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To Avoid Liquidation Panic, HNA Assures Deutsche Shareholders It’s A “Long-Term Investor”

The notoriously acquisitive Chinese conglomerate HNA – which recently had a sharp falling out with Beijing resulting in a margin call "shocksave" – is facing a serious cash crunch in 2018 as nearly a quarter of its $100 billion in debt – a large chunk of which was accumulated during a multi-year buying spree that […]

How “Ghost Collateral” And “Yin-Yang” Property Deals Will Collapse China’s Credit Bubble

One lesson from the 2007-08 crisis was that the vast majority of financial market participants, never mind the general public, were unfamiliar with subprime mortgages until the crisis was underway. Even now, we doubt many have much understanding of repo, the divergence between LIBOR and Fed Funds from 9 August 2007 and Eurodollar liquidity. In […]

Short Sellers Are Aggravating China’s Bond Rout – Regulators AWOL (For Now)

After the Party Congress finished in October and China’s centrally planned markets were released (somewhat) from the vice-like grip which had prevailed during the proceedings, we noted the comment from Huachuang Securities that China’s bond holders may be about to get hit by “daggers falling from the sky”, referring to deleveraging. They were right, to […]

What Is Behind China’s Bond Rout?

Until a modest dip in Chinese bond yields in the past two days, 10y CGB and 10y policy bank bond yields soared by 40bps and 70bps, respectively, over the last 2 months. In fact, Chinese government notes are headed for the worst selloff since 2013, with the 10-year yield surging 86bps this year to 3.92%, […]

UK Banks Can Withstand “Disorderly Brexit” But Need Additional £6BN; $35 Trillion In Derivatives Affected

For the first time since it (belatedly) began conducting stress tests in 2014, none of the UK’s major banks need to raise additional capital. More importantly, the Bank of England and the system could withstand a disorderly Brexit. As Bloomberg recaps, "the stress-test scenario therefore encompasses a wide range of U.K. macroeconomic risks that could […]

A “New Era” In Chinese Regulation Means Turmoil For $15 Trillion In China’s “Shadows”

The post-Party Congress attempts to deleverage and crack down on the worst abuses in China’s horrific credit bubble – especially the country's $15 trillion in wealth-management products – saw China’s authorities turn their sights on shadow banking and wealth management products (WMPs) specifically. On their way out are "guaranteed returns" and “capital pools”, which had […]

World Stocks Soar To New Record Highs As Oil, Metals Surge Ahead Of The Fed

US equity futures have hit a new records, helped by surging Asian and European stocks which have all started November on a euphoric note. Surging commodity prices, optimism about tax reform and hope for a new dovish Fed chair all combined to drive global stock markets to record highs on Wednesday, with the MSCI’s world […]

Fintech Revolution – Finance Professionals Rushing To Take Courses As Career Hedge

Fintech, blockchain and A.I. are revolutionising the banking industry and have the potential to replace a significant percentage of the human capital, eliminating a chunk of their cost bases. Last month, former Citi CEO, Vikram Pandit, was particularly pessimistic, claiming that 30% of jobs could be lost in the next five years. As CNBC reports, […]

Hedgies Have Never Been ‘Longer’ The Energy Complex As Analysts Raise Oil Price Forecasts (Again)

With WTI prices holding at 6-month highs around $54 (and Brent at $60), Reuters' John Kemp notes that hedge funds have never, ever been more bullishly positioned in the entire energy complex. Hedge Funds have accumulated a record 1.189 billion bbl of long positions in the five major petroleum contracts (Brent, WTI (x2), RBOB, HO)… […]

Global Stocks Jump Among Earnings Bonanza; Nikkei Closes Above 22,000 For First Time In 21 Years

US equity futures are higher, boosted by a bevy of better than expected earnings out of tech giants Amazon, Intel and Microsoft as Asian stocks and European shares climb amid the dovish sentiment unleashed from Thursday’s ECB update. Asian equities rose as investors bid stocks following strong corporate results from India to Japan. The MSCI […]

China Issues First Dollar Bond Since 2004, Bails Out Corporate Liquidity

Despite downgrades from the rating agencies, China is issuing its first sovereign dollar bond issues in 13 years on an unrated basis (what do the agencies know anyway) and at tight spreads to US Treasuries. The 5 and 10-year issues come just over a month since S&P cut the nation’s rating one level to A+ […]

How Rich Chinese Use Visa Fixers To Move To The U.S.

Authored by Peter Robison, Karen Weise, Wenxin Fan, and Yan Zhang via Bloomberg.com, Have a spare $500,000 to invest in an economically distressed American area (that actually isn’t distressed at all)? China’s EB-5 fixers will help you every step of the way… One summer Saturday in 2013, Vivian Ding took the stage in the grand […]

“Dear President Trump: America Is In For A Rude Awakening In January”

Authored by James Rickards via DailyReckoning.com, Dear President Trump, Over the last couple of years I’ve been all over TV… from Fox News to CNBC, CNN and Bloomberg. I’ve been telling our fellow Americans that the financial global elite was planning to issue their own globalist currency called special drawing rights, or SDRs. And that […]

The Single Biggest Bullish Catalyst For Oil

Authored by Nick Cunningham via OilPrice.com, One of the key objectives for OPEC is to bring down inventories, a goal that has been elusive this year. But if the oil futures curve is anything to go by, the oil market is showing signs of tightening. Brent futures have recently begun to exhibit a state of backwardation, […]