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baufinanciaphaster 👹 Profile picture
@bauhiniacapital
Aug 19, 2021 • 6 tweets • 2 min read • Read on X
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I’ll see your chug-a-lug tug @MrMacroMarkets and raise you a bustling HK waterfront.
And…. There’s my ride!
Victoria Harbour, crepuscule.
Oops. Slightly *less* panoramic.
HK is lit.
And in moving colour…

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More from @bauhiniacapital

baufinanciaphaster 👹 Profile picture
Apr 30
Yowza. Looks like Japan's intervention was larger than I thought it was.

Am guessing ¥5.5-6.0trln based on the Forecast BOJ Current Account Changes "Financial Factors" change for May 1.

That's $35-38bn.
I'd expect they'd be "comfortable" selling twice that again, without problem. If Korea and US joined in, one could expect another $50-100bn total selling as well.

As previously noted, this fiscal year (ending 31Mar25) is also the year of the quinquennial policy mix review.
Currently, the mix is basically 50/50 for yen and FX assets (unhedged) and that was based on a set of expectations/assumptions from 5yrs ago which favoured USD. IF they adjust those assumptions to normalise them, you'd probably get a midpoint closer to 40-45% FX and 55-60% yen.
Read 8 tweets
baufinanciaphaster 👹 Profile picture
Apr 26
A couple of points on USDJPY:

1) The MOF (officially, the Vice Minister of Finance for international Affairs) is the one who decides. The BOJ is the execution desk, not the decision-maker.

2) Gov Ueda can guide policy to react to market conditions if necessary, but will not
be a/the deciding factor on yen intervention

3) The MOF is sitting on big gains from the intervention in the 2010-2012 period. What they sold in Sep 2022 and what they would be selling now would likely be (as far as the bureaucratic memory is concerned) "taking profits" rather
than "dipping into reserves" to support the yen.

4) The MOF cares more about speculative impulse and speed of move than actual level. They aren't dumb. There is institutional memory. They recognise when trade flows, portfolio flows, and real interest rate differentials impact
Read 23 tweets
baufinanciaphaster 👹 Profile picture
Mar 22
I've been trying to get my head around this shocker because it opens a couple of weird cans of worms.

First, US$78bn of inflated revenues was something like 53% of reported revenues in 2019-2020. If those were false, then 2018 has to be in question (2019 gain was only +2.4%yoy
but 2018 was +49.9% vs previous year, and that is not in question?

The other part here is that PwC's onshore entity was the one auditing the books of the onshore Hengda entity. To screw up that amount of revenue across 1,000+ project companies meant that the audits of an
enormous number of project companies also had to be false. And those projects would have reported revenues and profits to local authorities as they booked the sales because the local authorities then take the contracted sale, observe the money in the escrow account, the process
Read 17 tweets
baufinanciaphaster 👹 Profile picture
Mar 16
The CSRC admonition to companies to pay higher dividends and/or buy back stock became really visible in English when China Telecom and China Mobile listed A-Shares and in their prospectuses they had nearly identical sections and clauses about returning capital to
shareholders and how their company, in different stages of its corporate lifecycle, would be expected to have a payout ratio of X, Y, or Z. That was academic for them because they were in Z meaning much higher div payout ratio to come, but key was that the language was identical
because the CSRC wanted it there.

There was a really interesting development recently. On 25 Jan 2024, there was an article in the China Securities Journal about a presentation by Xie Xiaobing, head of the Property Rights Management Bureau of the central (State Council) SASAC
Read 8 tweets
baufinanciaphaster 👹 Profile picture
Mar 11
Reading that Memo which is "NOT the official Prospectus or OM and shouldn’t be relied upon as official material for the upcoming macro fund"...

30-40 trades a year, half making money, half losing money, 15% fund target return at 10-12% annualised vol because either the ex-ante
trade distribution is truncated (there's a chart) because of great trade identification and top-notch portfolio construction OR ex-post because portfolio management and trading is top-notch.

Assuming each trade lasts 3-6mos = one has 7-20 trades on at any given time.
As few as 2 trades on if a 6wk horizon. Assuming a 10-12% portfolio volatility means using options (i.e. way lower than 50% daily win rate) to skew trade return distribution (and skew is assumed good, because Good Alpha), resulting in high Dollar Win vs Loss ratio (matching the
Read 10 tweets
baufinanciaphaster 👹 Profile picture
Feb 10
Nope.

"International bondholders just got wiped out for the benefit of domestic creditors - CCP policy!"

WRONG

"The lesson: Apportioning losses between domestic creditors and foreign creditors will be political, ie. domestic creditors outrank international creditors.

WRONG
This is not new. It has been known by any foreign bondholder who bought the bonds in the last decade. The bond offerings often provided org charts. There's one in the thread below.

Put simply (highly simply), offshore bondholders lent money to a company (Evergrande (3333 HK)) which owned a 60% stake in another company onshore. Image
Read 18 tweets

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