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Credit Suisse Buries China's Banks

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Wed, 10/12/2011 - 10:57 | 1765716 Reggie Middleton
Reggie Middleton's picture

Is the assertion that Chinese bank equity is worthless news to anyone that was paying attention?

Wed, 10/12/2011 - 11:00 | 1765726 SheepDog-One
SheepDog-One's picture

Chinese bank equity worthless? OK, so when do we get back to how US bank equity is even more worthless?

Wed, 10/12/2011 - 11:06 | 1765762 CClarity
CClarity's picture

Yup!  Many bank board room discussions in US about how the loans that cobbled together some payments in recent difficult years are now really struggling and starting to miss payments.  Loan loss provisions, reduced for bank profits a couple quarters back, now need reprovisioning.  Talk in the rooms now.  Expect to see the numbers in regional and community bank reports 4th Qtr.  For now, they're hoping magical thinking will turn it around . .  . but they'll need to take medicine before December.  Regulators are visiting more frequently and being tougher out in the field.

Wed, 10/12/2011 - 11:47 | 1765971 tekhneek
tekhneek's picture

Oh my god, you mean when people lose their jobs they don't make their loan payments?

Me-oh-my! What a pickle!

Let's raise taxes.

Wed, 10/12/2011 - 11:47 | 1765969 DaBernank
DaBernank's picture

We've all (here at least) been maintaining that US banks have no equity quite consistently since 2008. This is not a pro-US article. Did you not catch the reference in this very article to "Countrywide Lynch"? - the fact that China's banks are up to 100% overvalued is fairly underreported, especially by the "China will save us" and "China is invincible" crowd. The China bubble is not news to anybody who has been avoiding groupthink in the FinSvcs echo chamber but those inside the chamber are beginning to catch on.

Wed, 10/12/2011 - 11:51 | 1765990 disabledvet
disabledvet's picture

Fast Money vs Jim Chanos. They both can't be right.

Wed, 10/12/2011 - 12:30 | 1766180 ironymonger
ironymonger's picture

More worthless? Is that like 'more unique?'

Wed, 10/12/2011 - 11:01 | 1765735 Alvaro de Esteban
Alvaro de Esteban's picture

Nope, apart from central bankers, politicians, media, "market makers", investors........ of course

Wed, 10/12/2011 - 11:08 | 1765774 Archimedes
Archimedes's picture

Reggie! What's up! Hey I know I have given you grief for your Apple predictions but I think your time may be coming! But I have been hearing mixed meesages in the MSM. First I hear Ipads sales are off 25% then I hear that Iphone 4s sell out at the fastest pace in history.

Looking forward to your next post on this.


Wed, 10/12/2011 - 11:09 | 1765777 NotApplicable
NotApplicable's picture

As you well know Reggie, "bank equity" is an oxymoron.

Wed, 10/12/2011 - 11:15 | 1765805 Schmuck Raker
Schmuck Raker's picture

Maybe BAC.


PS-Love your posts Reggie.

Wed, 10/12/2011 - 11:15 | 1765809 BurningFuld
BurningFuld's picture

Quick answer. NO.

Wed, 10/12/2011 - 11:27 | 1765867 Chain Gun Smoke
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How come your avatar isn't you being shirtless and kicking something?

Wed, 10/12/2011 - 11:49 | 1765974 Smiddywesson
Smiddywesson's picture

It has been clear for a long time that China was a bubble.  If for nothing else, the hype around "The Century of China" story and the viciousness with which it was defended was the tell.

Now we are seeing the rule of hot money in play.  Fraud chases hot money, so you see companies like Sino Forest pop up, and even solid companies are found to be in worse shape than anyone thinks because hot money blinded everyone to them cooking the books.  Unfortunately, nowhere in the world has money been as hot as it was in China.  Hot money and no transparency will burn everything down.

Wed, 10/12/2011 - 12:41 | 1766230 Seer
Seer's picture

Of course it's all a bubble.  GROWTH is a bubble!  And, 10%+ growth?  Anyone thinking that this kind of number could hold out for very long has ZERO understanding of the exponential function: 10% means a doubling time of 7 years- yes! in just seven years China's economy would double! try to keep this up- can't happen.

Once I came to understand what exponential growth meant to economics (and other human activities) I found that it's all pretty easy to know what's ahead.

Wed, 10/12/2011 - 11:51 | 1765987 covert
Wed, 10/12/2011 - 12:46 | 1766245 YHC-FTSE
YHC-FTSE's picture

I'm probably one of those who has not paid attention. Back before Summer, we did the rounds of NPL estimates on Chinese banks, somebody's report had to be revised with apologies all round and now it turns out they were (almost) right after all. CS has been pretty good with their research this year, so I'm definitely awake this time. 

Wed, 10/12/2011 - 10:58 | 1765722 vote_libertaria...
vote_libertarian_party's picture

Thus another reason for a Bizarro World stock rally.


More signs of global economic collapse = buy buy buy

Wed, 10/12/2011 - 11:00 | 1765730 HelluvaEngineer
HelluvaEngineer's picture

Yes!  Just when my coke induced buying frenzy was waning, this news came out.  Party on!

Wed, 10/12/2011 - 11:03 | 1765736 SheepDog-One
SheepDog-One's picture

Im happy with my investment strategy, just last night picked up 4 more cases of Jim Beam pints. When this shit market implodes suddenly 1 morning, those will be worth more than Krugerands!

Wed, 10/12/2011 - 11:15 | 1765810 imaginalis
imaginalis's picture

For Molotovs?

Wed, 10/12/2011 - 11:40 | 1765936 BandGap
BandGap's picture

Alcohol content not high enough, only about 40%.  Low yield flame. Stick to cheap gas/diesel.


Wed, 10/12/2011 - 11:44 | 1765957 Gene8696
Gene8696's picture

That reminds me, I have some Woodfords to restock.

Wed, 10/12/2011 - 12:00 | 1766032 covert
covert's picture

shorting is the right trend for a while.



Wed, 10/12/2011 - 17:26 | 1767262 deebee
deebee's picture

That's the human interpretation. HFTs are only interested in quantifiable data..

Wed, 10/12/2011 - 10:59 | 1765724 SheepDog-One
SheepDog-One's picture

Im sure its all bad for the dollar so great for bubble equity markets!

Wed, 10/12/2011 - 11:00 | 1765732 Irish66
Irish66's picture

CDS told us this weeks ago

Wed, 10/12/2011 - 11:02 | 1765740 Lady Heather...UNCLE
Lady Heather...UNCLE's picture

as Tears for Fears sang: "It's a Mad World"

Wed, 10/12/2011 - 11:03 | 1765742 hedgeless_horseman
hedgeless_horseman's picture

A bit suprised to see the Swiss are not staying neutral in this war.

Wed, 10/12/2011 - 11:06 | 1765763 GeneMarchbanks
Wed, 10/12/2011 - 11:12 | 1765791 hedgeless_horseman
hedgeless_horseman's picture

Yes, but the Swiss Alps get pretty cold in the winter, and the wood only lasts so long.


Wed, 10/12/2011 - 11:24 | 1765855 moskov
moskov's picture

Swiss are neutral about war?


They have been Hitler's bitch for years during the world war II,How many Jewish slaves from the Nazi concentration camps have been shiped to Switzerland for human soup production...You figure

Wed, 10/12/2011 - 11:04 | 1765758 LongSoupLine
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"What's important here is stocks are at their highest in a couple of months" - Bob "shitbull" Pisani

Wed, 10/12/2011 - 11:04 | 1765759 SheepDog-One
SheepDog-One's picture

How is the dollar down and not UP on all this?? Truely retarded.

Wed, 10/12/2011 - 11:10 | 1765785 GeneMarchbanks
GeneMarchbanks's picture

It really isn't SD1, you just have to let go of the [fixed] delusion that the dollar is a 'free floating' currency at the mercy of 'markets'. No such animal. Market makers are in control, until one day they aren't. Or they set fire to the currency deliberately which is, to paraphrase Hugh Hendry, a political event not economic/monetary.

Wed, 10/12/2011 - 11:11 | 1765789 SheepDog-One
SheepDog-One's picture

Yea well thats pretty much the same as Ive been saying here all along.

Wed, 10/12/2011 - 11:09 | 1765776 Zonker
Zonker's picture

Two words - Useful Idiots.. get with the program ZH you are making your readers poorer by the hour

Wed, 10/12/2011 - 11:14 | 1765799 SheepDog-One
SheepDog-One's picture

ZH isnt making anyone do anything. Since Ive been on ZH, Im far richer, totaly prepared, and safely out of the rigged vampire casino.

Now scurry on along back to CNBC break time is over Cramer!

Wed, 10/12/2011 - 11:31 | 1765881 jdelano
jdelano's picture

So many of these freaking tools all of a sudden.  Getting my ass kicked so far this week but still up 32% for year on my two investments---Gold and Spy puts, one of those two definitely ZH approved.  In other words, scoreboard bitchez.  

Wed, 10/12/2011 - 11:26 | 1765862 Raynja
Raynja's picture

You do realize zh offered no investment advice? Forwarding a research report at no cost is a benefit to readers.
The only ones making us poorer by the hour is our govt.

Wed, 10/12/2011 - 11:10 | 1765787 SheepDog-One
SheepDog-One's picture

Kill The Dollar.....Save The Banksters......Kill The Dollar.....Save The Banksters.....

Wed, 10/12/2011 - 11:12 | 1765792 Schmuck Raker
Schmuck Raker's picture

With the amazing efficiency inherent in a centrally planned economy, I expect China will be able to rectify this little issue yesterday.

Wed, 10/12/2011 - 11:18 | 1765822 bankonzhongguo
bankonzhongguo's picture

Half the assets of any Chinese bank are non-performing rollovers.

Just like the trans-Atlantic banks.

The difference is every once in a while China takes a banker out back and shoots them in the head.

Sad when infrequent spats of Chinese justice undercut everything wrong in Amerika.

Millions for the Fed's (Red Coats) to chase grungy pot heads in the Emerald Triangle for once of Mother Earth, but NOT ONE PROSECUTION OF A BANKSTER culpable of trillions in fraud.

Now Fast & Furious.  This so-called government loses its legitimacy every day.




Wed, 10/12/2011 - 11:18 | 1765824 monopoly
monopoly's picture

And the markets just move higher. What else is new.

Wed, 10/12/2011 - 11:19 | 1765828 moskov
moskov's picture

So basically they are saying Chinese banks are worthless because People's Bank of China didn't give enough fake money like Fed did to the Wall St.? So UBS, CREDIT SUISSE, DEUTCHBANK, GOLDMAN SACHS, BANK OF AMERICA are all so self-sufficient themselves they can write their daily troll report about China all day everyday instead of looking after their shares plunging like failing stone due to their phoney trading.

Wed, 10/12/2011 - 11:56 | 1766010 buzzsaw99
buzzsaw99's picture


Wed, 10/12/2011 - 11:19 | 1765830 Tic tock
Tic tock's picture

China-area non-performing !? - under what scenario, China has ten times the growth potential of Europe under any scenario

Wed, 10/12/2011 - 11:21 | 1765841 monopoly
monopoly's picture

Well, true. But if the growth of Europe is 0 then 10 x 0 = 0. That is what we are saying here. There is no growth in China with these numbers.

Wed, 10/12/2011 - 11:26 | 1765860 moskov
moskov's picture

Who's going to buy French bags and German cars if China plunges? Africa?

Wed, 10/12/2011 - 11:32 | 1765891 Seer
Seer's picture

Yup.  AND, if Europe is growing(?) at 0% then China's exports are pretty much shifted downward.  Can't push on a string.

Internal growth really isn't growth, it's just self-parasitism (bound to burn out [quicker]).  But, increased internal growth will result in decreased trade, which will then mean a decrease in the purchase of US Treasuries, which then means a reduction in available liquidity for the US to cycle back to China (in trade).

People ought not confuse a less negative downward spiral as being a positive (upward) spiral.

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