Page 7 of 16 FirstFirst ... 56789 ... LastLast
Results 181 to 210 of 461

Thread: Charting China's Imminent Implosion

  1. #181
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



  2. Remove this section of ads by registering.
  3. #182
    For years, China’s industrial heartland has been cloaked in smog, its waterways choked with pollution pumped from enormous clusters of factories churning out the mountains of cement and steel needed to build the Chinese economy.

    Aiming to tackle what has become a huge public health problem, the authorities have cracked down on polluting industries, targeting provinces like Henan, which has a population of 100 million people and hundreds of factory towns.
    According to interviews with factory and business owners, and consumers and workers across Henan, that crackdown - conducted with often heavy-handed local enforcement - is crippling the economies of towns and cities that depend on polluting industries.
    Manufacturers across Henan have been particularly hard hit by the new environmental regulations, compounding the pressures the province faces from China’s slowing economy and a grinding trade war with the United States.

    More at: https://www.reuters.com/article/us-c...-idUSKCN1SU025
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  4. #183
    There was a time when in the years following the financial crisis, every Friday the FDIC would report of one or more small and not small banks failing, as their liabilities exceeded their assets, who were taken over by larger peers with a taxpayer subsidy to cover the capital shortfall. And while this weekly event, also known as "FDIC Failure Friday" has faded from the US, for now, it has made a grand appearance in China.
    China’s financial regulators said on Friday the country’s banking and insurance regulator and the central bank, will take control of the small, troubled inner Mongolia-based Baoshang Bank due to the serious credit risks it poses. The regulator’s control of Baoshang will last for a year starting on Friday, the People’s Bank of China (PBOC) and China Banking and Insurance Regulatory Commission (CBIRC) said on their websites.

    China Construction Bank (CCB) will be entrusted to handle the business operations of the small lender, based in the industrial city of Baotou, the statement said.
    Such a takeover by national authorities is extremely rare, and takes place amid gathering concerns among regulators and financial analysts about a renewed surge in bad debts...

    ... a record pace of corporate defaults, amounting to 39.2 billion yuan of domestic bond defaults in the first four months of the year, 3.4 times the total for the same period of 2018...

    ... and the deteriorating health of small-scale banks in rural areas and small cities as China’s economy slows and enormous debts come due.
    “It’s a rare move for the Chinese central government to take over a bank,” said Shujin Chen, an analyst with Huatai Securities.
    Moody's analyst Yulia Wan told the WSJ that regulators likely decided to take over Baoshang to limit any fallout to businesses in Inner Mongolia. “The move is to reduce the risk of a shock to the local economy,” said said, adding that the Baoshang takeover appeared to be the first time that national authorities seized control of a bank since Chinese lenders started listing on stock markets in the 1990s. In the past when banks came under pressure, local authorities would pull together funds from local state-owned firms and investors, or have another bank stage a takeover.
    As Reuters adds, this extremely rare takeover - the first in nearly three decades - comes at a time when the PBOC has aggressively eased financial standards and cut reserve ratios for smaller banks to avoid just this outcome, and highlights the long struggle of some smaller regional lenders in China, which suffer from deteriorating asset qualities, inadequate capital buffers, and poor internal controls and corporate governance


    Understandably, there is concern the Baosheng takeover "will add to the vulnerability of country’s financial system amid the economic slowdown." The reason: if one bank can fail, all can fail. And how long before depositors jog, run or sprint to their own bank to yank whatever deposits they have there, in the process beginning the terrifying bank run domino sequence of events, that eventually collapses China's $40 trillion banking system (by comparison, the US banking system is about $20 trillion).
    While it has been generally described as a "small" bank, Baoshang had a total of 156.5 billion yuan ($22.68 billion) of outstanding loans by the end of 2016, a 65% jump from the end of 2014, according to the bank’s last filing on its assets and liabilities on its website. What is absolutely bizarre, however, is that the bank's "official" non-performing loan ratio then was only 1.68% as of December 2016. That, in itself, would never have been sufficient to force a takeover, and suggests that not only was the bank's real bad debt ratio much higher, but that China continues to chronically under-represent the true state of its NPLs to avoid bank runs.
    The last time Baoshang disclosed financial data was in the third quarter of 2017. Then it had 576 billion yuan in assets and 543 billion yuan in liabilities, with a net profit of 3.2 billion yuan. Based on those 2017 numbers, analyst Long Chen with consulting firm Gavekal Dragonomics estimated that Baoshang back then was ranked around the 50th largest bank in the nation.
    Naturally, to avoid a panic bank run among other smaller, less capitalized banks, the CBIRC said that principal and interest on personal saving accounts in the bank will be fully guaranteed, and the business operations of Baoshang bank will not be affected by the takeover.

    The question now is whether bank investors, having seen first hand for the first time in nearly 30 years, that a Chinese bank can fail (and be taken over by the state), will jog at a leisurely pace, or not so leisurely, to their own local bank and pull out their deposits in a cool, calm and collected manner... or not so cool, calm and collected. If so, the trade with between the US and China will have a clear winner in the very near future.

    More at: https://www.zerohedge.com/news/2019-...insolvent-bank
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  5. #184
    China has a problem.
    Historically, when the PBOC wanted to exert a little influence on its FX market, it had merely to suggest intervention, or prompt its bankers to bid the yuan to squeeze the shorts... and it worked. In January 2017, when officials grew upset about the yuan’s weakness, they choked cash supply in Hong Kong and sent the currency’s deposit rates to record highs. That helped drive a rally in the offshore yuan.
    And the last six months have seen numerous significant squeezes.

    But something has changed.

    After the recent plunge took the currency to the brink of the critical 7 per dollar level, Guo Shuqing, head of China’s banking and insurance regulator, warned in a speech last night that speculators "shorting the yuan will inevitably suffer from a huge loss."
    The reaction was as expected, Yuan started to accelerate higher as the speech, delivered by a spokesman for the agency in Beijing, was run on front-page articles among local media, as Guo attempted to placate fears (and capital flight) claiming that higher U.S. tariffs will have a “very limited” impact on China’s economy even if it raises levies to the maximum level, and would hurt the U.S. about as much.
    However, the short-squeeze in yuan lasted around an hour, before sellers returned...

    Erasing all Guo's hard jawboning work.
    Perhaps it was his additional jab at recent chatter from Washington around currency manipulation as he exclaimed, how “ridiculous” it was that developed countries have long asked for more currency flexibility, but when the yuan’s rate become more market oriented, some of them showed fear.
    Either way, it appears - outside of direct intervention - China's jawboning policy is beginning to lose its mojo.



    https://www.zerohedge.com/news/2019-...orts-huge-loss
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



  6. Remove this section of ads by registering.
  7. #185
    Late last Friday, we reported that several hours after the market close, China's financial regulator and central bank made a shocking announcement: for the first time in nearly 30 year, China would take control of a bank, in this case the troubled inner Mongolia-based Baoshang Bank, due to the serious credit risks it poses.

    The news which highlights the potential for increased stress at regional lenders that piled into off-book financing in recent years, was strategically timed to hit ahead of the weekend, and with the market closed, it avoided an immediate panic selling waterfall. However, the fact that in China banks are now fair game for failure, and will soon join the record surge in Chinese corporate defaults...

    ... slammed the country’s financial sector on Monday, sending funding costs sharply higher and underscoring the potential for increased stress at regional lenders that piled into off-book financing in recent years.
    Unfortunately for Beijing, Bloomberg writes overnight that despite the strategically timed news, it wasn't enough to prevent turmoil from sweep across the nation’s bond market, where funding costs for lenders surged and yields on government debt jumped. The seven-day repurchase rate jumped 30 basis points to 2.85%, the highest in a month, as of late Monday in Shanghai, while the yield on 10Y sovereign bonds climbed 5 bps to 3.35%.

    “Baoshang’s case is a big wake-up call,” said Becky Liu, head of China macro strategy at Standard Chartered. "Participants in the interbank market, who didn’t differentiate credit when lending to banks on the belief that they will never go bankrupt, have now become more cautious. That has helped drive up funding costs and thus sovereign yields."
    Meanwhile, citing traders, Bloomberg also noted that the market is getting increasingly concerned that smaller banks may sell or refrain from buying government bonds because of difficulty getting funding, pressuring sovereign debt further, Liu said.
    While a full-blown bank run has yet to emerge, Baoshang Bank’s negotiable certificates of deposits and other bonds were suspended from trading Monday morning. Analysts said the takeover will hurt market sentiment on debt and shares of smaller banks and their issuance of NCDs could be harder from now on. The outstanding bonds of other city and rural commercial banks in similar situations could be sold off, China Merchants Bank said in a note.


    Yet despite promises of recovery, with the Mongolian bank now insolvent, China's Caixin reported that interbank creditors with deposits above 50m yuan may get back 70% of principal payment and corporate creditors may get no less than 80% at early stage. More concerning is that depositors will also be burned: while small, individual savings at the bank will be guaranteed by the government, corporate deposits and interbank liabilities above 50 million yuan will be negotiated, the regulators said on Sunday.
    Finally, the cost on China’s one-year interest-rate swaps, a measure of traders’ expectations for liquidity conditions, surged 7 basis points to 2.82%. That’s largest increase in a month.
    In short, what has just transpired is a bail-out with Chinese bail-in characteristics, and in other words, this may well have been the first domino to fall in China's banking sector which earlier today reported a record 268.5 trillion yuan ($38.9 trillion) in liabilities and 246.2 trillion yuan ($35.6 trillion) in assets, both up roughly 8% Y/Y, and well over double the size of the American banking sector.

    Perhaps the market is waking up that once the dominoes start falling, It will be next to impossible for Beijing to prevent a crash in the world's largest banking system. It's also why the debt sold offshore by Chinese small banks to help meet capital requirements also fell, with Bank of Chongqing’s $750 million Additional Tier 1 note was down 0.8 cents on the dollar, the biggest fall since March 20, to 94 cents. Securities from Bank of Zhengzhou and Huishang Bank also dropped.
    If or rather when more banks suffer Baoshang's fate, the drops will be far greater.

    More at: https://www.zerohedge.com/news/2019-...r-bank-failure
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  8. #186
    With China's bond market continues to be hammered in the aftermath of the government's surprise seizure of Baoshang Bank (see "A Big Wake Up Call": Chinese Bond Market Roiled By First Ever Bank Failure"), the PBOC - whose open market operations had been in dormancy for much of 2019 - finally panicked and on Wednesday injected a whopping net 250 billion yuan ($36 billion) into the financial system via open-market operations, as it fills what traders have dubbed a growing funding gap following the Baoshang failure.

    The consequences of this liquidity flood were instant: China’s overnight repurchase rate, a measure of interbank liquidity, tumbled the most in three weeks, while the benchmark 7-day repo rate also declined.

    "The operations so far this week send a strong signal that the PBOC is ready to ensure ample liquidity for the market, amid fragile sentiment in the credit and bond market," said Westpac strategist Frances Cheung. The central bank also set the daily yuan fixing at a stronger-than-expected level to prevent even a hint of speculation that China will be have no choice but to devalue the yuan as part of the "reliquification" of the market.

    The PBOC's massive liquidity injection, which was the largest since January when the S&P was still close to a bear market and started the tremendous Chinese stock market rally, also helped the Shanghai Composite be one of the few markets that closed in the green overnight.
    However, while the near-term reaction was favorable to Chinese risk, the paradox is that this only became a viable option as a result of a far greater problem: China's interbank funding market is starting to freeze.
    As we reported on Tuesday, the bank has - or rather had - more than 60 billion yuan of negotiable certificates of deposit (NCDs) and 6.5 billion yuan of subordinated bonds outstanding. Trading in the the company’s NCDs and other bonds was promptly suspended on Monday, with traders fearing that a self-fulfillling prophecy would emerge as contagion spreads to other troubled banks' NCDs and/or bonds.
    As noted previously, the contingent convertible/perpetual debt issued by some of the more troubled banks such as Huishang, Bank of Zhengzhou and China Zheshang Bank, was hammered over the past three days and has yet to recover.

    As an aside, for those asking why NCD's matter, the answer is because as we explained as far back as two years ago, numerous smaller banks had become acutely reliant on such shadow banking funding mechanisms as Certificates of Deposit, which had become the primary source of short-term funding for many of China's banks mid-size and smaller banks.

    As Deutsche Bank further explained, the banks most exposed to a shut down in this "shadow funding" pathway are medium-sized and small banks, for whom wholesale funding made up 31% and 23%, a number that has risen substantially in the interim period.

    The issue of NCD funding is especially troublesome, because as Bloomberg reported overnight, in the aftermath of the Baoshang seizure, some Chinese banks and securities firms "tightened requirements for negotiable certificates of deposits that are used as collateral for funding." In some cases, private NCDs were shunned altogether, and some financial institutions now only accept NCDs sold by state-owned and joint stock banks as collateral while some have refused to lend money to investors pledging NCDs issued by lenders rated AA+ and below for now.
    While the lock up in the NCD market is concerning, it is only partial so far, even as yields on Chinese banks' NCDs spiked in the past 48 hours after only 44% of the planned amount was issued. Putting this in context, banks typically issue an average of 82% of the planned amount.
    "The Baoshang incident is pressuring short-term liquidity," said a trader at a Chinese bank. "Along with month-end seasonal factors, cash conditions are becoming tighter and pushing up the near-date swap points higher. And that has led the swap curve moving upward."
    Ji Tianhe, China rates and FX strategist at BNP Paribas in Beijing, said that the takeover of Baoshang could be interpreted as a "marginal targeted deleveraging" campaign, and could change the ecosystem of the interbank market.
    "Smaller banks are supposed to serve the real economy, but some turned out be very active in interbank trading in order to expand their size. Now this latest move is pushing similar small lenders back to their core business," Ji said according to Reuters. He added that as small banks are not allowed to borrow in the exchange market and have to largely rely on bigger banks for interbank funding, "they are now facing a challenging funding situation."
    This also explains why traders are casting concerned glances at Chinese bonds, because as Jianghai Securities explained overnight, China’s government bonds may slide as banks sell them to make up a liquidity shortfall from issuing fewer negotiable certificates of deposits.
    Analysts at OCBC bank said in a note on Tuesday that the takeover had sparked a sell-off in Chinese sovereign bonds on Monday after reports that corporate deposits and interbank liabilities over 50 million yuan could be subject to a haircut of 20%-30%, "due to concern about the possible break of implicit guarantee."
    "This may cause interbank lenders to reassess their relationship with the smaller lenders," the analysts said.
    But a partial (or complete) freeze of the interbank funding market, which many believe is what was the key catalyst behind the US financial crisis as shadow funding conduits froze up in the aftermath of the Lehman failure, is just one of China's major headaches. The far bigger one is the risk of a bank run.
    And to address that, just around the time Baoshang was about to be nationalized, the central bank set up a wholly-owned deposit insurance fund with registration capital of 10 billion yuan on May 24, according to registration record on a website run by State Administration for Market Regulation. It's also why on May 26, the central bank said on May 26 that PBOC, CBIRC and Deposit Insurance Fund will guarantee some Baoshang Bank debt repayment.
    The good news is that for now, there have been no reports of bank runs, or even jogs, in China, although this is precisely the kind of news that would be throttled and censored as much as possible by Beijing, which can not afford a countrywide bank run, threatening the collapse of China's massive $35 billion banking system.

    China’s central bank will face increasing challenges in the coming weeks to balance liquidity injections and a depreciating yuan, Bank of America Merrill Lynch says.
    The last item is that with the PBOC panicking, this may have major implications on the global scene, where the last thing China can afford is to be seen devaluing the yuan. Alas, as Bank of America notes, the PBOC is now trapped as it needs to inject even more liquidity into the system amid deteriorating data, signs of fund outflows, US-China trade tensions and as 463 billion yuan of MLF matures on June 6. The PBOC’s challenge lies in adding liquidity without letting the yuan depreciate too far, and as BofA's Claudio Piron notes, "leaning more on monetary easing rather than fiscal will cause yields to fall and the yuan to depreciate against the greenback" which is why in preempting this, PBOC has added the massive cash injection through OMO. To be sure, while the PBOC will likely have to inject much more liquidity, the likelihood of a cut in banks’ reserve requirement ratio when the 463BN yuan of MLF expires in June is increasing.
    One thing that is certain: Baoshang is just the tip of the iceberg. According to UBS analyst Jason Bedford, who in 2017 was the first to highlight Baoshang’s troubles, there are several other banks that have “identical leading risk indicators” to Baoshang. Hengfeng Bank, Jinzhou Bank Co. and Chengdu Rural Commercial Bank all failed to publish their latest financial statements, have a large portion of their balance sheets invested in “loan-like investment assets” and are subject to negative local media coverage, he said in a note to clients published Tuesday.

    As Bloomberg reports, Hangfeng said that it hasn’t completed auditing and reviewing its financial statements. Officials at Jinzhou and Chengdu Rural didn’t reply to requests for comment.
    In short expect more Chinese bank failures in the coming weeks.

    More at: https://www.zerohedge.com/news/2019-...after-baoshang
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  9. #187
    China's debt-to-GDP ratio rose to an all-time high at the end of March, hitting 248.83 percent and marking an annualized increase of 3.73 percentage points, the South China Morning Post reported May 30.

    More at: https://worldview.stratfor.com/situa...-all-time-high
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  10. #188
    China's Official May Composite PMI printed modestly lower than April's at 53.3, with Services at 54.3 (in line with last month and goal-seeked expectations), while Manufacturing (expected to decline into contraction at 49.9) was considerably worse than expected, printing 49.4.
    This was below the lowest analyst estimate of 49.5.

    Under the hood of the manufacturing data, Output growth slowed, New Orders tumbled into contraction (with export orders plunging), inventories rose, employment slipped, and input & output prices contracted. The most affected were Small Enterprises.
    The Services data also showed weaker new orders and employment with selling prices slumping into contraction
    The drop clearly reflects pressure on the production side of the economy from the escalating trade war (following some pre-tariff stocking-up).
    None of this should be a big surprise as much of Asia's flash PMIs were weak and after spiking on record credit injections in the early part of the year, China's macro data has collapsed against renewed optimistic expectations...



    More at: https://www.zerohedge.com/news/2019-...ck-contraction
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  11. #189
    Almost four years ago, in September 2015 when bitcoin was trading at $200, we wrote "China Scrambles To Enforce Capital Controls (Which Is Great News For Bitcoin)" in which we explained that with China aggressively cracking down on its capital control "firewall", bitcoin was set to soar. Specifically, we said that "if a few hundred million Chinese decide that the time has come to use bitcoin as the capital controls bypassing currency of choice, and decide to invest even a tiny fraction of the $22 trillion in Chinese deposits in bitcoin (whose total market cap at last check was just over $3 billion), sit back and watch as we witness the second coming of the bitcoin bubble, one which could make the previous all time highs in the digital currency, seems like a low print as bitcoin soars past $500, past $1,000 and rises as high as $10,000 or more."

    A little over two years later bitcoin had risen 100x, hitting $20,000 as a result of, you got it, a lot of Chinese scrambling to use bitcoin as a capital controls evading mechanism (and not, as some financial "experts" claimed at the time, a Russian ponzi scheme) one which prompted Beijing to unleash draconian measures to curb bitcoin use, and eventually succeeded to break the magnetic draw that the cryptocurrency held for millions of Chinese money-launderers (and momentum chasers).
    Fast forward to today when in just the past month bitcoin has soared nearly 140%, and is back to $9,000 after tradiong as low as $3,000 in December. The reason, no surprise, is yet another massive ramp up in Chinese capital control which have recently surpassed all of Beijing's prior attempts at managing the flow of outbound capital.
    But don't take our word for it - none other than a former Chinese central bank adviser has admitted that Beijing’s capital account controls may be too “extreme” after personally being blocked from sending US dollar funds abroad because he was too old.



    As the SCMP reports, Yu Yongding, a former central banker at the PBOC and currently a senior research fellow at the Chinese Academy of Social Sciences, a state-owned think tank, told a financial forum in Beijing on Wednesday that he recently tried to exchange yuan to the value of US$20,000 at a bank and transfer the money out of China to pay for a trip to visit relatives living abroad.

    And then: surprise - the bank refused to provide the service even though Yu, like all citizens under Chinese law, is allowed to make foreign transfers of up to US$50,000 each year. According to Yu, the bank refused to provide the service because he is over 65.
    “I always support capital account controls, and I always encourage such measures. But sometimes we tend to be too extreme in doing things,” Yu was quoted as saying by Chinese news portal Sina.com. “Legal foreign exchange deals are being hindered.”
    While the former PBOC adviser confirmed the incident in a phone call with the South China Morning Post, he declined to elaborate further, declining to name the bank, and only stating that the implementation of China’s foreign exchange controls were "too rigid."
    “There were heavy outflow pressures in 2015 and 2016, but I don’t see clear signs of outflows at the moment,” Yu said.
    Well, there wouldn't be if capital controls are "extreme" although perhaps Yu was looking at the wrong place - if, as in 2016/2017 when Bitcoin exploded, the former central banker was instead looking at the price of cryptocurrencies he may observe some "clear signs" of outflows, those taking place via cryptocurrency.




    As the SCMP notes, Yu’s case adds fresh evidence that China is tightening controls of personal purchases of US dollars despite the US$50,000 allowance. The Post reported earlier this month that some Chinese banks have increased scrutiny of foreign-currency withdrawals and quietly reduced the amount of US dollars customers are allowed to withdraw, fanning concerns that Beijing is cutting the supply to individuals and companies.
    Why? Simple: because as part of China's defense of the Yuan from sliding below 7.00 vs the dollar, a key psychological level that would lead to an avalanche of yuan selling and sharply draining China's currency reserve - SAFE has maintained that the country has ample foreign exchange reserves, which stood at about US$3 trillion as of the end of April - Beijing is doing everything in its power to pre-empt this waterfall by making selling of the Yuan virtually impossible, in effect fully isolating China from the the global FX system. As a result those who are desperate to transfer their funds offshore are forced to find creative alternatives.
    Such as buying bitcoin instead, something will only accelerate the longer China cracks down on enforcing capital controls, which in turn will be a function of how long the trade war lasts.

    More at: https://www.zerohedge.com/news/2019-...-banker-denied
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  12. #190
    Russian Market‏ @russian_marke
    That very bearish moment when stocks don't react to desperate headlines from Pence saying that Trump is asking for a meeting with Xi at G-20.




    =======


    https://twitter.com/PDChina/status/1134438519546552321

    Beijing Threatens To Blacklist "Unreliable" US Companies, Loses Faith In Trade Deal.
    https://www.zerohedge.com/news/2019-...-xi-deal-looks

    https://twitter.com/russian_market/s...39311431090177


    https://twitter.com/YuanTalks/status...96992149311488

    =========
    Russian Market&#8207 @russian_market
    ... and Mexico is ready for a trade war with the stable genius.








    https://twitter.com/russian_market/s...72166020907008
    Last edited by goldenequity; 05-31-2019 at 08:11 AM.

  13. #191
    While the western world (and much of the eastern) has been preoccupied with predicting the consequences of Trump's accelerating global trade/tech war, Beijing has had its hands full with avoiding a bank run in the aftermath of Baoshang Bank's failure, scrambling to inject massive amounts of liquidity last week in the form of a 250 billion yuan net open market operation to thaw the interbank market which was on the verge of freezing, and sent overnight funding rates spiking and bond yields and NCD rates higher.
    Unfortunately for the PBOC, Beijing is now racing against time to prevent a widespread panic after it opened the Pandora's box when it seized Baoshang Bank two weeks ago, the first official bank failure in a odd replay of what happened with Bear Stearns back in 2008, when JPMorgan was gifted the historic bank for pennies on the dollar.
    And with domino #1 down, the question turns to who is next, and will they be China's Lehman.
    This was the question we asked last Thursday, when we published a list of regional banks that have delayed publishing 2018 reports, the biggest red flag suggesting an upcoming bank solvency "event."

    One day later we may have gotten our answer, when the Bank of Jinzhou, a city commercial bank in Liaoning Province, the second name in the list above, and with some $105 billion in assets, notably bigger than Baoshang, announced that its auditors Ernst & Young Hua Ming LLP and Ernst & Young had resigned, not long after the bank announced it would delay the publication of its annual reports.
    For those confused, the delay of an annual report and the resignation of an auditor, means a bank failure is not only virtually certain but practically imminent.
    As the bank - which first got in hot water in 2015 over its exposure to the scandal-ridden Hanergy Group - writes in a filing on the Hong Kong Stock Exchange, E&Y was first appointed as the auditors of the Bank at the last annual general meeting of the Bank held on 29 May 2018 to hold office until the conclusion of the next annual general meeting of the Bank. That never happened, because on 31 May 2019, out of the blue, the board and its audit committee received a letter from EY tendering their resignations as the auditors of the Bank with immediate effect.


    The reason for the resignation: the bank refused to provide E&Y with documents to confirm the bank's clients were able to service loans, amid indications that the use of proceeds of certain loans granted by the Bank to its institutional customers were not consistent with the purpose stated in their loan documents.
    As a result, "after numerous discussions and as at the date of this announcement, no consensus was reached between the Bank and EY on the Outstanding Matters and the proposed timetable for the completion of audit." As a result, after a clear breakdown in relations with its own auditor, the Board decided to appoint Crowe (HK) CPA Limited as the new auditors of the Bank to fill the casual vacancy following the Resignation and to hold the office until the conclusion of the 2018 annual general meeting of the Bank (we are taking the under with lots of leverage as Crowe will likewise quit in the coming weeks if not days).
    And confirming that not even the bank's management believes this "justification" will be enough to avoid a rout in the stock, the bank reported that it has requested the trading in the H shares (which was frozen on April 1) on The Stock Exchange of Hong Kong Limited to be suspended until the publication of the 2018 Annual Results. For anyone who hopes that these shares will ever be unfrozen for trading, there are a few bridges in Brooklyn that are for sale.
    The real question facing Beijing now is how quickly will Bank of Jinzhou collapse, how will Beijing and the PBOC react, and what whether the other banks on the list above now suffer a raging bank run, on which will certainly not be confined just to China's small and medium banks.

    https://www.zerohedge.com/news/2019-...verge-collapse
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  14. #192
    in Yuan, gold is near 3-year highs, as the quasi-peg has officially broken...


    More at: https://www.zerohedge.com/news/2019-...h-against-yuan
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



  15. Remove this section of ads by registering.
  16. #193
    With Chinese macro continuing its serial disappointment (absent the record liquidity-injection rebound in April), expectations were for Caixin PMI Services data to slow in May (after its exuberant rebound) echoing the demise seen in Chinese manufacturing.

    China's official manufacturing PMI tumbled into contraction (and Caixin was flat just above contraction) in May.
    China's official services PMI was flat from April but Caixin data plunged from 54.5 to 52.7 (well below the 54.0 drop expected).

    Commenting on the China General Services PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Services Business Activity Index fell to 52.7 in May from the recent high of 54.5 in April, although it remained firmly within expansionary territory."
    “Overall, China’s economic growth showed some signs of slowing in May. Employment and business confidence in particular merit policymakers’ attention.”
    Among the gauges included in the survey:
    1) The gauge for new business fell from the past month’s recent high but remained in expansionary territory, reflecting slowing growth in demand across the services sector.
    2) The measure for employment fell from the past month’s recent high while remaining within expansionary territory, suggesting jobs growth is slowing.
    3) Gauges for input costs and prices charged by services providers both fell slightly while remaining in expansionary territory. Growth in input costs outpaced that of prices charged, indicating that services companies remained under significant pressure.
    4) The measure for business expectations continued to fall, despite staying in positive territory, reflecting services providers’ weakening confidence in their future prospects.
    The Caixin China Composite Output Index fell to 51.5 in May from 52.7 the month before, mainly due to slower growth in the service sector.
    1) The gauge for new orders edged down while remaining in expansionary territory, while the measure for new export orders returned to growth, pointing to weakening demand at home but improved demand abroad. The negative effects of China-U.S. tensions on exports have yet to emerge, perhaps due to exporters front-loading shipments of products that are in the remaining $300 billion of goods not subject to punitive tariffs.
    2) The employment gauge continued to fall, entering contractionary territory. This suggested the labor market is under pressure. In a move that is likely related, the State Council recently set up a new leading group on employment.
    3) Both gauges for input costs and output charges edged down while remaining in expansionary territory. Growth in input costs outpaced that of output charges, indicating companies continued to be squeezed.
    4) The measure for future output fell markedly, to the lowest reading since the series began in 2012, although it remained in positive territory. This indicates business confidence is in urgent need of a boost.
    There was one big potential shift in May that could have affected the Services data - the yuan plunged...



    More at: https://www.zerohedge.com/news/2019-...it-7-year-lows
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  17. #194
    Following the government’s takeover of distressed Baoshang Bank Co., the People’s Bank of China tried to calm the situation by assuring investors that no further such interventions were in the cards: “Everyone,” says a message on the PBOC website: “please don’t worry. At present we don’t have this plan.” But Bloomberg reports today that a pair of smaller institutions, Guilin Bank Co., Ltd. and Jincheng Bank Co., Ltd., have delayed plans to sell RMB 1 billion ($140 million) in tier-2 bond sales following the Baoshang news.

    More at: https://www.zerohedge.com/news/2019-...ase-dont-worry
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  18. #195
    After a period of unnatural stability, in which the offshore Yuan traded in a tight range of 6.90 and 6.95 since May 13 the Yuan finally broke out of the channel and tumbled 0.5%, the most in three weeks to at low as 6.9625 vs the dollar, the lowest level since November 2018, after the chief of China’s central bank said Beijing has “tremendous” room to adjust monetary policy if the trade war with the U.S. deepens, and hinted there’s no line in the sand for the currency, meaning the key "psychological" level of 7 does not exist in times of trade war.

    The yuan had stabilized in recent weeks as authorities voiced support for the currency, following a rout in early May that pushed it near 7 per dollar level not breached since the global financial crisis. It still lost about 2.5% in May, among the worst in Asia.

    “We have plenty of room in interest rates, we have plenty of room in required reserve ratio rate, and also for the fiscal, monetary policy toolkit, I think the room for adjustment is tremendous," PBOC governor Yi Gang in an interview with Bloomberg in Beijing.


    Commenting on the recent yuan move, Yi said that “recently, it’s a little bit weaker, because the tremendous pressure from the U.S. side.” When asked if there’s a red line for the exchange rate, Yi said no number is more important than another.
    That was all FX traders needed to hear to start selling the yuan: "this is a hint that China may allow the yuan to break 7 if the trade war escalates, and Yi is seeking to prepare and guide the market," said Gao Qi, a currency strategist at Scotiabank in Singapore. "It’s possible that the yuan may breach that level if the trade talks collapse."
    Not possible - guaranteed. Even Yi refused to outright deny that trade war could lead to devaluation:
    “The trade war would have a temporary depreciation pressure on renminbi, but you see, after the noise, renminbi will continue to be very stable and relatively strong compared to emerging market currencies, even compared to convertible currencies,” Yi said, using the yuan’s official name. “I’m very confident renminbi will continue to be stable at a more or less equilibrium level.”
    He then said that “a little bit of flexibility of renminbi is good for the Chinese economy and for the global economy because it provides an automatic stabilizer for the economy,” adding that "the central bank of China is pretty much not intervening in the foreign-exchange market for a long time, and I hope that this situation will continue, not intervening."
    A growing number of economists predict that the worsening trade war and job market outlook could prompt the central bank to take bolder easing steps.
    “Looking forward, our base case is that an escalating trade war will push key gauges below the PBOC’s tolerance threshold, triggering 50 basis points of rate cuts and another 150-200 bps of reserve requirement cuts by year-end,” David Qu, an economist with Bloomberg Economics in Hong Kong, wrote in a recent report. That would most likely send the yuan below 7.00 for the first time in years and provoke a furious response from the White House.

    More at: https://www.zerohedge.com/news/2019-...ere-no-redline
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  19. #196
    Investors also focused on Chinese trade data reported overnight, which showed imports in May tumbled 8.5% from a year earlier, a much worse than expected outcome that signaled weak domestic consumption. Exports, however, unexpectedly rose 1.1% last month, though this was once again due to front-loading of shipments by firms to avoid higher U.S. tariffs. The frontloading may continue in June, according to Goldman, due to the concerns of possible tariff for the $300bn of China exports to US (late June or early July at the earliest if implemented), which could support exports momentum in the near term. However, with the fading of this effect, exports momentum may turn notably weaker, especially amid moderate global economic growth, which would call for easier domestic policy to maintain growth stability.

    Further commenting on the report, Goldman said that growth of imports for major commodities went down broadly. In value terms, crude oil imports slowed to +5.5% yoy in May (vs. +15.5% yoy in April); steel products imports continued to decline by 22.5% yoy in May (vs. -12.7% yoy in April); iron ore imports increased +24.0% yoy in May (vs. +23.1% yoy in April). In volume terms, crude oil imports decelerated to +3.0% yoy in May (vs. +10.8% yoy in April); steel products imports resumed the contraction by 13.1% yoy in May (vs. -3.8% yoy in April); iron ore imports decreased by 11.0% yoy in May (vs. -2.6% yoy in April), all indicating an economy that has hidden a sudden and profound air pocket.


    Over the weekend, we learned that China will implement export controls on sensitive sectors to prevent and resolve national security risks, while there were also reports that Chinese authorities reportedly warned several tech companies not to reduce exposure to China more than what was necessary due to trade restrictions or there would be consequences.

    In FX, the dollar gained versus all G10 peers as Treasuries dropped; antipodeans came under pressure amid a drop in China’s imports, while the yen also felt the heat from the possibility of further BOJ monetary stimulus. The euro briefly fell below $1.13, sliding 0.3%, as leveraged names unwound short-term dollar shorts, even if near a 2-1/2-month high of $1.1347 touched on Friday. Meanwhile in China, the onshore yuan fell to its weakest level since November as trading resumed after a holiday, following comments from China’s central bank governor in which he hinted there was no line in the sand for the currency.

    Monday’s decline followed the offshore yuan’s tumble to its weakest level since November on Friday, as People’s Bank of China Governor Yi Gang signaled that he was not wedded to defending the nation’s currency at a particular level. Financial markets in China and Hong Kong were closed Friday

    More at: https://www.zerohedge.com/news/2019-...les-uk-economy
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  20. #197
    China's automobile market has continued to catalyze the global auto recession, posting its worst sales month in history for May according to the China Association of Automobile Manufacturers (CAAM). The data showed a decline of 16.4% for May, following a decline of 14.6% in April and 5.2% in March. It was the sharpest decline ever for China's auto industry.
    Xu Haidong, CAAM’s assistant secretary general ignored the fact that his country was in the midst of a trade war and instead told Reuters: "One key reason for the drop was provinces implementing 'China VI' vehicle emission standards earlier than the central government’s 2020 deadline, stoking uncertainty among manufacturers."
    Or the same reason Europe has been using to explain away its own automotive depression recession.
    "We gave the manufacturers too little time to prepare," he continued, also noting that May's drop in demand was attributable to a "decline in purchasing power in the low-to-middle income groups as well as expectations of government stimulus to encourage purchases."

    Passenger vehicles were crushed lower for the 12th straight month, according to the Passenger Car Association ("PCA"). May retail passenger vehicle sales were down 12.5% on the year to 1.61 million units. May's data follows a drop of 16.6% in April and 12% in March. Passenger vehicle sales include sedan, MPV, SUV and minivan sales. SUV sales were down 9.6% to 669,395 units.
    Turning toward individual brands, Changan's auto sales fell 35% to 113,497 units in May and Great Wall Motor said that their sales had fallen 11.8% to 62,559, according to Bloomberg. Cui Dongshu, secretary general of PCA, told reporters in Beijing: “It is a pretty difficult time for the auto industry.”

    Sales by Chinese brands were down 26.5% last month, while initial data for June showed a "slight" increase in total sales from a year prior, as dealers slashed prices and continued to try and lure customers with incentives.
    Economic woes in China, partly as a result of the country's ongoing trade war with the U.S., continue to weigh on sales. At the same time, the rise of car-sharing services is reducing demand for purchasing new vehicles.
    Additional data from Marklines shows that Honda and Toyota were two of the only names that could buck the trend for the month.

    Baojun, Dongfeng and Trumpchi are all local brands that have fallen 40% or more this year, through April.
    Electric vehicle sales, which have been the sole "silver lining" for the recessionary industry over the last year, also saw a sharp slowdown in May. Sales were up just 1.8% versus 18.1% in April. EV sales were up 62% last year despite the broader auto market slowing.
    May's drop now marks an entire year of falling sales. The last time China saw retail auto sales rise was back in May 2018. And so, it is looking like a bloated and overextended global auto market will no longer be able to turn to China for reliable growth, as they have done since the 1990s. This has some automakers delaying expansion plans into China, while others execute global layoffs and restructurings. For example, we reported last month that there had been 38,000 layoffs across the industry over the last 6 months.

    The future turned even gloomier when outgoing Daimler CEO Dieter Zetsche said last month that "sweeping cost reductions" are coming to prepare for what he is calling "unprecedented" industry disruption.


    More at: https://www.zerohedge.com/news/2019-...rst-month-ever
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  21. #198
    Beijing May activity reported overnight was very weak and painted a fairly gloomy picture of the world’s second largest economy as the trade war with the United States starts to bite. May industrial output growth slowed to a more than 17-year low, the weakest since since 2002, and well below expectations, while fixed-asset investment also fell short of forecasts. Retail sales growth accelerated and surprised to the upside however.
    The full breakdown:

    • Industrial Output for May: 5.0%, est. +5.4% (range +5.1% to +6.4%, 35 economists), down from +5.4% last month.
    • May retail sales +8.6% y/y; est. +8.1% April +7.2%
    • Jan.-May fixed-asset investment excluding rural households +5.6% y/y; est. +6.1% (range +5.2% to +6.5%, 34 economists). Jan.-April +6.1%


    Commenting on the data, Goldman said "May activity growth was very weak" noting that IP month-over-month annualized growth was around 2.6% based on our seasonal adjustment, which was higher than April but still at a weak level. The shifting Labor Day holiday distorted IP, and to a lesser extent FAI, data on the downside, but the impacts were limited as there was a difference of only one vacation day which could not fully explain the extent of the data weakness. The impacts of shifting holidays tend to be larger on retail sales data. April retail sales data was exceptionally weak and the reversal of the distortion was the main driver of the rebound in retail sales in May. The slowdown in property transactions year-over-year growth was partially due to an unfavorable base effect, but sequentially transactions also cooled in April-May as the government marginally tightened property policies in a few cities such as Changsha, Xi’an, Beijing etc.
    As a result, expectations for more stimulus in China continue to grow as the Sino-U.S. trade dispute threatens to escalate into a full-blown trade war that many fear could push the global economy into recession.
    “The Chinese data was disappointing, especially the industrial output numbers,” said Chris Scicluna, head of economic research at Daiwa Capital Markets. “That’s given bond markets additional momentum.”


    More at: https://www.zerohedge.com/news/2019-...-broadcom-bust
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  22. #199
    Hong Kong's wealthiest residents are moving their fortunes out of Hong Kong because of the new extradition law that the Hong Kong government is currently discussing, Reuters writes. The local government is planning to allow extraditions to China if someone is a criminal suspect.

    The extradition law will cover both Hong Kong residents as well as foreign and Chinese nationals living or travelling in Hong Kong. It would also allow freezing and confiscating assets connected to financial crimes. However, the confiscation could be challenged by Hong Kong courts as it needs to meet a double criminality standard—the crime would need to be penalised in both Hong Kong and China.

    Tycoons are now eyeing Singapore and some have chosen to transfer their funds there. One wealthy individual has started moving his assets—more than $100 million—from a local Citibank account to a Singapore Citibank account out of fear of being “potentially politically exposed,” said an adviser who was involved in the transactions. He also admitted there were more people quietly shifting their funds, favouring Singapore.


    More at: https://news.yahoo.com/hong-kong-tyc...160804258.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  23. #200
    Please transfer my assets to Singapore immediately!



  24. Remove this section of ads by registering.
  25. #201
    Smack in the middle of a trade war with the U.S., China is facing a food shortage that’s raising prices for consumers. If officials can’t keep inflation in check, President Donald Trump’s Twitter tantrums will be the least of their worries.African swine fever is decimating China’s pig population. The country’s stock fell 21%, or by nearly 73 million pigs, from March 2018 through April 2019, according to official statistics. Unofficially, however, industry experts whisper about slides of more than 40% to 50%. That would be comparable to wiping out all the pigs in the U.S. and Europe combined. For a country that derives most of its protein consumption from pork, this is a problem.
    Compounding the challenge is the invasion of fall armyworm in the lead-up to the autumn harvest. Traveling up to 60 miles a day, the crop-eating pest is expected to be present in all Chinese provinces by the end of the year. This is already having a significant impact on expected yields of corn, wheat and rice.
    Beijing has moved to raise food imports, and had even considered increasing U.S. pork purchases before trade tensions ramped up last month. But there simply isn’t enough pork out there to replace the world’s biggest producer.
    This adds serious pressure to China’s economy. Food, alcohol and tobacco comprise 30% of the CPI basket, the highest share of any category. The isolated food component stands at about 20%, even after shrinking in recent years. May’s inflation data have already shown evidence of supply shortages: Pork prices gained 18.2%, pushing the consumer-price index up 2.7% from a year earlier, the highest since February 2018. While that’s still within Beijing’s comfort zone, we haven’t even hit the summer growing months, when the damage from armyworm will really kick in.
    This puts Beijing in a bit of a pickle. China has been banking on the idea that consumers will pick up the slack in a weakening economy. Just last week, officials announced new stimulus measures to boost purchases of cars, home appliances and electronics. But with rising prices offsetting gains from tax cuts earlier this year, that’s starting to seem like wishful thinking. China’s growth is slowing much faster than the headline official data admit. Higher inflation will only constrain Beijing’s options for further easing.
    The first step in addressing this challenge would be to recognize the seriousness of African swine fever and armyworm. There’s little evidence Beijing has done that. Instead, Chinese officials have been snuffing out critical media coverage, underreporting data and putting an all-too-rosy sheen on their response to the crisis, not unlike what we saw with SARS in the early 2000s, as Bloomberg Opinion columnist Adam Minter has written.
    Second, Beijing needs to rapidly increase imports to slow expected price increases – even if China starts to skew its protein balance more toward chicken and beef. Theoretically, that would be a boon for other key pork suppliers, such as the U.S. and Germany. In reality, though, the shifting contours of the trade war make relying on U.S. imports unlikely, and China’s relationship with Europe is lukewarm at best.
    The existential problem facing Beijing is how to address rising food prices and a slowing economy, which have a history of triggering episodes of social unrest. If pork prices do climb 70% this year, as officials forecast, Beijing will face a very unhappy population eager to assign blame for the mismanagement of a crisis. That will be a lot scarier than missing a GDP target.


    https://finance.yahoo.com/news/china...000036336.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  26. #202
    One month ago we wrote that in the aftermath of the shocking government May 24 seizure of Baoshang Bank - not shocking because the bank failed as most Chinese banks are insolvent if left to their own devices due to the real, and far higher levels of non-performing loans, but because the government allowed it to happen in the open, sparking fears of who comes next (and when) - the PBOC "finally panicked and injected a whopping net 250 billion yuan ($36 billion) into the financial system via open-market operations, as it fills what traders have dubbed a growing funding gap following the Baoshang failure."
    In retrospect, the PBOC failed to restore confidence in the stability of the Chinese banking system, and since then things have taken a turn for the far worse.
    Yet with the world fixated on the U.S.-China (Mexico, Europe, etc) trade conflict, it is easy to understand why many have brushed aside the Baoshang harbinger and its consequences which have exposed giant fissures under China's calm financial facade and are gradually freezing up the Chinese banking system.
    As the WSJ writes, on Sunday, China's securities regulator convened a meeting asking big brokerages and funds to support their smaller peers, according to a meeting summary circulated among industry participants Monday. The briefing cited rising risk aversion in money markets after defaults in the bond repurchase market.
    The immediate reaction, which we pointed out back in May, is that some of the key interbank lending rates - those which banks rely on to obtain critical short-term funds - have moved sharply higher in recent weeks, with the 1 month repo soaring, and almost doubling over the past month.

    For those who are only now catching up with this extremely important story, here is the background context: as we explained last month, and as the WSJ recaps, China’s short-term lending market for banks and other financial institutions has for years operated under the assumption that Beijing wouldn’t allow big losses in the event of defaults or insolvencies (hence the reason why Baoshang's failure was a shock). That confidence has been shaken by regulators’ unusual public takeover of the troubled Chinese bank near Mongolia last mont, and the even more stunning public admission by the central bank that "not all of Baoshang Bank’s liabilities would necessarily be guaranteed."
    “Bank failure always causes greater concern given systemic fears," said Owen Gallimore, head of credit strategy at Australia & New Zealand Banking Group, suggesting greater pressure on the private sector ahead.
    Naturally, with China growing at the slowest pace in recent history, beset by shadow bank deleveraging, trade war, a shaky transition to a consumer economy and China's first ever current account deficit, these stresses come at a very bad time for the normal functioning of the local economy.
    Meanwhile, nonbank financiers like brokerages and funds are key supporters of embattled private businesses, since they buy a significant percentage of corporate bonds. They are also far-and-away the biggest net interbank borrowers, following a 2016 crackdown on short-term borrowing by banks to fund leveraged wealth-management products.
    Furthermore, nonbank borrowing through bond repos and interbank loans skyrocketed since China’s central bank began easing monetary policy in early 2018, hitting a net 74 trillion yuan ($10.7 trillion) in the first quarter of 2019, according to Enodo Economics, and up nearly 50% from a year earlier. As the WSJ redundantly warns, "funding troubles for brokerages and other asset managers therefore pose big problems for both financial stability and the real economy."
    Meanwhile, as we warned as far back as March 2017, problems appear to be migrating from the smallish market for negotiable certificates of deposit (NCDs), used mostly by small banks, into the vastly greater bond repo market. Here, while key one-day and seven-day weighted average borrowing rates remain low thanks to huge central bank cash injections - such as the 250BN yuan we described back in May - longer tenors such as the 1 month repo have marched sharply higher (see top chart).
    As an aside, for those asking why NCD's matter, the answer is because as we first explained two years ago, numerous smaller banks had become acutely reliant on such shadow banking funding mechanisms as Certificates of Deposit, which had become the primary source of short-term funding for many of China's banks mid-size and smaller banks.

    As Deutsche Bank further explained, the banks most exposed to a shut down in this "shadow funding" pathway are medium-sized and small banks - such as Baoshang - for whom wholesale funding made up 31% and 23%, a number that has risen substantially in the interim period.

    Some more background: in China, the funding flow goes like this (per Bloomberg): big national banks lend to smaller regional lenders, which then provide financing to non-bank peers such as brokerages and funds. They in turn use the money to invest in corporate bonds.
    “Smaller banks play a key role in this chain,” said Ming Ming, chief fixed-income analyst of Citic Securities Co. Right now investors are quite "risk averse and everyone wants to mitigate counterparty risks. If things get worse, China’s financial market liquidity could collapse,” he added.
    In this context, the issue of NCD funding is especially troublesome, because as Bloomberg reported recently, in the aftermath of the Baoshang seizure, some Chinese banks and securities firms "tightened requirements for negotiable certificates of deposits that are used as collateral for funding." In some cases, private NCDs were shunned altogether, and some financial institutions now only accept NCDs sold by state-owned and joint stock banks as collateral while some have refused to lend money to investors pledging NCDs issued by lenders rated AA+ and below for now.
    Worse, as Bloomberg followed up over the weekend, the interbank market is now also freezing up as a result of counterparty suspicions: one month after Baoshang, Chinese bond traders in China are "rethinking counterparty risks as shock waves from a government takeover of a bank ripple through the country’s financial markets."
    In ominous echoes of what happened before, and certainly after the Lehman failure, it has gotten far harder for corporate bonds to be accepted as collateral for repo financing as lenders increasingly demand top quality bonds such as Chinese sovereign bills and policy bank notes as pledges, with Bloomberg noting that "traders are having second thoughts on taking even AAA rated short-term bank debt as security in the wake of last month’s seizure of Baoshang Bank"
    As a result, funding among China’s financial institutions has become clogged, in some cases to the point of paralysis, which have already caused borrowing costs to spike for brokerages and smaller banks . The timing couldn’t be worse, not only due to China's slowing economy, but with liquidity traditionally far tighter at the quarter-end, and further adding to the wide-ranging ramifications of the bank seizure. All this could mean higher defaults, according to Bloomberg Economics.
    “Non-bank financial institutions are actually the biggest buyers of corporate bonds in China, and if their funding chain breaks, demand for bonds, particularly those that can hardly be pledged for borrowing, will certainly get hurt," said David Qu at Bloomberg Economics in Hong Kong. “Weaker companies will suffer a rising cost when selling new bonds, which may eventually lead to higher default risks.”

    And while seasonal cash demand ahead of the quarter-end is probably playing a role, the WSJ adds that small banks, squeezed out of the market for NCDs, may also be trying to replace a portion of three or six-month NCD funding in the repo market (again, see the surge in the one-month repo rate which has nearly doubled from 2.9% to 5.2%).
    So is this China's (long overdue) Lehman moment?


    More at: https://www.zerohedge.com/news/2019-...market-freezes
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  27. #203
    Since the trade war began last year, analysts have been closely parsing every production-related decision by Apple and its suppliers, seeing them as bellwethers of the global consumer-tech industry: Will the American tariffs permanently restructure the global supply chain? Increasingly it's looking that way. Because not long after a Foxconn executive warned that the largest manufacturer of iPhones in mainland China was ready to help Apple shift production elsewhere, Nikkei reports that suppliers for iPhones, iPads, MacBooks and Apple Ear Pods have all drawn up plans to move 15%-30% of production outside of the mainland, with India, Vietnam, Mexico and Malaysia looking like the top alternatives.


    At this point, even if Washington doesn't follow through with plans to slap tariffs on another $300 billion in goods, companies, including Foxconn, Pegatron, Wistron, Quanta Computer, iPad maker, Compal Electronics, and AirPods makers Inventec, Luxshare-ICT and Goertek have all been asked by Apple to evaluate options outside of China.
    Other suppliers are watching these companies, and monitoring where they go.
    "We need to know where those big assemblers are heading to so that we can initiate our plan too," an executive at an Apple component supplier told Nikkei.
    Apple supplier Wistron has assembled cheaper iPhones in India since 2017, and Foxconn started assembling more iPhones there this year, but volumes have been very small. More than 90% of Apple's products are still assembled in China. And last year, the number of mainland Chinese and Hong Kong-based suppliers surpassed the number from the US and Japan for the first time, accounting for 41 of the top 200 suppliers.


    This is the biggest reason why Apple needs its suppliers to write up plans for long-term "diversification" of production. But trade tensions aren't the only issue with China: Apple also raised demographic issues like lower birth rates. Ultimately, millions of jobs in China are at risk.
    The California-based tech giant's request was triggered by the protracted trade tensions between Washington and Beijing, but multiple sources say that even if the spat is resolved there will be no turning back. Apple has decided the risks of relying so heavily on manufacturing in China, as it has done for decades, are too great and even rising, several people told Nikkei.
    "A lower birthrate, higher labor costs and the risk of overly centralizing its production in one country. These adverse factors are not going anywhere," said one executive with knowledge of the situation. "With or without the final round of the $300 billion tariff, Apple is following the big trend [to diversify production]," giving itself more flexibility, the person added.

    China has been the production base on which Apple's global success has been built over the past two decades. The country has not only been able to rally hundreds of thousands of skilled workers at short notice to fill rapidly rising orders as the company grew, but an extensive and complex ecosystem of components, logistics and talent has built up in and around Apple manufacturing sites.

    Some 5 million Chinese jobs rely on Apple's presence in the country, including those of more than 1.8 million software and iOS App developers, according to a study available on the company's website. Apple itself employs 10,000 staff in China, the company said.


    More at: https://www.zerohedge.com/news/2019-...-outside-china
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  28. #204
    One trading day after we reported that China was "Hit By "Significant Banking Stress" as SHIBOR tumbled to recession levels, and less than a week after we warned that China's interbank market was freezing up in the aftermath of the Baoshang Bank collapse and subsequent seizure, which led to a surge in interbank repo rates and a spike in Negotiable Certificates of Deposit (NCD) rates...

    ... China's banking stress has taken a turn for the worse, and on Monday, China's overnight repurchase rate dropped to its lowest level in nearly 10 years, after the central bank’s repeated liquidity injections to ease credit concerns in small-to-medium banks: The rate fell as much as 11 basis points to 0.9861% on Monday, before being fixed at exactly 1.000%.

    Seeking to ease funding strains after the Baoshang collapse and to unfreeze the financial channels in the banking sector, the PBOC has been injecting cash into the financial system to soothe credit risk concerns in smaller banks following the seizure of Baoshang Bank, which sent shockwaves through China’s markets.
    Also helping drive the rate lower is China’s move to allow brokerages to issue more debt, said ANZ Bank's Zhaopeng Xing, quoted by Bloomberg. As a result, at least five brokerages had their short-term debt quotas increased by the People’s Bank of China in recent days, according to filings.
    The improved access to shorter-term debt will cut costs for brokerages compared with alternative funding sources such as bond issuance. The flipside, of course, is that the lower overnight funding rates drop, the greater the investor skepticism that China's massive, $40 trillion financial system is doing ok, especially since the last time overnight funding rates were this low, the near-collapse of the global financial system was still fresh and the S&P was trading in the triple-digits.
    Commenting on the ongoing collapse in SHIBOR, Commodore Research wrote overnight that "low SHIBOR lending rates are supposed to be supportive and accommodative in nature — but rates are now at the lowest level seen this decade and are very likely an indication that China is facing significant banking stress at the moment. It is extremely rare for the overnight SHIBOR lending rate to be set as low as 1.00%. This previously had not all been seen this decade, and the last time it occurred was during the financial crisis in 2008 - 2009."
    Meanwhile, as the world's biggest financial time bomb ticks ever louder, traders and analysts are blissfully oblivious, focusing instead on central banks admitting that the recession is imminent and trying to spin how a world war with Iran would be bullish for stocks.


    https://www.zerohedge.com/news/2019-...new-decade-low
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  29. #205
    In the next five years China's ‘big three', PetroChina, Cnooc, and Sinopec, aim to increase spending by 517 billion yuan or $77 billion, which is a growth of 18 percent compared to last year. In contrast to Western firms, the Chinese state-owned energy giants are investing in oil fields that are mature and require high-costs to raise production. These assets need an increase in investment between 13 and 27 percent to reach their goals.

    Pouring money into oil fields with low productivity has become a concern for private investors who are skeptical about the future ability of Chinese energy companies to pay a dividend. Although the firms are state-owned, they are also listed on both Chinese and U.S. stock exchanges. As the potential rates of return of the concerning oil fields are relatively low for international standards, the value of the shares has dropped significantly.



    More at: https://oilprice.com/Energy/Crude-Oi...roduction.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  30. #206
    China's official NBS manufacturing PMI on Sunday printed unchanged at 49.4 in June, below expectations of an increase from May...
    ... with most of the key sub-components sliding to new cycle lows:

    • production index 0.4 lower at 51.3,
    • new orders sub-index was 0.2 lower at 49.6
    • employment sub-index edged down 0.1pp to 46.9.
    • imports sub-index down to 46.8, from 47.1,
    • new export order index down to 46.3, vs. 46.5 in May

    ... the other Chinese PMI, the Caixin Manufacturing PMI, hammered expectations as it unexpectedly slumped back into contraction.
    Falling from 50.2 in May to 49.4 in June, the Cixin PMI – which differs from the official, NBS report by shifting away from SOEs and large enterprises and instead focusing on small and medium businesses – was below the critical 50.0 threshold which divides contraction and expansion, for the first time in four months.

    According to the report, the June data highlighted a "challenging month" for Chinese manufacturers, with trade tensions reportedly causing renewed declines in total sales, export orders and production.
    Commenting on the June PMI data, Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said: “The Caixin China General Manufacturing Purchasing Managers’ Index was 49.4 in June, the second lowest since June 2016, indicating a clear contraction in the manufacturing sector, and only for the first time since late 2016, identical to China's official Mfg PMI print (which was also 49.4).
    "The subindex for new orders slid into contractionary territory, pointing to notably shrinking domestic demand. The gauge for new export orders returned to contractionary territory, but was better than the levels seen from last April to last December. Front-loading by exporters was likely to support this gauge as the China-U.S. trade relationship was under great uncertainty.
    The output subindex fell into contractionary territory. The employment subindex remained relatively stable in negative territory, likely due to government policies to stabilize the job market. The State Council set up a leading group on employment in late May.
    The subindex measuring sentiment toward future output plunged further, albeit staying in expansionary territory, a reflection of continuously weakening business confidence amid the Sino-U.S. trade conflict.
    Overall, China’s economy came under further pressure in June. Domestic demand shrank notably, foreign demand was still underpinned by front-loading exports, and business confidence fell sharply. It’s crucial for policymakers to step up countercyclical policies. New types of infrastructure, high-tech manufacturing and consumption are likely to be the main policy focuses.”
    In short, the US-China trade war is Trump's for the taking... if he wants it: companies responded to the latest escalation by reducing headcounts further and making fewer purchases of raw materials and semi-finished items. At the same time, China appears to be sliding into stagflation, as selling prices were raised following another increase in input costs, though rates of inflation were negligible, suggesting that companies failed to pass on costs to consumers. Also, business sentiment was broadly neutral at the end of the second quarter, with firms mainly concerned about the US-China trade dispute.

    More at: https://www.zerohedge.com/news/2019-...ian-pmi-prints
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  31. #207
    Though China wasn't the only Asian nation where manufacturing activity slumped last month, according to a slate of almost unilaterally disappointing PMI readings released earlier this week, the tend over the past year is increasingly clear: The trade war is President Trump's to win, as more tech companies resolve to move at least some production outside of the mainland.



    And in the latest warning to Beijing that the trade war is having a real, and perhaps irreversible, impact, Nikkei Asian Review reports that HP, Dell and Amazon are joining the wave of consumer-electronics manufacturers who are planning to shift production elsewhere.
    The burgeoning exodus, which also reportedly includes a half-dozen Apple suppliers (most notably Foxconn), Nintendo, Sony and others is threatening China's status as the global manufacturing hub.

    HP and Dell, the world's No. 1 and No. 3 laptop manufacturers, who are responsible for a combined 40% of the world's production, are planning to shift 30% of their production elsewhere.
    Lenovo Group, Acer and Asustek Computer are also evaluating plans to shift production elsewhere. And Amazon is planning to shift at least some of the production for its Kindle e-reader and Echo assistant. For all of these companies, the focus would mostly be on products bound for the US.
    HP has already drawn up plans to move some 20% to 30% of production outside China, and is reportedly looking to build out a new supply chain in Thailand and Taiwan. The move could begin as soon as the end of the current quarter, though Nikkei's sources cautioned that it's not set in stone.


    Dell, meanwhile, has already started a "pilot run" of notebook production in Taiwan, Vietnam and the Philippines, though it still has reservations about a possible shortage of skilled workers.

    More at: https://www.zerohedge.com/news/2019-...-leaving-china
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  32. #208
    China set a fresh monthly crude oil import record in April and continues to import growing volumes of crude oil this year, accounting for an estimated two-thirds of global oil demand growth in 2019.

    Yet, a rough estimate of actual Chinese oil consumption patterns lately suggest that the U.S.-China trade war has hit China’s industries and that nearly half of the rise in crude imports have gone into storage so far this year, according to Reuters columnist Clyde Russell, who offers an interesting perspective on whether China’s soaring crude oil imports adequately reflect what’s going on with the Chinese economy.


    Signs are pointing to a slowdown in China’s economic growth, while stockpiling—at high levels so far this year—could decelerate later in 2019 if oil prices rise to a level Beijing considers too high to build inventories at the current pace.
    China hit a new monthly record of 10.64 million bpd in crude oil imports in April this year, as refiners rushed to stock up with Iranian oil before the U.S. removed the sanction waivers. Then, China’s crude oil imports dropped in May from the monthly record in April, as Chinese refiners drastically reduced Iranian oil imports after the end of the U.S. waivers and as some state refineries were offline for planned maintenance.
    The headline number of China’s crude oil imports suggests that first-half imports jumped by 8.8 percent from the same period last year, or by around 800,000 bpd, according to estimates from Reuters’ Russell.
    This growth accounts for most of the world’s estimated oil demand growth for this year, which is currently pegged at 1.1 million bpd-1.2 million bpd by OPEC, the EIA, and the International Energy Agency (IEA).

    China set a fresh monthly crude oil import record in April and continues to import growing volumes of crude oil this year, accounting for an estimated two-thirds of global oil demand growth in 2019.
    Yet, a rough estimate of actual Chinese oil consumption patterns lately suggest that the U.S.-China trade war has hit China’s industries and that nearly half of the rise in crude imports have gone into storage so far this year, according to Reuters columnist Clyde Russell, who offers an interesting perspective on whether China’s soaring crude oil imports adequately reflect what’s going on with the Chinese economy.


    Signs are pointing to a slowdown in China’s economic growth, while stockpiling—at high levels so far this year—could decelerate later in 2019 if oil prices rise to a level Beijing considers too high to build inventories at the current pace.
    China hit a new monthly record of 10.64 million bpd in crude oil imports in April this year, as refiners rushed to stock up with Iranian oil before the U.S. removed the sanction waivers. Then, China’s crude oil imports dropped in May from the monthly record in April, as Chinese refiners drastically reduced Iranian oil imports after the end of the U.S. waivers and as some state refineries were offline for planned maintenance.
    The headline number of China’s crude oil imports suggests that first-half imports jumped by 8.8 percent from the same period last year, or by around 800,000 bpd, according to estimates from Reuters’ Russell.
    This growth accounts for most of the world’s estimated oil demand growth for this year, which is currently pegged at 1.1 million bpd-1.2 million bpd by OPEC, the EIA, and the International Energy Agency (IEA).

    Apart from wobbling economy, China’s crude oil demand, and possibly imports, could be dragged down in the short term by refiners curtailing refinery runs in the third quarter as massive refinery start-ups and slowing domestic fuel demand have created a fuel glut in the country, hurting refining margins.
    According to JLC International, Sinopec ZRC will cut daily crude consumption by 2.17 percent, while Tianjin Petrochemical is set to reduce its daily crude runs by 5.12 percent in July.

    More at: https://oilprice.com/Energy/Energy-G...Faltering.html
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment



  33. Remove this section of ads by registering.
  34. #209
    Despite an avalanche of monetary and fiscal easing, record-breaking credit injections, and the media's insistence that a trade war will cause inflation carnage, China's producer prices were unchanged year-over-year in June - the weakest since August 2016.
    Producer Goods (-0.3%) and Raw Materials (-2.1%) were the biggest deflationary drivers of PPI's weakness.
    At the same time, China consumer prices rose 2.7% YoY (as expected), hovering near its highest since Feb 2018. Food

    As Bloomberg notes, the deceleration brings back fears of a return of deflation which would erode companies’ profit and their ability to repay debt.

    More at: https://www.zerohedge.com/news/2019-...flation-threat
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

  35. #210
    The largest supplier of consumer goods in the world - China's Li & Fung - has said that Chinese factories are becoming "urgent and desperate" as US retailers move out of the country amid the ongoing trade war, according to Bloomberg, and more factory shut downs are likely to follow as the trade war continues.

    Companies like Li & Fung Ltd., which designs, sources and transports consumer goods from Asia for some of the world’s biggest retailers, are being pushed by their American clients to shift production out of China.
    Spencer Fung, chief executive officer said: “U.S. clients are definitely very, very worried. Everyone is making razor-thin margins already and most people have a huge percentage in China. So if the biggest source increases the price by 25%, they are worried.”
    And although he didn’t specify Walmart by name, the US retailer is the company's second largest customer, accounting for 7.6% of its revenue.


    Because of its position as a liaison connecting American retail companies to Asian factories, Fung has a clear perspective of the shifts taking place around the world due to the trade war. While trade deal talks have "resumed" following a recent ceasefire, there are signs that the global supply chain, traditionally very reliant on China as the factory to the world, is being permanently transformed. Companies like Intel, Apple, and Amazon have all said they are reviewing their global supply chain.
    Fung continued, talking about President Trump and his Twitter habits: "Nobody’s investing, nobody’s buying. The trade war is causing people to stop investment because they don’t know where to put the money. Many people put the money into Vietnam with one tweet."
    Looking ahead, China’s contribution to Li & Fung's total sourcing will fall from 59% in 2015 to less than 50% this year for the first time.
    Meanwhile, at the same time as Chinese factories are suffering, other Asian hubs have become beneficiaries. Americans have already seized all the manufacturing capacity in Vietnam as a result.
    “Vietnam, for example, is full, completely full. There’s no extra capacity for the U.S. companies to get in,” Fung said.


    To preserve market share, Chinese factories are slashing prices out of sheer desperation, creating an opportunity for European and Japanese consumer brands. Fung is advising clients to take advantage of these prices.


    More at: https://www.zerohedge.com/news/2019-...-and-desperate
    Never attempt to teach a pig to sing; it wastes your time and annoys the pig.

    Robert Heinlein

    Give a man an inch and right away he thinks he's a ruler

    Groucho Marx

    I love mankind…it’s people I can’t stand.

    Linus, from the Peanuts comic

    You cannot have liberty without morality and morality without faith

    Alexis de Torqueville

    Those who fail to learn from the past are condemned to repeat it.
    Those who learn from the past are condemned to watch everybody else repeat it

    A Zero Hedge comment

Page 7 of 16 FirstFirst ... 56789 ... LastLast


Similar Threads

  1. Astrology: Charting the Rise of Ron Paul
    By Kuldebar in forum Grassroots Central
    Replies: 226
    Last Post: 11-16-2012, 10:02 AM
  2. PMs: Charting JP Morgan's Historical Holdings of the Silver ETF
    By bobbyw24 in forum Economy & Markets
    Replies: 0
    Last Post: 05-10-2011, 06:18 AM
  3. Charting flip flops on tonights debate.
    By BamaFanNKy in forum Rand Paul Forum
    Replies: 3
    Last Post: 10-25-2010, 08:13 PM
  4. Charting software
    By kaberUSA in forum Economy & Markets
    Replies: 0
    Last Post: 11-19-2008, 04:52 PM
  5. National Ledger 7/19 - Charting the Rise of Ron Paul
    By propanes in forum Grassroots Central
    Replies: 0
    Last Post: 07-19-2007, 09:35 PM

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •