• BullionStar
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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 - 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
http://www.youtube.com/watch?v=l-O5IHVhWj0 (4:38)

RUN-DMC - Walk This Way
http://www.youtube.com/watch?v=4B_UYYPb-Gk (4:04)


The Secret World of Gold HD
http://www.youtube.com/watch?v=Dt7hTCeoXUM (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

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