Last summer, China unleashed an unprecedented array of measures - up to and including the arrest of "malicious short sellers" and prominent hedge fund mangers - to prevent its stock market bubble from bursting. It failed. A few months later, the chaos has spilled over from the relative containment of the capital markets and has engulfed not only the country's FX reserves, and capital account, but also the entire economy.
It should surprise nobody that when it comes to perpetuating the global central bank "put", China - which is at daily danger of having its house of trillions in non-performing loan card collapse at any moment - has perfected moral hazard better than any western central banker. However, even the staunchest cynics will be stunned by the latest development out of the Shanghai government where starting next month, venture capital firms which invested in high-tech startups since the beginning of 2015 can apply for government compensation if their investment loses money.
"We're gonna need a bigger Bullard"
- overheard on a trading desk this morning.
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China Flexes Muscles At Shanghai Gold Exchange
Written by Jeff Nielson (CLICK FOR ORIGINAL)
On Tuesday, we weren’t surprised to learn that some banks in Shanghai and Beijing were apparently running short of physical dollar bills.
According to Ming Pao, Shanghai residents were lined up at local banks in a frantic effort to sell RMB for USD amid China’s ongoing yuan deval.