There wasn’t a whole lot that made sense about iron ore’s price surge through August. In the flipside of what is believed also to be moving copper, Chinese authorities have made it plain that they will take pollution control seriously this winter. For copper, that likely means shutting down mine production, tightening supplies, and could therefore be price positive, perhaps [...]
The world of eurodollars is always going to be hidden. What goes on, really goes on, often sees no light of day. The most basic financing transactions are typically bilateral, meaning that the only people who really know the terms and the reasons are the two counterparties engaged. That is also true if one of those counterparties just happens to [...]
People often ask why I care so much about China. In some ways the answer is obvious, meaning that China is the world’s second largest economy (the largest under certain methods of measurement). Therefore, marginal changes in the Chinese economy are important to understanding our own global situation. But it goes much deeper than that. I have described my own [...]
November was the month where global bonds, particularly sovereign bonds, were routed in synchronized liquidation. As such, we would expect to find among various data sources evidence to suggest a monetary “dollar” background consistent with that fact. What that has meant in the months (and last several years) leading up to it was the foreign official sector in overdrive “selling [...]
The Chinese have been undergoing quite a bit of stress lately, with markets including stocks more likely to be in turmoil than not. In fixed income, the Finance Ministry was slightly shaken by a failed auction today, its first since summer 2015. Yesterday, government bond futures trading had to be suspended when the 10s and 5s experienced their largest drop [...]
Rumors persisted in China of new foreign currency restrictions from state authorities now trying to crack down on corporate activity. The story was picked up in many news outlets all over the world, but will remain unconfirmed as it is based on reports from the South China Morning Post and others inside the country that have only claimed to have [...]
Speculators are a curious bunch, not in what they do or how they do it but more so in how and really when they attain notice. When the SEC in July 2008 banned naked short selling of GSE and primary dealer stocks, they were the obvious enemy creating “unnecessary” trouble that was amplifying what was supposed to be in the [...]
China’s government or the PBOC moved to suspend three foreign banks from participating in cross-border currency transactions. From what I have seen, and nothing has been confirmed, rumors have suggested that Deutsche Bank was one of the three. The move has, as usual, created all manner of confusion in how to frame what the PBOC or Chinese regulators might be [...]
Not long ago, I wrote that it was somewhat odd that more attention wasn’t being paid to sovereign wealth funds. This was only somewhat surprising given that oil prices were still thought “transitory” and thus the mainstream clearly felt there wasn’t anything deeper to be assembled from that. However, now that it has finally dawned that oil isn’t likely to [...]
On November 2, Hong Kong’s Exchange Fund reported its worst ever quarterly loss. For the quarter the number was an astonishing -HK$63.8 billion, turning what was an already-reduced YTD profit from Q2 into a –HK$36.8 billion loss so far for 2015. What caught most people’s attention was not specifically the loss but that it was derived more so from “other [...]
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