Bill’s Commentary:
“Credit turns negative on top of the most over levered global financial system and real economy in all of history? This truly means something big, we will shortly see the fallout. On a separate note, maybe China (and the world) is buying gold, not as a hedge against Dollar inflation but versus Chinese deflation? Naw, it’s both!”
China’s Broadest Credit Metric Just Turned Negative For The First Time Since 2005
China has lots of economic problems (even if the market has been surprisingly generous in the past 4 months and allowed Chinese stocks to surge despite any actual economic rebound or recovery), but this is a new one.
It is hardly a secret that for much of the past 15 years, and certainly in the aftermath of the Lehman collapse, it was China’s unstoppable credit creation that lifted the world out of a deflationary shock time and again, and indeed it is a fact that as long as we can remember, China’s broadest credit aggregate, Total Social Financing, was always positive, come rain, blizzard, or shina.
Bill’s Commentary:
“WOW, a double whammy! Their money supply is contracting as well as new credit. How do you think this will end? And certainly, it won’t affect global financial markets nor the real economy, right?”
Pressure On China Heightens As Capital Outflow Chokes Liquidity
The latest money data from China shows its capital-outflow problem is worsening, pressuring policymakers to allow a further weakening in the currency.
China released money and inflation data over the weekend. CPI and PPI were not great reading, but money supply data was even more downbeat: M2’s growth disappointed, while M1 growth is moldering, falling 1.4% year-on-year versus +1.2% expected.
Bill’s Commentary:
“Deflation of the things you have …”
Delinquencies on Office Property Loans at Banks Are at 8 Percent While Office Loans the Banks Sold to Investors Show 31 Percent in Trouble
Just how much pain is being felt in the CMBS market related to office properties was further quantified on May 3 when Scott Carpenter reported the following at Bloomberg Law:
“About $52 billion, or 31%, of all office loans in commercial mortgage bonds were in trouble in March, according to KBRA Analytics.
“That share is up from 16% a year ago, according to the firm. Some cities have bigger headaches than others, with Chicago and Denver offices having 75% and 65% in jeopardy, respectively.”
Bill’s Commentary:
“More real estate death”
Iconic Trump Hotel DC Struggles Under New Owners, Foreclosure Auction Next Month.
One of Washington D.C.’s most iconic buildings, located just blocks from the White House, is set to be sold at a foreclosure auction next month. The Waldorf Astoria, formerly the Trump International Hotel at the Old Post Office, is at the center of financial turmoil with its new owners struggling to turn a profit like Trump did.
BillHolter.com 