Letters (e-mails) from Beijing

A good friend of ours – and one smart dude – who works for a very large asset manager was in Beijing this past week kicking the tires and meeting with locals to discuss markets and the economy.   Here is part of the e-mail he sent to us over the weekend,

China is going to blow. It is just a ? of when.

Record liquidity injection is because of rolling bad loans made as part of stimulus. Receivables and payables are rising and liquidity is gridlocked.

Govt will not let banks write down bad debt and has to inject liquidity. Repo rates 20% on Shanghai stock exchange so some are selling stocks to do repo. Heads up.

Swan alert!  Keep it on your radar, folks.

This entry was posted in China and tagged , , , . Bookmark the permalink.

2 Responses to Letters (e-mails) from Beijing

  1. Art Spinner says:

    Ask Debra if she has an off the record opinion.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.