China's Market Crashes Again

[erudne]

• China Halts Stock Trading For Day After Entire Market Crashes
  
  1/4/2016, 2:02:35 AM · by Zakeet · 33 replies Zero Hedge ^ | January 4, 2016
  
  Following the initial halt in CSI-300 Futures at the 5% limit down level, the afternoon session opened to more carnage and amid the worst 'first day of the year' in at least 15 years, Chinese stocks collapsed further to a 7% crash. At 1334 local time, stock trading was halted for the rest of the day across all exchanges (at least two hours early). [Snip] Dow futures are now down over 150 points from NYE close, Gold and Treasuries are bid, and offshore Yuan has plunged most since the August devaluation.

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[ZA_Survivalist]

Probably because its as fake as the products they rip off.

Crazy times.

 

[jluck]

Ours will follow, Get ready to buy,buy, buy!

 

[erudne]

China's Stock Market Is Plunging Into Turmoil, Authorities Trying To Inject Liquidity…




Next global economic shoe to drop.

Via The Telegraph:

Chinese authorities have escalated their market intervention in a bid to prop up stocks after $590bn was wiped off shares on Monday.

Beijing's state-owned financial institutions hoovered up shares, and regulators extended a selling ban on major companies, to quell investor fears after a tumultuous start to 2016 trading.
The main Shanghai Composite index of shares fell just 0.3pc on Tuesday, while the smaller Shenzen Composite declined less than 2pc, after bleeding 8.2pc at the start of new year trading.

Keep reading…

 

[erudne]

 

[erudne]

China Faces 15 Trillion Bombshell As Shadow Banking Sector Collapses

Submitted by Tyler Durden on 02/29/2016 22:22 -0500

We've spent more time than most documenting China's wealth management product problem.
WMPs are part and parcel of Beijing's sprawling shadow banking complex which, until 2014 that is, helped pump trillions of yuan into China's economy and shouldered the burden when it came to propping up the most important economy on the planet.
But WMPs are dangerous. In fact, we flagged them as an 8 trillion black swan back in August on the way to asking what would happen if China's shadow banking sector were to collapse altogether.
This is space that's running what amounts to an enormous maturity mismatched fraud. Of course the describes the entire fractional reserve banking system, but in the case of China's WMPs, it's all on the verge of implosion. Don't believe us? Just ask anyone who bought into products sold by Fanya Metals' Shan Jiuliang.
This is a very real threat to the Chinese banking sector. The multifarious nature of the space's liabilities makes it virtually impossible for anyone to assess what the embedded risks are. As we first documented last summer, some 40% of credit risk is carried off balance sheet and that figure might well have grown recently, especially considering mid-tier bank's propensity to extend new credit through new cateogries of channel loans that are classified as "investments" and "receivables"
In any event, China is desperate to revive the credit impulse and that means keeping the shadow banking space alive. Here's BofA with more on China's ticking WMP time bomb:

• Growth rate accelerated. By the end of 2015, WMP balance reached Rmb23.5tr, up 56.46% YoY. Astonishingly, growth rate accelerated last year compared to the year before despite a high base – in 2014, the balance grew from Rmb10.2tr to Rmb15.0tr, up 47.25% YoY. The key drivers of this accelerated growth are joint stock banks whose WMP balance rose from Rmb5.67tr to Rmb9.91tr, up 74.8% YoY; city commercial banks, Rmb1.7tr to Rmb3.07tr, up 80.6% YoY. On the other hand, the big four state-owned enterprise (SOE) banks' balance rose by a more moderate 53.2% YoY (from Rmb6.47tr to Rmb8.67tr) while foreign banks' balance declined by 25.6% (from Rmb0.39tr to Rmb0.29tr).
  
• Liquidity risk is rising. The outstanding balance of open WMPs, of which buyers can subscribe or redeem largely at will, reached Rmb10.32tr, up 96.95% YoY. They accounted for 44% of bank-run WMPs balance as of Dec 2015, up from 35% a year earlier. The increased share of open WMPs adds to the duration mismatch in the shadow banking sector and makes the system more prone to liquidity shock in our view. In 2015, banks issued Rmb158.41tr worth of WMPs, i.e., Rmb13.2tr a month on average. If WMP buyers decide to 'go on strike' for whatever reason, a liquidity crunch in the shadow banking sector could quickly develop in our view.
  
• Implicit guarantee still largely in place. Only Rmb1.37tr worth of open WMPs, representing 13% of the total, are priced based on NAV. Also, the portion of closed WMPs that are priced similarly is tiny. This means that the vast majority of WMPs are still sold with the so-called "expected return", which is largely viewed as promised return by WMP buyers by our assessment. In 2015, only 44 WMP products, or 0.03% of matured products during the year, caused investors to lose money. This loss ratio appears unusually low in our view. It is interesting to note that most of the 44 products were sold by foreign banks.
  
• Individual buyers still dominant. As of Dec 2015, individual investors, including high net-worth individual investors, accounted for Rmb13.34tr WMP balance, or 56.6% of the total (institutional investors, 30.6%; inter-banks, 12.8%). They subscribed to Rmb101.49tr of the newly issued WMPs during the year, representing 64.1% of the total. Mood of individual investors are more volatile than institutions in general.

The bottom line is this: if this implodes, it will not only tank the entire Chinese banking system but the global economy as well, as the amount of liabilities here is quite frankly enormous.

http://www.zerohedge.com/news/2016-0...ctor-collapses

 

[Brutus57]

Which means their next large export would be container ships full of Chicom soldiers heading to a West Coast port near you as they come to seize assets they have gotten as collateral for all their loans.

Brutus Out

 

[Stomper]

LET IT RAIN!!

 

[JackFrost]

Buy stocks they said, the market is thriving they said! pppsssssshhhhhhhh. I aw waiting to wake up one of these mornings in the not too distant future and the whole shebang will have gone to snikes overnight. Get what you can , can what you get and SIT ON THE LID!

 

[Burt Gummer]

I have learned that '1000 facts as to why the economy must collapse next month' - no matter how logical and rational - is just nothing to stress over in the here and now.

Bottom line is none of it is random at all in our ant farm. When/if our owners decide to pull the plug, they will. Hopefully later than sooner.

Perhaps the real, brutal collapse is many years away. Or next week. Better to be ready in either case. "Ready" means you can remain alive for an extended period of life without outside help. No one is 100% ready for anything though.

When that terrible day comes - my guess is war to cover the bankers misdeeds and collapse of the dollar - it won't be smooth sailing for anyone regardless of any level of preparedness. It won't be temporary, but lifelong. In summary, horrible.

But living day to day stressing over it is not the way to lead a happy and healthy life. Don't be the Ostrich with its head in the sand, but don't be Hardy Har Har either.

My fav bumper sticker: "All Empires collapse, but not ours. Ours will last forever."

The best defense isn't a bunker, it is a sense of humor.

 

[Stomper]

^^^Truth^^^

 

[markl32]

I welcome a market correction with a clear buying signal.

 

[erudne]

At this point I'm in maintenance mode, I'm an observer (with a plan) none of these dots concerns me beyond my ability to maintain my current state and I have that locked down AWACBE