After the globally coordinated rescue package was announced Monday the Chinese stock markets boomed in sympathy with the rest of the world, with the SSE Composite closing up 3.6% for the day. Tuesday the SSE Composite shot up 3.5% within minutes of opening, but the party was already over in China. Over the rest of …
Read More…Category: Bank run
Holiday thoughts on misunderstanding data
We’re starting the holiday week – October 1 is the anniversary of the 1949 revolution – so markets were closed today and will be closed for the rest of the week, and there’s a pretty good chance not a whole lot will happen on the policy front until the end of the holiday schedule. Much …
Read More…Bank run in Hong Kong
What was supposed to be largely a US financial crisis seems to be spreading even further. This might come as both a surprise and an annoyance to those who believe that the cause of the crisis was specific mistakes made by US bankers and regulators, but much less of a surprise to those who assume …
Read More…Worrying about the banking system
While Monday’s stock market, led by the banks, continued Friday’s big bounce back, rising 7.8% to add to Friday’s 9.5% surge, leaving us at a 2-week high (largely on buyback talk, I think), worries about the banking sector actually seemed to be deepening. Today, perhaps in response, the stock market was a lot more confused, …
Read More…Cap on bank deposit withdrawals in Shenzhen
Finally we have a piece of somewhat good news. Industrial production was up only 17.9% year on year in October, down substantially from September’s 18.9% year-on-year rise. Not only is this well below last month’s number, it is also well below expectations, which were for an 18.3-18.5% rise. But we shouldn’t get too excited …
Read More…Financial instability in China
I get a lot of emails and phone calls asking me what I think is the likelihood of a sharp financial “adjustment” in China, and what the impacts are likely to be. The first point to make is that it is a safe bet that China will experience financial instability, and not necessarily because …
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