China

Last night, when previewing the most important macro event of the day - far more important than US retail sales which predictably tried to refute the gloomy reality reported by actual retailer CEOs - namely China's montly loan creation number, we said that "according to MarketNews, Chinese bank loan growth is expected to slow sharply in April compared with March as the pillar of bank lending, mortgage loans, slowed as the property market cooled." Citing bank officials, MNI said that combined new loans in April by the Big Four state-owned banks were more than halved from Mar

Well that de-escalated quickly...

As Reuters reports,

Chinese steel futures were on course for their biggest weekly fall since 2009 on Friday, as a selloff in the country's commodities showed signs of spreading to other global markets for raw materials such as palm oil and base metals.

 

After issuing a record $1 trillion in combined bank and shadow loans in the first quarter which just like during the financial crisis provided a short-term boost to global growth (while sending China's debt/GDP to all time highs)...

... China's dramatic debt issuance binge is about to hit a brick wall.

Following last week's Sohn Conference, where the overarching theme was one of prevailing bearishness topped by Stanley Druckenmiller's near-apocalyptic forecast that only gold will be left standing after all confidence evaporates in the "magic people" known as central bankers,  yesterday some 1,800 hedge fund industry executives gathered in Las Vegas at the SkyBridge Alternatives Conference or SALT, where the prevalent concern about the future of the world continued, driven primarily by worries about China.

With the frenzied speculation that drove levels and volumes in Chinese commodities off the charts having dawned on everyone from Cramer to Chinese Securities regulators as 'not real', it appears everyone is scrambling to not be the bagholder for this bubble as authorities crackdown on Chinese asset managers pooling retail investor funds, warning of the rise of "ponzi schemes." While nobody knows for sure how much of the trading surge has been driven by individuals, but the evidence suggests retail punters are playing a big role, and as Bloomberg reports, the average