You can view a basic financial model for a CCFD over here.
Wednesday 20 April 2016
Saturday 16 April 2016
Early Warning on the Qingdao port scandal
When discussing the Qingdao Port Scandal, my view is that proper risk surveillance would have highlighted the glaring "rehypothecation" risk that had been building up over the years.
In fact, way back in 2013, a full year before the Qingdao port scandal erupted, Goldman Sachs had highlighted how commodity repo financing was used to arbitrage the interest rate differentials on onshore CNY and USD (see here) . An update was issued in March 2014, a full three months before all things broke out (see here), which foretold quite precisely what was going to happen in an unwind. This was reported in noteworthy finance blogs such as Zero Hedge way back in 2013 as well (see here)
In fact, way back in 2013, a full year before the Qingdao port scandal erupted, Goldman Sachs had highlighted how commodity repo financing was used to arbitrage the interest rate differentials on onshore CNY and USD (see here) . An update was issued in March 2014, a full three months before all things broke out (see here), which foretold quite precisely what was going to happen in an unwind. This was reported in noteworthy finance blogs such as Zero Hedge way back in 2013 as well (see here)
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