Read on Twitter
While most of the people on my twitter feed are all about the next 5-10pts in ES and vanna/charm/gamma squeeze (or anything else which is the flavor of the month), very few look at a pretty big thing that can (and should) be alarming - China shadow banking
This "little" problem is something that unlike other crises, is an ongoing bubble-like train wrack that the CCP has to carefully deflate, so every few months they deleverage a bit more.
In 2015 they had to deleverage their stock market after a boom of margin retail accounts
In 2015 they had to deleverage their stock market after a boom of margin retail accounts
that sent their stocks to the moon (think today& #39;s US market on steroids). After that they had to devalue their currency, which global markets really didn& #39;t like.
After that they kept on letting thousands of companies to under in a controlled way, and occasionally drained
After that they kept on letting thousands of companies to under in a controlled way, and occasionally drained
the market (causing funding squeeze in CNH).
The last round of china deleveraging took a pretty heavy toll in the shape of Archegos Capital (for those who wonder how come this happens in a time when the US market is rallying).
The last round of china deleveraging took a pretty heavy toll in the shape of Archegos Capital (for those who wonder how come this happens in a time when the US market is rallying).
So why is all this should be interesting to us? I think that historically speaking, when sht hits the fan in the Asian market they tend to escalate quickly once the market narrative changes (mainly because most people don& #39;t pay attention to Asian markets until things become ugly)
Worth keeping an eye on the Asia-Pacific region and the different markets to gauge the changes in the dynamic of the different markets (I would look at all different aspects - FX, Rates, Credit, and Equities)
Just my two cents.
Just my two cents.
