

China Halts Bank Cash Transfers - pmorici
http://www.forbes.com/sites/gordonchang/2014/01/26/china-halts-bank-cash-transfers-2/

======
blazespin
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-
stoppag...](http://www.zerohedge.com/news/2014-01-26/no-there-no-stoppage-
cash-transfers-china)

~~~
streetnigga
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
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…

~~~
streetnigga
"whether or not people were burned by using ZH for trading tips"

I never said anything about "trading tips," just that ZH has proven itself to
be built upon a pile of rumor mill excrete.

~~~
cinquemb
> _just that ZH has proven itself to be built upon a pile of rumor mill
> excrete._

…that everyone from cnbc reporters, economists, peeps at nanex and
billionaires have felt the need on occasion to participate with to varying
degrees. So now that's out of the way, what do you really want to add to topic
at hand?

~~~
streetnigga
Well thanks for the inquiry.

I think the take on ZH's reporting seems rather correct. If the controls only
apply to Citibank then the phrasing of the the article's headliner is a bit
much. As for the meat of the subject Citibank has been a laggard[0] entity for
some years, after the great recession and all.

[0]
[http://www.google.com/finance?cid=662713](http://www.google.com/finance?cid=662713)

~~~
cinquemb
I think that makes it even more interesting when you think about them in the
context of their peers, and considering it has been a cyclical bear market
since 2000, would you say this is a one off or a sign of more things to come
in general in the current environment in china?

~~~
streetnigga
One of the reasons I expressed bother that ZH didn't link to the report they
cited was my lack of view into the China. Heck my best metric is valuation of
US stock of a company registered in the US, not it's sister/brother in a
different nation. Typically though there is no major divide in reaction to
core stability across markets. Not much of a comment on China just Citi, ZH,
parent article.

------
austinz
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
Yes. via [http://www.marketwatch.com/story/china-bank-transfer-halt-
on...](http://www.marketwatch.com/story/china-bank-transfer-halt-only-for-
small-amounts-2014-01-26)

"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."

------
tokenadult
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)

------
Alex3917
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
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.

~~~
kolev
You really believe Bitcoin will survive decades?

~~~
panarky
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.

------
teh_klev
Original linked article appears to 404. Here's a link to archive.org's
snapshot:

[https://web.archive.org/web/20140127024857/http://www.forbes...](https://web.archive.org/web/20140127024857/http://www.forbes.com/sites/gordonchang/2014/01/26/china-
halts-bank-cash-transfers-2/)

------
jrockway
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
As writer of software, I'm also betting on option B.

------
otoburb
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
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

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

