling of the South Sea Bubble of the early 1700's. Stay

-Australia flags China’s debt mountain as risk to stability
-China's Biggest Banks Have Written Off $40 Billion in Bad Debt This Year (Non-performing loans are growing faster than profits.)

[Aman A.K.A. Ahamburger]

desperate times, call......

China Unveils Three Major Decisions Within Three Minutes

Little more than three years into the job, veteran reformer Lou Jiwei was replaced as finance minister in favor of Xiao Jie, a former senior aide to Premier Li Keqiang who has spent more than two decades at the ministry..,

The Standing Committee also ruled that Hong Kong people who advocate independence from Beijing can’t hold public office -- a rare intervention aimed at stopping two elected localists from taking their posts.

Chinese Billionaire Cuts Salary to 15 Cents Amid Cash Crunch

[Aman A.K.A. Ahamburger]

It's always interesting to see words and phrases that you use show up in headlines. Stay

The $2trillion black hole in China's economy has caused, China's Debt Grew at a Terrifying Rate in the Last 12 Months

[Aman A.K.A. Ahamburger]

Nov 21, 2016 11:15:15 GMT -5 Aman A.K.A. Ahamburger said:

The reality of, Putin's actions set in, and a crossover into the Asian crisis has begun! Stay

-Russia has to be deterred in its attempts to ruin the world order,’ Ukraine deputy PM urges U.S.
-The Silk Road Gamble
-IS claims attack that kills dozens at Shi'ite mosque in Kabul
-Islamic State deepens foothold in Somalia’s Puntland state

And here we are! The following article is well written, and covers most everything discussed as we have watched the slow motion plane crash that is set to engulf the eastern Hemisphere. Stay

China’s economic problems will come to a head in 2017: Faced with a heavy debt load, the Asian nation would find it difficult to absorb an eternal shock such as a U.S. trade war

[Aman A.K.A. Ahamburger]

China’s central bank caps yuan’s outflow to stem currency’s slump

China’s central bank will limit the amount of renminbi that Chinese companies and individuals can remit outside the country, imposing a cap for the first time in more than two decades to stem the yuan’s outflow as the currency plumbs daily lows.

Companies domiciled in China will be limited to net currency outflows equivalent to 30 per cent of the owners’ equity, according to Order No. 306 issued Monday by the People’s Bank of China, a copy of which was obtained by the South China Morning Post.

This is a reversal in government policy, which had previously encouraged the renminbi’s worldwide usage, part of a long-term strategy to internationalise the currency. The central bank has instituted a range of measures to plug gaps where the currency could be remitted amid its 7 per cent slump this year against the US dollar, from banning Chinese citizens from buying insurance policies offshore, to requiring credit card companies to seek currency licenses.

[Aman A.K.A. Ahamburger]

Front and center, their is no way for China to cheat their way out of this. After a not seen in 20 year manover to stop capital outflows, China in now killing economic growth to stop flow that is cause by economic weakness that is causing capital outflows. The economic weakness is causing more pressure on debt, which is causing economic weapons and capital out flows. So, China has to keep using their reserves and stepping up capital controls........................

Oh, and there is no unrest in China, because everything out of China is censored and only a positive message is presented... *Cough* fake news...

It's weird to think the fire of war will actually be the thing China needs to truly progress.

[Aman A.K.A. Ahamburger]

and the fudging has gotten bad enough that China statistics chief says false economic data is a problem

[Aman A.K.A. Ahamburger]

as the smoke in the mirror clears to reveal that looking at China's neighbours is the true reflection of China's economy; China's leaders find themselves trapped in a web of lies and debt. Stay

President Xi Open to Growth in China Falling Below 6.5%

[Aman A.K.A. Ahamburger]

China's tightens cash injections to cut outflows, markets rattled by default

[Aman A.K.A. Ahamburger]

Ka$h is king! Stay

China’s money market pain seen worsening as bonds pressured

China’s debt market is heading for its biggest monthly decline in at least a decade..

..Liquidity will be the biggest risk next year

[Aman A.K.A. Ahamburger]

-China’s Credit Engine Is Running Out of Gas
-China Said to Consider Options to Back Yuan, Curb Outflows
-China’s Scrutiny of Currency Transactions Sends Casinos Slumping

[Aman A.K.A. Ahamburger]

Don't worry, everything is A-okay in China.

China Said to Intervene in Stock Market as Xi Attends Davos

[Aman A.K.A. Ahamburger]

They can't even manufacture good news anymore, so shut it down!

Two China real estate consultancies halt monthly home price data