• 525 days Will The ECB Continue To Hike Rates?
  • 526 days Forbes: Aramco Remains Largest Company In The Middle East
  • 527 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 927 days Could Crypto Overtake Traditional Investment?
  • 932 days Americans Still Quitting Jobs At Record Pace
  • 934 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 937 days Is The Dollar Too Strong?
  • 937 days Big Tech Disappoints Investors on Earnings Calls
  • 938 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 940 days China Is Quietly Trying To Distance Itself From Russia
  • 940 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 944 days Crypto Investors Won Big In 2021
  • 944 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 945 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 947 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 948 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 951 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 952 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 952 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 954 days Are NFTs About To Take Over Gaming?
readtheticker

readtheticker

readtheticker

We are financial market enthusiasts using methods expressed by the Gann, Hurst and Wyckoff with a few of our own proprietary tools. Readtheticker.com provides online…

Contact Author

  1. Home
  2. Markets
  3. Other

China Credit Wobbles is a Worry

China credit issues are about to jump from the back page of the WSJ to the front page, you can expect these charts to change as the Chinese credit shakes get more violent.

As it looks like the Chinese will NOT be bailing out everything that goes bust, ZeroHedge have been covering this story.

Extract

We consider the trust market the most vulnerable part of the major financing channels for companies, i.e. loan, corporate bond and trust. The quality of the borrowers in the trust market tends to among the lowest. Within the trust market, collective trust products, i.e. those sold to more than one investor, tend to be risker than single trust products, i.e. those sold to a single investor. This is because investors in single trust products tend to be more substantial in resources, thus most likely more sophisticated in their risk control.

The Wind database lists close to 12,000 collective trust products, worth Rmb1.34tr, which cover roughly half of the collective trust market (Rmb2.72tr as of the end of 2013). It has reasonably good quality data series on the issuing dates and amounts raised. However, data on maturing dates are sporadic. We estimate that the average duration of the trust products is around 2 years. Based on this assumption and the issuing dates, we have mapped out a rough maturing profile of the collective trust market. As we can see from Chart 1, 2Q and 3Q this year will be the next peak maturing period for this market.

The positive spin on these possible defaults is that the overall dollar value is not that scary, however like any crack in the credit dam, a little leak can be beginning of something more serious. Remember they said sub prime in the US housing bust was not a concern and could be contained.

Charts that could be rocked south during 2014 on Chinese credit wobbles.

Copper ETF Chart
Larger Image

Shanghai Index
Larger Image

Hang Seng Index
Larger Image

Australian Oridnaries
Larger Image

Australian Dollar Index
Larger Image

More here from Gary Shilling from Yahoo Finance

 

 

Investing Quote

"The only way you get a real education in the market is to invest cash, track your trade, and study your mistakes.... The examination of a losing trade is tortuous but necessary to ensure that it will not happen again." ~ Jesse Livermore

"Money couldn't buy friends, but you got a better class of enemy" ~ Spike Milligan

 

Back to homepage

Leave a comment

Leave a comment