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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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Sun, 12/22/2013 - 22:05 | 4269691 Antifederalist
Antifederalist's picture

Ruh roh.

Sun, 12/22/2013 - 22:20 | 4269728 ZH Snob
ZH Snob's picture

and no subversive Cap'n Crunch code either.

Sun, 12/22/2013 - 22:25 | 4269733 Deo vindice
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?

Sun, 12/22/2013 - 22:24 | 4269736 nmewn
nmewn's picture

Frank Marshall Davis?

Sun, 12/22/2013 - 22:53 | 4269802 Hedgetard55
Hedgetard55's picture

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

Sun, 12/22/2013 - 23:08 | 4269847 markmotive
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

Mon, 12/23/2013 - 00:30 | 4270011 BillyTheBlade
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

Mon, 12/23/2013 - 00:54 | 4270054 Ineverslice
Ineverslice's picture

Hot n' Sour

Won  Ton

Mon, 12/23/2013 - 01:35 | 4270099 TruthInSunshine
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.

Mon, 12/23/2013 - 05:50 | 4270274 TuesdayBen
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..........:::

Mon, 12/23/2013 - 06:09 | 4270283 negative rates
negative rates's picture

I can't do a thing during the morning, but i'm really on top of my stuff at night.

Mon, 12/23/2013 - 07:48 | 4270344 Herd Redirectio...
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.

Mon, 12/23/2013 - 06:45 | 4270310 disabledvet
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.

Mon, 12/23/2013 - 11:53 | 4270841 TheReplacement
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?

Mon, 12/23/2013 - 04:46 | 4270241 FreedomGuy
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 ..."

Sun, 12/22/2013 - 22:28 | 4269747 NoDebt
NoDebt's picture

They learned from the best, Deo.

Mon, 12/23/2013 - 02:15 | 4270143 Herd Redirectio...
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?

Mon, 12/23/2013 - 09:50 | 4270521 jefferson32
jefferson32's picture

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

Mon, 12/23/2013 - 11:55 | 4270843 TheReplacement
TheReplacement's picture

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

Sun, 12/22/2013 - 22:03 | 4269692 max2205
max2205's picture


Sun, 12/22/2013 - 22:06 | 4269693 NIHILIST CIPHER

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

Mon, 12/23/2013 - 04:48 | 4270242 FreedomGuy
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.

Mon, 12/23/2013 - 05:04 | 4270250 cnmcdee
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?


Mon, 12/23/2013 - 17:06 | 4271713 Raynja
Raynja's picture

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

Mon, 12/23/2013 - 08:55 | 4270442 RSloane
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.

Mon, 12/23/2013 - 12:29 | 4270917 roadhazard
roadhazard's picture

or republicans

Sun, 12/22/2013 - 22:07 | 4269695 VD
VD's picture

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

Sun, 12/22/2013 - 22:09 | 4269700 Ignatius
Ignatius's picture

"Cash crunch"


Sun, 12/22/2013 - 22:10 | 4269704 Dan The Man
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?

Sun, 12/22/2013 - 22:18 | 4269721 insanelysane
insanelysane's picture

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

Sun, 12/22/2013 - 22:12 | 4269705 Antifederalist
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?

Sun, 12/22/2013 - 22:33 | 4269752 NoDebt
NoDebt's picture

See: boiling frogs.


Sun, 12/22/2013 - 23:11 | 4269851 Oldwood
Oldwood's picture

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

Mon, 12/23/2013 - 02:55 | 4270170 wintermute
wintermute's picture

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

Mon, 12/23/2013 - 07:49 | 4270349 Herd Redirectio...
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.

Mon, 12/23/2013 - 07:13 | 4270321 Zero Debt
Zero Debt's picture

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

Mon, 12/23/2013 - 02:08 | 4270136 Surging Chaos
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!"

Mon, 12/23/2013 - 02:11 | 4270137 Attitude_Check
Attitude_Check's picture

Try anarchy - Somalia

Sun, 12/22/2013 - 22:12 | 4269707 Bay of Pigs
Bay of Pigs's picture

China has financial journalists?

Sun, 12/22/2013 - 22:33 | 4269720 nmewn
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 ;-)

Mon, 12/23/2013 - 04:29 | 4270229 cnmcdee
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.

Sun, 12/22/2013 - 22:30 | 4269709 Oldwood
Oldwood's picture

Crash crunch?

Chinese words for cash crunch

Sun, 12/22/2013 - 23:15 | 4269859 Apostate2
Apostate2's picture

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

Sun, 12/22/2013 - 22:28 | 4269714 Goldilocks
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)

Sun, 12/22/2013 - 22:19 | 4269718 nmewn
nmewn's picture

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

(Or sumpin)

Sun, 12/22/2013 - 23:30 | 4269890 akak
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."

Mon, 12/23/2013 - 00:45 | 4270044 TheFourthStooge-ing
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.

Mon, 12/23/2013 - 07:49 | 4270348 Manipuflation
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.

Sun, 12/22/2013 - 22:27 | 4269739 Oldwood
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.

Sun, 12/22/2013 - 22:28 | 4269746 fxrxexexdxoxmx
fxrxexexdxoxmx's picture

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

Sun, 12/22/2013 - 22:39 | 4269771 TaperProof
TaperProof's picture

Coming soon to America

Sun, 12/22/2013 - 22:48 | 4269787 nmewn
nmewn's picture

New York Times ;-)

Sun, 12/22/2013 - 23:18 | 4269867 Oldwood
Oldwood's picture

There is no need for anyone to panic, unless of course they tell us not to panic. In that case we should always panic but do so while doing our best to not look like we are in a panic. Slowly at first, head for the exits only breaking into a full run when there is no other choice. For all the bullish talk out there I believe they all have one eye on the exit at all times..

Mon, 12/23/2013 - 00:50 | 4270032 walküre
walküre's picture

Technically Chinese government paper is more attractive than Fed paper. Gold backed and by definition no cash crunch. What is the yield on that paper? Are Chinese millionaires going to dump their overseas real estate holdings to pile into their own government's paper? No, of course not. The paper from China is the biggest fraud in our current financial system. The Chinese Central Bank has no idea just how much of the Mao paper is out there and how much of it is legit. Maybe they don't actually want to know or they're partial to the fraud. I keep repeating myself. The Chinese are defrauding the Yids and that is causing massive headaches from NY to London to Tel Aviv. On top of it, the Chinese are converting their paper to gold which will appease the Arabs and other oil and gas suppliers. Quite the feat and we're unfortunately on the losing end because all our eggs are in the Yid's basket.

Mon, 12/23/2013 - 08:09 | 4270377 29.5 hours
29.5 hours's picture



"The paper from China is the biggest fraud in our current financial system."


Absolutely!  Except for the Japanese paper. And the U.S. paper. And maybe that Euro thing too...





Mon, 12/23/2013 - 01:13 | 4270045 ThirdCoastSurfer
ThirdCoastSurfer's picture

What happened in 2010 to cause the companion spike?

Update: May have found part of the reason for today's spike: The results of an audit were released today that found that local government debt has been found to have increased to CNY 19.94 trillion from CNY 10.7 trillion in 2010, effectively doubling in two years. If the audit is conducted every two years and released at about this time of year, then it's par for the course, even it was a double bogey in result. Federal and financial debt are so low though that this is probably just a rebalancing of risk by the financial industry, although you can't just completely overlook the lack of central control and the implications of CNY 5 trillion a year unevenly distributed among the local provinces. Somebody's gonna fry, like Bo Xilia -unless he was the cause of it!

Mon, 12/23/2013 - 04:53 | 4270246 cnmcdee
cnmcdee's picture

Hmmm.. Doubling every two years, Not bad.  They even outdid Obama.

So lets see if we forward calculated it based on the laws of doubling.


2^8  16 years (256 x debt)

2^16 32 Years (65536 x debt)

2^32 64 Years (4294967296 x debt)

So by the year 2080 roughly they will have a debt so large it will require Bitcoin addresses, as they will be the only thing long and detailed enough to handle it.


I wonder what the US debt will be at that time?

Mon, 12/23/2013 - 00:53 | 4270049 lolmao500
lolmao500's picture

How long before China starts a war with Japan to distract attention???

Mon, 12/23/2013 - 01:21 | 4270094 chump666
chump666's picture

China will start to repatriate funds, cancel investment and generally bring their funds home.  Possible shutting up boarders and military key trade routes ala Bird Flu crisis.  Watch the Yuan high fixes, also watch gold and gold buys out of China. At the time keep an eye on the 10s and 30s (USTs).  The cronies will get the Santa Rally as long as the NY FED provides liquidity right up till 2014 (note that their POMO increased not decreased after Taper).  Then after that...The Fed underwriting stocks could be history

Finally bookmark "google searches =  Japan China tensions" for the countdown.

Mon, 12/23/2013 - 03:50 | 4270172 Mine Is Bigger
Mine Is Bigger's picture

China cannot simply start an agressive war against Japan.  The country is not self-sfficient in energy and food.  And while Japan is not liked, neighboring countries, including Russia, will side with Japan if China attacks Japan.  Then, China cannot import energy and food from anywhere beause its access to the ocean is quite limited despite its massive land size.

Mon, 12/23/2013 - 01:05 | 4270077 chump666
chump666's picture

Those commie capos.

Mon, 12/23/2013 - 01:13 | 4270081 ebworthen
ebworthen's picture

The FED and CNBC and the MSM are no different.

Tune in tomorrow to hear how Bernanke is a genius and Yellen is going to part the Red Sea.

Mon, 12/23/2013 - 01:15 | 4270090 Rock On Roger
Rock On Roger's picture

When was the last time China started a war? They don't start wars.

I'm sure they will get revenge for Nanking and Manchuria though, when the time is right.


Stack on


Mon, 12/23/2013 - 01:16 | 4270092 Rukeysers Ghost
Rukeysers Ghost's picture

"Business conversation at table very bad for digestion." - Charlie Chan

Mon, 12/23/2013 - 01:55 | 4270117 dunce
dunce's picture

Actually i applaud them as the only major government practicing any restraint and for hoarding gold.

Mon, 12/23/2013 - 02:50 | 4270120 TheRideNeverEnds
TheRideNeverEnds's picture

such negativity!  


every single tick in just about every single index is new lifetime highs every day for much of this year, same with most stocks.


securities are going straight up without an end in sight just close your eyes and buy them, you will double your money by this time next year.   



just dont buy anything related to gold, gold is a worthless pile of shit and is going to zero.  

Mon, 12/23/2013 - 02:02 | 4270126 Colonel Klink
Colonel Klink's picture

Rai Tu Hi

Mon, 12/23/2013 - 02:06 | 4270134 Kreditanstalt
Kreditanstalt's picture

The forbidden phrase: ????

Mon, 12/23/2013 - 02:07 | 4270135 Kreditanstalt
Kreditanstalt's picture

See??? Even ZH forbids those Chinese characters...!  They print out as "????"

Mon, 12/23/2013 - 03:30 | 4270192 Rock On Roger
Rock On Roger's picture

You've got me looking. Post a link.


Stack on

Mon, 12/23/2013 - 02:16 | 4270140 q99x2
q99x2's picture

If an asteroid larger than 6 miles across is set to impact the earth within a week why tell anyone.

Seems like good sense to me.

Mon, 12/23/2013 - 04:56 | 4270247 cnmcdee
cnmcdee's picture

You're talking about the one that is supposed to hit Puerto Rico, and trigger a Tsunami to wash over Florida, and New York and take out the internet for a year when the main internet servers in New York get knocked out?


People are talking like 2014 is the year for it.

Mon, 12/23/2013 - 02:55 | 4270167 starman
starman's picture

Fortune cookies anyone?

Mon, 12/23/2013 - 03:35 | 4270194 AGoldhamster
AGoldhamster's picture

Extremely bullish - SnP 184x in a matter of a day or so.

Mon, 12/23/2013 - 04:19 | 4270227 Peter Pan
Peter Pan's picture

Perhaps the US administration could learn something from the Chinese and ban the use of "constitiution", "privacy" and "gold". 

Mon, 12/23/2013 - 06:00 | 4270278 mobydick
mobydick's picture

And the award for Most Positive Liar of the Year goes to:-

The Chinks?

The Japs?

The Bernank?

The Dragon Man?

Mon, 12/23/2013 - 06:32 | 4270301 ebworthen
ebworthen's picture

"You no say probrem wit China!"

C'mon, default already U.S.S.A.!

Mon, 12/23/2013 - 06:38 | 4270302 falak pema
falak pema's picture


There is a good summary of what awaits Eurozone and its current banking problems as portrayed in this article :

Bottom line / Merkel is right. Its her way or the  highway. And her way in MORE POLITICAL integration to discipline Europe and save the Union. She and her crowd want EUrope's nation states to accept new PAx Germania, BUT via the EU mechanisms that ensure national agreement and consultation; not by DICTAT !

And in many ways she is SPOT ON ! Germany has the best position to negoiate LT as lead economy with that RM Powerhouse Russia, as the Khodo prison release deal proved and Gazprom now feels the heat of German muscle.

And, Germany has the best industrial model in the world with a DECENTRALISED ENERGY GRID ! As the ZH post on renewable energy points to.

Is PAx Germania the virtuous way ? 

Read this : Germany Right to Hold Out on Banking Union -

Mon, 12/23/2013 - 07:32 | 4270331 negative rates
negative rates's picture

Welcome to the partnership, NOT! And the germans don't have any muscle, they are a people who enjoy collapsing upon themselves only to try it again. They have been proved to be in deep denial on many issues and in collusion with other like minded country's as to their intentions. They are the skelton in the closet.

Mon, 12/23/2013 - 09:20 | 4270469 falak pema
falak pema's picture

Since we are in the game of geopolitical star gazing chew on this :

 Parallels With The Era That Led To The First World War - Business Insider

For once this Tory Elitist hoi-poloi Vanity Fair type journal, not BI but The Economist, now descends from its "holier than thou and white man's superior technology/culture perched pinnacle" to give us a sober historical appraisal of our dystopian world; remembering the lessons of the past when Pax Britannica fell; as could now happen to PAx Americana world.

Tory UK no longer has all the solutions to the world that Maggy"s farm concocted in Saint Francis inspired certitude...Cameron blues, the ongoing crisis and the NSA scam, all based in UK/City land, have now chastened the rampant elitist hubris of this journal.

Sobering, alarmist trends ...something a heretic like me could have written when drunk on bubbly !


Mon, 12/23/2013 - 06:51 | 4270312 Quinvarius
Quinvarius's picture

Submitted for your approval:  The bankers put the price of a global asset class used as savings and collateral for 3/4 of the world down 40%.  What would we expect to happen?  They really need to stop tinkering.

Mon, 12/23/2013 - 09:08 | 4270458 Pumpkin
Pumpkin's picture

Ignoring the truth always helps any crisis.

Mon, 12/23/2013 - 09:29 | 4270490 orangegeek
orangegeek's picture

rook evwee-wun


no mo rik-quidee pwaw-bwem

Mon, 12/23/2013 - 09:57 | 4270542 orangedrinkandchips
orangedrinkandchips's picture

US: this is your short term market on "drugs".....025% FFR

China" this is your economy NOT on "drugs".....9.8% shibor



Ironic....dont ya think?



Mon, 12/23/2013 - 11:13 | 4270730 IrritableBowels
IrritableBowels's picture

These are not the words you're looking for... 

Mon, 12/23/2013 - 12:59 | 4271008 Iam Yue2
Iam Yue2's picture


Do NOT follow this link or you will be banned from the site!