Faber News Flow

Update (1015ET) : US futures are giving back their kneejerk gains as the penny starts to drop that this is  not the euphoric 'all clear' after all. As we detailed below - and traders are starting to realize -   Beijing may have just found a brilliant solution to the Evergrande problem , effectively rescuing the company and averting a systemic crisis all at the same time: it will pay local bondholders and soft nationalize/bailout Evergrande, but  will avoid allegations of backsliding on tightening/deleveraging promises and improving "common prosperity" by stuffing foreign creditors . And that is not what the market wants to hear... Chinese stocks are fading back too (after reopening from the holiday)... The question is - will Beijing use this as a strawman to judge the impact of such a restructuring strategy? And what will be the impact on the foreign dollar bond market after this? We suspect Larry Fink wishes he had listened to George Soros now. *  *  * US equity futu...

After two anxiety-filled days during which China was on holiday and traders hammered Hong Kong trader property stocks, contagion fears arising from China Evergrande Group's debt crisis moderated overnight with mainland stocks declining less than expected on Wednesday as they resumed trading, after Evergrande's onshore unit unveiled vaguely worded plans to pay interest due Thursday on a yuan bond, while leaving the fate of a $83.5 million offshore bond coupon payment in limbo. As we noted earlier, in its filing to the Shenzhen Stock Exchange, the Evergrande unit said that it reached an agreement with yuan bondholders on an interest payment due Sept. 23. It, "has been resolved via negotiations off the clearing house," but didn't specify how much or when it will pay the 232m yuan coupon at stake. The language is potentially ominous because under normal circumstances, Chinese bond issuers would simply transfer money to a clearing house to complete payments. The "...

"If that's true, we are very close to the China Syndrome " Evergrande's imminent default is rocking markets – but few believe the collapse of a Chinese property developer could trigger a global financial crisis. What if Evergrande is just a symptom of a deeper malaise within the Chinese economy and its political/business structures? Maybe there is more at stake than we realise? What if Emperor Xi decides he needs a distraction? Amid this week's market turbulence, and the overnight headlines, Evergrande dominates thinking this morning. The early headlines say the risk is "easing". Don't be fooled. S&P are on the wires saying it's on the brink of default and is unlikely to get govt support. It's Asia's largest junk-bond issuer.  Anyone for the last few choc-ices then? The market view on the coming Evergrande " event " is mixed.  Some analysts are dismissing it as an internal " China event ", others reckon there may b...

Few were surprised to see that the crash in Evergrande dragged down property names (one among  then, Sinic Holdings),  crashed 87% in minutes and was halted), banks exposed to the property developer (according to report there are over 120), with the contagion spreading to commodities directly linked to China's property sector (such as Iron Ore which plunged 10%), as well as FX of commodity-heavy countries, one ominous decline was that of Asia Pacific's largest insurer, Ping An (whose name literally and unironically means " safe and well" ), which dropped 3%, following a 5% drop on Friday, and hitting a four year low on concerns about its property exposure. The selling took place  even though the company issued a statement Friday saying that its insurance funds have "zero exposure" to Evergrande and other real estate companies "that the market has been paying attention to."  Real estate accounts for about 4.9% of Ping An Insurance's investments,...

There are some things that bring joy to my soul. My pleasures are simple ones. Peanut butter on toast (the food of gods), witnessing Macron getting a slap, and this… The awesome thing here is that what is taking place is that our competition on bidding for coal assets has disappeared in a cloud of woke smoke. This will quickly become geopolitical, and the question is this:  can BlackRock, Citi, Prudential, HSBC, and their other woke mates decide the fate of nations? They are already affecting  the fate of nations . Witness Canada and all of Western Europe. I found a live shot of their respective energy policies: But will they do the same to China? Will they do the same to Russia? The answer to that will only be fully revealed in the due course of time, but we don't really need any crystal balls here as we just watch actions, not words. "China put 38.4 gigawatts (GW) of new coal-fired power capacity into operation in 2020, according to new international research, more than thre...