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If You Thought China's Equity Bubble Was Scary...
Don't look at their corporate bonds...
As Bloomberg details, as the rout in Chinese stocks this year erased $5 trillion of value, investors fled for safety in the nation’s red-hot corporate bond market. They may have just moved from one bubble to another.
The risk of a downward spiral in debt prices has increased after investors took on leverage to amplify their returns, according to Ping An Securities Co. The monthly volume of bond repurchase agreements -- a form of borrowing used by investors to increase their buying power -- has jumped 83 percent from January to 39 trillion yuan in September, according to data from the Chinamoney website.
Furthermore, Commerzbank AG puts the chance of a crash by year-end at 20 percent, up from almost zero in June. Industrial Securities Co. and Huachuang Securities Co. are warning of an unsustainable rally after bond prices climbed to six-year highs and issuance jumped to a record. The boom contrasts with caution elsewhere. A selloff in global corporate notes has pushed yields to a 21-month high, and credit-derivatives traders are demanding near the most in two years to insure against losses on Chinese government securities.
A reversal in the bond market would do more damage to China’s economy than the drop in shares and exacerbate capital flight from the biggest emerging market, according to a worst-case scenario projected by Banco Bilbao Vizcaya Argentaria SA. The Spanish lender more than doubled its first-quarter profit by selling holdings in a Chinese bank.
"The equity rout merely reflects worries about China’s economy, while a bond market crash would mean the worries have become a reality as corporate debts go unpaid," said Xia Le, the chief economist for Asia at Banco Bilbao. "A Chinese credit collapse would also likely spark a more significant selloff in emerging-market assets."
We leave it to Commerzbank's Zhou to conclude...
"Global investors are looking for signs of a collapse in China, which itself could increase the chances of a crash... This game can’t go on forever."
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anyway of shorting that?
convergence trade though. long one, short the other.
If that scenario happens you can short just about any equities and make money.
Like shorting government run markets is so simple a caveman could do it.
Phsical Gold and Silver in your posession.
Some dim sum bond issues are listed on London, Frankfurt, and Luxembourg exchanges. Otherwise find an institutional investor holding them that will lend them.
Putin 2016
This, comrades, is Chinese Commie Capitalizm #WINNING
it just doesn't matter. nothing matters. i don't know why i even pay attention anymore. it's all rigged and meaningless. i could check back in ten years and the headlines would still be exactly the same.
Just watching for when something catches fire.
Same. But I'm running out of popcorn.
Buy it by the can. There is plenty more to go around.
https://www.google.com/search?q=popcorn+in+a+can&espv=2&biw=1280&bih=855...
the second you stop paying attention is when things change.
Thats why you keep coming back.
just in case
Just one more hand. I just know my luck is changing.
addiction
Why is anyone shocked? Massive central bank fuckery causes bond bubbles. This is not news.
Is it possible that these bubbles are enabled by people believing that they will profit from the collapse? Too many people are making money on the up and down sides of this for it to ever change. Even people here, bemoaning the corruption and distortions, are looking for avenues of profit from a crash we all see coming. Can we really expect healthcare to improve if the principle owners are equally invested in mortuaries?
It is important to understand Wanta knows very key people in the PRC. He was the guest of 4 stars at the 2005 POTUS inauguration ..
https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)
Doom on. China's 2nd House (Mao's founding) has had Pluto there appx. 8-11 mos. It's gonna be horrific; ditto the USA's in 2016.
If you look at the stats, facts and political trends, then is no longer a mere "Currency War".
This is ratcheting up to full-fledged, Financial Warfare. No prisoners will be taken, other than hapless and unprepared taxpayers on all sides -- as usual. Remain hapless and unprepared at own risk.
S&P500 Bears will have the upper hand for the next two weeks in my view. Be careful with longs.
I don't trade VXX, but what they do to that product is amazing.
http://tripstrading.com/2015/10/10/sp500-suffering-from-low-energy/
http://tripstrading.com/2015/10/09/sp500-how-cycles-take-their-time/
http://tripstrading.com/2015/10/08/sp500-tripstrading-cycle-model-3/
Oh, no, China is fine! After all, they say so and so does bubblevision. Isn't that enough.
I DON'T trust any single chart as result of overlaying 2 different charts together, especially if it is done by Tyler Durden.
The way he does it is simply statistically invalid.