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China 'Stealth' Devaluation Continues - Yuan Plunges For 6th Day, Default Risk Soars, Fosun Bonds Crash

Tyler Durden's picture




 

USDCNY broke above 6.4500 for the first time since the August devaluation, extending its post-IMF plunge to 6 days. This is the largest and longest streak of weakness since March 2014 as China seems to have taken the SDR-inclusion as blessing to devalue its currency drip by drip. Default risk is once again stomping higher as CDS surge from 94bps to 112bps (2-month highs). The biggest news in China tonight is the disappearance of Fosun International's Chairman, China's 17th richest man (and the collapse in the company's bonds, since stocks are suspended).

For the 6th day in a row (something which has not happened since March 2014), Yuan has plunged, now below the Augsut devaluation lows....

 

The pressure on onshore Yuan (above) is being driven by even more significant selling pressure in offshore Yuan as outflows appear to be accelerating... and PBOC seems happy to "allow" the onshore Yuan to devalue alongside it

 

to its lowest since July 2011...

 

And Chinese default risk is on the rise...

 

But what everyone is talking about is the disappearance of Fosun International's chairman.

Its USD 2020 bonds plunged by a record and the company suspended its shares in Hong Kong after Caixin magazine reported that billionaire Chairman Guo Guangchang had gone missing.

 

The shares declined for a sixth consecutive day on Thursday in Hong Kong, losing 1 percent to close at HK$13.34, and tumbled more than 11 percent to $1.55 in over-the-counter trading in New York. Fosun International dollar bonds fell by a record, with the $400 million of 6.875 percent bonds due in 2020 slumping 16.1 cents to 88.3 cents on the dollar as of 9:10 a.m. in Hong Kong.

Closely held Fosun Group, which controls Fosun International, has “lost contact” with Guo, 48, the magazine said, citing people it didn’t identify.

“The news that the chairman went missing will take a toll on the bond prices and until the company can clarify the situations, we’d expect further weakness in the near term,” Nuj Chiaranussati, a Singapore-based debt analyst at Gimme Credit LLC.

Broadly speaking, Chinese stocks continue to drift lower after the rescue from carnage into month-end...

 

Charts: Bloomberg

 

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Fri, 12/11/2015 - 00:13 | 6908605 Francis Marx
Francis Marx's picture

I guess this means the cheap dollar store crap will remain a dollar.

Fri, 12/11/2015 - 00:15 | 6908620 joego1
joego1's picture

Maybe even free?

Fri, 12/11/2015 - 01:12 | 6908801 tc06rtw
tc06rtw's picture

   
     Two-for-a  Dollar Store.

Fri, 12/11/2015 - 01:58 | 6908913 McCormick No. 9
McCormick No. 9's picture

An-DENNN????

Fri, 12/11/2015 - 04:50 | 6909103 xyzcracker
xyzcracker's picture

And still not worth 2 bits.

Fri, 12/11/2015 - 00:14 | 6908613 Crush the cube
Crush the cube's picture

Worlds largest manufacturer of pneumatic air nailers?

Fri, 12/11/2015 - 07:48 | 6909318 . . . _ _ _ . . .
Fri, 12/11/2015 - 00:23 | 6908649 Yen Cross
Yen Cross's picture

    I need moar mirrors.

Fri, 12/11/2015 - 00:28 | 6908670 NoDebt
NoDebt's picture

China will be looked upon as the greatest fraud of the 21st century.  

<gasp!>  NoDebt, you can't be serious.  Look at all the gold they bought!  Look at their balance of trade!  Look at the beautiful ability they have to direct their economy in any direction they choose thanks to their modern totalitarian government!

Kids, trust me, I've seen this movie before.  China's fucked and the current downturn in their Potemkin economy is NOT transitory.

 

Fri, 12/11/2015 - 00:40 | 6908713 aurum4040
aurum4040's picture

Dude China will be fine - what part of a $4 trillion surplus, untold gold reserves, and 1.3 billion pissed off at the West people do you not understand?.... 'Appear weak when you are strong.....' ~ Sun Tzu

Fri, 12/11/2015 - 02:01 | 6908917 McCormick No. 9
McCormick No. 9's picture

Moar Woar is the answer to bond yield contagion.

We're all broke, so let's go kill people and blow shit up!

The human is indeed a dismal creature.

Fri, 12/11/2015 - 14:55 | 6911289 Arnold
Fri, 12/11/2015 - 03:25 | 6909026 Otrader
Otrader's picture

Is there anything China does not produce these days? 

Fri, 12/11/2015 - 04:52 | 6909106 xyzcracker
xyzcracker's picture

Quality?

Fri, 12/11/2015 - 07:41 | 6909304 Mentaliusanything
Mentaliusanything's picture

Whats the problem, Gou's in Sydney. In His House in St Ives. Has been for a few days. Ever heard of a Work break and upcoming Chinese new Year. Not every rock hides a spider.

Fri, 12/11/2015 - 07:42 | 6909307 Mentaliusanything
Mentaliusanything's picture

Whats the problem, Guo's in Sydney. In His House in St Ives. Has been for a few days. Ever heard of a Work break and upcoming Chinese new Year. Not every rock hides a spider.

Fri, 12/11/2015 - 08:06 | 6909353 aurum4040
aurum4040's picture

I am not so sure if quality is the true answer anymore. Sure there are pockets of problems but look at their new VT4 tank for example that is supposedly better than Russia's T14 Armada... its no joke 

Sat, 12/12/2015 - 02:29 | 6910789 ThroxxOfVron
ThroxxOfVron's picture

1.3 billion pissed off at the West "

 

IMHO: you are highly mistaken.

 

1. The Chinese people would by and large still be in the rice paddies and reed-woven fishing boats without Western investment and technology.

2. Thier own power mad 'leaders' :

A. Put the people through the wood chipper of the Cultural Revolution

B. Restricted births so stringently that there are tens of millions of legitimate domestic born Chinese citizens that were -and still are today- barred from being issued identification or allowed to access the public social services systems

C. Expropriated their foraging and farming lands to build cities of sweat shops and factories within which to put the peasantry to work at what were indeed slave wages enriching only a tiny portion of the politiburo and their cronies and princelings

D. Polluted the environment to a degree not seen anywhere in any developing nation since the dawn of the industrial revolution

 

The Chinese will destroy their own Oligarchs long before they even consider mobilizing to cross the globe in order to take whatever their grievances with the USA might be to it's shores.   

Unless they are politically connected criminals most Chinese with any skills or money want the fuck out of China.  The Chinese that do come to the USA are busy buying property, getting educations, building businesses, not causing violence or making demands that their cultural values be enshrined in or supersede existing US secular law as per some other more self-centered and contemptible problem immigrant demographics ( yeah: I'm looking right at YOU, islamists )...

The average Chinese owes more gratitude to the USA than their own idiot Oligarchs.

Fri, 12/11/2015 - 00:54 | 6908758 1GR
1GR's picture

Make the Yuan look week, make the dollar look strong, dump more US debt for top dollar, buy more manipulated undervalued gold til it's gone.

Fri, 12/11/2015 - 00:58 | 6908769 scatha
scatha's picture

All China’s competitors have been devaluating their currency for last five years. China must devaluate vs. dollar at least 30% to return to export situation from 2010.

The whole shit is about internal consumption and is exactly that: shit. Facing uncertainty and instability of markets, jobs and overall policies of the Chinese government including cracking down on corruption among former power Mafiosi causing Chinese people to save, save, save while commodity prices are falling, since their spending depends on income only, not prices, something that SSE maniacs do not understand.

So they will be no consumer economy in China anytime soon, not at least as long as they do not shopo-zobiefy them as it happened in the US. That's why global commodities are crashing, and all commodity producers sink since China tightening its belt for next few decades at least until 2+2 generation will be born and raised. 

More truth on China and the US economy can be found here:

https://contrarianopinion.wordpress.com/economy-update/

 

 

Fri, 12/11/2015 - 01:06 | 6908790 Yen Cross
Yen Cross's picture

 Those PBoC credit default swaps look tasty, but I'll NEVER get paid.

Fri, 12/11/2015 - 02:05 | 6908923 McCormick No. 9
McCormick No. 9's picture

All those who have been abducted by faeries claim that they were brought to the underground faerie kingdom, and seated at a great feast. Before them was a table laid with the most delicious delicacies. Those who bowed their heads to say a prayer of thanks to God, discovered, upon raising their eyes again, that the feast had vanished, and before them were nothing but piles of dry leaves.

Indeed, I think Wall Street is that long-lost faerie kingdom, and someone has been saying some prayers of late.

Fri, 12/11/2015 - 02:15 | 6908940 Yen Cross
Yen Cross's picture

  I'm not questioning your dialect. "per se'"

 WTF is an/a " faeries"? I usually call them Fairies. Peter Pan and such....

  FWIW--- McCormick seasoning salts, I don't like my " riverpig" with too much MSG.

Fri, 12/11/2015 - 04:58 | 6909115 xyzcracker
xyzcracker's picture

McCormick could refer to a farm implement, or something like that. Could be horse drawn, low emision.

Fri, 12/11/2015 - 07:52 | 6909324 . . . _ _ _ . . .
. . . _ _ _ . . .'s picture

Ask him to spell 'jail.'

Fri, 12/11/2015 - 15:00 | 6911309 Arnold
Arnold's picture

Gaol?

Fri, 12/11/2015 - 01:10 | 6908800 Bank_sters
Bank_sters's picture

The only solution for the kleptocrats is to steal from the savings of everyone else.  That is the model, comrades.

Fri, 12/11/2015 - 01:23 | 6908825 GRDguy
GRDguy's picture

Hmmm, Fosun's bonds crashed.  Somebody's paper promise isn't being kept.  

Fri, 12/11/2015 - 01:36 | 6908859 shitco.in
shitco.in's picture

Where is the bitcoin chart? 

Fri, 12/11/2015 - 01:59 | 6908909 OregonGrown
OregonGrown's picture

Que "Rod from God" in     3        2         1

http://www.inquisitr.com/2346562/china-tianjin-explosion-was-caused-by-p...

Fri, 12/11/2015 - 07:47 | 6909315 headhunt
headhunt's picture

All the rocket scientists who want to settle in communist currency get F'd... who would of thought.

It is still all paper and communist paper is near the bottom on the trust scale.

Fri, 12/11/2015 - 09:08 | 6909549 lucky and good
lucky and good's picture

China is in big trouble but don't expect to hear about it because to most of the world China's economy remains veiled behind a shroud and is far from transparent. Not only because China is far away from our shores, but the fact is their economy is very controlled by the government that acts as its puppet master and corruption has flourished. The bottom-line is we often have a difficult time getting real information on what is happening. To many of us it has become clear that China is in a situation similar to what America faced in 1929 following a period of rapid growth and credit expansion.

This is written not to diminish the accomplishments of China or to question their progress, but to point out much of what we have witnessed is the result of one time factors that have largely played out. Several factors have drastically changed politically, socially and from a military perspective since the days when America fueled China's growth. The article below titled, "China's Veiled Economy" highlights some of the reasons for doubting China.

It should be noted that in the long run China's woes will also have a negitive affect on Japan.

 http://brucewilds.blogspot.com/2015/12/chinas-veiled-economy.html

Do NOT follow this link or you will be banned from the site!