Are Inverted Chinese Corporate Curves A Harbinger Of A "Hard-Landing" Recession?

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Fri, 01/07/2011 - 07:11 | 855459 Midas
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So, I will soon have an opportunity to buy the dip?

Fri, 01/07/2011 - 07:22 | 855468 AUD
AUD's picture

more are rushing to the safety of near-term fixed income

Are you sure you have this the right way round? I would have thought that a rush into near term would push down yields at the short end rather than raise them.

Fri, 01/07/2011 - 07:59 | 855500 Tyler Durden
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Sorry, forgot the quotation marks around it...

Fri, 01/07/2011 - 08:22 | 855519 jm
jm's picture

Interesting article.  This is a 10s30s-type issue in Chinese context, right?

Even for gov securities, fixed income in China is typically bought and held to maturity.  There is no liquid secondary market.  (Maybe that is changing?)  Between those mechanics and limited supply any selling will result in big moves.


Fri, 01/07/2011 - 08:40 | 855529 ageofreason
ageofreason's picture

So at least we know why they said they (the Chinese) would nuke first and ask questions later the other day......

Fri, 01/07/2011 - 09:44 | 855668 bobert
bobert's picture

+1  LOL

Fri, 01/07/2011 - 08:54 | 855545 Sam Clemons
Sam Clemons's picture

Seems that a Chinese slowdown will continue to shorten the supplies of many AG products (wheat right?), PMs, and REMs.

Fri, 01/07/2011 - 09:47 | 855678 bobert
bobert's picture

Hmmmm....makes one ponder doesn't it?

Fri, 01/07/2011 - 09:44 | 855665 bobert
bobert's picture

Rushing for 4.67% at the long end of the curve in order to lock in a good rate while they can

rather than settle for 4.97% short term i.e., the Chinese bond market is predicting an economic

slowdown. Remember the last time the interest rate curve in the US was inverted??? 2006-2007.

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