Letters (e-mails) from Beijing

A good friend of ours – and one smart dude – who works for a very large asset manager was in Beijing this past week kicking the tires and meeting with locals to discuss markets and the economy.   Here is part of the e-mail he sent to us over the weekend,

China is going to blow. It is just a ? of when.

Record liquidity injection is because of rolling bad loans made as part of stimulus. Receivables and payables are rising and liquidity is gridlocked.

Govt will not let banks write down bad debt and has to inject liquidity. Repo rates 20% on Shanghai stock exchange so some are selling stocks to do repo. Heads up.

Swan alert!  Keep it on your radar, folks.

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2 Responses to Letters (e-mails) from Beijing

  1. Art Spinner says:

    Ask Debra if she has an off the record opinion.

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