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đź”” China Deleveraging & Some Ridiculous Charts
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China's Deleveraging: "Smaller shadow banking together with deleveraging reform suggests that financial market risks are under control"
That's the quote from ING after today's credit data...
It's fair to say that most are aware of the enormous Chinese debt and many will have seen some variant of this chart at the end of 2020...
Which then brought about the debt-reduction policy response...
PBOC OFFICIAL: CHINA’S MACRO LEVERAGE RATIO AT 279.4% AFTER LIFTING 23.5 PERCENTAGE POINTS IN 2020.— Breaking Market News (@FinancialJuice) April 12, 2021
Not making much headway on the ratio so far, although they may be reducing the shadow banking sector...
Back to the ING report 👇
Credit data matches deleveraging reform on real estate developers
China's total credit grew by CNY3.34 trillion in March and CNY10.24 trillion in 1Q21, down CNY873 billion from 1Q20.
But yuan loans grew by CNY7.91 trillion in 1Q21, which was an increase of CNY659 billion from 1Q20.
The difference comes from a fall in shadow banking activities, including trust loans, entrusted loans, and less funding raising from corporate bonds and stocks.
The deleveraging reform started with real estate property developers in early 2021, and there have been added regulations on how banks lend to these developers. Together with moves to shrink shadow banking businesses, this deleveraging reform should help real estate property developers to reduce debt.
This is also important to the health of the financial sector in China because real estate property developers have borrowed heavily in the past.
Developers were 27% of China’s record first-quarter defaults via Bloomberg
The problem with shadow-banking is that it's shadowy...
Are the financial risks actually under control?
Or are they hiding in plain sight?
🔥 Hot and 🚫 Not
🔥 Nuance Communications: Up by 22%! in pre-market - Microsoft will buy the AI firm in a $19.7 billion deal 💥
(Reuters) Microsoft Corp said on Monday that it will buy Nuance Communications Inc in a $19.7 billion deal, as it looks to bolster its suite of enterprise applications with the artificial intelligence firm’s advanced speech technology.
Microsoft’s offer price of $56 per share is at a premium of 22.86% to Nuance’s last close of $45.58.
🚫 Head & Shoulders patterns on Spanish industrial data 👇
There's been a pandemic of ridiculous charts lately: no vaccine available yet, but David has us covered on what we can learn from them 👇
