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Nathaniel Taplin
@nate_taplin
, 4 tweets, 2 min read Read on Twitter
(1) China's gummed-up monetary policy transmission in 3 charts.

If they can't fix this, outlook for 2019 is pretty bad.

#PBOC cuts to banks' reserve requirement ratio (RRR) successfully pushes financial system liquidity back higher...
(2) ...but shadow banking crackdown means very little of this is making it into real lending, unlike in previous easing cycles

wsj.com/articles/china…
(3) ...instead, all that liquidity pumps up bubbles in high-rated bonds and property, while borrowing costs for most companies remain very high

wsj.com/articles/china…
(4) Small boosts to bank capital will help. on.wsj.com/2sPwzWh

But hard to see how can be resolved without (a) letting up on shadow banking or (b) "flood-type stimulus" pushing SOE/sovereign yields so low that banks have to start pushing rates on real loans down sharply
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