• BullionStar
    05/30/2016 - 21:24
    The US Gold Market is best known as the home of gold futures trading on the COMEX in New York. The COMEX has a literal monopoly on gold futures trading volumes worldwide, but very little physical...

Shadow Banking

Tyler Durden's picture

P2P Property Lending Explodes In China; Officials Panic





“Funds used for down payments cannot be borrowed." You might think that what’s implied there is too bad to be true - even in the increasingly ludicrous world of P2P and marketplace lending. But in fact, P2P lenders in China have indeed been funding down payments on homes, embedding an enormous amount of excess leverage into the market while simultaneously driving up prices in Tier-1 cities.

 
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Why Our Financial System Is Like The Titanic





The "unsinkable" global financial system is rushing headlong toward its encounter with the iceberg, while the passengers and crew remain supremely confident and unaware of the risks, risks that will only become "obvious" after the global financial system has broken in half and sunk to the bottom, destroying most of those who believed it unsinkable.

 
Tyler Durden's picture

After January Scramble, Chinese Lending Collapses





After January's record-smashing CNY3.4 trillion (half a trillion dollars!) surge in aggregate credit expansion in China, the post-lunar-new-year hangover hit hard in February as credit growth tumbled 77% from Janaury's level to just CNY780 ($112bn). This is the weakest February loan growth since 2011. Drastically missing expectations, and following authorities comments on the need to "monitor" excess credit growth, all categories of total social finance registered a sharp drop... which as Goldman warns, means China's GDP growth target will be "challenging."

 
Tyler Durden's picture

Do Any Of The Current Rallies Pass "The Sniff Test"? (Spoiler Alert: No!)





Everything from iron ore to copper to the Baltic Dry Index to stocks to bat guano is rallying. The problem is not a single rally passes "the sniff test:" is the rally the result of changing fundamentals, or is it merely short-covering and/or speculative hot money leaping from one rally to the next? Every one of these rallies is bogus, a travesty of a mockery of a sham of price discovery, supposedly the core function of markets. What shift in fundamentals drove this rally? Higher profits? No, profits are declining, especially once the phony adjustments are stripped away. Is the global economy strengthening? Don't make us laugh!

 
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The "Terrifying Prospect" Of A Triumph Of Politics Over Economics





All of life’s odds aren’t 3:2, but that’s how you’re supposed to bet, or so they say. They are not saying that so much anymore, or saying that history rhymes, or that nothing’s new under the sun. More and more 'they's seem to be figuring out that past economic and market experiences can’t be extrapolated forward - a terrifying prospect for the social and political order.

 
Tyler Durden's picture

China: A 5-Year Plan And 50 Million Jobs Lost





China never had an actual economic model or growth model. It simply printed an obscene amount of money, especially after 2008, and used it to build factories, 30-storey see-through apartment blocks and highways into nowhere cities, without giving much if any thought to where this would lead when their formerly rich western customers had less to spend on its ever increasing amount of ever more useless products. It was "to infinity and beyond" from the start, but that’s a line from a kids’ fantasy story, not a 5-year plan or an economic model.

 
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Even "Flim-Flam Accounting" Can't Hide This Profitless Recession





If you think all this is a solid foundation for ever-higher profits, by all means go buy stocks with all four feet. But don't be surprised if the rest of the market disagrees at some point - for example, when even flim-flam accounting can't hide the fact that profits are in a free-fall back to "normal" levels 60% below current levels.

 
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The Reason For Copper's Dramatic Surge: Chinese Copper Inventories Hit Record





In the aftermath of China's record credit creation spree, a question that emerged is what China is spending all this newly created money on. One answer emerged overnight when Bloomberg reported that after tumbling in the first half of 2015, copper inventories at the Shanghai Futures Exchange had been steadily rising, and in the most recent week soared by 11% to an all time high of 305,106 tons.

 
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China Faces 15 Trillion Bombshell As Shadow Banking Sector Collapses





If WMP buyers decide to ‘go on strike’ for whatever reason, a liquidity crunch in the shadow banking sector could quickly develop in our view.

 
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China Stocks Crash: Down More Than 4% To Fresh 15 Month Lows





Suddenly the Chinese market realized what we said earlier in the weekend, namely that with the much anticipated G-20 meeting a complete dud, and with no major stimulus on the horizon, suddenly the trapdoor below Chinese stocks opened and the Shanghai Composite has started the new month tumbling over 4%.

 
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G-20 Needs To "Man Up" Or Risk Sparking Market Chaos, Citi Warns





“Keeping the previous language would be very disappointing and would be viewed as either complacent or reflecting policy paralysis. [They need to] man up and tell member countries that monetary policy should be accompanied by fiscal expansion.”

 
Tyler Durden's picture

China May Have Found A "Solution" To Its Massive Bad Debt Problem





Last April, China had an idea about how to boost the country’s dying credit impulse. One idea was to supercharge the country’s nascent ABS market which was barely producing $50 billion in supply per year. That effort failed in large part due to banks' unwillingness to offload their good assets in a time when NPLs are rising. So you can probably guess what Beijing's "solution" is.

 
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Frontrunning: February 25





  • Europe shrugs off pre-G20 China stocks slump, sterling steadies (Reuters)
  • China Unveils Its Deliverables for G-20 -- And No Plaza Pact (BBG)
  • Foreign Money Could Be Slow to Enter China’s Bond Markets (WSJ)
  • China Urged to Stomach Much Higher Fiscal Deficit (WSJ)
  • Trump's Momentum Has Republicans in Congress Confused and Cowed (BBG)
 
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BofA Asks: Is This The Chinese Shadow Bank Failure That Will This Trigger The Chain Reaction





"In a scenario in which investors are not bailed out and thus become more cautious, eg, rolling over some of the debt instruments in the shadow banking sector, some borrowers may struggle to obtain credit, for example, developers and coal miners. Whether this scenario would trigger a chain reaction is a key risk that needs to be monitored."

 
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