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China Central Bank Crushes Hopes For A "Large-Scale Fiscal Or Monetary Stimulus"
Late into Friday's major market selloff, a completely unfounded rumor emerged out of nowhere, seeking to rekindle the BTFD spirits, that with central bank intervention from both the BOJ and ECB already priced in, and with the Fed still in taper mode (if not for much longer should the S&P dump accelerate), that the last central-planner wildcard, China, would join the fray and a major monetary gusher would come out of Beijing over the weekend to halt the slide. Alas, we have bad news for said BTFDers: just hours before futures are set to open on Sunday afternoon, the chief economist at China’s central bank said Saturday that he doesn’t see any reason for large-scale fiscal or monetary stimulus “in the foreseeable future” despite slowing growth in the world’s second-largest economy and disagreements about the depth and timing of economic overhauls.
According to the WSJ, the PBOC's Ma Jun, speaking in Washington at a meeting of the Institute of International Finance - the same place where Jamie Dimon said that he is concerned about shadow banking - said the Chinese job market “looks pretty stable” despite wobbly economic growth. That's up to debate, but it was what he said about leverage in certain sectors — including real estate, certain state-owned enterprises and local-government financing vehicles — that was already too high, and that further lending to these areas should be avoided.
Ma Jun, chief economist at the People’s Bank of China, shown in September.
We have covered the critical state of China's debt-stock consistently since 2009, a country whose corporate debt is higher than any developed or developing country, so while we wholeheartedly agree with Jun, one question emerges: why tell the truth? After all, the only reason the status quo managed to survive so long is because it piled lies upon lies upon propaganda. If indeed the times has come for the truth, then all bets are off...
And while in Beijing, debate about how to manage the country’s slowdown has been intense, so far the monetary authority has not been involved apart from rumors and innuendo. Furthermore, it was in late September when hopes flared that China would join the easing fray following news that the existing PBOC governor, Zhou, would be replaced with a far more pro-stimulus candidate. However, so far that has not materialized.
The People’s Bank of China so far has bolstered the economy using narrow stimulus measures, including targeted lending in sectors like agriculture and public housing. But The Wall Street Journal reported last month that Chinese leaders are considering replacing the central bank’s governor, Zhou Xiaochuan, as part of internal battles over whether larger-scale expansion of credit should be used to spur economic growth.
Mr. Ma on Saturday instead emphasized the importance of reforms to prevent slower growth from turning into a broader crisis. The government is working on improving the productivity of state-owned companies and better controlling their spending, he said. Beijing also is endeavoring to allow more companies both public and private to go bankrupt, which is “warranted,” he added.
Clearly, this is a major market negative. As for future growth, Mr. Ma said China has “interesting bright spots” including tech and health care, which he predicts will rise to above 10% of GDP from 6% today. “I think the chance of a hard landing is very low,” he said, referring to worries about a sharp slowdown in China’s economy.
The punchline:
Part of China’s “new normal,” he said, is that “big stimulus” won’t be called for every time growth decelerates. “And secondly, the new norm will involve a lot of rebalancing in terms of changing the economic structure.”
If that is indeed the case, one can now forget about any Chinese monetary intervention. Or rather, one can forget about such intervention until such time as the Chinese housing market is in freefall, at which point China's 1+ billion society will be on (if not beyond) the edge of out right revolt. To say that the PBOC will not get involved at that point is certainly naive. However, to gether there, there will be blood on the streets, metaphorically when it comes to the New York stock exchange in Mahwah, NJ and literally when it comes to China.
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the tsunami's getting bigger...
the us futures market opens in about 4 hours..
this is going to be wild...
I've never seen the bankers go without. Imagine the horror if they were allowed to FAIL.
Gasp.
The image of a spoiled petulant child having a tantrum comes to mind.
i think we started an economic war...
and now we're losing...
'writing a check with your mouth, that you're butt can't cash' comes to mind...
"Situation normal, sir; all fucked up; over"
I cannot believe this info has not been programmed into the FED models. they are allknowing, you know.
Otherwise, we would be forced to expect an Ebola outbreak in China...
He's telling truth because when the US market closes he's gonna announce that China is going to free float the Yuan as it now has 12000 tons of gold, and will subsequently corner the oil market, US unexportable fracking gas be damned, and there by move it's economy towards its own billion plus consumer market versus bankrupt Europe and America . ..
China make a move, markets will make move next, we will watch
why would china use stimulus when it is ready to pull the trigger on a higher gold price that will turn all fiat currencies on their ears?
Wi Tu Hy !!!!
Need Moar Chinese burrito stawks to do US IPOs
China can easily handle collapse of house prices. They will shoot at crowds.
It can't be done in USA or EU
The writer is comparing oranges to carrots
What the government cannot handle are food inflation riots. That is the only fear.
USSA all it takes is taking away or switching off the ICRAP. As far as shooting , Ayssymetric will do the job.
not toroish
SGE weekly withdrawls
https://www.bullionstar.com/image/2408
Wholesale demand is more relevant.
Wot Tai Fook?
Chow Tai Fook ? gotta remember to check up on that Chow Tai Fook every month ??? Fractal Parasite; love the screen name; it's fits the Zeitgeist perfectly.
Looks like this is the best time to buy ... the price is too low.
"China Central Bank Crushes Hopes For A "Large-Scale Fiscal Or Monetary Stimulus""
Translation: We're going to be still standing when the dollar implodes.
An American, not US subject.
Do you think Russia will have a seat in the Chinese lifeboat when the USD sinks?
China has pulled the plug
Germany playing the bad guy in the EU, while China, and the FED outright say no more printing.
Coordinated, planned implosion incoming
S&P futures below critical 1904 support
OH, goody. that's just so special"---in the voice of the SNL 'church lady'
This is bullish. Even Tyler admitted in previous articles bad news is bullish and good news is bullish. So this is bullish or bullshit.
you don't seem to understand; his statement was based on the reflex connection between the S&P and Bernankes "brain", such as it was, he's not there anymore; literally, now. And yellin in not all that interested.
I do understand that there is nothing to understand. You do not understand the way the markets work if you think markets move up and down freely. I understand how this works because you can not use a rational thought process to understand anything they try to do. There is no way to understand this without understanding the way the central banks understand. Do you understand now.
Well, excuse me for breathing, your augustness.
All is well buddy. Could not resist messing with you. My point is and will be until the electrical grid/internet does not exist, you can not predict what the Fed will do and how they will handle markets. They throw so much shit on walls that even the CB's are not sure what will stick. I have learned a long time ago(rather painful education) to make profit in this market is go with the flow.
The Chinese private sector owns 15,000 tonnes of gold.
It appears the PBOC may have as much as 7,000 tonnes of gold.
Why the (!) would the Chinese screw up their currency when they
hold ALL the cards that count???
Here is the "OFFICIAL" news.
The Chinese Communist Party doesn't dare let it's economy slide. They know that their heads will be used for soccer balls if they do. 20 million new employees enter the workforce every year.
They will move to America and take over everything including the white women an then might have some intelligence and folks with balls in the USSA
There's a silver lining to every cloud; or something like that.
I prefer gold lining on a tinfoil hat
More currency wars.
If the big 5 US banks would have been allowed to fail we would be having a real recovery now. We still have something the Chinese don't... Trillions of USD floating around the globe and if, one day, everybody decides they don't want them they'll come flooding back to the US all at once, no?
Thank God China understands the global economy is extraordinarily imbalanced and is doing what is necessary to restore balance. Now if the Fed would simply buy gold directly and in large quantities we might be able to navigate the only semi stable pathway.
You're joking, right. ha-ha. You are joking, aren't you? Expecting the Fed to buy gold is like expecting the pope to buy little statues of Lucifer for his apartment; sorry, but I don't think so.
The Fed will ride in and save the day.....once the sell off gains a little more steam.
You go first; I be following up.
50 Ghost Cities in Ghost City Index Explains Government Crackdown on Development
Worst city has built more than 10X the amount of housing needed by the residents.
We've got 5 million useless Negroes we could send them to live in their empty city; would that help?
Of course, remote bailout of the Wall St. Fascists. I don't think so! Even small home implosions are acceptable to rid the system of the QE Syphilis.
Mofo Fed calls it stimulus, but the only mofo thing it stims is the wall st. banks and the 0.001%. Money velocity has crashed so where the fark is the stim. part? Nowhere! Biggest scam for the last 5 yrs.
Well, the real estate market will need to hit 40%+ decline for it to hit home for the home owners as that is about the level before they hit the streets in China. Unlike the US where a 10% decline and your screwed as most are NINJA's or at best minimal equity on the homes. Anyway, most of the homes are now owned by the Fed and octopussy that it owns!!
very true. those zero down mortgages will come back to bite those folks. My family still believes in saving up for the 20%+ down payment ... plus a fat cushion on top of that just in case. Most buyers don't think about the substantial closing costs plus the maintenance, property taxes, insurance and so on. My Dad always says have the 20% down PLUS another 20% for all the other stuff that comes along first year.
Oh yeah, a stable job helps!
They've been going thru a large scale monetary stimulus for the past decade. Those ghost cities and enormous civil works projects weren't funded by private capital.
Exactly.
They've been going thru a large scale monetary stimulus for the past decade. Those ghost cities and enormous civil works projects weren't funded by private capital.
Part of China’s “new normal,” he said, is that “big stimulus” won’t be called for every time growth decelerates.
Translation?...
Janet Yellen, Stan Fischer and Jack Lew... You're All Fucked!!!
Chinese have captured the equivalent of the entire world gold production.But guess what's coming to America?Or is it already here?
http://www.silverdoctors.com/the-implementation-of-the-coming-totalitari...
Their economy is govt funded already, so not much more they can do.
China is utterly and completely faaaarrrrrrrrrkkkkkkkkked. $25 trillion in credit collaterized by overvalued real estate. Have fun bailing your banks out, Chicoms. Every single last one of them. Total value of commercial land in Beijing is said to be $21 trillion. Total value of all US real estate, land and buildings, owned by households - $21 trillion.
HHaHahHahaHahahHahahaHahahahHahahahaHahahahahHahahahahaHahahahaha...
The Jap bubble ain't a patch on the China variant.
I repeat - China is faaaaarrrrrrrrrrrrkkkkkkkked. So is the rest of Asia.
Why are so many of them taking their Money out of the Country and buying Real Estate all over the World? I am sure they know that the good times are going to stop soon. The smart Money is always a step or two in front before the Shit hits the Fan. Same us Stackers, we know all good things come to a sudden end and we are ready for it.