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Overnight SHIBOR Goes Whoosh
Just four words for global liquidity watchers: Overnight and 1-Week SHIBOR.
Overnight... yes, this is a 3% (absolute) increase in Overnight interbank lending rates in one day (or for the purists a doubling in the rate from Friday).
Source: Shanghai Interbank Offered Rate
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It's going up so that's bullish.
Holy shit. During the 2007 mess the Libor rate cracked up by 0.4% overnight and THAT was huge.
Data, Bridge of the USS Enterprise Saucer Section:
"Oh shit"
Star Trek Movie some time ago.
EDITED ... so much for the damn Boost Phase, now we are in cruise phase.
http://www.youtube.com/watch?v=h9hg0uMwUrI&NR=1
http://www.youtube.com/watch?feature=player_detailpage&v=WSuAZJY3EeU
Each bubble gets larger and more exaggerated it seems.
Just had to provide link to the "Bubble Song", the Bernak's ringtone:
http://www.youtube.com/watch?v=vdED3rVgIu4
May 26:
http://www.bloomberg.com/news/2011-05-26/china-to-keep-building-shibor-as-benchmark-rate-pboc-says-1-.html
you soooo should be on cnbc...
Technically its a 100% increase over Friday...
Fecal matter hitting the Westinghouse?
Well... it certainly isn't inflationary.
Troubles a brewin' repaet of 2008... this time coming from Europe (near perfect repeat of Great Depression 1)
Deja Vu - eerie...
i liked your new pic. HOT!
Is this QE3?
Am I reading the first graph wrong? It is not a 3% increase, it is a 3 point increase....which is nearly a 100% increase overnight...right?
If it goes from 3% to 6% that is a 100% increase, but also a 3% increase.
Oh kids, behavioral science tells us it's a 3% "absolute increase", and a 100% "relative increase."
nominal might be appropriate than absolute
lookin at those charts, seems more like 3.924% move (from around 3.031% to 6.955% is a 3.924% increase), meaning more like 130% increase for overnight, similar for 1-week,
just sayin'
It actually is a 3% increase. Which also is nearly a 100% increase.
It is both....thanks
Two mints in one!
Who's on first?
if it is both 3% and 100%, and both are
increases, what is the down side? ( don't
actually try to answer that ).*
also, is a 3% and a 100% increase the same
as 103 "fold" increase? ( same ).*
also, does this development mean that some one,
somewhere, just made enough money to buy a country
and all the people in it? ( same )*.
The Collapse of Nations All By The Hand Of Corrupt Bankers
Bob Chapman
International Forecaster
June 19, 2011
http://www.infowars.com/the-collapse-of-nations-all-by-the-hand-of-corru...
3% is the same as 100%. My brain hertz.
this might have to do with it?
http://www.ctbto.org/specials/1945-1998-by-isao-hashimoto/
.
check this.
http://theautomaticearth.blogspot.com/2011/06/june-18-2011-monetary-psy-...
...
"The latest Treasury International Capital (TIC) report shows that net inflows into Treasuries increased for the month of April, mainly due to foreign government purchases. So when can we expect all of those "private accounts" to get with the program?
"Outside of equities, official accounts, which include foreign central banks, were the biggest buyers in the month with net inflow into Treasuries of $24.4 billion vs a net outflow from private accounts of $1.0 billion.;
A look at Treasury holdings by nations shows a $7.6 billion rise in mainland China, which is also a positive, to $1.15 trillion and a small decline in Japan to $906.9 billion. UK-based accounts, which are the third largest holders of US Treasuries, shows a $7.8 billion increase to $333.0 billion."
Well, with the rapidly progressing financial troubles of Europe and Japan, I suspect it will not be very long from now. In the meantime, as discussed in Bailing Out the Thimble with the Titanic, the Fed can continue to exert some influence over longer-term rates by selling insurance (IR swaps) on Treasury bonds through primary dealer banks, without any explicit monetization or anyone being the wiser (major investors). Eventually, the time will come when some form of QE3 is necessary, but that time will likely be sometime next year after asset prices have come down significantly. As for Gross, well, I still expect that financial shark to be well-positioned for the long-bond rally when it occurs, and in no small part because of his immensely pubic fear-mongering tactics."
( at link photo of shark jaws here )
Good and scary stuff. Especially the Great White.
What's on second?
3% is on first, 100% after the interlude (grab your popcorn)
Is that equal to the Doublemint twins?
http://www.youtube.com/watch?v=fVq4_HhBK8Y&feature=player_detailpage
It is actually hints like this, while the idiots as Marketwatch and on CNBS go on talking about green shoots, that let those who pay a little attention to get short and sit back a little bit until it's impossible to not see the issues at hand. Get short and wait.
That's above my threshold of a "hint".
Yes, but it's not headline story material for Marketwatch or MSNmoney so who really cares? :)
Hah! noice.
ORI
Pop-Corn...!!! Pop-Corn...!!!!
Get your Pop-Corn.....!!!!
I'm thinking something stronger.
+ 80 proof!
+100 proof. ;-)
180 proof and it will come from a still. The liquor stores will be empty soon enough.
it'll be a vueve if we take out that 1252 on the /es.
Redbull & Stroh 80 !!
Mom-corns perhaps?
ORI
commooon baby! Daddy needs an education in another country!
This is all pre-programmed window dressing to otherwise pare down the number of still standing banks - the Alpha Banks.
More banking chaos means fewer TBTF and thus guranteed survival for those at the center of this global assault on the human spirit.
The race is on to make it to the Basel 3 finish line.
And isn't it funny how Goldman-Sachs has been greased up for the sacrifice over these past few weeks?
And the Drums fill the jungle speaking collect the firewood and gather the feasting time.
Man I hope GS hangs, but I have been assuming they wouldn't, too much regulatory capture.
Think about it...
Goldman was at the center of the whole mess. They had people in the Treasury Department, they were called before Congress. We know the sins of Goldman! Yeah, that's the ticket...
We demand a public trial! The SEC has got the beef!
Live! On TV! The Trial of the Century!
There's Lord Blankfein doing his best Ollie North, going, "I do not recall that, Mr. Chairman. I'll have my people..."
Oh, you know the rest.
It was set up this way...
Trial of the Century is fitting for the Crime of the Century...
http://www.youtube.com/watch?v=jon3q6me5Sg
You have a Division Bell avatar and you give me Supertramp?
For shame...
http://www.youtube.com/watch?feature=player_detailpage&v=eXb_E6X6__0
+1
GS Orly? Doubt it somehow. Too many other smaller big fish that need to go first. GS might get a slightly large slap on the wrist, perhaps they'll have to give back some of that TARP generated profit as a fine, but not much more, not yet. I think.
ORI
Looks like you got it all figured out.
Does this mean I won't be able to get gyros from the corner sandwich shop anymore?
Cash seems to be running out. That would explain the lasting SSE weakness throughout the last month.
You mean "a over 100 % increase" right?
Silver Bitchez?
This is -- for now only -- highly deflationary.
Not really. This is like turning down the kitchen faucet to try to stop a flood, a flood that is caused by heavy rains and no roof (ie Bernanke's printing and the dollar peg, respectively).
On UK bank news ala Greek partial/full default. Nice, funding/liquidity blowout till the ECB starts printing into the Eurozone...now watch Germany go into inflation paranoia.
Lets the chaos begin.
So.... this means... they are tightening up their supply of loans because they'll be less available. Which means they are trying to control the country's cash supply. Which means that Chinese inflation will be going... down? I can't tell - I dont' know all the implications of these things.
So can someone explain what SHIBOR is? And what this means?
got google? takes about 3 seconds
http://www.shibor.org/shibor/web/html/index_e.html
perhaps "shybor" would be better?
http://www.youtube.com/watch?v=mIdgqWPdsA0&feature=player_detailpage
Libor or euribor for China.
Or, in other words, the rate at which Chinese banks agree to lend money between themselves. The higher the rate is, the higher the nervosity of these banks.
A ~7% shibor basically means that cash is very scarce or that various banks are in a major danger of default. It is generally caused by rotting lending books.
Thanks! I knew of SHIBOR, but didnt really know what this signal meant.
+1
That was nice and concise.
Nervosity - nice coinage.
and if you look at SHIBOR trends...
http://www.shibor.org/shibor/web/ShiborJPG_e.jsp
you will see that this takes us back towards December 2010...anyone know what the story was then?
Shibor (Shanghai Interbank Offered Rate) is calculated, announced and named on the technological platform of the National Interbank Funding Center in Shanghai. It is a simple, no-guarantee, wholesale interest rate calculated by arithmetically averaging all the interbank RMB lending rates offered by the price quotation group of banks with a high credit rating. Currently, the Shibor consists of eight maturities: overnight, 1-week, 2-week, 1-month, 3-month, 6-month, 9-month and 1-year.
http://www.shibor.org/shibor/web/html/index_e.html
Is shibor yuan denominated loans or USD?
shybor comes in all denominations.
china money market/interbank offer rates...good to watch since a fear trade is starting in Europe google UK banks withdraw money from EZ.
Now all we need is Ben 'madman' Bernanke to open up massive USD swaps. The genius will set oil bid and hit Europe/Germany with stagflation
"Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks.Standard Chartered is understood to have withdrawn tens of billions of pounds from the eurozone inter-bank lending market in recent months and cut its overall exposure by two-thirds in the past few weeks as it has become increasingly worried about the finances of other European banks."
http://www.telegraph.co.uk/finance/financialcrisis/8584442/UK-banks-abandon-eurozone-over-Greek-default-fears.html
Tens of billions in liquidity? Maybe this is why the GBP is slowly strengthening on the Swissie.
Most likely re: GBP/CHF check the close price trade very HFT
doesn't look too good at all, you get this feeling countries are gonna start pulling money out of the EZ. And Germany is worried the ECB revs up the printing press.
http://www.youtube.com/watch?v=6JUkfA_SaM4&feature=player_detailpage
Yes the CHF trade is getting scary. I'm sure BIS had a left hand in that, and STILL does.
Party time is all I can say. Let the games begin.Will Ben be addressing this and what will he say.
Ben? Ben? anyone? Ben?
(Beuller)
Ben can raise rates in 15 minutes...Ben? Ben!?!?
the rate increases are transitory don't worry.
Is your handle from Mrs. Doubtfire?
you've met me at a very interesting time in my life... TD
Will be papered over once again, they have been doing it so long... Its second nature! But first a three thousand point drop!
GE reaches tentative 4-year deal with unions
http://www.reuters.com/article/2011/06/20/us-ge-idUSTRE75J0KA20110620?fe...
The tide is going out again - whose naked this time?
+1
Never mind the hot wimmen and flopping fishies, start praying for your oncoming death by Tusnami.
It's already too late to run for the hills when the sea has run out.
http://www.youtube.com/watch?v=5rf1Bn3Rg0o&feature=player_detailpage
A classic clip DV! Most instructive too.
Wow this is insane, that is a parabolic rise in inter bank lending, this is going to have drastic effects tomorrow.
http://silverliberationarmy.blogspot.com/
First casualty will be chinese metal importers, who will be forced to dump massive built up inventory onto the market as they will no longer be able to afford the short term financing that was funding the imports. Metals dump = usd run?
They dont dare.
If everyone wants USD now, and fast; Gold and Silver is gonna crush the puny who cannot afford it by the time they decide to buy physical.
In other words, don't buy more than you can physically carry while making good time across the hills.
You sound well qualified to be the FRC. You should put in an application.
I think I just Schiff'd my pants.
Too funny +1 I call it DOO DOO.
Tyler, how does this compare to the similar rise in January?? What makes it different?
http://www.zerohedge.com/article/shibor-we-have-liquidity-problem
Same question
And here:
http://www.zerohedge.com/article/shibor-we-have-big-liquidity-problem
Perhaps this isn't really the end of the world.
Compare and Contrast. From Morgan Stanley Januay 21:
SHIBOR Surged on Liquidity Shortage
PBoC Open Market Operations: The PBoC made an announcement on Tuesday to suspend bill issuance this week. As regular repo operations were suspended as well, net liquidity injection surged to Rmb249 bn (Exhibit 1) this week (Rmb229 bn of redemption of regular bills and repos plus Rmb20 bn of 7-day repos sold last week). However, if we factor in the latest RRR hike effective January 20 that locked about Rmb350 bn of liquidity, more than Rmb100 bn of net liquidity was withdrawn from the system this week. Compounded with the surge in liquidity demand before the week-long Lunar New Year holiday (Feb 3 – 9), market liquidity became very tight this week, as reflected by the surge in SHIBOR rates, led by the 478 bps increase in the 7-day rate (Exhibit 2).
Re-launch of Reverse Repo: To alleviate the liquidity thirst before the Lunar New Year, it was reported that the PBoC conducted Rmb50 bn of reverse repos on Thursday. Recall that reverse repos were conducted by the PBoC in the week before the Lunar New Year during 2004 -2007 to inject liquidity. In our view, the re-launch of reverse repos on Thursday after their suspension for two years indicates the severity of liquidity stretch might be higher than expected. In addition, what’s different this time is that the PBoC conducted the reserve repos with chosen banks instead of through open market operations. This suggests to us that besides the systematic liquidity tightness, some banks may be more vulnerable to continued escalation of tightening measures from the PBoC to control inflation.
What’s next: After taking into account their cost and effectiveness, we believe that RRR may continue to play the key role of liquidity management if the trend of one-way operation (withdrawal) of liquidity management remains intact. Besides the conventional RRR hike, we expect that Dynamic Differentiated RRR will become a primary monetary policy tool in 2011.
Our take home:
In other words, the set of factors now compared to January, is completely different.
But that said, the central planning cartel most certainly has things under control. That is, until it doesn't.
Thank you
Thanks Tyler, good info.
why else "bailout the all powerful state banking sector" a few week(s?) back? i say this calls for immediate investigation!
http://www.youtube.com/watch?v=IrBMEVBzh1E&feature=player_detailpage
3% is the new 100%.
Now I have to do the friggin math to post this stupid comment...
This is Chinatown. They have their rules.
The word there is that the Fed will target the CPI to 5%. Zero interest rate for "extended period" till CPI to 5%. Be prepared!
Where have I recently seen something similar? Could it be the WSJ? Is someone sending a message?
http://online.wsj.com/article/SB1000142405270230445150457639400281024654...
Chinese CPI, US CPI or both at once?
i'm sure it could only mean something wonderful!
Ice 9.1?
By itself it seems like a non-event.
Shibor shoots to the moon every June. Call it the Shibor clock.
Yip, i give it a day or two to settle.
http://www.youtube.com/watch?v=uVmU3iANbgk
What levels did Shibor "shoot" to in the last couple of Junes
...it does seem to climb for some reason in and around june.
Balancing the books. Hiding the weiner. papering over the shortfall. plugging the leak.
what ever you call it, just make the books whole or someones getting a cap in the head.
For that I will gladly pay you Tuesday for a hamburger today.
All right so overnight Shibor is skyrocketing. 7 days Shibor is skyrocketting also but much less so. Then ZH just said Libor did not matter anymore as it was cooked to death by the banks so we should consider FRA-OIS rather.
So how does this Shibor spike translate in the European market today?
So why aren't HK and SSEC stocks reacting, big 4 banks BoC ICBC CCB ABC all rather muted today. O/N is well within January's 7.8% peak
PBOC raise reserve requirement last week, today is the first day bank hand in that money to PBOC.
But sisn't this just happen in Jan '11 as well? It didn't casue the "big one" then.
http://www.zerohedge.com/article/shibor-we-have-liquidity-problem
Entirely different set of factors. From above:
Compare and Contrast. From Morgan Stanley Januay 21:
SHIBOR Surged on Liquidity Shortage
PBoC Open Market Operations:
The PBoC made an announcement on Tuesday to suspend bill issuance this
week. As regular repo operations were suspended as well, net liquidity
injection surged to Rmb249 bn (Exhibit 1) this week (Rmb229 bn of
redemption of regular bills and repos plus Rmb20 bn of 7-day repos sold
last week). However, if we factor in the latest RRR hike effective
January 20 that locked about Rmb350 bn of liquidity, more than Rmb100 bn
of net liquidity was withdrawn from the system this week. Compounded
with the surge in liquidity demand before the week-long Lunar New Year
holiday (Feb 3 – 9), market liquidity became very tight this week, as
reflected by the surge in SHIBOR rates, led by the 478 bps increase in
the 7-day rate (Exhibit 2).
Re-launch of Reverse Repo:
To alleviate the liquidity thirst before the Lunar New Year, it was
reported that the PBoC conducted Rmb50 bn of reverse repos on Thursday.
Recall that reverse repos were conducted by the PBoC in the week before
the Lunar New Year during 2004 -2007 to inject liquidity. In our view,
the re-launch of reverse repos on Thursday after their suspension for
two years indicates the severity of liquidity stretch might be higher
than expected. In addition, what’s different this time is that the PBoC
conducted the reserve repos with chosen banks instead of through open
market operations. This suggests to us that besides the systematic
liquidity tightness, some banks may be more vulnerable to continued
escalation of tightening measures from the PBoC to control inflation.
What’s next:
After taking into account their cost and effectiveness, we believe that
RRR may continue to play the key role of liquidity management if the
trend of one-way operation (withdrawal) of liquidity management remains
intact. Besides the conventional RRR hike, we expect that Dynamic
Differentiated RRR will become a primary monetary policy tool in 2011.
Our take home:
In other words, the set of factors now compared to January, is completely different.
But that said, the central planning cartel most certainly has things under control. That is, until it doesn't.
SHIBOR is soaring because of the bitcoin crash...
http://bitcoin-money.blogspot.com/2011/06/bitcoin-market-hacked-crashes-...
(sarc)
Bitcoin is worse than stupid.
Really? I just discovered bitcoin yesterday and my considered opinion was that it is for real.
The mt gox exchange getting hacked has nothing to do with the p2p currency itself. It is just one of several exchanges.
HA HA HA, His previous post was, "BITCOIN, LIKE GOLD, BETTER THAN GOLD?"
Where he drew the conclusion "What are you waiting for? Are you ready to change the economics of the planet and for the first time in history to remove a large part of power to those who have always held and used against the weak? "
The next blog he watches it go to the wall. He said "this is going to be the biggest story ever"...no its not.
Thats some funny shit.
Yeah, epic fail. I almost want to sign up for blogger just so I can comment with this
http://www.youtube.com/watch?v=rX7wtNOkuHo
that's real money getting obliterated. how much? does anyone know?
Great explanation Tyler. Thaks for the update!
First casualty will be chinese metal importers, who will be forced to dump massive built up inventory onto the market as they will no longer be able to afford the short term financing that was funding the imports. Metals dump = usd run?
Will there be some bargain prices on silver tomorrow?
Is this a serious event??? or Should I just laugh nervously knowing that it is probably just a meaningless change in rates. or Should I be slightly anxious knowing that some big time players are getting anxious....
http://www.youtube.com/watch?feature=player_detailpage&v=dWBmaKk32fE
The RRR hikes are really biting. It is not unusual to see spikes in SHIBOR towards the end of the month as banks scramble for funds to meet ratios. However to see this mid-month is very strange. Anecdotally I know of banks in China who are literally begging customers not to withdraw funds.
So here comes the PBoC with its version of the PDCF in 5...4...3...
Meanwhile, seeing as the ECB is utterly useless and the Fed has to do the ECB's job for it, how long is considered minimally acceptable for a gentleman to pause before going back for more banging of Lady QE?
let us look to the history books to guide us:
http://www.youtube.com/watch?feature=player_detailpage&v=iqGLbvSjkuk
EZ+China (housing market crunch time) = perfect sh$storm kickin in, right now. Traders bring up your oil charts...
damn...
death to contango via brent/WTI! Long live texas fracking!
This move could be due to the PBoC raising reserve requirements. Reserve deficient banks have to hit the interbank market harder. Should ease pretty quickly.
http://www.dailymarkets.com/stock/2011/06/14/peoples-bank-of-china-raise...
And flying Monkeys are decorating spread sheets for me. This trade was(TELE) relegraphed 1.5 months ago! Pb]BoC has tightend 3 times in a 6 month period, and Australia is in (tin)flation tank. The ACB's have stopped rinse washing... ect....
Also options coming up and below 79.7-50 area digital! major stops just under 80.
WHOH Doggies !!! Now that's scary.
Zerohedge must be slipping.
My captcha was ... + 2 = 10
http://www.shibor.org/shibor/shiborChartShow_e.do?termId=3M
now zoom out, the thing is always crazy.
China 1-Day Shibor Rises Most in 5 Months as Redemptions Drop
http://www.bloomberg.com/news/2011-06-20/china-1-day-shibor-rises-most-i...
Bitcoin Gets Hacked . another hack attack making headlines, this hit on an internet based currency without a central bank or a country to back it up. here's how it works. you can buy coins through online exchange using a bank transfer, just like you buy your roeuros pounds. over the weekend the biggest exchange that trades bit coins was targeted by hackers sending the coins' value from $17 to less than a single cent
http://bitcoin-money.blogspot.com