Tag Archives: China

China’s Communist Party concluded the Third Plenum of its 18th Congress in November 2013. It was the much-discussed reform mandate that many in the West took to mean another positive step toward neo-liberal reform. At its center was supposed to be a greater role for markets particularly in the central task of resource allocation. In some places, the Party’s General Secretary Xi Jinping was hailed as the great Chinese...

Two years ago, when UBS looked at the world’s most expensive housing markets, it found that London and Hong Kong were the only two areas exposed to bubble risk. UBS Global Real Estate Bubble Index - Click to enlarge What a difference just a couple of years makes, because in the latest report by UBS wealth Management, which compiles the bank’s Global Real Estate Bubble Index, it found that eight of the world’s...

Eleven days ago, we asked a question about Treasury bills and haircuts. Specifically, we wanted to know if the spike in the 4-week bill’s equivalent yield was enough to trigger haircut adjustments, and therefore disrupt the collateral chain downstream.  US Treasury, Jan - Sep 2017(see more posts on U.S. Treasuries, ) - Click to enlarge Within two days of that move in bills, the GC market for UST 10s had gone...

Two years ago, when UBS looked at the world's most expensive housing markets, it found that London and Hong Kong were the only two areas exposed to bubble risk. What a difference just a couple of years makes, because in the latest report by UBS wealth Management, which compiles the bank's Global Real Estate Bubble Index, it found that eight of the world's largest cities are now subject to a massive speculative housing bubble.  And while perpetually low mortgage rates are clearly to...

The framing is a bit clumsy, but the latest data in favor of the artificial CNY surge comes to us from Bloomberg. The mainstream views currency flows as, well, flows of currency. That’s what makes their description so maladroit, and it can often lead to serious confusion. A little translation into the wholesale eurodollar reality, however, clears it up nicely. Demand for foreign exchange outstripped that for yuan for...

Given that today started with a review of the “dollar” globally as represented by TIC figures and how that is playing into China’s circumstances, it would only be fitting to end it with a more complete examination of those. We know that the eurodollar system is constraining Chinese monetary conditions, but all through this year the PBOC has approached that constraint very differently than last year.The updated balance...

The People’s Bank of China reported this week that its holdings of foreign assets fell slightly again in August 2017. Down about RMB 21 billion, almost identical to the RMB 22 billion decline in July, the pace of forex withdrawals is clearly much preferable to what China’s central bank experienced (intentionally or not) late last year at ten and even twenty times the rate of July and August. The US Treasury Department...

A week ago we tweeted… Dear @SNB_BNS_en – you are the next bitcoin: congratulations pic.twitter.com/cld4YNbNLb — zerohedge (@zerohedge) September 14, 2017 But as Bitcoin rebounded from its China challenges, it overtook The SNB once again as bubbliest bubble. However, a 13% spike in the share price of The Swiss National Bank today has put an end to that leaving the central bank back in first place among the...

 All the way back in January I calculated the total size of China’s 2016 fiscal “stimulus.” Starting in January 2016, authorities conducted what was an enormous spending program. As it had twice before, the government directed increased “investment” from State-owned Enterprises (SOE).By my back-of-the-envelope numbers, the scale of this fiscal side program was about RMB 1.45 trillion, or nearly 2% of GDP. It was about...

Accurately measuring the scope of global wealth inequality is a notoriously difficult undertaking – a fact that was brought to light last year when the International Consortium of Investigative Journalists published the Panama Papers, exposing clients of Panamanian law firm Mossack Fonseca. As the papers revealed, Mossack Fonseca, which is only the world’s fourth-largest provider of offshore financial services, boasted...