This is officially a credit crisis of interbank lending between China mainland and Hong Kong.
HIBOR was already absurdly priced last night at 13.4%; tonight it went full retard and blew out to 67%.
Separately, but related, Chinese citizens are scrambling to get out of their yuan in exchange for dollars. People on the ground say, over the past two weeks, they’ve seen a 40% spike in money changer services. The average flight out of China is 200,000 dollars.
The Shanghai is ignoring the news, flat for the session–so far.
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I am confused. China bought US debt now China is buying US dollars?
Citizenry and govt are two different things. Stop getting high on your own supply.
Economics are not my strength thus the fascination. I would never adulterate my clarity of thought with the likes of an opiate.
They are “buying” dollars by selling our bonds and stocks. Have you noticed how the selling here looks like it’s being done by drunken monkeys? Total amateurs.
Apparently, HIBOR blowing out is to make it expensive for speculators to be short CNH. CNH:RMB to parity a day after having widest spread ever
Sucks for Hong Kong re. Sucks hardcore.
Agree, these moves are to make it more difficult to short CNH. CNH/CNY (offshore/onshore RMB respectively) are effectively at parity as a result.
While most (almost 90%) of HK mortgages are HIBOR indexed, the bulk have caps (i.e. PRIME less 3.1% which at the current 5.25% prime would make the index portion of ones mtg rate 2.15%). The authorities are not trying to implode the real estate market.
morons
I believe Chinese citizens are still a limited to $50,000 of transfers out of the country per yr. Folks that reached that limit in 2015 can now use their 2016 quota, so it’s logical that currency transactions might spike early in the year.
Also, some of the increase in currency transactions may be people planning international travel over Chinese new year. Chinese tourist spots have become egregiously expensive during new year (not to mention crowded), so more Chinese are leaving the country for their holiday.
Money changers get around it. Watch vid
Who understands the currency markets and the interbank lending between China mainland and Hong Kong? Almost no one.
About all I understand about this is that, at least for now, the US dollar is still safe to remain the world’s reserve currency. When things get effed up, everyone wants US dollars.
I guess Asians may be coming to buy RE in the U.S. now, as we have no such RE problem, particularly on the West coast, which is the closest place in the U.S. to Asia. And the West coast is chock full of fellow Asian folks already. Just like home perhaps– except not as much pollution.
fuck, feel like I’m going to wake up and see $22 oil
Is there anyone left dumb enough to invest in Chinese stocks? You’d have a better chance of not being scammed by replying to every email you receive from Nigerian princes.