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Chinese Cash Flow Shocker: More Than Half Of Commodity Companies Can't Pay The Interest On Their Debt

Tyler Durden's picture




 

Earlier today, Macquarie released a must-read report titled "Further deterioration in China’s corporate debt coverage", in which the Australian bank looks at the Chinese corporate debt bubble (a topic familiar to our readers since 2012) however not in terms of net leverage, or debt/free cash flow, but bottom-up, in terms of corporate interest coverage, or rather the inverse: the ratio of interest expense to operating profit. With good reason, Macquarie focuses on the number of companies with "uncovered debt", or those which can't even cover a full year of interest expense with profit.

The report's centerprice chart is impressive. It looks at the bond prospectuses of 780 companies and finds that there is about CNY5 trillion in total debt, mostly spread among Mining, Smelting & Material and Infrastructure companies, which belongs to companies that have a Interest/EBIT ratio > 100%, or as western credit analysts would write it, have an EBIT/Interest < 1.0x.

As Macquarie notes, looking at the entire universe of CNY22 trillion in corporate debt, the "percentage of EBIT-uncovered debt went up from 19.9% in 2013 to 23.6% last year, and the percentage of EBITDA-uncovered debt up from 5.3% to 7%. Therefore, there has been a further deterioration in financial soundness among our sample."

To be sure, both the size (the gargantuan CNY22 trillion) and the deteriorating quality (the surge in "uncovered debt" companies) of cash flows, was generally known.

What wasn't known were the specifics of just how severe this bubble deterioration was for the most critical for China, in the current deflationary bust, commodity sector.

We now know, and the answer is truly terrifying.

Macquarie lays it out in just three charts.

First, it shows the "debt-coverage" curve for commodity companies as of 2007. One will note that not only is there virtually no commodity sector debt to discuss, at not even CNY1 trillion in debt, but virtually every company could comfortably cover their interest expense with existing cash flow: only 4 companies - all in the cement sector - had "uncovered debt" 8 years ago.

Fast forward to 2013 when things get bad, as about a third of all corporations are now unable to cover their annual interest expense, even as the total addressable corporate debt has soared to CNY4 trillion for just the commodity sector.

And then in 2014, everything just falls apart. Quote Macquarie, "more than half of the cumulative debt in this sector was EBIT-uncovered in 2014, and all sub-sectors have their share in the uncovered part, particularly for base metals (the big gray bar on the right stands for Chalco), coal, and steel."

Compared with the situation in 2013, while almost all sub-sectors did worse in 2014, but things appear to have worsened faster for coal companies as more red bars have moved beyond the 100% critical level for EBIT-coverage.

It means that last year about CNY2 trillion in debt was in danger of imminent default.

The situation since than has dramatically deteriorated.

So are we now? Macquarie again: "Given the slumps in metal and coal prices so far this year, it’s quite likely the curve will have deteriorated further for commodity firms this year, with total debt getting better in the meantime."

In other words, it is safe to assume that up to two-third of Chinese commodity companies are now at imminent danger of default, as they can't even generate the cash to pay down the interest on their debt, let alone fund repayments.

We fully expect this to be the source of the next market freakout: when the punditry turns its attention away from macro China, which has more than enough problems to begin with, and starts to focus on the cash flow devastation in China at the micro, or corporate, level.

 

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Thu, 10/01/2015 - 21:05 | 6618820 VWAndy
VWAndy's picture

HAhahahahahahahaha.

Thu, 10/01/2015 - 21:09 | 6618845 knukles
knukles's picture

Learry?

Thu, 10/01/2015 - 21:28 | 6618891 remain calm
remain calm's picture

No Big Deal, NBD

www.youtube.com/watch?v=1YDurhx8QyA

 

 

Thu, 10/01/2015 - 21:51 | 6618990 Fahque Imuhnutjahb
Fahque Imuhnutjahb's picture

Dung Bang Fan !!

Thu, 10/01/2015 - 22:51 | 6619151 Mark Urbo
Mark Urbo's picture

Been saying for a long time...

 

..and catching shit on this site, but China is a house of cards and they are going down.

Thu, 10/01/2015 - 23:24 | 6619235 38BWD22
38BWD22's picture

 

 

What about the Chinese bearing manufacturers?  Bearings are practically a commodity nowadays.

Fri, 10/02/2015 - 01:05 | 6619395 Save_America1st
Thu, 10/01/2015 - 23:28 | 6619249 83_vf_1100_c
83_vf_1100_c's picture

  Well that sucks. Where will I buy my cheap plastic crap at now?

Fri, 10/02/2015 - 01:46 | 6619444 Spitzer
Spitzer's picture

Just wait till China starts covering all of these losses with forex reserves. And all of the inflation that the US exported there comes back.

Fri, 10/02/2015 - 04:54 | 6619563 new game
new game's picture

they must depeg, but will they? find the value of the yuan, but will they? markets(remember swissy)are already doing it as they accum yuan fx to hold the peg, ha. cornering themselves from the inevitable. ways to go as behind the scenes t's sold.

then the house crumbles fast. but wait, they have 1 T bonds to liquidate first, ha, this shit is gonna get real. yellow girl,get ready to expand that bal sheet to 5.5 T, ha again as qe 4 will be a massive bond buy program to keep the us goverment ponzi alive for another breath...

other option is usa equities tank and the flight to security save yellow ass and they pick up the slack to the tune of 500B, JMFO.

Thu, 10/01/2015 - 22:40 | 6619127 eforce
eforce's picture

Sum Ting Wong?

Thu, 10/01/2015 - 23:30 | 6619255 Proofreder
Proofreder's picture

Shocking

"Can't pay"

 Not: Won't pay or pay you later, little at a time ... just plain Can't Pay - I gots' no money, nothing (cue the yougetnothing clip)  Velocity of money is ZERO.

Can't squeeze water from a rock, blood from a turnip, or cash from a broke chink.  Soon a travling broke culture will arise, like gypsies - a source of migrant workers and mercernies. But it's all ok, because conflict is good and lots of good is right around the corner. The Revolution may not be televised, but it will be Twittered.    Aaah, tweeted?  Screwit.

Got Popcorn?

Thu, 10/01/2015 - 21:24 | 6618898 MalteseFalcon
MalteseFalcon's picture

Just lend these companies the money to make their interest payments.

Where's my Nobel?

Thu, 10/01/2015 - 23:57 | 6619311 ThroxxOfVron
ThroxxOfVron's picture

"Just lend these companies the money to make their interest payments.

Where's my Nobel? "

 

At the pawn shop.

Fri, 10/02/2015 - 01:35 | 6619437 Not Goldman Sachs
Not Goldman Sachs's picture

Too comlex. Just print and give. A necessary gov action for the people.

Fri, 10/02/2015 - 02:15 | 6619461 Cosmicserpent
Cosmicserpent's picture

Greek style.  Money in the backdoor.

Thu, 10/01/2015 - 21:27 | 6618909 junction
junction's picture

So, Chinese commodity companies have the credit worthiness of a subprime auto lender.  In 2008, before Hank Paulson shoveled trillions of taxpayer dollars in the form of TARP money to banks and insider financial institutions like Goldman Sachs, Wall Street was facing total collapse.  Good thing the Feds and the drug cartels were there to bail out the Ponzi scheme fraudsters. 

Thu, 10/01/2015 - 21:57 | 6619009 techpreist
techpreist's picture

Now we know why so many rich Chinese are buying everything up over here and building ghost cities; their companies are going bankrupt, and they are dumping their money in anything tangible they can get to escape the coming storm.

In reality, a lot of investments are going to zero over there. I would be sad, except it might actually be a good thing when folks with more modest income over there can afford a place to live again.

Nah, who am I kidding? The Party will not let the price of anything go down.

Thu, 10/01/2015 - 23:13 | 6619214 Buck Johnson
Buck Johnson's picture

No, there running because they know their countries history.  When it faulters or it tumbles the populace (which is large) looks for people who are responsible.  Remember before they went after the rich and the political and had them arrested and executed.  That is why they are trying to get their money out and their asses along with their family.  They don't want to end up being executed by the public.  Remember China's economy has no middle class, it was made with the hot economy and money that has been propelling it for years.  Once that is gone it's back to peasants and bad land that cant support it.  I still say that China is going to take over either Africa, Australia or Canada in the future, mark my words.

 

Fri, 10/02/2015 - 00:41 | 6619378 shovelhead
shovelhead's picture

Chinese don't fuck around.

Some cops were beating a woman on the street and a crowd gathered to yell at them to stop.

At first they didn't. Then they did. The crowd beat the police to death and the Army had to go in.

They had to collect a few stray odd pieces of cop here and there.

No games.

Thu, 10/01/2015 - 21:06 | 6618822 FreeShitter
FreeShitter's picture

Horrey Shit

Thu, 10/01/2015 - 21:08 | 6618839 blindman
blindman's picture

Pink Floyd - Wish You Were Here
https://www.youtube.com/watch?v=IXdNnw99-Ic

Thu, 10/01/2015 - 23:30 | 6619256 THE COIN
THE COIN's picture

Once i listened to that one clip i had to keep going and listen to 12 more.

Thanks

Thu, 10/01/2015 - 23:36 | 6619265 Proofreder
Proofreder's picture

Comfortably Numb - tonight is good to be

https://www.youtube.com/watch?v=JU-OSLBKwG0

Enjoy.

Thu, 10/01/2015 - 21:07 | 6618831 MFL8240
MFL8240's picture

And 100% of the US Banks are insolvent!

Thu, 10/01/2015 - 21:23 | 6618895 buzzsaw99
buzzsaw99's picture

only when cash flow is lower than payroll + bonuses + dividends will they have a problem. their asset books are irrelevant.

Thu, 10/01/2015 - 22:25 | 6619087 ebworthen
ebworthen's picture

No worries, the Treasury and the FED have their backs!

Bailouts, MBS purchases, QE, all they can take at the back door at 0.025%.

You and I have to pay 4%-29% on what the banks lend us.  What a deal man!

If that ain't a Ponzi the Pope is Jewish, America is a Republic, and Russia is evil.

Thu, 10/01/2015 - 23:22 | 6619233 J Pancreas
J Pancreas's picture

I'm a fully invested shareholder in BAC, JPM and WFC and am a proud Discover card holder with a limit of $750. I find your comment inaccurate and place my full confidence and life savings in Brian Moynihan's soft hands.

Thu, 10/01/2015 - 22:05 | 6618848 fockewulf190
fockewulf190's picture
Yóuxì jiéshù de rén! Yóuxì jiéshù!

(Game over man! Game over!)
Thu, 10/01/2015 - 23:19 | 6619226 J Pancreas
J Pancreas's picture

Was Vazquez in that film a hairless guy or an ugly woman? Inquiring minds would like to know.

Thu, 10/01/2015 - 21:11 | 6618858 Goldilocks
Goldilocks's picture

Eddy Grant - Electric Avenue
http://www.youtube.com/watch?v=vtPk5IUbdH0 (3:10)

Thu, 10/01/2015 - 22:03 | 6619017 blindman
blindman's picture

take it higher goldilocks,
i me be listening.

Thu, 10/01/2015 - 21:13 | 6618863 general ambivalent
general ambivalent's picture

Red sky at night, sailor's delight.

Thu, 10/01/2015 - 21:15 | 6618868 OC Sure
OC Sure's picture

Deflationary bust or here come rising prices? 

Marginal producers default, go out of business, less goodies are produced, prices rise. Prices rise, CBs raise rates (yeah, right?), more marginal producers go offline, prices rise again...repeat.

Thu, 10/01/2015 - 21:19 | 6618874 CHoward
CHoward's picture

Fuck 'em.  I'm tired of this shit.

Thu, 10/01/2015 - 23:43 | 6619278 RockyRacoon
RockyRacoon's picture

I believe you've about summed it up.  No charts, graphs, or technical analysis of any kind required.

Thu, 10/01/2015 - 21:20 | 6618881 joego1
joego1's picture

It looks like it all goes to the ah fuckit bucket.

Thu, 10/01/2015 - 21:22 | 6618887 surf0766
surf0766's picture

How many nails for a coffin?

Thu, 10/01/2015 - 21:24 | 6618897 trulz4lulz
trulz4lulz's picture

By the looks of things, it seems as though a coffin wont be a luxury for many of us.

Thu, 10/01/2015 - 21:22 | 6618889 Personality Disorder
Personality Disorder's picture

thoes Chinees, so tricky.

Thu, 10/01/2015 - 21:23 | 6618896 philosophers bone
philosophers bone's picture

Sounds like they just need to change GAAP again or have the analyst community create a new non-GAAP financial measure to bring the ratio under 1:1. No problem.

Thu, 10/01/2015 - 21:24 | 6618899 Oldwood
Oldwood's picture

What do we remember about 2008? Not only were borrowers over extended, but the supposed assets were suddenly devalued as well. How long have we heard stories about Chinese firms quadruple pledging commodity assets, with lenders coming to find empty warehouses. There is such massive oversupply of everything in China, once payments fail to be made, the dominoes will fall hard and fast. Deflation of everything they have except food, clean water and air.

Thu, 10/01/2015 - 23:48 | 6619290 RockyRacoon
RockyRacoon's picture

Clean air and water?  Ooopsie!

Sat, 10/03/2015 - 07:47 | 6624304 FredFlintstone
FredFlintstone's picture

does all of this have anything to do with the recent explosions over there?

Thu, 10/01/2015 - 21:25 | 6618900 nmewn
nmewn's picture

Of course it goes without saying, anyone still in China and even remotely connected with Macquarie will soon be getting a courtesy call from Vice Minister of Public Security Meng Qingfeng and his merry band of "patriot guards".

To check the strength of attachment...of their fingernails ;-)

Fri, 10/02/2015 - 05:55 | 6619608 Element
Element's picture

What I resent is people calling Macquarie a 'bank', when it's just another flavor of calamari.

Thu, 10/01/2015 - 21:26 | 6618902 buzzsaw99
buzzsaw99's picture

zirp can totally fix this

Thu, 10/01/2015 - 22:17 | 6619064 cheech_wizard
cheech_wizard's picture

I'm expecting to see a massive dump of US debt in 3...2...1...

About $1.27 trillion at last count.

Thu, 10/01/2015 - 22:18 | 6619069 Superdave532
Superdave532's picture

NIRP

FIFY

Thu, 10/01/2015 - 21:28 | 6618914 GRDguy
GRDguy's picture

Yu'all just need to print more yuans, ya hear?  (To cover the interest.)

Thu, 10/01/2015 - 21:29 | 6618916 razorthin
razorthin's picture

Replace the drills with printing presses.  Works for broke goobermints.

Thu, 10/01/2015 - 21:29 | 6618919 ThrowAwayYourTV
ThrowAwayYourTV's picture

What kind of retard would invent a world where the sole survival of its inhabitants needed to depend on buying and selling shit to survive?

This must be a computer game we are living in. Nothing real would work like this.

 

Thu, 10/01/2015 - 21:40 | 6618957 Ms No
Ms No's picture

Yeah and just think the Native Americans spent most of their time fishing, hunting, humping, arts & crafts and telling stories by the camp fire.  Damn are we stupid.

Thu, 10/01/2015 - 23:51 | 6619298 Proofreder
Proofreder's picture

Absolutely ...

Got rid of all that shit at Wounded Knee

Sat, 10/03/2015 - 07:45 | 6624298 FredFlintstone
FredFlintstone's picture

and smoking the peace pipe

Thu, 10/01/2015 - 23:47 | 6619289 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

Keynes

Thu, 10/01/2015 - 21:31 | 6618922 Whalley World
Whalley World's picture

No Ticky

No Washey

Thu, 10/01/2015 - 23:49 | 6619292 MASTER OF UNIVERSE
MASTER OF UNIVERSE's picture

It's no ticky no laundry, Wally World.

Thu, 10/01/2015 - 21:33 | 6618939 Grandad Grumps
Grandad Grumps's picture

Tell me again who controls commodity prices?

This reminds me of the Japanese in the 1980s and their mark-to-market collateral. When the price of their collateral declined they were stuck with a couple of lost decades.

Did the bankers trap China the same way?

Thu, 10/01/2015 - 21:35 | 6618945 Goldilocks
Goldilocks's picture

Charlie Brown: I got a rock
http://www.youtube.com/watch?v=5tIhwITwhSg (1:01)

Thu, 10/01/2015 - 21:46 | 6618974 OC Sure
OC Sure's picture

 

 

UP is DOWN, Millie Goldsholl, 1969.

https://www.youtube.com/watch?v=tjBn2YE-RoA

Applies to just about everything. No one said it better...

Thu, 10/01/2015 - 21:38 | 6618956 Ms No
Ms No's picture

Just another tack to throw at the big baloon and see if this one pops it.   

Thu, 10/01/2015 - 21:44 | 6618965 fowlerja
fowlerja's picture

Wait...I have the answer...remember when Greece could not make their interest payments..well..they did this three times and the ECB came to their rescue...China needs to fess up and contact the ECB. ... China...Is there an interest?

Sat, 10/03/2015 - 07:43 | 6624295 FredFlintstone
FredFlintstone's picture

I thought China was going to bail out Greece? It is hard to keep up.

Thu, 10/01/2015 - 22:07 | 6619027 Sorry_about_Dresden
Sorry_about_Dresden's picture

Let's hope that is not what Kevin Henry was buying!

Thu, 10/01/2015 - 22:12 | 6619049 Catullus
Catullus's picture

What a waste.

Thu, 10/01/2015 - 22:12 | 6619051 Jack Burton
Jack Burton's picture

As each layer in the onion of financial fraud is peeled away, we will see that our glorious Globalized Economy was one giant lie, rip off and cluster fuck. In the end, all it was really was a tiny elite who decided to defraud the whole fucking world and then run for the hills. Well, the shit storm is here, the elites have gotten 90% of earths wealth, now they are heading for the hills.

Remember the promise of Bill Clinton? How globalized markets and economies would make us all well off? Guess what? He fucking lied!

Thu, 10/01/2015 - 23:39 | 6619270 Uber Vandal
Uber Vandal's picture

Oh come one now Jack, back when Bill Clinton was President, we did not have two rascal scooters in every garage and an iPhone / iPod / iPad in every pot.

See how much things have double plus good improved?

<Insane level of sarc>

Thu, 10/01/2015 - 22:15 | 6619060 ISEEIT
ISEEIT's picture

Shit!!!

Somebody call in Krugman!!

I think I'm turning Japanese..I think I'm turning Japanese..I really think so>>>

https://www.youtube.com/watch?v=IWWwM2wwMww

Thu, 10/01/2015 - 22:30 | 6619095 yogibear
yogibear's picture

LOL, print more and super TARPs.

To Central Banksters just print 10s of trillions more.

Piled Higher & Deeper (PhD). Fed has plenty of them.

Thu, 10/01/2015 - 22:49 | 6619145 bankonzhongguo
bankonzhongguo's picture

Why I even comment on this I'll never know.

So I used to audit these guys for years.

Not the mamby pamby exchange listed companies, but the old-skool pre danwei annihilation iron rice bowl PLA SOE.

Not only is there trouble with interest repayment, the assets are not even there folks.

In Asia you get financing on LC and a host of other "paper asset" documents.

Look at every China warehouse deal in the last year.  It's either re-re-re-hypothecated commodities or Jewish lighting.

They read JPM and COMEX's book too.

China is the ancient intersection of everything you know about Japan's lost decades and the current Wall Street-Fed QE Orgyplex.

(Hey I just made that word up!)

The government set goals of 7% annual growth is the same quota approach used to document wheat harvest during the Great Leap Forward. And we know how that worked out.

At some point (only after the West recalls what corporate governance actually means) will the music stop.

So all these Ivy league MBA'ers have been creaming their jeans to be China, Inc. exactly because of what you read here about debt.

It's not meant to be paid back.

If you are an insider you get moar debt, moar money, moar workouts, moar accommodation.

You have to really be on ice to be on the shit list and generally you just need to farm out some jobs to the right people to kick the can down the road.

Are there regulators. Sure.  How about that internal inspection unit and makes people disappear? That's the culture man.

What is a central state/party/industry going to do - shut down munition factories and not roll out cell phone service?

Everything IS a State interest, therefore nothing can fail.

And you are seeing exactly this philosophy introduced into America thanks to the smartest guys in the room.

Is Norinco going into forbearance?

There is an ancient Chinese saying on this.

'Nigga, please.'

All the more reason to never passively invest in China.

 

Thu, 10/01/2015 - 22:50 | 6619149 nomorebuyins
nomorebuyins's picture

ROR

Thu, 10/01/2015 - 22:57 | 6619169 bgilliam83
bgilliam83's picture

Yeah, no shit!!  I wonder if this has something to do with the interest never existing in the first place!  fucking clown show

Thu, 10/01/2015 - 23:08 | 6619200 45North1
45North1's picture

Getting Glencored...

Thu, 10/01/2015 - 23:12 | 6619212 Bunga Bunga
Thu, 10/01/2015 - 23:17 | 6619219 Mini-Me
Mini-Me's picture

Trillion yuan coins?

Thu, 10/01/2015 - 23:32 | 6619258 83_vf_1100_c
83_vf_1100_c's picture

  As viable a plan as any. Do you think the thieving bastards would take the precious and mint it with zinc?

Fri, 10/02/2015 - 00:22 | 6619351 Proofreder
Proofreder's picture

Now there is an idea ...

China has a huge pile of gold and even larger pile of phys copper.  Mix the two and there you are - Coin of the Realm, the Chinese Realm.  Base 10x paper on that and the PetroYuan is a shoo-in for world dominance.

Go for it.

Fri, 10/02/2015 - 09:15 | 6620130 . . . _ _ _ . . .
. . . _ _ _ . . .'s picture

They aren't trying to drive the price of tungsten (W) up, they just need more for themselves.

http://investingnews.com/daily/resource-investing/critical-metals-invest...

Tungsten imports into China have started to drop in 2015.

Have they gone through all their gold by now? Prolly.

 

Fri, 10/02/2015 - 00:30 | 6619363 theeseer
theeseer's picture

Chinee economy like Chinee food feel full then one hour later EMPTY feeling!! "Confussister"

Fri, 10/02/2015 - 00:56 | 6619399 peterk
peterk's picture

MACQUARIE made this report????? MACQUARIE  was the  AUstralian Bank that almost went belly up in 2008. The  then  australian treasurer  gave them an emergency $20 Billion  loan, inteest free off course... they took the money and invested in US Bonds...... pissed off the  Treasurer  as the money was supposedly to  help  day to fay operations..

I wouldnt be listening to  what  Maquarie has to say on anyting  let laone debt.

They had a  return on investment of around 1-2%. they were so leverged up to produce their  profits,  but it loks good when  they say "we made $1 bilion"  in profits. yes maybe. but it was while using $ 100 Billion in debt. better to have invested it all in US T bonds and sat in their back sides.

Macquarie likes to  prance around as some  sophisticated invest ment house.. its all  bulldust!

Fri, 10/02/2015 - 03:12 | 6619514 salman
salman's picture

Things will ONLY become serious when these companies would not be able to cover the salaries...

Fri, 10/02/2015 - 07:17 | 6619566 Angry Plant
Angry Plant's picture

Apple will makes 60 billion in profits almost entirely from Chinese made products this year.

How long until Chinese come looking for that money apple made.

The ancient asian tradition of robbing the foriegners blind is not a crime has really disappeared from local cultural memory.

Fri, 10/02/2015 - 05:16 | 6619578 Spungo
Spungo's picture

The good news is that the commodity companies have record high mouse clicks per dollar ratios.

 

Anyway, I think everyone here should listen to at least 1 conference call held by a resource company. They say a lot of interesting stuff. The latest one from Teck Resources stated at one point that China's slowdown started in Q4 of 2013. 

Fri, 10/02/2015 - 06:45 | 6619649 Last of the Mid...
Last of the Middle Class's picture

Does this mean their central planning is worse than our central planning?

Fri, 10/02/2015 - 07:15 | 6619698 lucky and good
lucky and good's picture

It is becoming clear China is in a situation similar to what America faced in 1929 following a period of rapid growth and credit expansion. To say the economy of China is shaky understates the situation. The kind of growth we have witnessed in China during the last several decades has been extraordinary and was driven by several "one time factors" that have be played out.

To those who doubt just how massive the problems are they only need look to the newly constructed city of Ordos in Inner Mongolia. Most of the new town buildings are empty or unfinished. This was noted a few years ago, but the situation has grown more dire. Below is the latest in a series of articles concerning China's deteriorating economic situation.

http://brucewilds.blogspot.com/2015/09/china-economic-update.html

Fri, 10/02/2015 - 18:40 | 6623085 venturen
venturen's picture

So that means they will have a record up market day monday...that is the way it works here...terrible news....record market. It is like the Staples Easy Button...Market Up Day needed....just push the Button

Fri, 10/02/2015 - 19:33 | 6623257 Chuck Knoblauch
Chuck Knoblauch's picture

Throw another faggot on the fire.

It's not burning.

i need more cowbell, and Chinese fear porn.

That order is a #21 on the Chinese menu.

To go please.

Fri, 10/02/2015 - 20:40 | 6623464 Herdee
Herdee's picture

The Fed and all Central Banks will be coordinating their money printing even further because the alternative is just too horrific according to Richard Duncan:

http://video.cnbc.com/gallery/?video=3000420214

 

Fri, 10/02/2015 - 22:11 | 6623679 Wild E Coyote
Wild E Coyote's picture

The truth is a little more complicated.
The take from my commodify analyst friend is that, the so called Chinese companies that are in deep trouble are private enterprises that borrowed from western Banks. They do it mostly by using western bank instruments as collateral, with Chinese Banks.
However, the transactions internally were in Yuan and after deducting administrative costs and cost of the Mercedes and golf carts, there was not so much to pay for the collateral.
So, we will be seeing a wave of Chinese company bankruptcy just as it happened in 1998 among ASEAN tiger economies (anyone still remember those boast from ASEAN Chinese companies?)
But I doubt China will capitulate as ASEAN government's did in 1998 to take over the debts.

Fri, 10/02/2015 - 23:03 | 6623798 yogibear
yogibear's picture

Let's see the implosion! All these banksters printing.

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