China "Fixes" Liquidity Crisis By Banning Media Use Of Words "Cash Crunch"

Tyler Durden's picture

UPDATE: 7-day repo is now up 220bps at 980bps - as the "liquidity crisis" is worse than any other seasonal effect on record...


and to think the media was proclaiming the crisis over just an hour ago as the rate (in green) was sent around the world...


How do you "fix" a nations' banking system's increasingly desperate need (and dependence upon) for government-provided liquidity without giving in and just providing all the inflation-stoking liquidity the banks demand? Simple - in China - you ban the media from discussing it. As The FT reports, Chinese propaganda officials have ordered financial journalists and some media outlets to tone down their coverage of a liquidity crunch in the interbank market, in a sign of how worried Beijing is that the turmoil will continue. The censors have warned reporters not to "hype" the multiple-sigma spikes in overnight-funding rates and have forbidden the press from using the Chinese words for "cash crunch."

Of course - early prints in today's repo market are seeing levels normalize back to around 4-5% (just as Goldman Sachs 'suggested' they would because this liquidity spike is nothing but 'seasonals' - hhhmm)


Via The FT,

Chinese propaganda officials have ordered financial journalists and some media outlets to tone down their coverage of a liquidity crunch in the interbank market, in a sign of how worried Beijing is that the turmoil will continue when markets reopen on Monday.


Short-term interest rates for loans in the interbank market shot up last week in an apparent repeat of the cash crunch in June




Money market rates surged again on Friday, even after China’s central bank announced on Thursday evening that it had carried out “short-term liquidity operations” to alleviate the problem.




In response Chinese censors have warned financial reporters not to “hype” the story of problems in the interbank market, and in some cases have forbidden them from using the Chinese words for “cash crunch” in their stories, according to two people with direct knowledge of the matter who asked not to be named.


The Communist party’s powerful propaganda department and various other party and government bureaux frequently issue bans and detailed instructions to Chinese media on “sensitive” issues that could undermine party legitimacy.




That directive also ordered media to “strengthen their positive reporting” and “fully report the positive aspect of our current economic situation, bolstering the market’s confidence”, according to a copy obtained by the FT.

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ZH Snob's picture

and no subversive Cap'n Crunch code either.

Deo vindice's picture

China has figured out how to solve every problem.

Pollution levels too high? Change the allowable PPM of particulate matter. Problem solved.

Financial crisis looming? Ban the use of words that describe it. Problem solved.

Who would have thought problem solving could be so easy?

Hedgetard55's picture

Slanty eyed dog eating fucks are no different from their yellow fucking monkey cousins in Japan.

markmotive's picture

Sounds like they took a page from Oprah's book...

Wishful thinking and acting 'as if' won't make your dick bigger.

Chris Martenson and David Collum: Broken Markets, State Capitalism & Eroding Liberty

BillyTheBlade's picture

Sounds like China is taking a play out of the ol' US media play book....or is it the other way around

TruthInSunshine's picture

Sweet, then souring, provincial bank loans.

One can smell the aroma of the spoiling Chinese interbank system from Camden, and that's saying something given the background odor in Camden.

I highly doubt that even the PBoC has even the slightest idea as to how deep the red ink on provincial bank balance sheets runs since those in charge of those banks were praying on bended knee to Mao that they'd be able to show improvement in the quality of their loan portfolios by now, yet look at what's happening/being reported regarding Shanghai new home prices just tonight (down 14.3% IN ONE WEEK).

China and Japan are two of the most toxic economic & financial shitstorms (for different reasons) that the media (global, not just Chinese & Japanese) has intentionally downplayed by an astounding amount, that both represent an imminent & systemic risk to the global economy.

TuesdayBen's picture

Hmmm. FT uses the term 'Chinese propaganda officials'. Curious. Trying to recall the last time I heard a media outlet use the term 'US propaganda officials'. Thinking, thinking..........:::

Herd Redirection Committee's picture

I was telling someone today, can you imagine if someone told you a story about Mexican police officers, hiding on the side of the street, on the last few days of the month, trying to entrap people, and make them pay a bribe/extortion payment.  People would be livid.  Yet the same thing happens here in North America.  We just call it a 'ticket' or a 'fine', instead of a bribe, and on life goes.

disabledvet's picture

"our systemic risk. your problem." we still have too big to fail. we'll see I this amounts to anything more than a blip just like the last time. the only reason the propaganda gets spewed is for "forward" (meaning buyer) "guidance." seasonal factors are meant as a cover for those who have already shorted this thing and are looking to pick up deals on the cheap.

TheReplacement's picture

Does it really matter to them?  If China goes belly up, what happens in Japan, America, and Europe?  One wild-outta-da-blue guess is that they all sink.  When all the major economies implode the world economy implodes.  It'll be a massive global reset.  Then what?  Who has the resources like gold or oil? 

Perhaps the only thing keeping us in the game at this point is shale oil (or the perception it has generated).  If that goes poof then they are free to pull the trigger or does anyone think they genuinely care about our well being?

FreedomGuy's picture

It's a common leftist play. Just twist and change words to change the perception of reality, starting with "People's Republic of ..."

NoDebt's picture

They learned from the best, Deo.

Herd Redirection Committee's picture

How exactly does one "fully report the positive aspect of our current economic situation"?

Fully report, the positive aspect?  So not fully reporting, then?

jefferson32's picture

Does anyone know if there's a precedent in China (the explicit banning of particular words/discussions in financial news)?

TheReplacement's picture

Yes but they banned discussing the ban and Cisco and Google made it happen.


Can we solve our healthcare crisis by banning the words "President Obama"?

FreedomGuy's picture

"Obamacare" was cool when it looked good. Now it is the "Afordable Care Act" which is still a lie. It should be the "Government Healthcare Seizure Act". That would represent truth in advertising.

cnmcdee's picture

I find the best way to understand any government program is to simply reverse the terms.

Affordable Care Act

If you reverse the words you pretty much get what the program is about:

Unaffordable Negligence Act?


Raynja's picture

Close, but I'd have to go with unaffordable negligence reality.

RSloane's picture

Progressive websites were urging their readers to use the "affordable care act" instead of Obamacare to help the president and democrat congress critters distance themselves from this POS law.

VD's picture

they aren't as sophisticated as Western media, yet, but they've certainly got the right general idea...

Ignatius's picture

"Cash crunch"


Dan The Man's picture

That directive also ordered media to “strengthen their positive reporting” and “fully report the positive aspect of our current economic situation, bolstering the market’s confidence”, according to a copy obtained by the FT.


Been doing it here for ...ever?

insanelysane's picture

China is just trying to keep pace with the US gov.

Antifederalist's picture

How much more of this shit is it going to take until a critical mass of the world's human population realizes that governments are inherently evil, corrupt and unnecessary?

Oldwood's picture

Its when we see the lid going on the pot that we know the water is reaching a boil.

wintermute's picture

Bail-ins for bank depositors is the lid going on.

Herd Redirection Committee's picture

The problem is not governments.  Its centralization of power.  Too much power in too few hands.  Gov'ts are the mechanism for control/further centralization, though, I will grant that.

Zero Debt's picture

The problem is that the water keeps evaporating, so it gets progressively harder for the frog to jump out.

Surging Chaos's picture

I liken the concept of government to One Ring.

Conservatives hope they can control the Ring "We just need the right people and hope they don't become corrupt!".

Liberals just want to be drunk with power and are all like, "Gimme that damn ring!"

And libertarians (at least the ancaps) are like, "THROW THAT SHIT INTO MOUNT DOOM!"

Bay of Pigs's picture

China has financial journalists?

nmewn's picture

They're subsidized by the state, so all's well.


Wut?...Did I stick a chopstick in someones eye?

I don't know what else to call CCTV, Peoples Daily & Xinhua but owned & operated by or completely subsidized ;-)

cnmcdee's picture

and the US media is not controlled / owned / and ass banged by the Us gov?  It's wwhy we are all here because anything resembling the truth has been swallowed up in the 1984 meat grinder.

Oldwood's picture

Crash crunch?

Chinese words for cash crunch

Apostate2's picture

The phrase 'cash crunch' is xian jin duan que. The word for 'cash' is the character for gold. 

Goldilocks's picture

RUN-DMC - It's Tricky (4:38)

RUN-DMC - Walk This Way (4:04)


The Secret World of Gold HD (42:35)

nmewn's picture

"Running dog media lackeys are counter-revolutionaries against the Party!"

(Or sumpin)

akak's picture

"Chinese Citizenism Communaughty Party attempts to monolize the offuscation means via duplicitous anti-truthiness, becoming parangong of hypocriticality with upping vigor in the dangdang."

TheFourthStooge-ing's picture

Chinese citizenism citizens are naturally bent against truth.

Innately skilled propagandists, facts only serve one purpose for them: material to be distorted to serve their propaganda.

Ignoring an issue is solving an issue in the world of Chinese citizenism.

Bear with it.

Manipuflation's picture

You three are something to be sure.  I know that you like to have some fun so let's have some fun.  It really pissed me off though that Tyler Cato Institute post.  Umm, I mean, Captain of the steins and bergs.  Nevermind.  I do have ask if you have seen daddy joobux on any other boards lately?  Ain't that going to be a son of a bitch to explain? 

The guy never did me wrong so far.

Oldwood's picture

I bet this kind of thing really rubs Obama raw when he thinks HE is the most powerful man in the world but he can't yet make these kinds of proclamations. I'm sure he's working on it. Probably has some new presidential signing order in the works.

fxrxexexdxoxmx's picture

The only thing that rubs Obama wrong is Michelle. That is why he keeps Reggie Love so near.

TaperProof's picture

Coming soon to America