Thousands stormed into the banks, and they've got the chinks to show for it.
Christopher Marlowe in "Shakespeare in Love"
Posted on 07/16/2020 8:26:16 PM PDT by BeauBo
Social media-fueled rumors about banks collapsing are popping up at an unprecedented frequency in China, forcing regulators and even the police to step in to calm depositors.
Just since the past month, worried savers have descended on three banks to withdraw funds amid rumors of cash shortages that were later dismissed as false. Over the weekend, customers rushed to a bank in the northern Hebei province to take out money, prompting local regulators to publicly vouch for the soundness of its lenders as the police halted the run.
Confidence in (communist China's) $43 trillion banking system is eroding among the nation's more than one billion account holders, threatening a cornerstone of China's rise into an economic powerhouse. After several bailouts and the first bank seizure in more than two decades last year, the Covid-19 outbreak and its economic fallout have exacerbated an already-shaky situation in the world's largest banking system...
The China Banking and Insurance Regulatory Commission (CBIRC) last Saturday again warned that lenders were facing a surge in bad debt as the economy sputters at its slowest pace in four decades.
While stopgap measures, which have included rolling over debt and delaying loan payments, have limited an immediate surge in bad debt, the regulator said the fundamental issues of poorly managed banks and the deteriorating ability of companies and individuals to repay loans are still far from solved...
Small banks are facing a US$349 billion shortfall in capital, according to an analysis by UBS Group AG... the regulator said the shortfall could mean slower profit growth or even sliding profits at some institutions.
Corporate bonds are also suffering, adding further pressure on banks. About 80 billion yuan worth of Chinese bonds defaulted on and offshore so far this year, the most in at least three years, according to Bloomberg...
(Excerpt) Read more at theedgemarkets.com ...
Bank runs are starting to occur. Lots of banks there can not cover their debts to depositors - this is likely the start of a long process (years) of many small and rural banks collapsing into Government receivership.
This long expected banking crisis, is only one of the likely economic crises heading for the communist Chinese economy - the biggest bubble in human history.
The loss of the convertibility of the Hong Kong Dollar (now under near term consideration, because of the new Security Law), is probably going to shockingly choke the flow of hard currencies (like US Dollars, Euros and Yen) that the ChiComs need to buy all the imports they rely on (food, fuel, minerals). It could potentially drain China's foreign reserves trying to keep the HK Dollar pegged to the US Dollar.
Kind of a perfect storm is possible, where the economy collapses due to COVID, the trade war and everybody stampeding to pull supply chains out of China; the banks collapse under bad debts, asset bubbles in real estate and stock markets burst, and the Chinese currency collapses.
The CCP might be able to drag this out into slow motion (a lost decade or two), but it is looking like the party may be coming to an end (Pun intended), but it might well happen in sudden moves at some point.
When one of Hemmingway's characters was asked how they went bankrupt, they quotably answered something like: Slowly over a long period of time, and then suddenly. That is kind of how it happens.
Kyle Bass @Jkylebass Jul 15
China’s bank runs have begun. At precisely the time when Chinese banks need any and all cash flow to pay for severe loan losses, the State Council demands 1.5 trillion rmb (75% of 2019 profits!) from banks to “help the economy”.
Kyle Bass @Jkylebass Jul 15
These bank runs are happening for logical reasons: 1. Many rural Chinese banks are insolvent and begging Beijing for money, 2. Chinese regulator is warning of sharp rise in bad loans and capital shortages, 3. Regulator is limiting withdrawals of “large amounts” adding panic
Maybe, but just now I searched Google News for Chinese-language media worldwide, using the Chinese term for “bank run.” There were no stories after 6/23, and all the ones that appeared were from the Falun Gong website The Epoch Times.
Thousands stormed into the banks, and they've got the chinks to show for it.
Christopher Marlowe in "Shakespeare in Love"
“Starting in July 2015, Bass made a multiyear bet against the Chinese yuan based on a predicted banking collapse in China. Bass closed out his position against the Chinese currency in early 2019 when the predicted devaluation of the currency did not occur.
Bass argued in 2015 that the Chinese banking system was undercapitalized and its foreign reserves would be insufficient in a crisis. Bass predicted a hard landing for the Chinese economy following a bank crisis and a severe devaluation of the Chinese currency, variously given as "somewhere between 15%-20%" and "30 to 40 percent".[43][44] Hayman suffered its worst year in 2017 with a loss of 19% due to the strengthening of the Chinese yuan.”
He sounds like another Gordon Chang, always predicting imminent Chinese collapse.
Socialism with Chinese Characteristics don’t work.
Bank runs... coming to America this fall when no more stimulus comes
The corrupt media is already hyping coin shortages....
“He sounds like another Gordon Chang, always predicting imminent Chinese collapse.”
He did come in early a bit early with his bet, but this bubble grew beyond any before, so it wasn’t unreasonable. His timing was just moderately off.
Now the US President is dropping the hammer, to push that house of cards over.
I follow Bass, he is one of the few I do.
But he does, frankly, seem to be a bit bearish on China.
Not that I’m saying he’s wrong. I agree with the guy.
But I don’t think he is unbiased, about China, is all.
:)
China has a coal reserve that can last 48 hours. Then there’s ghost cities. And the big dam that’s at capacity. And oh yeah they killed a generation of women.
And, pity, their whole system is corrupt from the chairman all the way down to the soldier shooting drug dealers in the head.
Maybe the new secret weapon against Commie China is.....
“I want to withdraw my account balance”....
https://www.freerepublic.com/focus/f-news/3865646/posts
The US is now considering kicking the struts out from under the ChiCom Ponzi scheme, by cutting their relatively limited, but highly critical, flow of US dollars (real money). This is not a spur of the moment consideration - it has long been viewed as their Achilles Heel, that would be the economic “nuclear option” to scuttle their economy/finances. Now it seems to be coming, as part of the reaction against China’s repression in Hong Kong.
They have a huge Potemkin Village economy, in their local Monopoly Money currency, that they have inflated with the largest money printing spree in human history. Then they have another economy, based on real money (hard currencies like US Dollars, Euros and Yen), with which they must buy their real commodities from outside of China.
Saudis don’t want Renminbi for their oil, Australians don’t want it for their Iron, Americans and Argentinians don’t wan’t it for their grain. China needs hard currency to settle shipments at their ports.
They have a trillion dollars in reserve, but that is also their buffer to defend the value of their currency, prop up their domestic stock markets, and operate most of their overseas Belt and Road Initiative Projects. When the real money gets scarce, real things start to break down, that the communist Government can’t just command.
“I don’t think he is unbiased, about China”
Clearly, he is vehemently anti-communist - which is to his great credit.
Beyond that however, he is also a hard-nosed numbers guy, who backs up his positions with data. The data on China’s debt load, bad debt load, money printing spree, and the extent of fraud in their finances is truly epic.
Math will have its day.
Kyle Bass has been great about pointing out these hard number trends, while most were lulled into thinking it was different this time - centrally controlled China could endlessly manipulate all the levers they controlled, to print money and pile up debt to infinity, and beyond.
This is a once in a generation realignment that is occurring, with the USA (Japan, India, the UK and EU) largely decoupling from China - pulling supply chains out much quicker than we all went in. Drop that bomb, along with the COVID shock, into their dramatically overstretched financial situation (while they have also tipped into structural demographic decline); and it would take a miracle to not have a major readjustment.
It is really a matter of when, rather than if - and that is something that just none of us (including Kyle Bass) could predict exactly.
“I don’t think he is unbiased, about China”
Clearly, he is vehemently anti-communist - which is to his great credit.
Beyond that however, he is also a hard-nosed numbers guy, who backs up his positions with data. The data on China’s debt load, bad debt load, money printing spree, and the extent of fraud in their finances is truly epic.
Math will have its day.
Kyle Bass has been great about pointing out these hard number trends, while most were lulled into thinking it was different this time - centrally controlled China could endlessly manipulate all the levers they controlled, to print money and pile up debt to infinity, and beyond.
This is a once in a generation realignment that is occurring, with the USA (Japan, India, the UK and EU) largely decoupling from China - pulling supply chains out much quicker than we all went in. Drop that bomb, along with the COVID shock, into their dramatically overstretched financial situation (while they have also tipped into structural demographic decline); and it would take a miracle to not have a major readjustment.
It is really a matter of when, rather than if - and that is something that just none of us (including Kyle Bass) could predict exactly.
China has in the past declared that financial security is national security. The Shanghai stock market crashed in 2015 and the police not understanding the ups and downs of stock arrested lots of people.
Now, with runs on banks if China can’t fix the problem then you will probably see people being arrested and charged with national security crimes.
“with runs on banks if China can’t fix the problem then you will probably see people being arrested and charged with national security crimes.”
Reportedly, the runs were ended on individual banks, by the police making arrests (I did not see what charges they used). They just force people to do as they are told.
l8r
There are posters here that will call yo a “Communist sympathizers” if you criticize The Epoch Times. They think it is more reliable than The Bible.
> “Maybe, but just now I searched Google News for Chinese-language media worldwide, using the Chinese term for “bank run.” There were no stories after 6/23”
No offense, but you seem completely unaware of the fact that the CCP had infiltrated almost all Chinese-language media worldwide, except for a few such as the Epoch Times you mentioned, and Apple Daily in Hong Kong, which has been operating at a loss because businesses are pressured not to place ads with them.
It just occurred to me that a move to all digital money would end bank runs and maybe banks. The government would become the Bank and one’s assets would be entirely at the mercy of the mercy of the government.
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