FYI: In attempting to head off a Bernie Madoff moment, China has set the stage for an even deeper bond market rout.
Ten-year government note yields last week hit the psychologically important 4 percent level as investors braced for sweeping rules to curb risks in the country's $15 trillion asset-management industry.
Did Someone Shout Rout?
Caving into social pressure, banks in China have been bailing out wealth-management products that have gone bad. That's not going to be allowed come June 2019. If an offering defaults, issuers or manager can't use their own funds to prop it up or roll the product over into a new one. Those found violating the new conditions will be fined.
Regards,
Ted
