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Ice-Nine Spreads To Shanghai: Chinese Interbank Liquidity Evaporates

Tyler Durden's picture




 

Previously we disclosed that FRA-OIS spreads in both the US and Europe have been on a tear as a result of ongoing concerns that European liquidity may be frozen. Then following the previous post we decided to check in on Chinese liquidity. To our lack of surprise we find Chinese availability of unsecured interbank lending has quietly dropped to the second worst of 2011, now that the rate on 7 Day SHIBOR has hit 7.4%, the highest since the spike in early January, and a range that goes back all the way to the August 2007 quant market crash. Keep a close eye on this should Chinese vital interests become impaired and China is forced to dump trillions of money formerly reserved for US Treasurys (and currently held in US-denominated reserves, thus forcing a selling of USD and buying of EUR), to buy European debt, once the next two dominoes, Italy and Spain, fall.

 

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Fri, 06/17/2011 - 07:34 | 1376987 CPL
CPL's picture

That's because they just bought any and all offers in the premarket.  Just look at it.

 

ridiculious jump on what looks like two buyers.  wonder if they'll dump it all to get credit moving again before the market opens.

Fri, 06/17/2011 - 07:59 | 1377043 oh_bama
oh_bama's picture

Remember there was a post on zero hedge that SHIBOR was at 7% and change early feb? Whata happeneda? NOTHING!

CHINESE SHORT TERM RATES ARE SLIGHTLY MORE VOLITILE and just LIVE WITH IT

DOn't get excited wihtout anything real!

 

Fri, 06/17/2011 - 07:32 | 1376990 qussl3
qussl3's picture

Funny thing is when that happens all the assets running out of the EUR into the USD will ensyure that the Chinese are just pissing in the wind.

Fri, 06/17/2011 - 07:39 | 1376999 GoinFawr
GoinFawr's picture

Do you mean 'pissing with the wind at their backs'?

Fri, 06/17/2011 - 07:45 | 1376992 GoinFawr
GoinFawr's picture

Anything to get the tanks rollin' again.

Fri, 06/17/2011 - 07:35 | 1376998 SecondComing
SecondComing's picture

Kilgore Trout and Montana Wildhack are pas de deux on that ice, don'tcha know.

Fri, 06/17/2011 - 07:36 | 1377000 Soul Train
Soul Train's picture

equity markets will be toast. Bye bye 200 dma.

Fri, 06/17/2011 - 07:39 | 1377011 HelluvaEngineer
HelluvaEngineer's picture

Dunno.  Was thinking of waiting until next week to reload shorts, but might be smarter to step back in this afternoon.  Anyone have a crystal ball handy?

Fri, 06/17/2011 - 07:47 | 1377016 CPL
CPL's picture

I wouldn't touch a damn thing.  Weather is looking bad for shorts and longs.  Well, if people actually use stops anymore.

 

Get the feeling we'll see a huge pop, then a massive drop sometime...yet by some strange coincidence we'll end up flat by the end of the day with 1/10th the usual volume historically

 

basically it's just another Friday in the new society of grab and spend.

Fri, 06/17/2011 - 08:20 | 1377096 Tense INDIAN
Tense INDIAN's picture

Good Idea...wait for some time....watch the dollar...there was a chart by Danerics..showing one last move below last low....we may have that with these last Bailouts...

Fri, 06/17/2011 - 07:38 | 1377006 JW
JW's picture

Having said that Peter Thal Larsen notes - 'For all the talk of another Lehman moment, European banks are a lot less nervous. Just look at interbank rates: '

Fri, 06/17/2011 - 07:41 | 1377013 Paralympic Equity
Paralympic Equity's picture

Tyler, do you think that China will start to buy Greek debt?

 

There is a rumour that the will end the CNY and USD peg on sunday?

Fri, 06/17/2011 - 07:46 | 1377021 Tyler Durden
Tyler Durden's picture

There is exactly 0.0001% implied probability this will happen. Which is higher than the 0.000% realized probability this happened the last two times this event was "rumored" to happen.

But anything to push the USD lower, EUR higher...

Fri, 06/17/2011 - 08:05 | 1377054 Paralympic Equity
Paralympic Equity's picture

Thanks for your view,

It seems that today they will say (not do) anything just to keep the markets from crying.

 

Fri, 06/17/2011 - 07:41 | 1377014 Cassandra Syndrome
Cassandra Syndrome's picture

But hey who cares in the land of Bloomjerk

U.S. stock-index futures climbed as as investors awaited a report that may show a gauge of leading indicators rebounded.

 

 

Fri, 06/17/2011 - 07:59 | 1377022 Paralympic Equity
Paralympic Equity's picture

I am allways surprised on how they explain what is happening.

BTW. good luck to the futures when the U. of Michigan release comes out.

Fri, 06/17/2011 - 07:59 | 1377026 Paralympic Equity
Paralympic Equity's picture

-double-

Fri, 06/17/2011 - 08:05 | 1377051 HelluvaEngineer
HelluvaEngineer's picture

Vonnie Quinn said that futures are up, indicating that there may be buying at the open, as opposed to every other fucking day.

Fri, 06/17/2011 - 07:54 | 1377017 AldoHux_IV
AldoHux_IV's picture

Trying to take over the world can be a very expensive failure.

Fri, 06/17/2011 - 07:48 | 1377019 Sudden Debt
Sudden Debt's picture

Don't worry! Benny will save us with his pot of gold!

And if we all put our head in our asses at the same time, everything might pass without anybody noticing.

Fri, 06/17/2011 - 07:49 | 1377029 AldoHux_IV
AldoHux_IV's picture

Only a matter of time when this debt blowsup in their faces-- they should be more concerned with their domestic issues than propping up insolvent nations and institutions, but people have to learn the very hard way. Unfortunately sometimes it takes violent revolutions before those lessons are ever learned and change occurs-- you can't own people through debt that is designed to take they're individual right and sovereignty-- history has proven this to be ill-fated thinking.

Fri, 06/17/2011 - 07:57 | 1377036 Tense INDIAN
Tense INDIAN's picture

So one last DOWN move for the dollar .....

Fri, 06/17/2011 - 07:58 | 1377039 Ted K
Ted K's picture

Eeh, who cares? The stupid little Chinky cunts will use it as an excuse to invade Europe claiming it's really Tibetan and Han have the right to anything Tibetan.  Then the Chinese Politburo will re-write school textbooks to claim the Eiffel Tower was originally a phallic tool Mao used on his 3 wives in the '60s.  Does anyone really care what these monkeys do???

Fri, 06/17/2011 - 08:32 | 1377121 squexx
squexx's picture

Asshole!

Fri, 06/17/2011 - 08:38 | 1377134 i-dog
i-dog's picture

Wow!...you truly are as moronic as your namesake!

Fri, 06/17/2011 - 08:14 | 1377083 siglo
siglo's picture

the above is 1 month not 1 week repo ... arguments still valid ... 6.685%

 

Fri, 06/17/2011 - 08:33 | 1377122 PulauHantu29
PulauHantu29's picture

Business INsider just published new photos of China's Ghost Cities...they seem to be multiplying even as fewer and fewer are buying them and most sit empty...spooky:

 

http://www.businessinsider.com/chinese-ghost-cities-2011-5?op=1

Fri, 06/17/2011 - 10:05 | 1377382 Marley
Marley's picture

Some day, my son, all this will be yours!

Do NOT follow this link or you will be banned from the site!