China

China

The Notorious 120% LTV Mortgage Is Back

With China desperate to reflate its once-burst housing bubble (as every other bubble including stocks, bonds, and yes - even rebar - has burst) and with no regulators to oversee the insanity in the local housing market, it means that the infamous 120% LTV mortgage has finally resurfaced. As SCMP reports, Sun Hung Kai Properties Ltd., Hong Kong’s largest developer surprised the market on Wednesday by offering an unprecedented home loan worth as much as 120% of the flat value without the need to submit income proof in order to woo buyers for its new project in Yuen Long.

First Treasuries, Now China Is Also Liquidating US Stocks

As it turns out, China wasn't selling only Treasurys. According to a Bloomberg analysis when peeking deeper at the TIC data, while China’s sales of Treasuries have slowed, its holdings of U.S. equities are now showing steep declines as Beijing proceeds to liquidate a substantial portion of its US equities: China's stash of American stocks sank about $126 billion, or 38%, from the end of July through March, to just $201 billion. That far outpaces selling by investors globally in that period.

NATO Says It Might Now Have Grounds To Attack Russia

On Tuesday, June 14th, NATO announced that if a NATO member country becomes the victim of a cyber attack by persons in a non-NATO country such as Russia or China, then NATO’s Article V “collective defense” provision requires each NATO member country to join that NATO member country if it decides to strike back against the attacking country. In the context of this announcement that cyberwar is on the same status as physical war, Obama might declare the U.S. to have been invaded by Russia when former U.S. Secretary of State Hillary Clinton’s State Department emails were copied by someone in Russia.

USDJPY, Nikkei Plunge As BoJ Disappoints With "No Change"

While only 5 of 40 economists expected a rate cut and only 7 of 39 any additional easing, hopes were rife for some additional ETF buying or hints at further stock purchasing by The Bank of Japan... but no. USDJPY immediatley plunged to a 104 handle and Nikkei 225 crashed 300 points.

"When The Dragon Roars" - ASEAN Officials Unleash Statement Critical Of China... Then Immediately Retract

"We expressed our serious concerns over recent and ongoing developments, which have eroded trust and confidence, increased tensions and which may have the potential to undermine peace, security and stability in the South China Sea." That is what was said in a statement issued by the Association of Southeast Asian Nations (ASEAN)... before it was immediately retracted.

Currency-nado: Yen, Yuan Surge; Gold Tops $1300; Bitcoin Spikes To 28-Month Highs

The US Dollar continues to slide (after bouncing off Fed statement plunge lows), as it appears a rush to other 'currencies' is under way. USDJPY is plumbing new depths beyond Oct 2014's lows (before the end of QE3 and start of QQE2), offshore Yuan is rallying (back below 6.60), gold just hit $1300 (pushing May highs back to Jan 2015 highs), and finally Bitcoin is spiking as China opens once more (now above $700), its highest since Feb 2014. Japanese bonds are at new record low yields (and Treasuries are pushing lower with 10Y at 1.55% near Feb's flash-crash lows).

JPMorgan CIO Crushes Cameron's Scaremongery: Brexit "Hardly The Stuff Of Economic Calamity"

First The Telegraph, then The Sun, and today The Spectator all came out on the "Leave" side of the Brexit debate. However, perhaps even more shocking to the establishment is the CIO of a major bank's asset management arm dismissing the apparent carnage that Cameron, Obama, and Osborne have declared imminent, warning that, "many articles on the Brexit vote overstate its risks and consequences." As JPM's Michael Cembalest adds, the reality is "hardly the stuff that economic calamity is made of." As The Spectator concludes, "the history of the last two centuries can be summed up in two words: democracy matters."

Chinese Spy Ship "Shadows" US, Japanese Naval Drill In Western Pacific

Following the recent escalation by China when it announced it is ready to impose an Air Defense Identification Zone to target US spy flights above the South China Sea and "thwart US provocations", China has decided to return the favor and as Reuters reports a Chinese observation ship shadowed the U.S. aircraft carrier John C. Stennis in the Western Pacific on Wednesday, the carrier's commander said, as it joined warships from Japan and India for drills in waters which Beijing considers its backyard.

The Complete Fed Preview (Or Why The Dollar Is Falling)

While The Fed is a "motivated rate raiser," it appears that they are losing confidence in their growth forecasts, which means, as Goldman Sachs notes, another downgrade to the long run rate tomorrow, bringing the cumulative reduction in the Fed’s tightening cycle over the past year to 75 bps. There is a good chance the market will see this as a signal to sell the Dollar, on the grounds that the Fed will look increasingly uncertain over the medium-term trajectory of policy.

Something Unexpected Emerges In China's Latest Money And Credit Data

China's corporate bond market, one of the fastest growing sources of cheap credit, did something in May it hasn't done in in six years: it shrank.  And then there was the record contraction in banker's acceptance bills, a pseudo currency used by companies for payments that have been the subject of several instances of massive fraud. Hopes for a big credit push are again being dashed.