BREAKING: China's net new loans dropped -$50.4 billion in July, marking only the 3rd monthly decline this century. This is a broad measure of new bank lending in China and a key gauge of overall economic activity. The decline was also more than 3x larger than expected. Loans extended specifically to the real economy posted an even sharper drop, with net repayments of -$87.5 billion, the largest monthly decline in data going back to 2002. Aggregate financing, a broader measure of total credit, rose +$207.7 billion, but almost all of it came from +$192.9 billion in government bond sales rather than organic private lending. This comes as corporate and household longer-term loans shrank, reflecting weak investment appetite and demand for property. China's economic activity is deteriorating sharply.(The Kobeissi Letter)