China Margin Debt Hits 8-Week High, Japan Pumps'n'Dumps As Kyle Bass Fears Looming EM Banking Crisis

Tyler Durden's picture

Following Marc Faber's reality check on China recently, Hayman Capital's Kyle Bass took a swing tonight noting that "China's 7% GDP growth is a farce," and adding that, just as we detailed previously, China's credit cycle has begun and non-performing loans will rise rapidly leading to an emerging Asia banking crisis ahead. Japanese markets continue to entertain with "someone" insta-ramping NKY Futs 100 points at the open only to give it all back as USDJPY slides back towards 120.00 (and 10Y JGB yields drop below 30bps for the first time in 6 months).

Hayman Capital's Kyle Bass discusses China at Sohn San Francisco:

  • *HAYMAN'S BASS SAYS CHINA 7% GDP GROWTH IS A 'FARCE'
    *HAYMAN'S BASS SAYS HE'S ASSUMING CHINA CREDIT CYCLE HAS BEGUN
    *HAYMAN'S BASS: CHINA WILL FACE NPL CYCLE, CREDIT CONTRACTING
    *HAYMAN'S BASS: ASSUMES 8.5%-10% CHINA LOANS NON-PERFORMING
  • *HAYMAN'S BASS SEES EMERGING ASIA BANKING CRISIS AHEAD

Confirming our previous detailed analysis on China's Banking System's Neutron Bomb.

China continues to drift quietly under the hammer ofthe Polituburo ahead of The Plenum

 

The Chinese continue to lever up...

  • *SHANGHAI MARGIN DEBT BALANCE RISES TO EIGHT-WEEK HIGH

 

*  *  *

Japanese markets are once again a farce also...

A mysterious insta-buyer lifted Nikkei futures 100 points in one big bid at the open, but USDJPY continues to tumble as hopes of moar from The BoJ fade...

 

It's been a ride..

 

10Y JGB yields are back under 30bps - lowest in 6 months...

 

The spread between Offshore an Onshore Yuan continues to widen suggesting outflows are picking up once again.

 

And that appears to be flowing - as we have detailed extensively - to Bitcoin...

 

Charts: Bloomberg

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HedgeAccordingly's picture

Chanos has it right.. China is the next Japan.. or its the USA? i think we are 7 years into the USA's lost decade.. Japan 17 years into theirs..

China meltdown exposes how markets cling to myths about China
Stanley Lord's picture

I saw Chanos at the Grant's Conference last week at the Plaza, he did not talk about China, just oil, do not make any bullish oil bets for the next five years.

Yen Cross's picture

  That 400 pip yuan spread is ugly.  Gee... I wonder who's buying JGB's? </sarc>

 Watching Japan and China every night is like watching a "Beavis & Butt-head", re-run on an endless loop.

HedgeAccordingly's picture

BOJ. .then they ease more driving Yen lower and usd/jpy higher.. supporting equities while driving rates into the pisser as Europe eases and drives the USD higher further driving the YEN lower... 

nmewn's picture

Meng? Meeennng!? Help...Meng. We love you...

HyeM's picture

the suspense is killing me (and a million other ZH regulars)....CRASH ALREADY !!!!

JenkinsLane's picture

Does anyone know when or if the Politburo will announce the outcome of the 5th Plenum meeting? I understand it's just a draft but, to me, a 6.5% GDP

growth target vs. a 7% GDP target is significant for copper, Glencore's survival chances, etc.

earleflorida's picture

If china goes away and fixes its financial house away from the ussa/jap/roc's maddening crowd, all the better for the chinese.

Remember this?

It isn't china thats reliant on its export/import trade, as the three amigos are...[!]

booboo's picture

No, trying to keep 1.5 billion people fed is their problem. I can go along time without a rubber chicken.

Latitude25's picture

Too bad no video of Kyle.  I enjoy his insights and debate style.

DirkDiggler11's picture

It's not just an Asian debt crisis that is concerning, but also Latin America, the EU, and now Russia as well. So, pretty much everyone except those living in Iceland or Antartica are screwed in a bad kind of way.

Good thing I bought more ammo this week ...

Itsthetiming's picture

China might be able to do something the USD can't - write it off. Literally.

What's the consequence? It's not like the trading partners will stop buying so who looses?

jcdenton's picture

Someone in another thread said he will not worry until he hears thunder. The thunder you will hear starts in the East. It will then be a rolling thunder ..

https://app.box.com/s/hfgvcqg7gqh7i27at6sv53ywu87lwarp (Read Me First)

Amb. Wanta largely took down the USSR via Aneko Credit based in Singapore. His partner at the time was the son of a Chinese warlord (read Triads). The father, chief adviser to Lee Kuan Yew. I'm sure we are capable of connecting dots from here ..

 

theyjustcantstop's picture

billionaire hedge fund managers, 50% of the time thier talking the fed's book, the other 50% of the time thier trolling for investors.

if your going to short china, a few d.m.'s, and several e.m.'s, put your money on the table.

the international bankers are losing some of thier power,

the B.O.E. can't make a big move for fear of horrible outcome,

B.O.J.'s moves are likeading the same book, day after day, 24 hrs. a day.

the fed. can't raise 1/4%, because of these countries your're wanting to short.

 

 

Hongcha's picture

The Party can do anything it wishes within its own borders.  There is no one to whom they need to answer.  No rules but their own and they can change them whenever they wish.  If you don't mind making coin on totalitarian dictatorships, China is the way to go.  Look how cheap their bank stocks are.

Apostate2's picture

One niggling problem is that GDP has been reported before firms and industries have even reported 3rd quarter results.

Now ain't that grand.

assistedliving's picture

this is a "pro's" market each picking the pocket of the other.  18,000 on the Dow and 90% of the sheeple

(that wud be me) are losing money.  He who has the best insider knowledge (GS?  Eddie George Soros, Hank Paulson?) of the next CB move wins.  Everyone else is just lucky.  If they say different, they're lying.