5 ms·

China Halts Bank Cash Transfers

52 points by pmorici 13y ago

Alex3917 13y ago
This is why I'm starting to put money into Crypto. If there is some exploit and the whole thing drops to zero overnight then at least it affects everyone more or less equally, which seems better than Obama and his Goldman Sachs buddies deciding how much our dollars are worth on any given day.
- panarky 13y ago
  It's fun to talk about the value of the dollar being manipulated by dark forces, and to hear people talk you'd think the dollar must have lost a lot of value recently. Not really. In the last year, the US dollar actually increased in value 10% against the Canadian dollar, increased 12% against the Japanese yen, and increased 20% against the Australian dollar. It decreased 1% against the Euro, decreased 3% against the Swiss franc, and decreased 4% against the pound. In gold terms, the US dollar is 39% more valuable today than it was a year ago. I also put some money into crypto-currencies, though not because I fear the imminent collapse of the dollar. The dollar's value has been pretty stable even through the financial collapse. Dollars seem perfectly fine for transactions, though no currency is suitable as a store value for decades or generations.
  - Alex3917 13y ago
    The reason the dollar is increasing in value is because the stock market is increasing in value, and the reason the stock market is increasing in value is because it was previously decimated by a group of wall street insiders working together with government regulators to crash the economy.
    - TDL 13y ago
      Yes, because what the financial elite want the most is to crash economy. It's not like they have all their wealth tied up in financial assets that rely on a healthy economy to remain valuable...
  - retrogradeorbit 13y ago
    It's being manipulated, not by dark forces, but by sovereign nations in the open market. https://en.wikipedia.org/wiki/Currency_War_of_2009%E2%80%932011 https://en.wikipedia.org/wiki/Currency_War_of_2009%E2%80%932...
  - kolev 13y ago
    You really believe Bitcoin will survive decades?
    - panarky 13y ago
      I don't think any currency is a good store of wealth for decades or generations. Bitcoin doesn't have enough of a track record to make predictions about how long it will last. I bought Bitcoin and other crypto-currencies not as a long-term store of wealth, but for their other valuable qualities.
otoburb 13y ago
Growing up it used to be common to hear the refrain that when the USA sneezes, Canada catches a cold. This aphorism was meant to highlight Canada's heavy dependence on the USA back in the 70s and 80s. I am not in finance and don't appreciate nor understand the full implications or consequences of China's PBOC behaviour citing nationwide system shutdowns, but I feel that we could s/USA/China and then s/Canada/USA to get the same gist and sense of uneasiness.
- fredgrott 13y ago
  Basically, China props up its banking system just as the USA does.. The problem is they do not do it through normal banking reserve controls.. This is or might be the canary in the coal mine for the China banking system as Banking reserves should not have to be adjusted by removing access to cash as that indicates a bigger problem.. This could be related to some toxic assets on the China Banking system books
- panarky 13y ago
  I heard a slightly different version of that saying: "When the US sneezes, the rest of the world catches a cold." Funny how when the US credit rating was lowered, the prices of US Treasury bonds actually increased, and their yields fell. When US financial institutions went bankrupt, the value of US government securities went up. When the Federal Reserve printed money to buy bonds, the value of the dollar actually increased. And when the Federal Reserve stopped printing money to buy bonds, the value of the dollar still increased. Maybe the rumors of the death of America are premature, and maybe the old saying is still true.
fennecfoxen 13y ago
China's central bank makes Ben Bernanke look like a do-nothing.
jrockway 13y ago
So my choices here are to believe that it's: a) Some strange conspiracy that nobody understands. or b) A software bug. As a long-time user of software, I'm betting on option B.
- klawed 13y ago
  As writer of software, I'm also betting on option B.
austinz 13y ago
Gordon Chang is a professional China skeptic with a rather unimpressive track record. As he's a blogger on Forbes, you can check out his article history for a variety of predictions he's made in the past that haven't panned out, or the book he talks about in his profile.
- jsm386 13y ago
  Yes. via http://www.marketwatch.com/story/china-bank-transfer-halt-only-for-small-amounts-2014-01-26 http://www.marketwatch.com/story/china-bank-transfer-halt-on... "While banks in China have suspended some interbank transfers and other systems for several days, the move only covers some Internet transfers and those for small amounts, according to a statement on the People's Bank of China website. Meanwhile, state-run Beijing Times said customers can still conduct small-scale transfers via ATMs. On Sunday, Forbes contributor Gordon Chang, author of "The Coming Collapse of China," said that Citibank had halted bank transfers for three days, calling the move "ominous" for the Chinese banking system. However, the central bank had flagged the move earlier this month, saying the move was due to system maintenance and would occur once a month for the rest of the year."
blazespin 13y ago
No, There Is No Stoppage Of Cash Transfers In China snip… “Earlier today, Forbes managed to spook readers with a bombastic report that China’s commercial banks had been instructed by the PBOC to halt cash transfers – something which would have dire implications on China’s banking system ahead of its new year holiday, and send the banking system into a tailspin just as China is desperate to avoid all turbulence ahead of a potential shadow banking default. Leaving aside the fact that one should typically rely on official PBOC advisories, posted quite clearly on its website (where one finds no mention of this notice), one could simply keep track of interbank liquidity indicators such as repo and SHIBOR, both of which dropped, indicating that liquidity actually improved. Anyway, here is what really happened, as reported by China Compass. “Forbes columnist Gordon Chang claimed in a much-quoted item today that the Peoples Bank of China had instructed commercial banks to halt cash transfers. Chang’s column, entitled “China Halts Bank Transfers,” specifically refers to Citibank’s Chinese branches. The report is entirely misleading.” Our advice – focus on the real “weakest links” in China’s banking system, of which there are many and are backed by facts, not the least of which is the potential upcoming shadow banking default. Ignore groundless rumors and speculation. More from China Compass:” continue http://www.zerohedge.com/news/2014-01-26/no-there-no-stoppage-cash-transfers-china http://www.zerohedge.com/news/2014-01-26/no-there-no-stoppag...
- streetnigga 13y ago
  Citibank is singled out as a weak performer in China then eh? Weak to the point of bringing up the specter of default at least. Then again ZH didn't exactly link to China Compass as far as I can see, and ZH has a really shit track record overall so I give no benefit of the doubt for quotes.
  - cinquemb 13y ago
    Well forbes just pulled the article, so that should speak for itself whether or not people were burned by using ZH for trading tips or anything beyond intellectual masturbation/infotainment. Though this "maintenance period" coinciding with liquidity drying up in chinese markets naturally has people wondering if this can be the straw that brakes the camels back. But if it is, with all the tongue-in-cheek tones floating around on this, do people really think an event like that will be contained to just chinese markets? I can only think of the people behind the all cash real estate purchases in us markets thinking they need to now flip their recently acquired properties in order to cover a shortfall only to see that everyone else will be trying to do the same…
tokenadult 13y ago
CNBC reporting with quotations from various commentators about what is going on in China just now: http://www.cnbc.com/id/101364585 http://www.cnbc.com/id/101364585
teh_klev 13y ago
Original linked article appears to 404. Here's a link to archive.org's snapshot: https://web.archive.org/web/20140127024857/http://www.forbes.com/sites/gordonchang/2014/01/26/china-halts-bank-cash-transfers-2/ https://web.archive.org/web/20140127024857/http://www.forbes...

52 points by pmorici 13y ago

This is why I'm starting to put money into Crypto. If there is some exploit and the whole thing drops to zero overnight then at least it affects everyone more or less equally, which seems better than Obama and his Goldman Sachs buddies deciding how much our dollars are worth on any given day.

panarky 13y ago
It's fun to talk about the value of the dollar being manipulated by dark forces, and to hear people talk you'd think the dollar must have lost a lot of value recently. Not really. In the last year, the US dollar actually increased in value 10% against the Canadian dollar, increased 12% against the Japanese yen, and increased 20% against the Australian dollar. It decreased 1% against the Euro, decreased 3% against the Swiss franc, and decreased 4% against the pound. In gold terms, the US dollar is 39% more valuable today than it was a year ago. I also put some money into crypto-currencies, though not because I fear the imminent collapse of the dollar. The dollar's value has been pretty stable even through the financial collapse. Dollars seem perfectly fine for transactions, though no currency is suitable as a store value for decades or generations.
- Alex3917 13y ago
  The reason the dollar is increasing in value is because the stock market is increasing in value, and the reason the stock market is increasing in value is because it was previously decimated by a group of wall street insiders working together with government regulators to crash the economy.
  - TDL 13y ago
    Yes, because what the financial elite want the most is to crash economy. It's not like they have all their wealth tied up in financial assets that rely on a healthy economy to remain valuable...
- retrogradeorbit 13y ago
  It's being manipulated, not by dark forces, but by sovereign nations in the open market. https://en.wikipedia.org/wiki/Currency_War_of_2009%E2%80%932011 https://en.wikipedia.org/wiki/Currency_War_of_2009%E2%80%932...
- kolev 13y ago
  You really believe Bitcoin will survive decades?
  - panarky 13y ago
    I don't think any currency is a good store of wealth for decades or generations. Bitcoin doesn't have enough of a track record to make predictions about how long it will last. I bought Bitcoin and other crypto-currencies not as a long-term store of wealth, but for their other valuable qualities.

otoburb 13y ago

Growing up it used to be common to hear the refrain that when the USA sneezes, Canada catches a cold. This aphorism was meant to highlight Canada's heavy dependence on the USA back in the 70s and 80s. I am not in finance and don't appreciate nor understand the full implications or consequences of China's PBOC behaviour citing nationwide system shutdowns, but I feel that we could s/USA/China and then s/Canada/USA to get the same gist and sense of uneasiness.

fredgrott 13y ago
Basically, China props up its banking system just as the USA does.. The problem is they do not do it through normal banking reserve controls.. This is or might be the canary in the coal mine for the China banking system as Banking reserves should not have to be adjusted by removing access to cash as that indicates a bigger problem.. This could be related to some toxic assets on the China Banking system books
panarky 13y ago
I heard a slightly different version of that saying: "When the US sneezes, the rest of the world catches a cold." Funny how when the US credit rating was lowered, the prices of US Treasury bonds actually increased, and their yields fell. When US financial institutions went bankrupt, the value of US government securities went up. When the Federal Reserve printed money to buy bonds, the value of the dollar actually increased. And when the Federal Reserve stopped printing money to buy bonds, the value of the dollar still increased. Maybe the rumors of the death of America are premature, and maybe the old saying is still true.

fennecfoxen 13y ago

China's central bank makes Ben Bernanke look like a do-nothing.

jrockway 13y ago

So my choices here are to believe that it's: a) Some strange conspiracy that nobody understands. or b) A software bug. As a long-time user of software, I'm betting on option B.

klawed 13y ago
As writer of software, I'm also betting on option B.

austinz 13y ago

Gordon Chang is a professional China skeptic with a rather unimpressive track record. As he's a blogger on Forbes, you can check out his article history for a variety of predictions he's made in the past that haven't panned out, or the book he talks about in his profile.

jsm386 13y ago
Yes. via http://www.marketwatch.com/story/china-bank-transfer-halt-only-for-small-amounts-2014-01-26 http://www.marketwatch.com/story/china-bank-transfer-halt-on... "While banks in China have suspended some interbank transfers and other systems for several days, the move only covers some Internet transfers and those for small amounts, according to a statement on the People's Bank of China website. Meanwhile, state-run Beijing Times said customers can still conduct small-scale transfers via ATMs. On Sunday, Forbes contributor Gordon Chang, author of "The Coming Collapse of China," said that Citibank had halted bank transfers for three days, calling the move "ominous" for the Chinese banking system. However, the central bank had flagged the move earlier this month, saying the move was due to system maintenance and would occur once a month for the rest of the year."

blazespin 13y ago

No, There Is No Stoppage Of Cash Transfers In China snip… “Earlier today, Forbes managed to spook readers with a bombastic report that China’s commercial banks had been instructed by the PBOC to halt cash transfers – something which would have dire implications on China’s banking system ahead of its new year holiday, and send the banking system into a tailspin just as China is desperate to avoid all turbulence ahead of a potential shadow banking default. Leaving aside the fact that one should typically rely on official PBOC advisories, posted quite clearly on its website (where one finds no mention of this notice), one could simply keep track of interbank liquidity indicators such as repo and SHIBOR, both of which dropped, indicating that liquidity actually improved. Anyway, here is what really happened, as reported by China Compass. “Forbes columnist Gordon Chang claimed in a much-quoted item today that the Peoples Bank of China had instructed commercial banks to halt cash transfers. Chang’s column, entitled “China Halts Bank Transfers,” specifically refers to Citibank’s Chinese branches. The report is entirely misleading.” Our advice – focus on the real “weakest links” in China’s banking system, of which there are many and are backed by facts, not the least of which is the potential upcoming shadow banking default. Ignore groundless rumors and speculation. More from China Compass:” continue http://www.zerohedge.com/news/2014-01-26/no-there-no-stoppage-cash-transfers-china http://www.zerohedge.com/news/2014-01-26/no-there-no-stoppag...

streetnigga 13y ago
Citibank is singled out as a weak performer in China then eh? Weak to the point of bringing up the specter of default at least. Then again ZH didn't exactly link to China Compass as far as I can see, and ZH has a really shit track record overall so I give no benefit of the doubt for quotes.
- cinquemb 13y ago
  Well forbes just pulled the article, so that should speak for itself whether or not people were burned by using ZH for trading tips or anything beyond intellectual masturbation/infotainment. Though this "maintenance period" coinciding with liquidity drying up in chinese markets naturally has people wondering if this can be the straw that brakes the camels back. But if it is, with all the tongue-in-cheek tones floating around on this, do people really think an event like that will be contained to just chinese markets? I can only think of the people behind the all cash real estate purchases in us markets thinking they need to now flip their recently acquired properties in order to cover a shortfall only to see that everyone else will be trying to do the same…

tokenadult 13y ago

CNBC reporting with quotations from various commentators about what is going on in China just now: http://www.cnbc.com/id/101364585 http://www.cnbc.com/id/101364585

teh_klev 13y ago

Original linked article appears to 404. Here's a link to archive.org's snapshot: https://web.archive.org/web/20140127024857/http://www.forbes.com/sites/gordonchang/2014/01/26/china-halts-bank-cash-transfers-2/ https://web.archive.org/web/20140127024857/http://www.forbes...