China Default Thread

Discussion in 'Journals' started by Stockolio, Apr 30, 2019.

  1. As you all know, China is collapsing and quite viciously... I have highlighted many defaults in my thesis china thread, now I will be updating almost daily the Defaults and Liquidity in china until a Small or Medium Bank Collapses and starts the Minsky Moment

    They have over 2 Trillion Yuan of bad loans swept under the rug they do not count defaults on those, giving it to specific banks to try and contain shock, but whole country is defaulting, it is getting extremely serious.

    China mentioned one more RRR then they are done, they threw the towel not long ago saying they couldn't keep up expanding credit this high, true given extreme bankruptcy of system... Also very short on US Dollars, that's why I think Chinese Bank will start defaulting much sooner then people anticipate, offshore dollar drought is very real, Powell better stop QT... Mini-QE Fed is restarting in Sep will help tho

    https://www.nasdaq.com/article/corp...s-china-backs-off-broad-easing-20190430-00159

    https://www.bloomberg.com/news/arti...er-revising-2017-cash-holdings-by-4-4-billion

    https://www.caixinglobal.com/2019-0...fire-sale-fails-to-ease-crisis-101410054.html

    Other companies that have faced similar scrutiny from regulators include Kangde Xin Composite Material Group Co., which defaulted on a bond in January after reporting cash levels just four months earlier that were enough to pay the debt 15 times over. The CSRC began investigating Kangde Xin in October.

    “We have seen a number of Chinese companies with high cash balances still seek funding from investors, and later on the cash just disappears,” said Raymond Chia, head of credit research for Asia excluding Japan at Schroder Investment Management Ltd. “We should really question borrowers.”

    Investors will watch the CSRC for more details on what went wrong at Kangmei, according to Guo Feng, head of the wealth management department at Northeast Securities Co. Whatever the result, the company may struggle to win back investor confidence, said Shen Chen, a partner at Shanghai Maoliang Investment Management.

    This scandal could narrow their refinancing channels as investors flee.
     
  2. RedDuke

    RedDuke

    From Bloomberg article "Disclosure puts spotlight on accounting quality in China".

    If this becomes widespread, omg here we come.
     
  3. To know the truth about something one needs the facts.
    After you have the facts you still got to be able to interpret the facts correctly in order to get to the truth.

    Anything about China lacks reliable facts. Good or bad I don't believe anything coming out of China.
     
    Last edited: Apr 30, 2019
  4. China has been able to “hold things together” for about two years longer than expected. I’m assuming the Chinese Government has thrown everthing they can to keep up appearances, especially in order to avoid weaking their negotiating position on a pending trade agreement with the United States.

    The US and the rest of the global economy will likely be affected by a China meltdown. Remember the Asian Contagion Financial crisis? The US West Coast and Canada has seen real estate prices affected by Chinese investor purchases. Usually these purchases are for rental properties, so there still should be some stability in prices if the US economy stays healthy.
     
    Stockolio likes this.
  5. Dalios debt crisis book points to accounting shenanigans before the big one. Good call on this thread buddy. How will you play it though?
     
  6. destriero

    destriero

    China crash mode will be presaged in the FX... and it's not happening.
     
  7. Not shorting anything China... That's crazy! There Central Bank is a major player in there markets
     
  8. There currency will be the last thing to go, that's why Kyle Bass RMB short for years doesn't make sense, by the time the RMB hits 7 +, shit would have hit the fan way before. I have been keeping an eye on world liquidity but China a lot, things aren't looking good at all in interbank raising rates, but CB warned it would happen, injecting enough just not to collapse... Main issue is the shortage of US Dollars and US Issued debt that they clearly cannot ever pay back at this point. Hong Kong is gonna get smoked too, wonder how hard it will affect Mainland. They are pegged to US Interest Rates, HK been losing a lot of US Reserves defending in 2019

    https://www.marketwatch.com/investing/bond/ambmkrm-10y?countrycode=bx

    I check it daily, once it reaches 4 %, it's means it's dry as fuck in there
     
  9. destriero

    destriero


    Bullshit. The currency is the first to go (1997). His RMB trade hasn't worked because they haven't collapsed. Ostensibly you trade, right?

    2019-04-30_1614.png
     
    Last edited: Apr 30, 2019