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Chinese Banks Stop Lending Due To Liquidity Freeze
If one thought the schizophrenic lies out of Europe between 2010 and 2013 were bad enough (the bulk of which it now appears were orchestrated by Mario Draghi), here comes China, a country which already has a "credibility" issue so to say, which has no choice but to lie as blatantly as possible in order to preserve some semblance of stability. The reason: as first forecast here months ago, and as has subsequently materialized, the credit/liquidity collapse in the country that lives and breathes on credit creation (the bulk of which is created in the shadow banking system) is rippling through the banking sector and causing unprecedented fallout for a financial industry that is already starved for every marginal yuan (and in a Keynesian "credit=growth" world, the economic crush is just waiting beyond the next corner).
Not unexpectedly following news that various retail and online banking services had been impaired in the early part of the week at China's biggest banks, now Caixin reports that banks are simply shutting lending to both businesses and individuals.
From Caixin:
A number of banks have temporarily halted lending to businesses and individuals apparently due to mounting pressure from liquidity shortages.
They include some branches of Bank of China (BOC) and Industrial and Commercial Bank of China (ICBC), sources from the two banks said.
The bank was already having a hard time keeping up with deposit-to-loan ratio requirements even before the liquidity shortages hit, not to mention executives' recent determination to sort out the bank's liquidity management and control loans.
BOC plans to resume lending on July 15, he said.
As for ICBC branches, the amount of loans they can make is routinely capped under a monthly limit set by headquarters, a source from the bank's Shenzhen branch said. It was not unusual for branch banks to reach lending quotas before the end of month, he said. What was rare, however, was that headquarters had cut down on the quotas to make room for its own operations.
"All of our loans have been put on hold," the source said, "There may be some credit line when it comes to July, but it will definitely be used up in a few days."
* * *
The tightened liquidity, which started about June 6, has affected the interbank market, stock market, government bond underwriting and securities refinancing operations.
On June 23, ICBC customers had trouble using its online, counter and ATM services. This included making withdrawals and paying bills. The same thing happened to BOC users a day later.
The two banks responded by saying the disruptions were caused by system upgrades. However, users of China's Twitter-like weibo services were not convinced the problems were unrelated to the banks' liquidity situations.
A source from Agricultural Bank of China said there was no need to worry about large banks.
Luckily in China sources never lie. And neither does the PBOC, which recently said liquidity is ample, and that banks "are fine." In the meantime, anyone needing a loan to engage in business, and grow the Chinese economy at its just as laughable 7%... come back tomorrow.
And anyway, it's not the loan halt that is an issue for banks. It is when they have to do the same to deposits. The good news at least for now, is that the Chinese population hasn't figured out that as the PBOC undergoes an ad hoc $1 trillion deleveraging, a like amount of deposits will be impaired. But just like Russians in Cyprus, they will. Eventually.
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When the bank runs begin, that's when it gets real. I'll make the popcorn.
Irish butter for me, please.
Oh, and pink Himalayan salt if you have it.
Just print moar.....what's the problem?
"Supplies!"
Gosh, its a bad juke but somehow it just fits.
Can you say DIVERSION.......and they're gonna need a BIG one......
I love the smell of liquidity crunch in the morning.
"A source from Agricultural Bank of China said there was no need to worry about large banks."
But that's true -- there is no need to worry.
Just like there's no need to worry whether the sun will come up, because it's a foregone conclusion.
There's no need to worry about the banks, because they're already dead -- they just haven't fallen down yet.
What there is a need for is a plan for what to do when the urban Chinese find themselves just as poor as the rural Chinese.
Got yuan? Got Ag?..
economics.. physics.. same difference.
As I much as I hate to say it, this is going to drive people back to buying Treasuries in the near term. 10 yr yield going back to sub 2% in the next month or two IMO
Somehow I just don't see the Chinese public's reaction to bank failures being a rush to Treasuries.
I'm halfway in between you guys, I have 2.40ish with a side of nuttin much goin on elsewhere as we all go crazy.
I may dip my toe in the water and buy some stocks today to see if I can mush this bitch.
"Don't go into the long grass, don't go into the long grass!!"
http://www.youtube.com/watch?v=_DV5EbkIgd0
lol I just grabbed a canadian telecom thats gettin hammered. Just my toe.
I just can't operate under the premise that the mad max will be here by lunch.
I doubt that will happen that soon fonz, but just to be sure I tried on my assless chaps.
pods
I've been sittin here so long I don't fit in mine anymore.
I feel like pizza the hut.
I for one, have plenty of peroxide stashed, you know, just in case my "ride" likes blondes.
I agree. No panic in the Asian markets due to this. Actually, it's a little surprising that there wasn't a bigger reaction.
Ice Nine is doing its work. Ever notice that when things a really, really bad, there is absolutely no news about it? Not a good idea to interpret silence as peace and prosperity. Fact is that China is vacuum imploding right now. Its something that not even they are in control of since it started when Japan went mini-Bernak in March. "adjustment" of the Yen means China's most profitable top end exports just got decimated. Cash flow from that top end profitability is noiw decreasing and its hitting the bottom line. China can't do anything about it, really. I tried to tell you guys that Japan's decision would trigger the death of the global ex machina of liquidity...
im reminiscing the recent past with the lehman thingee.....money narkets went to yielding 7%---treasury money markets were closed to new investors by mutual funds(only place percieved safe)....breaking the buck seemed a logical outcome........haircut for everyone looked like the outcome. Futures were limited down (or up) most everyday.....the country was transfixed on their wealth loss.........commodites dropped 30%, TIPS yielded 3.00% + all along the curve; all banks were insolvent, but the powerful only threw lehman and bear streans to the wolves; the rest were bailed out, interest rates were dropped to .25% and qe started in full force (even though many were upset at the deficit level of that era already). The depression that didn't happen. And that was only 5 years ago.
Does this mean no more zero-down Ghost Cities?
Anyone that walks into the T-Bills will never walk out the same though. Everyone understands what the cost will be if they push a nickle into them. Unless they jack the interest rate up to 20%, there will be no buyers for that debt. If it ever got to 20%...then we've got a different problem then don't we?
Only someone that really wants to lose their shirt will approach them. I'm sticking to building hardware, tools, silver/gold, seed and tight land management. This is the situation that makers, builders and dreamers are going to have to change/evolve or drop where they stand. This is not optional anymore. Five years ago there were options, now there is only one path left.
Besides, with China not loaning I can tell you who's buying US debt this month. No one.
Good luck to all, grab the popcorn BTW it's about to get really interesting. And make sure you've got a bit of physical cash on hand, it'll take a couple of months for people to understand it's not worth anything now.
T-bonds yes. T-bills, not a real risk. U.S. is not going to simply default, you will have an interest rate spike first.
The US defaulted last year. The jam on that polished turd was called 'The Fiscal Cliff'. What's it been so far? five...six times? They are beyond broke now...well and beyond that point.
Ever play golf with a guy that calls a Mulligan every third shot?
Means that you don't play with them until they figure out how to drive and putt. Otherwise it's a long painful game that nobody can figure out the score at the end of it. Baring that you aren't out teaching a friend how to play the game.
The current situation nothing like what Volker was addressing ain 1980-81. T's will never go to 20% due to the Fed tightening. Might go there if every mofo on the planet wanted to sell T's, and that may certainly be coming along shortly.
If the merry go round music stops (what is happening in China right now) around the globe then we are all staring into a virtually bottomless pit of owing. And the "assets" side of the ledger, even if sold at face would fill maybe 3 to 5% of that hole. In such a scenario the entire system implodes on itself, and there will be a scramble for tangibles, energy and farmland "in hand" without regard for price since "price" in currency which are worhtless is a meaningless measure.
Right. Now, do you want the 'blue' or the 'red' pill? (In the end - and the end could be upon us faster than a jack-rabbit in heat, the best pill might be mother's little helper, just to take the edge off the sword as well collectively fall on it - or swallow it.)
The best defense of the individual, against the insanity of the collective, is independent thought and action. Proceed accordingly.
Independent in thought acting towards the greater good of the communities they live in. Prepare for the worst and hope for the best.
And here we are today. There is no measure of value in an exchange. In place of this trade mechanism the substitute is now outright theft.
Brazil is a good example right now. Government rolled in, kicked people out for a soccer match and seized their homes for good measure. What's the body count up to now there? 2.5 million on the streets roaring through every government security practice and check point. Even the police are on side for this one because they know the difference between right and wrong. Plus if they didn't they would be torn to pieces.
Quite so, quite so. Populus will indeed exert its might. Too bad for the "authorities", hey?
Weird thing is I don't believe anyone knows who the 'authority' is anymore. Men with guns lose just as much as the guy that pours foundations for a living. Both groups are stuck in a similar position.
Getting eaten ass up from a horrible and unsolvable math problem of compound interest, fools printing money and rising costs which slams head long into what everyone's social expectations are.
"There's no need to worry about the banks, because they're already dead -- they just haven't fallen down yet."
Long Ping time sux
If you do the math, RTT has to be 2.5+ years at the present juncture, but it's probably fair to say the Fed's routers are bad by now.
here.we.go.
https://www.youtube.com/watch?v=XqwCejSZA28
divert to war. revert to war. invert a war. prevent a war. divest a portfolio and bet on war. war. mf'er's are gonna take us to war - again, most likely
Let's just send them Justin Bieber.
in five boxes.
looking at your down vote.... I noticed we've got a angry Bieber fan amongst our midst....
ps: I voted you up because all that little prick deserves is a good kick in the nuts
At the Hagley museum annual fireworks display last Friday, the fireworks company decided to use a Bieber song for the finale. They even lit off a caricature of the little twerp complete with throatmike made out of fireworks. The finale was loudly booed. Bieber's 15 minutes are over.
Sudden Debt said: "that little prick deserves a good kick in the nuts"
Seriously, I don't think they've descended yet.
And what if the young guys refuse to play cannon fodder this time?
And if it's the only game in town for some?
they won't.
All successful diversions start with a good advertising campaign to ensure our boys keep lining up at the recruiting station for God and Country.
Perhaps, but stories like this one pass from person to person, even if never being seen on TV:
http://libertyblitzkrieg.com/2013/06/24/i-feel-no-more-pain-i-am-free-a-...
And what if the young guys refuse to play cannon fodder this time?
once they've been unemployed for long enough and can't afford Halo 64 they'll be ready
"And what if the young guys refuse to play cannon fodder this time?"
It's like Call of Duty but for real, no chance, they have already been programmed. :(
did you ever doubt that bankerswere gangsters? read the article about recorded conversations among the top executives of the Irish Bank that was bailed out with taxpayers money. For sionists /antisionists is a must read since it even has a nazi reference. Incredible but true. Irish are super angry.
Irish are super angry.
Yeah, but will they DO anything?
http://www.youtube.com/watch?v=Cwxc_zLH560
IRA2?
This time they'll just shun them. Hard eating if no one takes your order...or wants your business...cost of living goes up spectacularily for an individual family that's not wanted. Nobody wants the troubles again, they just want them gone.
Jesse put this one up http://www.youtube.com/watch?feature=player_embedded&v=QIMucHfUMyg
That would require that the same amount of energy availablity as WW2...which doesn't exist for a world war of 7.2 billion people. Which is why there are only two options left.
Either way. The balance is going to be restored to this world that we are borrowing against the future. Again...it's going to get so weird and there just is no choice in the matter as I understand it.
Aliens - big enough? Probably not. Maybe Mars Attacks then.
Governance is a better word to use.
Nice fist-bump to UHF!
"Wheel....of........FISH!!!!!!"
"What's in the box?"
"Fluctuations!"
1 trillion $ deleveraging sounds interesting indeed. They're re-inventing insanity.
we only have refined salt from the teardrops from unicorns... 1 billion$ per gramm... how much you want?
Cossack55,
I throw a 1/4 tea spoon of per gallon of distilled water. Keeps me from drinking the poison fluoride water.
No shit. Was there last week. Born and raised in WI and Irish butter is the shit.
Allow me to " pull some out of my arse ".
Yep exactly, it's all just academic eggheads chin rubbing and drawing on black boards till the bank seizes up, then it's fo reelz.
"Chinese think a hundred years ahead". one word, "Casheconomy". a bright future without banks.
Cash is freedom. Loan is slavery.
http://www.couriermail.com.au/business/breaking-news/hong-kong-stocks-op...
HAng Seng up 2.43%. WTF?
This movie gets better and better each day. The suspense is killing me.. how is it going to end? http://tinyurl.com/mem7o7x
I guess that could explain the gold beat-down at the HK open last night.
yes, liquidity squeeze forces chinese funds to dump paper gold. if PBOC does not intervene there'll be lots of bankruptcies over there in china.
Yeah - about $1270/oz. The debt 'bomb' is growing megatons every day, world-wide, and no one knows what to do with it. Kind of like, you know this 290-lb guy is seriously flirting with your girlfriend and she's digging it, and he'll take her away and poke her in a few minutes and you, at 165 lbs just can't let that stand, so you know you're gonna take a swing at him and when you do, even after you break his nose, he's gonna de-construct your physiology, but you're gonna do it anyway - so, there you are - lying on the floor with a tooth stuck in your eye and the other eye ain't workin' too good either and you realize, you just went too far, but ya' couldn't help yourself. The Debt Bomb just took you out.
Good description. The solution it seems is to just buy stawks. Look at S&P... gap up this morning. Bloody hell I'm about to kill someone!
of course....dont need extra POMO today, just draghi jawbone until tomorrows largest POMO, this will continue until the end of the quarter. They have 2 more days to get back above 1600.
Which is hilarious considering you probably don't want her anyway if she's just going to brush up with any tom, dick, or harry that walks by...
Nothing to fear, comrades. Shadow banking will pull up the slack.
When there's no sun, there's no shadow
Spoken like a man with no halogen.
Don't need no EU, Japanese or Chinese economies when we have Goldman's CNBC painting signs with arrows that tell everyone which direction the economy is going. All hail Goldman Sachs the world is about to end.
JPM and Goldman See $1,800/oz Gold By Year End (Jan 22, 2013)
Source
...and only five months passed since then.
still might be an accurate forecast. The House of Cards is getting wobbly.
Frock of brack swans.
So, then, they have revealed their secret plan.
Black Adder tells everyone he is selling off his gold (but does not tell them it is paper receipts), everyone panics, sells All Their Gold, and he buys it up cheap, stashes it, then tells everyone he changed his mind and it's up over 1800$ again.
A Cunning Plan.
Ah you wan money? I give at 20% ok?
20% is a good daily rate. And if you don't mind we'll keep your daughter as "COLLATERAL"... we'll teach her how to dance for starters...
Nothing to see here, move along.
Good thing China is too big to fail....
The next bank to be cyprused is gonna get this from me: My stack next to me, me eating popcorn and downing some lagers :)
Is there anyone left with a legitimate bid in the PM markets? Are there bonafide bids in any markets?
here is your bond rally.
The Chinese won't sit on lines at the ATM because the ATMs are currently not spitting out gold.
I think the Chinese are brilliantly feinting here. When another right cross comes from the Americans, the subsequent Chinese block and jaw shot will be a gold-backed currency.
The first black swan has landed.
Yes
yellow... it's a yellow swan...
but in the end, they taste the same.
yerrow sran ... $5.99. come with eggrorr. brack sran, come with no eggrorr.
Total bullshit! They will just begin to print trillions of yen. What is the downside? Peasants starving? Is that anything new in China. The only thing that matters in the world is that the aristocracy across all borders are kept wealthy, safe and happy. Nothing else matters.
Move along people. Nothing to see here.
Hey, I actually shot one while at the range yesterday. Black as a native African.
When the major and I got to the swan, we found one of those little bands on its leg. It said "COMEX."
Anyone know whose bird I shot?
"No more money...
You go home now."
Better stop lending than robbing the current account holder. Wait, they may be doing both.
they ran out of account holders to rob, that sucks
Hold on, gonna go check msm to see what I'm supposed to be thinking today.
Alright, Texas abortion bill filibuster, something about prostitution or gay marriage, and Paula deen.
Cool.
Also, what is considered main stream anymore? I don't have tv so I'm trying to do this based on memory alone..
'Nurse, check Mr. DoE out - he's been reconditioned and is now ready for the new reality. Be sure he gets his POMO shot and library card on the way out.'
Aaaand it's stuck.
/unstuck
Well shit. That didn't work. Now what do I do?
This shit reminds me of when I was a kid, and was bad for the babysitter. I had to lay in bed stomach turning, dry heaves of fear, knowing that when the old man got home he was going to take the belt to my ass.
Well everyone, get ready to have the belt taken to your asses. I'm not sure when the old man is getting home though.
The old man stopped for a few beers on the way home, so it's gonna be later than usual. But he's also gonna be pissed, in more ways than one, so the ass-woop'n is gonna be a bit more enthusiastic....
My dad was old skool, he used the buckle end.
Confused one says if Party loses "Mandate of Heaven" then Party recieve man date from broke and horny general.
Apparently the "Chinese Dream" is looking more like American one every day.
Speaking of the Chinese looking more American, where's Ananonymous with his (their) usual idiocy? Wonder if they will keep posting even when their paychecks start bouncing?
I heard his leave time over at nsa had built up and he had to take it or lose it.
I had to look at the title again. For a minute there I thought I was reading about the U.S. This is obviously dollar positive so i better get the scuba gear on, retrieve my gold and sell it quickly for some Benny bucks.
At these prices? You'd be better off leaving it where it is and buying a new boat to have an accident with.
Not an informative post amoungst the bunch of you. Hey, at least I taught you "amoungst".
This site has been compromised as reported. Shame. Time was it was number one stop in reality.
Now all the informative realists are tired of the "one line" competitions. ZeroHedge=Comedy central.
Hey, don't get me wrong, you guys are good (very good actually) but as a serious website? fast losing ground.
If a website is judged by its commenters, (As it should?) you cunts have turned this roller into a trailer.
My apologies for the C word.
Regards.
No worries...cunt.
My point exactly...not even an apology.
Regards.
The market has become comedy central, have you missed that aspect? That's kind of like the whole freaking point.
...and the laughs just keep on comin'....
I fully understand what you are saying and agree with you somewhat. However, I would much rather laugh at the absurdity of our current reality, than cry. I also think ZH has been infiltrated by a horde of agenda driven posters. They are fairly easy to pick out and ignore, or ridicule, fortunately.
When you have been on this site for as long as we have there is only so much to be said that hasn't been repeated ad nauseum. All you can do is laugh. Having said that this site has some of the most informed and in touch people I know.
Then you don't know too many informed people do you. Otherwise you wouldn't be here.
Unless you are inside the box.
People really aught to realize the scale of the (you know, I nearly typed opposition) other side. They number millions and most of then don't even know they are "your enemy". They are just working for the "man".
'And the answer is?....how the fuck would I know. Just pick a few stitches and see what unravels.
'And what happened to spell- check? Here? HaHa, we don't trust people who can't speel....
Recunts.
Apologies.
Your coke must be better'n mine
So let me get this straight - you've been waiting in the wings for 4 years just to start being a hater now - with your mighty 11 posts?
Having been lurking this site for at least that long - my impression is that the content of the articles hasn't changed that much. Like any board - the commenters cycle through - but the overall quality here is prettydamn good.
Name a site that's a better clearing house of alternative reporting w/better/more informed commentary and I'm sure many of us here would love to hear about it.
"Your impression"? Oh, I'm impressed. Name a site with less cunts as commentators?
That's a toughie. Really, when you think of Huff.....
I came to ZH to learn what to do in the event of.....
All I've heard for 2 years is pm's, lead and supplies.
...Waiting...
Regards.
In those 2 years, have you gotten to stacking?
BTW - Maybe if you posted more - you'd learn more. The biggest benefit of this site is throwing your notions about what we're each experiencing into the pit and seeing which ideas survive. Kinda of how survival of the fittest leads to stronger populations, but this is for your world-view.
PS Noboy can inject wisdom/knowlege into your head - you actually have to work at it.
PPS HuffPo? Really?
Hey, I know you nsa guys have a job to do, but go take a coffee break, on me, your employer, the Taxpayer.
I hear there are some of those sovereign people posting over at Huffpo.
So give me a link to a more informed web site. I am always looking for better information. I'm not talking about, chit-chat either.
In the game of capture the flag, once you've toppled the gov't, central bank, regulators, attorneys general, and most MNCs, what's a cyberspace free blog?
Skin retail, push social agenda of open society, misinform and scare-bait, sully with middle school commentary. You should issue a prospectus. That's practically a dividend for garbage brain Anglo-American sitting bulls.
Only trustworthy spot on the globe is between your ears, behind your eyes. And judging by some that's just a wormy brainpan too.
Thank you for your informative post. Don't let the door hit you where the good Lord split you on the way out.
The good Lord obviously split you in a place more sensitive than mine. Smack my ass all you like.
Is your face sensitive?
Regards.
so you come on here to complain about the quality of the comments on here, and this is how you lead by example?
You mean the quality can go down?
Regards.
You proved it could.
regards.
I'd want to meet you. But, careful, I could be NSA.
Really.
Regards.
I came on here to learn.....and what have you taught me?
Regards.
Looks like someone didn't get the free lunch they wanted...
A high percentage of you neighbours, buddy.
I'll let them know that you sympthise. Are you in the program?
Got a uniform?
Regards
First of all, I'm not your buddy, guy... I came here for knowledge too, this is a wonderful place to learn. There are a great many here to learn from and with, and if you're not afraid to eat some humble pie after an OT post (or misjudging someone and taking a little verbal redirection) along the way, you may have seen that. Being a douche bag isn't going to work, though. Also, I find much credibility is given if you can successfully spell your words, just sayin...
If your looking for a friend, get a dog!
I don't know, but you already taught me that you're an oxygen thief and a waste of vertical space.
It's a free world. You may open your fortune cookie.... Take your time.
Bugger off
Doc,
I have often mused to myself about "the who" the guys are behind the site are. Anonymity? Got it. But was thinking what better way to corral "the malcontents" into one place. Who says that FEMA camps are a physical place only?
If I was MOAR paranoid then I am now, I would look for PURE tinfoil either that or make it myself since Albertdons has only really cheap aluminum foil available....and we ALL know that aluminum foil AMPLIFIES the government takeover waves.
Just saying
I find that lining my windows with Reynolds Wrap foil suppresses such ideas.
Carry on.
It's NOT tin foil.
i upvoted you because i like punching myself in the face
Do you realize how many times this post has been moved?
Keep punching, we might get a result.
Nope, you;re still alive.
Was that harsh? Apologies.
Regards.
Your the first ZHer that hoped i was dead,
well fuck you too
Well we are after all at zh. Bitchez