Chinese swaps up 12% !!!

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
China has a huge manufacturing crisis, they just down graded the figures last Fri. Their debt has become overwhelming. Their insistence on epic and continuing QE is hurting the Yuan. They and Russia are now trading with other nations away from the dollar. China has been setting themselves up to back the Yuan with gold, 900 million ounces last year alone. Their dollar reserves are dwindling. The TBTJail banks are at war with them, and using the CDS will make loans more expensive.

I don't think the Chinese care. Normally when you see a huge spike in a sovereign CDS you would expect tat nation to fail. In this case it is quite the opposite.

It is part of the currency wars......although they do have somewhat of a debt and growth problem.


Australian PM to sign currency conversion deal with China during visit: reports - People's Daily Online

The US petro dollar is on its last legs.
 

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
There is one other option, and that would be a credit event. A US default. That would spike China's CDS.
 
Jan 2008
32,903
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Vertiform City
I found this (it was the only thing reasonably relevant that I could find, outside of the posts here): Bearish Swaps Signal Divides SocGen, Deutsche Bank: China Credit - Bloomberg
Actually, this is very interesting. And revealing.

What it tells me is the CDS activity is sucking all the headroom out of that market too!

Hence the "curve flattening" they're talking about.

Bottom line here: it is becoming quite apparent to me that we don't have a "liquidity" crisis.

What we have, is a headroom crisis.

Gotta think about this one for a while.
 

michaelr

Former Staff
Dec 2006
89,668
6,643
FEMA Region 10
Actually, this is very interesting. And revealing.

What it tells me is the CDS activity is sucking all the headroom out of that market too!

Hence the "curve flattening" they're talking about.

Bottom line here: it is becoming quite apparent to me that we don't have a "liquidity" crisis.

What we have, is a headroom crisis.

Gotta think about this one for a while.
We are a stone throw away from a bond crash. This might signal a US default.