The Briefing Room

General Category => Economy/Business => Topic started by: catfish1957 on November 23, 2020, 10:39:32 PM

Title: <Some> AAA-Rated Bonds Are Tumbling as China Default Fears Spread
Post by: catfish1957 on November 23, 2020, 10:39:32 PM
(https://s3media.freemalaysiatoday.com/wp-content/uploads/2017/11/china8.jpg)

https://www.newsmax.com/finance/streettalk/aaa-rated-bonds-tumbling-china/2020/11/23/id/998448/ (https://www.newsmax.com/finance/streettalk/aaa-rated-bonds-tumbling-china/2020/11/23/id/998448/)

<snipit>
A string of defaults by Chinese state-owned companies has sent shockwaves across the world’s second-largest credit market.

But some bonds have fared much worse than others as investors clamber to avoid the next potential blowup. Among the most notable losers: notes issued by Pingdingshan Tianan Coal Mining Co., Jizhong Energy Group Co., Tianjin TEDA Investment Holding Co. and Yunnan Health & Culture Tourism Holding Group.

While none of the companies have missed debt payments, and all four are rated AAA by Chinese domestic ratings firms, their bonds have tumbled by at least 14% since Nov. 10. That’s when a surprise default by a state-owned Chinese coal producer cast fresh doubt on the implicit guarantees that have long underpinned government-backed borrowers.
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I am admittedly not knowledegable of specifics of China's economy right now, but we do need to keep a weary eye on this story to see what China does to shore up some of their supposed prime lending instruments.  This could turn into a Chicom sponsored shell game where, capital is moved out of foreign bonds (specifally U.S Treasuries) At last glance China own $1.1T of our debt.  Be aware that these events sometimes have a dominoing effect. Especially when they rock the world's second largest economy.



Title: Re: <Some> AAA-Rated Bonds Are Tumbling as China Default Fears Spread
Post by: DB on November 23, 2020, 11:10:13 PM
So is the 2021 storm just starting to get wound up?
Title: Re: <Some> AAA-Rated Bonds Are Tumbling as China Default Fears Spread
Post by: catfish1957 on November 23, 2020, 11:51:13 PM
So is the 2021 storm just starting to get wound up?

Great question.  Hopefully, this game of economic chicken they have been playing with us the past 5 or so years is starting to catch up with them, and just be some harbringer of the understanding you can't unload your cheap junk at cost on the world's market forerver, without some circumstances. Trump's tough play was working, and sadly we may not see the plan work to fruitiion.

I do know that a Biden presidency is going to be very pro-Chicom, and anti-US business.
Title: Re: <Some> AAA-Rated Bonds Are Tumbling as China Default Fears Spread
Post by: catfish1957 on November 25, 2020, 12:46:16 PM
Just a bump of a topic to remind everyone how close Trump came to bringing the Chicoms to their knees. 

If Biden takes the reins January 20th, we revert back to slaves of our Chinese Economic Overlords.  Makes me want to puke.
Title: Re: <Some> AAA-Rated Bonds Are Tumbling as China Default Fears Spread
Post by: DB on November 25, 2020, 09:42:17 PM
Just a bump of a topic to remind everyone how close Trump came to bringing the Chicoms to their knees. 

If Biden takes the reins January 20th, we revert back to slaves of our Chinese Economic Overlords.  Makes me want to puke.

It isn't over yet.
Title: Re: <Some> AAA-Rated Bonds Are Tumbling as China Default Fears Spread
Post by: IsailedawayfromFR on November 26, 2020, 01:12:51 PM
It isn't over yet.
I agree. Sure doesn't feel over when I woke up and read the news this Thanksgiving day.