China Credit Apocalypse Playing out

Almost 3 years ago, in our post Credit Entropy and the China Credit Syndrome (
https://crediteye.wordpress.com/2011/05/11/credit-entropy-and-the-china-credit-syndrome/), we had asserted that most of China’s big companies were unviable and the banking system was headed for a one way ticket to the zoo. That scenario is now being played out in front of our eyes. The interbank rate has shot through the roof on the news of big defaults. It is now time to worry about the creditworthiness of the world’s big mining companies, whose credit story has been closely correlated to China’s.