Category Archives: Shadow Banking
Global Deflation Alert: Chinese Credit Creation Tumbles To 27 Month Low
At the end of November, we showed a troubling observation for China – and global – macro watchers from Axiom’s Gordon Johnson: for the first time ever, record Chinese credit creation had failed to stimulate the economy, and in fact the exact opposite appeared to be unfolding – economic growth is slowing across a number […]
IMF Stress Tests Find $280 Billion Black Hole In Chinese Banks’ Capital
The IMF released a new analysis on the instability stability of the Chinese financial system. Speaking to the media in an online briefing, some of the insights from Ratna Sahay, deputy director of the IMF’s Monetary and Capital Markets Department, hardly advanced our knowledge much. Sahay noted that “Risks are large. Having said that, the […]
China’s Infrastructure Boom Heading For Rapid Slowdown In 2018
There have been signs since October’s Party Congress that China’s infrastructure boom was about to cool off as the leadership seeks to contain debt levels and focus on the quality not the quantity of growth. Subway building is one sector which has seen some high-profile project cancellations. In mid-November 2017, Caixin reported that China’s top […]
China Deleveraging Hits Corporate Bonds As Cascade Effect Begins
Following the market lockdown during October’s Party Congress, many commentators were disturbed by the continued rise in Chinese government bond yields as we returned to “business as usual”, with the 10-year rising to 4%. At the beginning of this month, we discussed the sell-off (see “China: Shadow Bank Inflows Are Critical To Sustain The Ponzi…But […]
Globalization Is Poverty: “The Endgame Is Painfully Obvious”
Authored by Raul Ilargi Meijer via The Automatic Earth blog, Central bankers have never done more damage to the world economy than in the past 10 years. One may argue this is because they never had the power to do that. If their predecessors had had that power, who knows? Still, the global economy has […]
China’s Shadow-Lending Ecosystem Could Be As Large As $40 Trillion, PBOC Guesses
Authored by Deep Throat at Deep Throat Blog Today, I'd like to take some time to revisit a couple of related topics that we first started discussing a few years ago. I am, of course, referring to the burgeoning increases in China's Debt levels, Shadow Bank Assets (loans) and M2, along with a high-level analysis […]
David Stockman Warns “Don’t Forget About The Red Swan”
Authored by David Stockman via The Daily Reckoning, Given the anti-Trump feeding frenzy, we continue to believe that a Swan is on its way bearing Orange. But if that’s not enough to dissuade the dip buyers, perhaps the impending arrival of the Red Swan will at least give them pause. The chart below comprises a […]
China: Growth Despite North Korean Tensions?
Much to everyone’s surprise, China’s economy showed impressive growth numbers as the economic growth rate will very likely come in at 6.6% which is a bit higher than the official government estimates which were calling for a 6.5% growth rate (but lower than the historical growth rate). For 2018, the market seems to be expecting […]