China Default Thread
- Thread starter Stockolio
- Start date
https://www.bloomberg.com/news/arti...t-record-in-2018-the-2019-pace-is-triple-that
https://www.caixinglobal.com/2019-0...ained-for-trading-manipulation-101412516.html
https://www.caixinglobal.com/2019-0...-slower-sales-service-scandals-101412763.html
Remember majority of defaults and bad loans are swept under the rug and not declared... They are " sold " and sent to few specific banks, as a strategy to contain banking crisis about to happen. They appear as loses on banks balance sheets, but government doesn't want to say the truth, truth hurts in China!
https://www.caixinglobal.com/2019-0...ained-for-trading-manipulation-101412516.html
https://www.caixinglobal.com/2019-0...-slower-sales-service-scandals-101412763.html
Remember majority of defaults and bad loans are swept under the rug and not declared... They are " sold " and sent to few specific banks, as a strategy to contain banking crisis about to happen. They appear as loses on banks balance sheets, but government doesn't want to say the truth, truth hurts in China!
OK so China defaults internally. They just devalue the currency and move right along. If the peasants disagree, they will be ended, Tiananmen Square style.
https://www.reuters.com/article/us-...s-money-from-its-employees-idUSKCN1SG11U?il=0
https://www.caixinglobal.com/2019-05-11/leshis-listing-suspended-as-delisting-looms-101414254.html
China Minsheng Investment Group (CMIG), among the country’s largest private investment firms, is raising funds from its employees as it seeks to combat a liquidity squeeze, a company representative told Reuters on Friday.
The company has set up a special funding pool for the fundraising. All of CMIG’s employees in its headquarters can put their own money into the pool and choose between buying CMIG’s debt or equity, said the representative.
Debt-laden CMIG, once among China’s most high-profile and acquisitive private companies domestically and globally, had missed payment and formed an emergency committee to deal with its liquidity troubles, raising investors’ fears about financing pressures on China’s overall private sector.
https://www.caixinglobal.com/2019-05-11/leshis-listing-suspended-as-delisting-looms-101414254.html
China Minsheng Investment Group (CMIG), among the country’s largest private investment firms, is raising funds from its employees as it seeks to combat a liquidity squeeze, a company representative told Reuters on Friday.
The company has set up a special funding pool for the fundraising. All of CMIG’s employees in its headquarters can put their own money into the pool and choose between buying CMIG’s debt or equity, said the representative.
Debt-laden CMIG, once among China’s most high-profile and acquisitive private companies domestically and globally, had missed payment and formed an emergency committee to deal with its liquidity troubles, raising investors’ fears about financing pressures on China’s overall private sector.
How to trade this?
I don't... Just keeping tabs on China's defaults in this thread, until a small-medium bank collapses later this year. Not really recommending Shorting anything China really, there CB will intervene until their death, much better shorts and returns in US markets
Michael Pettis has been tracking for a decade now.
https://www.bloomberg.com/news/arti...c-loans-in-china-is-a-bonanza-for-debt-buyers
https://www.caixinglobal.com/2019-0...flyer-gets-government-lifeline-101416090.html
https://www.caixinglobal.com/2019-0...ouble-over-shady-bond-business-101415769.html
Use outline.com for paywall, also worth noting... https://www.marketwatch.com/investing/currency/usdhkd
Highest it's ever been since pegged to Dollar is 7.8502 which happened in March 2019 but HK CB came in to defend it, it's currently at 7.8501, why aren't they stepping in to defend like they have constantly been doing before ?
https://www.caixinglobal.com/2019-0...flyer-gets-government-lifeline-101416090.html
https://www.caixinglobal.com/2019-0...ouble-over-shady-bond-business-101415769.html
Use outline.com for paywall, also worth noting... https://www.marketwatch.com/investing/currency/usdhkd
Highest it's ever been since pegged to Dollar is 7.8502 which happened in March 2019 but HK CB came in to defend it, it's currently at 7.8501, why aren't they stepping in to defend like they have constantly been doing before ?
https://www.bloomberg.com/news/arti...cret-stoke-default-concerns?srnd=fixed-income
Ouuuuu weeeee... China's bond defaults exploding! Getting exposed to the accounting fraud and lies
China’s domestic bond market is on course for a record year of defaults. What’s a little less clear is exactly how many defaults there might have been.
When a company in developed markets fails to make a bond payment on time as agreed, that information typically becomes public in swift order, and the issuer would normally be declared in default by ratings agencies and investors. But in China, sometimes things aren’t so obvious -- one of many idiosyncrasies for global funds to be aware of as they consider the increasingly open local-currency Chinese market.
An opaque practice that’s increasingly concerning analysts is when a debtor stops servicing bonds through an official clearing house, and instead does private deals with bondholders that might involve late payments.
The investment bank CICC has counted at least seven distressed borrowers that have engaged in the method since March. A separate filing from Henan Shengrun Holdings in mid April shows that it planned to repay part of the 650 million yuan ($94.6 million) notes due 2021 in private.
“The actual default rate in China may have been understated,” said Cindy Huang, an analyst at S&P Global Ratings in Hong Kong. S&P, which in January won a license to rate China’s onshore bonds, mainly relies on local financial data providers and the clearing houses to help monitor defaults. “Some such cases are recognized as default but some are not," she said.
Outline.com to bypass paywall, 8 hidden defaults identified in article, many more are hidden in specific banks balance sheet, in January itself China banks had 120 Billion Yuan defaults!!!
https://sbr.com.sg/financial-servic...avy-losses-delinquencies-hit-1788b-in-january
Ouuuuu weeeee... China's bond defaults exploding! Getting exposed to the accounting fraud and lies
China’s domestic bond market is on course for a record year of defaults. What’s a little less clear is exactly how many defaults there might have been.
When a company in developed markets fails to make a bond payment on time as agreed, that information typically becomes public in swift order, and the issuer would normally be declared in default by ratings agencies and investors. But in China, sometimes things aren’t so obvious -- one of many idiosyncrasies for global funds to be aware of as they consider the increasingly open local-currency Chinese market.
An opaque practice that’s increasingly concerning analysts is when a debtor stops servicing bonds through an official clearing house, and instead does private deals with bondholders that might involve late payments.
The investment bank CICC has counted at least seven distressed borrowers that have engaged in the method since March. A separate filing from Henan Shengrun Holdings in mid April shows that it planned to repay part of the 650 million yuan ($94.6 million) notes due 2021 in private.
“The actual default rate in China may have been understated,” said Cindy Huang, an analyst at S&P Global Ratings in Hong Kong. S&P, which in January won a license to rate China’s onshore bonds, mainly relies on local financial data providers and the clearing houses to help monitor defaults. “Some such cases are recognized as default but some are not," she said.
Outline.com to bypass paywall, 8 hidden defaults identified in article, many more are hidden in specific banks balance sheet, in January itself China banks had 120 Billion Yuan defaults!!!
https://sbr.com.sg/financial-servic...avy-losses-delinquencies-hit-1788b-in-january