China Liquidity

With all of the massive liquidity injections in China the markets are still showing sings of an inherent liquidity crisis. Kyle Bass has been warning of this danger for quite some time now. When this reaches the tipping point is anyone’s guess but you must be aware of it.

Shibor – Shanghai interbank lending rate

Shanghai Composite daily has pulled back below the kumo. Have to see if this turns into something more serious.

SPX v JNK daily. Junk is still above the 15 day MA for now but this is one chart I will be watching very carefully.

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