tag:blogger.com,1999:blog-7713394782406533224.post8741916689816762091..comments2024-03-29T00:07:09.063-04:00Comments on IICS: China's Anti-Corruption Drive Causes Global Tremors: 800,000 Tons of Copper Could Hit the MarketLZhttp://www.blogger.com/profile/05082516166181943903noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7713394782406533224.post-73623888947048656892014-06-23T06:22:38.690-04:002014-06-23T06:22:38.690-04:00but what about political pressure? PBOC was pressu...but what about political pressure? PBOC was pressuring lenders even before this with the lower rates and lower reserve requirements... if lenders tighten up again PBOC will likely just pressure them again, no? PBOC cannot afford too much tightening of credit because I would guess that the one thing they fear more than a collateral controversy is an outright credit collapse leading to social unrest... I mean, look at the lengths the West goes to prop up lenders and banks; I would guess the PBOC has not only even more ability but even more willingness and mandate to do so because the power of the politburo depends on it...<br /><br />i'm not professing, mind you... i really don't know for sure yet. but I just can't imagine right now the PBOC allowing lenders to tighten up too much. I think it'd be more likely for them to just make an example of a borrower... you know, strike some fear into the hearts of borrowers, a witch hunt a la anti-corruption, to make an example of anyone that would dare scare lenders into worrying if the borrower is a good credit risk or not....<br /><br />or something like that would certainly carry much less macro and political risk than just letting lenders tighten up at a time when it's clearly the PBOC mandate to prevent that... I think<br /><br />of course this is bigger picture, i could certainly see a week or two of tightening depending on how quick lenders react, and then how quick PBOC reacts.<br /><br />great analysis, in any case, BTW... i'm genuinely not being critical, just curious to discuss various possibilities. Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7713394782406533224.post-6462810539054174392014-06-23T03:30:15.620-04:002014-06-23T03:30:15.620-04:00They wouldn't release all of it, but right now...They wouldn't release all of it, but right now credit is tight because the banks don't know who is a good credit risk and who is a bad one. As long as that remains the case, there will be pressure on some borrowers to move their copper if it is no longer useful as collateral.LZhttps://www.blogger.com/profile/05082516166181943903noreply@blogger.comtag:blogger.com,1999:blog-7713394782406533224.post-16447310327938725502014-06-23T02:47:30.942-04:002014-06-23T02:47:30.942-04:00Why would so much credit not be extended? If anyth...Why would so much credit not be extended? If anything, the discovery of missing copper and the still high demand to take and give credit will increase demand for them to take on more copper security, not release all of it... I don't understand that reasoning -- for it to all ship would be the entire system collapsed, and if that were the case there would be far greater problems than copper prices, and the PBOC will never allow that when they still have so many tools to prop up those extending credit to keep the economy alive.... i dunno that's what we've been thinking all weekend at least, who knows for sure, rightAnonymousnoreply@blogger.com