The Coming Economic Perfect Storm. 3 Major Bubbles About To Burst: Oil, China, & Wall St

BEIJING (AP) — China has ended controls on bank interest rates in a move toward making its financial system more market-oriented.

The change announced Friday by the central bank comes amid promises by the ruling Communist Party to make the economy more efficient and productive.

Analysts say one of the most important changes will be to overhaul China’s banking industry that subsidizes state industry and lends little to entrepreneurs.

http://www.usatoday.com/story/money/business/2013/07/19/china-bank-lending-rates/2567583/?utm_source=dlvr.it&utm_medium=twitter&dlvrit=110940

Krugman: “China is in big trouble. … Not some minor setback along the way, but something more fundamental.”

http://www.nytimes.com/2013/07/19/opinion/krugman-hitting-chinas-wall.html?_r=1&

Key point Krugman misses: China isn’t so much hitting a wall as bringing itself to an emergency stop. It’s deliberate

https://twitter.com/Max_Fisher

$ES_F $19.7bn was invested in global equity funds in the past week, the most for six months $$

$ES_F $700m was pulled from bond funds.The amount put in US equity funds was the most since June 2008

https://twitter.com/MrTopStep

People’s Bank of China decided to further promote market-oriented interest rate reform

Approved by the State Council, People’s Bank of China, from July 20, 2013 from the full liberalization of financial institutions lending rate controls.

First, the cancellation of financial institutions lending rate 0.7 times the lower limit, by a financial institution lending on commercial principles independently determine the level of interest rates.

Second, cancel bills discounted interest rate controls, changing the discount rate at the rediscount rate plus points in a manner determined by the financial institution determined independently.

Third, the establishment of rural credit cooperatives are no longer lending rate caps.

Fourth, to continue to strictly implement differentiated housing credit policies to promote the healthy development of the real estate market, individual housing loan interest rate floating range temporarily adjusted.

Full liberalization of lending interest rate controls, the financial institutions in consultation with the customer pricing will be further expanded space, and promoting financial institutions to take differentiated pricing strategy, and reduce financing costs; favor of financial institutions to continuously improve the ability of independent pricing, changing the operating mode , improve service levels, increase business, residents financial support; help to optimize the allocation of financial resources, better play the role of financial support for the real economy, but also strong support for economic restructuring and transformation and upgrading.

http://www.zerohedge.com/news/2013-07-19/pboc-scraps-lending-rate-floor-full-liberalization-interest-rate-controls

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