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8 Oct, 4 tweets, 1 min read
🚨🚨Video of protests at Ping An Bank as of yesterday where police were called. Apparently being censored locally. Details unclear at this point, but could be related to developer Sichuan Languang ...
Things are getting hotter. Meanwhile smaller than expected liquidity injection in the first and the Global Times is making it absolutely clear it intends to pop the bubble.
Sichuan Languang details as of a couple weeks ago here:
From reports: These are homebuyers whose deposits for apartments with Sichuan Languang were used to repay debt owed by the developer to Ping An.

Demonstrates the difficult choices to come...

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More from @TheLastBearSta1

TheLastBearStanding Profile picture
6 Oct
China Credit Update - Mini Thread (10/6/21) 👇👇
2. #Evergrande made headlines in the US two weeks ago when markets dropped 2%. But the slide was more likely due to gamma "unclenching" after a massive 9/17 options expiration. Since Evergrande has now been deemed "contained", attention has moved elsewhere.
3. The story was never #Evergrande. The story is a decade of unsustainable, unproductive debt fueled growth that is key to Chinese economic growth, holds the countries wealth, and is at risk of imploding as Beijing breaks the implicit debt backstop.

Read 11 tweets
TheLastBearStanding Profile picture
4 Oct
🚨The Volatility Squeeze: TLDR Twitter Thread👇👇
2. Volatility is a financial product, complete with ever-growing chain of derivatives and structured products. Each stage magnifies leverage and exposure. There are also indirect connections that amplify these movements (dealer hedging, risk parity funds, etc.)
3. Volatility is subject to short squeezes given its unlimited downside. Structured products and derivatives can amplify these moves. The first volatility squeeze occurred on "Volamageddon". Short Vol products were wiped in a day.
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TheLastBearStanding Profile picture
27 Sep
🚨🚨Banks in Theory and Practice (9/27/21)👇👇
THEORY: Banks play a crucial role in a country's economy. They take money that is not currently being used and lend it to others. Through extending credit, they are allocating resources, but importantly they are also responsible for assessing the value of capital they have lent.
3. Example: a bank lends $100, and that money is used by the borrower to generate value, that ensures the bank is repaid $100 with interest. But that doesn't always happen. Its up to the bank to constantly reassess the value of that loan and the likelihood they will be repaid.
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TheLastBearStanding Profile picture
22 Sep
🚨🚨 The Argument for a Bank Crisis (9/22/21) 👇👇

If contagion in the property sector spreads, and the sector continues its rapid contraction, a Chinese banking crisis is *IMO* is a significant risk if not a probability.
2. The belief that banks are not at risk ignores both huge direct and indirect property exposure as well as the direct warnings of Chinese regulators. Its rooted in the belief of power and desires of central intervention; the same faith that incorrectly assumed an EG bailout.
3. Setting the backdrop, on 12/31/20 Chinese regulators directed domestic banks to limit their property exposure to 40% of their total loan book in order to head off systemic risk, and provided them four years to comply. spglobal.com/marketintellig…
Read 23 tweets
TheLastBearStanding Profile picture
15 Sep
🚨🚨 China Credit - Writing on the Wall - and How to Trade It. (9/15/21)👇👇
2. In June, I described contagion in the Chinese credit as a tail risk - not necessarily a probability, a significant risk that was being underpriced. But now the fuse has been lit and no one is stamping it out. The collapse of the property sector is now a probability.
3. (If you're newer to the saga, I'd encourage you to read this master thread below thread in sequence as it provides necessary pretext. If you're up to date, then jump right in.)
Read 27 tweets
TheLastBearStanding Profile picture
10 Sep
This relates to EG's wealth management product ("WMP") of which 99% of employees are invested in (they are protesting). Some top brass left and were paid out before payments halted. WMPs are a huge funding source for developers. Citizens (who buy apts) are creditors. Disaster.
2. WMPs, which are funded by citizen's savings, totaled $1 TRILLION dollars according to BBG, and regulators are cracking down. bloomberg.com/news/articles/…
3. Reported: Staff of Shenzhen Financial Bureau: “We are not sure if Evergrande Wealth belongs to the Financial Bureau, the China Banking Regulatory Commission, or the People’s Bank of China. It is currently not on our P2P list.”
Read 4 tweets

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