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Oct 4, 2017 Will China Govt Ever Control their Lending?

October 4th, 2017

We are still closed for the China Holiday Week along with South Korea. The China Beige Book a few days ago showed that China Banks were still out there making loans at levels that the China Govt did not want. It also showed that Businesses had Copper Inventories without having a need for them (well besides securing additional loans in Shadow Markets to buy Bitcoin, Real Estate, etc). The Shanghai Futures had a large drop in Inventory over rumors of Import Limitations of Scrape coming up (that is China Govt’s way to really try and get some air out of this massive Bubble they have created with the help of all the other Central Banks. Of course Traders and Algos saw this as a “Blue Skies Global Growth Story” and is buying without any fear. There is still a 100% belief that the China Govt will back any bad loans and will add Stimulus ala 2009 and the Central Banks will do “Everything” if the markets start to turn. JNK is back up to the levels that we saw with Japan’s Abe massive stimulus in 2015. Today Yellen speaks and the official list of Fed Heads came out with the canidates we already discussed. Us Bears are becoming extinct. Is this what a market top feels like? I always think it can’t get worse, but it does. Futures are flat tonight.

Oct 2017