The Asian Crisis

[Aman A.K.A. Ahamburger]

Crossing over into the global conflict thread: China’s ‘Belt and Road’ vision struggles to leave port

And then:
-China to promote insurance investment in debt-for-equity swaps
-China's Deleveraging Bill Tops $500 Billion
-Corporate China braces for credit crunch as onshore bond issuance shrinks

[Aman A.K.A. Ahamburger]

We need to raise funds to pay off old investors!! We can only fake it for so long!!

Chinese insurer warns of defaults as ban on new products bites

In a letter to China’s insurance regulator seen by the Financial Times, Foresea Life Insurance warns that the company expects Rmb60bn ($8.7bn) in redemptions this year and might be unable to meet payouts unless it is able to sell new products. 

In December, the China Insurance Regulatory Commission banned Foresea for three months from applying to sell new products. In February, the agency banned Foresea chairman Yao Zhenhua, China’s fourth-richest man, from the industry for 10 years.

China Unicom Units Inflated Sales for Years, Document Shows

[Aman A.K.A. Ahamburger]

It's probably nothing; it's like Mark Mobius keeps reminding people; China is a "planned" economy. Because planned/command economic structure have never failed.

-China Hit by First Moody's Downgrade Since 1989 on Debt Risk
-Ghost of the 1997 Crisis Stalks Hong Kong's Economy

Higher Chinese interest rates loom, as the one-year Shanghai Interbank Offered Rate hits a two-year high, perching above the one-year prime loan rate

The interbank funding cost of Chinese banks is quickly approaching, if not exceeding, the interest rate banks charge their clients, creating a distorted view of the financial landscape....

...many banks already have cancelled discounted rates for mortgaged loans. On Friday, regulators demanded higher deposit rates from banks competing for their funds.

The reversed gap between funding cost and interest charges will only accelerate the process for Chinese banks to raise interest rates on loans to home buyers, infrastructure projects and industrial enterprises.

[Aman A.K.A. Ahamburger]

as discussed as far back as 2011 around here; Is China’s economy turning Japanese?(It is more than 30 years since Tokyo began inflating a property and stock market bubble, as fears grow that Beijing faces a similar fate). Since we were talking about it before almost everyone; I can now say; China wishes their story will end up like Japan's. This War is Going Global (Thanks Putin): It's still China's! Stay

[Aman A.K.A. Ahamburger]

Fraud, fraud everywhere. Sex and drugs in the EU, negative interest payments and now "ghost" collateral to go with "ghost" cities!

Special Report: 'Ghost collateral' haunts loans across China's banking system​

The missing collateral is a setback for CITIC. But it is indicative of a much wider problem that could endanger the health of China's financial system – fraudulent or "ghost" collateral. When bank auditors in China go looking, they too often find that collateral recorded on the books simply isn't there.

In some cases, collateral that has been pledged simply doesn't exist. In others, it disappears as borrowers in financial distress sell the assets. There are also instances in which the same collateral has been pledged to multiple lenders. One lawyer said he discovered that the same pile of steel was used to secure loans from 10 different lenders.

With the mainland facing its slowest growth in over a quarter of a century, defaults are mounting as borrowers struggle to repay their loans. The danger of fraudulent collateral in this situation, say economists, is that it exacerbates the problem of bad debt for China's banks, increasing the risk of financial turmoil.

[Aman A.K.A. Ahamburger]

That's a fake mustache!!

China accuses 2 more provinces of faking data

And, as mentioned a few different times now(at least) WAR is blocking China's aspirations​; which is now right on their doorstep in the Philippines. This war has gone global, and it's China's! Stay

How the Gulf row is blocking China’s new Silk Road

[Aman A.K.A. Ahamburger]

From overseas acquisition to prison... No problems at all: Anbang Says Chairman Can't Perform Job for Personal Reasons

And, runnin' on empty. Stay

China Banks Brace for June Cash Squeeze as Fund Costs Jump

Wholesale funding costs climbed to the most expensive in history...

The one-month interbank rate known as Shibor rose to 4.59 percent on Friday, the highest since April 2015. That surpasses both the one-year cost of 4.41 percent and the Loan Prime Rate....China’s bond yield curve has inverted for the first time since 2013’s cash crunch, and the second time in data going back 2006.....

.....Chinese banks’ excess reserve ratio, a gauge of liquidity in the financial system, fell to 1.65 percent at the end of March,....“Major banks don’t have much extra funds....Lenders have become increasingly reliant on wholesale funding

[Aman A.K.A. Ahamburger]

As China's debt problems spread across Asia; and China continues to manipulate their capital outflows numbers.. Kyle Bass offers up a nice summary of what's truly going on with China's debt manipulation. Of course the big thing Mr. Bass is ignoring/underestimating/doesn't see? is that WAR is what will run China off the tracks.

Stay

[Aman A.K.A. Ahamburger]

So, basically China has been forced into QE due to a historic inversion of the yeild curve.... runnin' on empty. Stay

China Deploys Bond-Buying Tool First Time to Boost Liquidity

China used a new tool to boost liquidity in its government-bond market for the first time Tuesday, purchasing one-year notes that had seen limited demand among investors.

The operation is part of a broader initiative to generate a reliable yield curve for risk-free government debt that can serve as a benchmark for borrowing costs across the economy. While China has more than 22.9 trillion yuan ($3.4 trillion) of government securities outstanding -- one of the world’s largest -- it has less liquidity than many developed nations.

[Aman A.K.A. Ahamburger]

Jun 16, 2017 22:36:58 GMT -5 Aman A.K.A. Ahamburger said:

As China's debt problems spread across Asia; and China continues to manipulate their capital outflows numbers.. Kyle Bass offers up a nice summary of what's truly going on with China's debt manipulation. Of course the big thing Mr. Bass is ignoring/underestimating/doesn't see? is that WAR is what will run China off the tracks.

Stay

-New credit crunch hits China Inc as banks rein in short-term lending
-Chinese bank named and shamed for hiding loan risks
-Thailand's Bad Loan Ratio Is Worse Than China's
-Why the great malls of China are starting to crumble
-China’s debt surpasses 300 percent of GDP, IIF says, raising doubts over Yellen’s crisis remarks
-Islamic State: Australian troops could soon fight extremists in Asia, US Marine Corps general says
-China gives $16m in weapons to help tackle Marawi siege

[bimetalaupt]

Jim Chanos: Psychology of short selling; China makes Europe, U.S. debt look like child's play
Published on Jul 9, 2012

Subscribe to this channel: www.youtube.com/OpalesqueTV

Jim Chanos is a legendary short seller and Founder of Kynikos Associates, the hedge fund management company he started in 1985. Sitting down with Opalesque.TV, he talks about his background and first great short idea in Baldwin United, which led him to believe he could successfully start Kynikos utilizing a short selling mandate.



Chanos gives insights from his 27 years in the business into the asymmetries between the long and short side of investing and talks about the drastic difference in psychology between successful short sellers and long only investors. While the actual skill-set (to analyze companies etc.) is identical, good short sellers must be capable to withstand the "giant positive reinforcement machine" that Wall Street has become. This is something most investors cannot do and why most of them, even hedge fund managers, fail on the short side.



In this Opalesque.TV BACKSTAGE video, Chanos also tells the story of how he developed his bearish view on China, beginning with the analysis of Chinese mining stocks in 2009 where his deeper analysis led him to the view that China is in a dire state due to bad credit and credit extension, which "makes Greece and Spain and the U.S. look like child's play". He also shares valuable insights about the issues around Chinese listed companies, and what people should be aware of when investing in Hong Kong's H-share market.



In addition, Chanos speaks about why short selling bans are in the end devastating to financial markets, and how pure net short mandates fit into institutional portfolios.



Jim Chanos is the founder and Managing Parntner of Kynikos Associates LP, the world's largest exclusive short selling investment firm. Mr. Chanos opened Kynikos Associates LP in 1985 to implement investment strategies he had uncovered while beginning his Wall Street career as a financial analyst with Paine Webber, Gilford Securities, and Deutsche Bank. Throughout his investment career, Mr. Chanos has identified and sold short shares of numerous well-known corporate financial disasters; among them, Baldwin-United, Commodore International, Coleco, Integrated Resources, Boston Chicken, Sunbeam, Conseco, and Tyco International. Mr. Chanos is chairman of the Coalition of Private Investment Companies, whose members are diverse in their size and investment strategies. The members' clients include pension funds, asset managers, foundations, other institutional investors, and qualified wealthy individuals. In that role, Mr. Chanos has testified before Congress and provided comments to regulations proposed by the U.S. Securities and Exchange Commission and the Financial Services Authority in the United Kingdom.



Mr. Chanos is currently a Lecturer and Becton Fellow at the Yale School of Management, teaching a class on the history of financial fraud. Born and raised in Milwaulkee, Wisconsin, Mr. Chanos received his BA in economics and political science in 1980 from Yale University.


This  is worth watching! risk reduction system dictate need to master short selling!
BiMetalAuPt 

[Aman A.K.A. Ahamburger]

Nice to have another legend in the business vindicate on the bear side analysis of our firm, eh DB?

asymmetries between the long and short side of investing and talks about the drastic difference in psychology between successful short sellers and long only investors....

...and the balanced (rare) investor is the most Efficient on the Frontier!!! Especially when the most KISS strategy is being deployed with CPU power based on the only true historical precedent in the market; volume!

God bless.

[Aman A.K.A. Ahamburger]

And Japan wasn't completely fabricating their numbers while cracking down on their population; nor was Japan facing a world war. In fact, Japan had US, China and EU growth...



-(1995)JAPANESE SCRAP $2 BILLION STAKE IN ROCKEFELLER
Behind China's Boldest Dealmaker, Billions in Pledged Shares

[Aman A.K.A. Ahamburger]

About that internationalization of debt mentioned elsewhere:

Veteran Emerging-Market Investor Says EM Risk Could Be Higher Than in 2008

Since entering the world of emerging markets nearly three decades ago, Robert Koenigsberger has seen more than his share of changes.

One of the most consequential is the migration of allocators from hedge funds to exchange-traded and mutual funds in recent years. That’s effectively made them one-day liquidity vehicles, versus the 90-day instruments leveraged funds typically offer.

"We’re potentially sitting on one of the most illiquid market conditions in emerging markets that I’ve ever seen,"

[Aman A.K.A. Ahamburger]

Jul 14, 2017 14:20:22 GMT -5 Aman A.K.A. Ahamburger said:

And Japan wasn't completely fabricating their numbers while cracking down on their population; nor was Japan facing a world war. In fact, Japan had US, China and EU growth...



-(1995)JAPANESE SCRAP $2 BILLION STAKE IN ROCKEFELLER
Behind China's Boldest Dealmaker, Billions in Pledged Shares

Wanda Deals in Jeopardy as China Scrutiny Mounts

[Aman A.K.A. Ahamburger]

-China orders Anbang to sell Waldorf Astoria, other foreign assets
-Overnight lending cost in Hong Kong hits new post-crisis high

[Aman A.K.A. Ahamburger]

I read the following article and it made me think about how it was outlined a couple years back on this thread that China had a choice to make: be rational and logcal and let their economy tank; or be irrational and believe in their own BS that Chinese culture is superior to market forces - just like Japan did. They obviously chose the later. Now, thanks to Putin's irrational choices in 2014, things are set to work out even worse for China than had they just taken the pain in 2015 when their housing market tanked due to ghosts. Crazy times these be.

China: A Keynesian Monster

This image is one of wasteful spending and immense economic errors. The contrast is as puzzling as it is scary. It tells us something important about the nature of the recent Chinese economic miracle: that it is fundamentally fake.

[Aman A.K.A. Ahamburger]

The irony of the previous post mixed with: Chinese lender urges rational response after bank run.

[Aman A.K.A. Ahamburger]

In a crossover from the debt wall thread, .

Don't Forget About The Red Swan

The chart below comprises a picture worth thousands of words. It puts the lie to the latest Wall Street belief that the global economy is accelerating and that surging corporate profits justify the market’s latest manic rip.

What is actually going on is a short-lived global credit/growth impulse emanating from China. Beijing panicked early last year and opened up the capital expenditure (CapEx) spigots at the state-owned enterprises (SOEs) out of fear that China’s great machine was heading for stall speed at exactly the wrong time.....

.....However, you cannot grow an economy indefinitely by building pyramids or any other kind of low-return/no return investment – even if the initial growth spurt lasts for years as China’s had.

Ultimately, the illusion of Keynesian spending gets exposed and the deadweight costs of malinvestments and excess capacity exact a heavy toll.

If the investment boom that was financed with reckless credit expansion is not enough, as was the case in China where debt grew from $1 trillion in 1995 to $35 trillion today, the morning-after toll is especially severe and disruptive. This used to be called a “depression.”....

....Half of the world’s GDP growth since the 2008 crisis has been in China, and that, in turn, was purchased by the greatest credit eruption in recorded history.

CSRC says state meddling stabilises China stock market

[Aman A.K.A. Ahamburger]

-The Chinese Economy's Fatal Flaws
-China bank loans to slow as lenders rapidly exhaust annual quotas
-China Banks’ Interbank Lending Falls for First Time Since 2010
-Prominent China debt bear warns of $6.8tn in hidden losses
-China's Dalian Wanda drops plans to buy Nine Elms Square in London
-China's new problem: 'Frenzy' of consumer lending creates debt 'explosion'

[Aman A.K.A. Ahamburger]

Printed in the SCMP no less...

My prediction: the coming collapse of China’s Ponzi scheme economy

no command system can last long in charge of an economy. Attempts at this particular form of hubris inevitably end in either war or financial crisis...

Command systems may be good at deciding where to direct economic effort in wartime but they are hopeless in peacetime at deciding when to stop and do something else

Which is why this next war is China's. Then, Chinese people will no longer put up with being commanded.

[Aman A.K.A. Ahamburger]

Although the article is US centric, it's very apt to this trend;

What Is the Liquidity Trap?

Trouble erupts, however, when, on account of loose monetary and fiscal policies, a structure of production emerges that ties up much more consumer goods than the amount it releases. This excessive consumption relative to the production of consumer goods leads to a decline in the pool of real savings.

This in turn weakens the support for economic activities, resulting in the economy plunging into a slump. (The shrinking pool of real savings exposes the commonly accepted fallacy that the loose monetary policy of the central bank can grow the economy.)

Once the economy falls into a recession because of a falling pool of real saving, any government or central bank attempts to revive the economy must fail.

Not only will these attempts not revive the economy; they will deplete the pool of real savings further, thereby prolonging the economic slump.

Of course if you're China, you can just fudge the command lines... When the music's over...

China is going to hit a wall (In fact, they already did in 2013. But you gotta luv that fraudulent International monetary system...)

[Aman A.K.A. Ahamburger]

and then: China Sacks Russia!!!.. considering all the hype surrounding the Sino-Russian cooperation: Russia, in One of Biggest Bailouts in its History, Rescues Otkritie Bank Stay

[Aman A.K.A. Ahamburger]

A and more negative rates for the fraudulent International monetary system and the Bank of Cyprus posts big loss on bad debt provisions...

[djAdvocate]

Cyprus is such a whorehouse. 

[Aman A.K.A. Ahamburger]

Even more impossible to escape because their way out is on fire! A great little outline of trends discussed. Stay

China Battles "Impossible Trinity

Just because something is inevitable does not mean it cannot be postponed...

...The Impossible Trinity theory was advanced in the early 1960s by Nobel Prize-winning economist Robert Mundell. It says that no country can have an open capital account, a fixed exchange rate and an independent monetary policy at the same time.

You can have one or two out of three, but not all three. If you try, you will fail — markets will make sure of that.....

...China cannot keep the capital account even partly closed for long without drying up direct foreign investment. Similarly, China cannot raise interest rates much higher without bankrupting state-owned enterprises.

China is buying time until the Communist Party Congress in October.

It’s important to realize that for Beijing, the Chinese economy is more than about jobs, goods and services. It’s a means of ensuring its legitimacy. The Chinese regime is deeply concerned that a faltering economy and mass unemployment could threaten its hold on power...

...China has a long history of violent political fracturing, and the government is deeply worried about regime survival if it stumbles. Many in the West fail to appreciate Beijing’s fears and overestimate the support it has among the disparate Chinese people.

[Aman A.K.A. Ahamburger]

It's probably nothing.... Especially because ya know, fraud...

Chinese debt is so bad that even Chinese bankers now say it's a 'bubble'

Huarong trades in nonperforming loans, distressed assets, and bad debt. Investors are so sure that the government has the debt situation under control that people are pouring money into risky debt products rather than fleeing from them, he says.

"There is a bubble in the price of bad assets," he told the Financial Times. "If you don't understand the market for bad assets or asset restructuring and merging, for nonprofessionals there is big risk. Not only will you not make money, you will also lose money."


There has been an uptick in the number of voices openly worrying that the country's debt is out of control. One of them, Charlene Chu, now says Chinese debt is so large its scale is becoming almost unimaginable. Chu, a former Fitch analyst now at Autonomous Research, told the Financial Times recently:

"Everyone knows there's a credit problem in China, but I find that people often forget about the scale. It's important in global terms ... It can create a problem of proportions that people would think is never possible. We're moving into that territory."

[Aman A.K.A. Ahamburger]

Aug 30, 2017 0:40:35 GMT -5 Aman A.K.A. Ahamburger said:

and then: China Sacks Russia!!!.. considering all the hype surrounding the Sino-Russian cooperation: Russia, in One of Biggest Bailouts in its History, Rescues Otkritie Bank Stay

Aug 30, 2017 19:44:06 GMT -5 Aman A.K.A. Ahamburger said:

A and more negative rates for the fraudulent International monetary system and the Bank of Cyprus posts big loss on bad debt provisions...

Ah, this is where I posted about the last Russian bank failure. Might as well note; Russia's B&N Bank balance sheet hole could reach $6 billion. I don't have time to look for the post about dividend cuts, but another trend called which has been little discussed;

Pace Of Dividend Cuts Slows Near End Of 2017-Q3

Despite having the potential to be the best quarter in 2017, the pace of dividend cuts for the third quarter is at a level that is consistent with recessionary conditions being present in the U.S. economy...

Since DOW and S&P companies get 50% of their earnings from markets outside of the US... Perhaps all the fraud in the global economy?

S&P Cuts China’s Credit Rating, Citing Risk From Debt Growth

[Aman A.K.A. Ahamburger]

Ah yes, tying the information together on this thread: Xi uses speech to tighten China's grip on 'culture and morals'; and To inspire young communists, China turns to 'Red Army' schools. Stay

[Aman A.K.A. Ahamburger]

If the amount of fraud in China wasn't already at epic purportions... The reason for housing stabilizing shows up. Chinese Cities Buy Off Housing Glut With Borrowed Money