People's Bank Of China
"China has a $28 trillion problem. That’s the country’s total government, corporate and household debt load as of mid-2014... equal to 282 percent of the country’s total annual economic output," Bloomberg notes, adding that efforts to deleverage this massive debt burden aren't compatible with the measures Beijing needs to take to boost economic growth. But if you thought the debt problem was bad now, it's going to get worse because as Reuters notes, China is about to activate the ABS machine.
The People’s Bank of China may have tripled holdings of bullion since it last updated them in April 2009, to 3,510 metric tons. It is worth noting that the U.S. refuses to allow their gold reserves to be publicly audited and the Bundesbank is having difficulty repatriating much of its gold stored with the Federal Reserve. This has led many analysts to speculate that the U.S.’s gold reserves have been leased out or sold or are encumbered as part of an ongoing effort to manipulate gold prices.
The following clip seemed to sum up perfectly just what The PBOC is attempting to do (and just exactly how it will end). With Chinese equities entirely decoupled from any sense of fundamentals, elementary-school-educated people piling their life savings into a market that is up 100% YoY amid the worst economic conditions in a decade or more, and margin trading that is surging (and now being probed - as Reuters reports, PBOC Shanghai has asked banks to check margin trading risks); how could anything go wrong?
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- Russia’s Foreign Minister Sergei Lavrov to Leave Iran Nuclear Talks (WSJ)
- Obama Ramps Up Lobbying on Iran as Deadline Looms (WSJ)
- Greek yields edge up as lenders scrutinise reform pledge (Reuters)
- Oil prices drop on possible Iran deal, dollar (Reuters)
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- Iran nuclear deal to see $20 oil if Tehran floods crude market (Telegraph)
- China’s Zhou Says PBOC Has Room to Act on Growth Slowdown (BBG)
Ahead of The Fed's 'impatience' today, and amid a tumbling EUR, the oldest central bank in the world has decided it is time to go further into the illustrious ranks of NIRP/QE'ers:
*RIKSBANK CUTS KEY RATE TO -0.25%, TO BUY GOVT BONDS FOR SK30 BLN
So as opposed to Denamrk's roundabout QE, Sweden just jumps in and monetizes that debt direct by expanding their QE program and shifts from small NIRP to bigger NIRP. All this while suggesting the labor market is strengthening and inflation has bottomed out. The reaction - SEK is plunging and OMX surges.
Following the dramatic December surge in Russian interest rates when the Bank of Russia scrambled to preserve confidence in the then-plummeting currency and sent the interest rate to a whopping 17%, now that the oil price crash has stabilized it has been walking down this dramatic move, and after reducing rates by 2% on January 30 to 15%, moments ago the Bank of Russia once again cut rates this time by the expected 100 bps to 14%. The bank also said that more rate cuts are in the pipeline.
Bank Of Korea Unexpectedly Cuts Interest Rate To Record Low 1.75%, 24th Central Bank To Ease In 2015Submitted by Tyler Durden on 03/11/2015 21:19 -0400
The currency war salvos just keep on coming. Moments ago the BOK unexpectedly (the move was predicted by just 2 of 17 economists polled by Bloomberg) cut its policy rate from 2.00% to a record low 1.75%, in what is clearly a full-blown retaliation against the collapse currency of its biggest export competitor, Japan, whose currency has cratered to a level that many in South Korea believe has become a direct subsidy for its competing exports. As such the only question is why the BOK didn't cut earlier. And following the surprise rate cut by Thailand earlier today, the "surprise" South Korean rate cut means there are now 24 easing policy actions by central banks in 2015 alone.
- RBS to cut up to 14,000 jobs in investment banking unit (FT)
- Doctors, patients scramble ahead of high court Obamacare decision (Reuters)
- Rajan Cuts India Rates After Modi Agrees to Inflation Target (BBG)
- Russia’s Putin Makes First Public Comments on Killing of Boris Nemtsov (WSJ)
- House breaks impasse, passes security funding without provisions (Reuters)
- How a 25-Year-Old Investor Spurred Lumber Liquidators’ Plunge (BBG)
- Jeff Immelt’s Overhaul of GE Impeded by Falling Oil Prices (WSJ)
- Sahara India Defaults on Luxury Hotel Loans From Bank of China (BBG)
In a surprise move, the RBI just cut its main interest rates for the second time in two months, taking it from 6.75% to 6.50%, in what the central bank calls a “pre-emptive” policy move, but what is in reality merely a confirmation that so far in 2015 at least 20 central banks have lowered their interest rate.
Overview of the major events in the week ahead.
And then there were 21. Hours ago on Saturday, the country whose currency is largely pegged to the dollar which itself is now anticipating a rate hike in the coming months, surprised the world by confirming its economic slowdown yet again following a recent rate cut just this past November when it lowered its benchmark rate by 40 bps, after it again cut benchmark lending and deposit rates by 25 bps starting on March 1. Specifically, the PBOC will lower the one-year lending rate to 5.35% from 5.6% and its one-year deposit rate to 2.5% from 2.75%. It also said it would raise the maximum interest rate on bank deposits to 130% of the benchmark rate from 120%.
All Out War Pt 3: Contrary to Central Bank Rhetoric, the Danish Krone Peg's as Fragile As Glass, May Throw Banks Into Turmoil!Submitted by Reggie Middleton on 02/11/2015 09:22 -0400
Exactly as I warned 3 wks ago, Nordic countries are facing pressure. Here's strong evidence of a krone break, havoc to ensue in global banks, how to monetize when skittish brokers pull access & leverage.
Moments ago the number of central banks who have eased so far in 2015, most of them unexpeted, rose by one more from 15 to 16, when in addition to Singapore, Europe, Switzerland, Denmark, Canada, India, Turkey, Egypt, Romania, Peru, Albania, Uzbekistan and Pakistan, Russia and, most recently, Australia it was China's turn to do what so many banks had said was inevitable, even if meant backtracking on all its blustery talk about limiting bad debt expansion, and cut its reserve requirement ratio for bank by 0.5% effective Thursday, to boost liquidity and support the economy.
Non-bombastic, non-insulting simply straight-forward look at next week's key events and data. If you are so inclined...
- Saudi Arabia’s New King Probably Will Not Change Current Oil Policy (BBG)
- Saudi King’s Death Clouds Already Tense Relationship With U.S. (WSJ)
- Oil Pares Gains as New Saudi King Says Policies Stable (BBG)
- Kuroda Says BOJ to Mull Fresh Options in Case of More Easing (BBG)
- U.S. pulls more staff from Yemen embassy amid deepening crisis (Reuters)
- Putin Said to Shrink Inner Circle as Hawks Beat Billionaires (BBG)
- A Few Savvy Investors Had Swiss Central Bank Figured Out (WSJ)