China Tells International Banks: Stuff It!

[Bindare_Dundat]

http://market-ticker.org

This could get nasty if true.

The State-owned Assets Supervision and Administration Commission, the regulator and nominal shareholder for state-owned enterprises (SOEs), told six foreign banks that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying in an article published on Saturday.

See what lawless behavior gets you folks?

You start this crap - selling worthless paper, intentionally turning a blind eye to fraud, profiting from fraud, screwing consumers and foreigners alike and guess what?

BINGO!  A foreign government that runs a command economy says "Ok, you think that was cute?  Try this!"

For banks that are hoping to sell more derivatives hedges in China, the world's fastest-expanding major economy and top commodities consumer, the danger goes beyond the immediate risk to existing contracts to the longer-term precedent that suggests Chinese companies can simply renege on deals when they like.

Oh, so our wonderful banks have been over there peddling their junk in Beijing too eh?  Derivatives you say? 

I love it.

We reap what we sow, and may the "foreign banks" (you know this includes some nice juicy ones over here in the US) get stiffed and stuffed.

I have no sympathy - zero - for the IBs who get burned by this.

Now let's see China grow a pair of brass church bells and tell Geithner and company to stick it on their debt sales - or even better, why not sell?

If our government refuses to do the right thing and acts like Tony Soprano, then perhaps we need a bigger, badder, more powerful gang to come smack our government around a bit.

[Soul Crusher]

MORE ON THIS
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China warns banks on OTC hedge defaults (will default on derivitives if it wants to)
reuters ^ | Sat Aug 29, 2009

Posted on Tuesday, September 01, 2009 6:33:20 AM by dennisw

Chinese state-owned enterprises (SOEs) may unilaterally terminate derivative contracts with six foreign banks that provide over-the-counter commodity hedging services, a leading financial magazine said.

China's SOE regulator, the State-owned Assets Supervision and Administration Commission (SASAC), had told the financial institutions that SOEs reserved the right to default on contracts, Caijing magazine quoted an unnamed industry source as saying.

It did not name the banks or the firms in question, but said Keith Noyes, an official with the International Swaps and Derivatives Association, had confirmed he was aware of the letter to the banks. He declined to comment further to Caijing.

It also cited a SASAC official as saying that almost every SOE involved in foreign exchange or trade had some exposure to derivatives such as crude oil, non-ferrous metals, agricultural commodities, iron ore and coal, although only 31 SOEs were licensed to do so.

Nobody at SASAC was immediately available to comment on Saturday.

SASAC took over the job of overseeing SOEs' derivatives trading from the securities regulator in February after several Chinese firms reported huge losses from derivatives, and quickly tightened the rules, ordering firms to quit risky contracts and report their positions on a quarterly basis.

In January, Air China (601111.SS: Quote, Profile, Research) (0753.HK: Quote, Profile, Research), Shanghai Airlines (600591.SS: Quote, Profile, Research) and China Eastern (600115.SS: Quote, Profile, Research) reported book losses of almost $2 billion on aviation fuel hedging contracts, the official Xinhua news agency said at the time.

For more details on China's derivatives regulation, please click on: [ID:nPEK207347]


(Excerpt) Read more at in.reuters.com ...

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China is not going to be played a fool like we were. 

Good for them! 

Instead of bailing out these criminal banksters like GWB and Obama did, we should have shown them a jail cell or the poor house. 

[Eyeball Chambers]

So lets tell China to go fuck themselves concerning our debt. 

[240 is Back]

So lets tell China to go fuck themselves concerning our debt. 

parking at walmart will get much better.

[Eyeball Chambers]

parking at walmart will get much better.

I'm starting to actually enjoy shopping at Walmart, it's almost like an old time Freak Show.

Where do these people live?  Last time I was in there I saw three or four trashy looking porn type girls (my favorite  ) looking at clothing,  about 8 feet away there was a freaky looking guy who had what appeared to be a DIY haircut watching them like he was watching TV.  It was hilarious.  Also when I was in line to  check out this big fat lady standing in front of me, was so close to the man in front of her, and she kept coughing real loud.  It cracked me up, he looked like he was holding his breath. 

[Soul Crusher]

So lets tell China to go fuck themselves concerning our debt. 

This is about the reckless derivatives and CDS, not treasuries to fund govt.   

[Bindare_Dundat]

So lets tell China to go fuck themselves concerning our debt. 

and then China says, "Thanks for all these shiny new factories you brought over here. It will do us well in making nice super cheap products for all our trading partners and our own billion people. What is it that you make again?"

[Eyeball Chambers]

and then China says, "Thanks for all these shiny new factories you brought over here. It will do us well in making nice super cheap products for all our trading partners and our own billion people. what is it that you make again?"

 

[GigantorX]

and then China says, "Thanks for all these shiny new factories you brought over here. It will do us well in making nice super cheap products for all our trading partners and our own billion people. What is it that you make again?"

I believe that China is half myth/propaganda and half-truth. Do you believe any of the numbers coming out of a Communist govt. ? That every single year no matter what, they magically achieve their goal of 8% growth? They are totally dependent on foreign consumption, yet even when the world is tanking and the very credit pumps that we/the world use to buy Chinese goods are dry, our incomes have dropped, huge job losses and the 'House as an ATM' bubble has burst....the Chinese still are meeting their magical "benchmark" of 8% growth. How? the Govt. pushes MASSIVE stimulus, forces banks to lend to bankrupt companies, tons of under performing loans and the list goes on. Cooking the books is def. going on.

China is a manufacturing powerhouse, but they aren't as explosive as they seem, I would go as far as to say they could be the next bubble to pop. But what indigenous Chinese manufacturing company is researching, designing and building products the world wants to buy? TV's? No. Lenovo has computers but this assembly and other low margin lever pulling....cars? No. Planes? Boeing and AirBus simply build them there. Trinkets? yes. Pencils, Pens, Happy Meal toys? yes.

Also, what will they do with the shiny new factories if they have no-one to sell the products too. And on the other side, what will they build with the factories if U.S./European companies that design/R&D these products are forced out? China does little innovation, little R&D etc, they even admitted that it will be 10 plus years before they can design a car on their own that could pass all safety/emissions tests and compete with the West. They survive on piracy and a sweatshop economy, essentially a feudal banana republic. A very important point is that their "industrial revolution" is going straight into the teeth of a terrible economic correction and a time period when oil and other precious commodities are becoming harder to find and more expense to buy.

I'm sorry about the rant, this is all my opinion, but China just isn't this huge scary monster that will devour us all. I'm not underestimating them, but I don't believe that they are invincible. No fuckin' way.

Again, I welcome the argument, shred me if you will, but I'm going to take the contrary viewpoint on this.

[George Whorewell]

Im not going to chime into the merits of anyones arguments here, but Gigantor is clearly right about the Chinese Government. They do and say and manufacture whatever facts they feel like forcing upon the population. Political dissidents are kidnapped and killed or jailed indefinetly and political officials that take bribes ( and aren't favored by the communist party for whatever reason) are executed. Businessmen who make too much money and dont have political clout ( or fall out of favor) are jailed and have their assets seized. I was reading an article recently where a civil rights lawyer who was defending petty thieves stealing to feed their families and ordinary citizens being prosecuted on trumped up charges for voicing their political viewpoints was taken in the middle of the night by police and hasn't been seen or heard from in more than 6 months.

While China isn't as brutally repressive as they used to be ( at least publicly), the fact of the matter is that there are no Chinese government "watchdog" groups that can hold politicians accountable, there is no free press, there is no freedom of speech and there is no way to verify if they numbers they put out are accurate.

[Soul Crusher]

Im not going to chime into the merits of anyones arguments here, but Gigantor is clearly right about the Chinese Government. They do and say and manufacture whatever facts they feel like forcing upon the population. Political dissidents are kidnapped and killed or jailed indefinetly and political officials that take bribes ( and aren't favored by the communist party for whatever reason) are executed. Businessmen who make too much money and dont have political clout ( or fall out of favor) are jailed and have their assets seized. I was reading an article recently where a civil rights lawyer who was defending petty thieves stealing to feed their families and ordinary citizens being prosecuted on trumped up charges for voicing their political viewpoints was taken in the middle of the night by police and hasn't been seen or heard from in more than 6 months.

While China isn't as brutally repressive as they used to be ( at least publicly), the fact of the matter is that there are no Chinese government "watchdog" groups that can hold politicians accountable, there is no free press, there is no freedom of speech and there is no way to verify if they numbers they put out are accurate.

Of course that it true, GW, but I think the Chinese are utterly pissed off right now at the specter of having to pay out on fraudulent financial instruments sold to them by wall street thieves.

While they cook the books no doubt, they are also concerned with the level of spending we are engaging in and looking to decouple from the dollar if possible.

Even though their govt may be communist, they see the writing on the wall as far as the financial condition we are in.       

[GigantorX]

While I see China wanting to get rid of the dollar, it would probably be catastrophic to their economy. The problem for China's Communist Govt. is that for domestic consumption to increase, political freedom will also have to increase. They have sort of feudal system at this point and control the people, means of production, the numbers, lending, internet, communicaiton etc. They still, as GW said, repress and jail people. Everyone is a member of the glorious "Party", but it is a means of control.

Capitalism needs a free political and social environment as well. But, as mentioned above, for that to happen the "Party" would collapse.

This is all a big dance and China is no different than any other player. They have plenty of meat in this game, it may not be the same meat as the U.S. or the UK or Russia, but they still have massive interests and power in play.

[Bindare_Dundat]

I believe that China is half myth/propaganda and half-truth. Do you believe any of the numbers coming out of a Communist govt. ? That every single year no matter what, they magically achieve their goal of 8% growth? They are totally dependent on foreign consumption, yet even when the world is tanking and the very credit pumps that we/the world use to buy Chinese goods are dry, our incomes have dropped, huge job losses and the 'House as an ATM' bubble has burst....the Chinese still are meeting their magical "benchmark" of 8% growth. How? the Govt. pushes MASSIVE stimulus, forces banks to lend to bankrupt companies, tons of under performing loans and the list goes on. Cooking the books is def. going on.

China is a manufacturing powerhouse, but they aren't as explosive as they seem, I would go as far as to say they could be the next bubble to pop. But what indigenous Chinese manufacturing company is researching, designing and building products the world wants to buy? TV's? No. Lenovo has computers but this assembly and other low margin lever pulling....cars? No. Planes? Boeing and AirBus simply build them there. Trinkets? yes. Pencils, Pens, Happy Meal toys? yes.

Also, what will they do with the shiny new factories if they have no-one to sell the products too. And on the other side, what will they build with the factories if U.S./European companies that design/R&D these products are forced out? China does little innovation, little R&D etc, they even admitted that it will be 10 plus years before they can design a car on their own that could pass all safety/emissions tests and compete with the West. They survive on piracy and a sweatshop economy, essentially a feudal banana republic. A very important point is that their "industrial revolution" is going straight into the teeth of a terrible economic correction and a time period when oil and other precious commodities are becoming harder to find and more expense to buy.

I'm sorry about the rant, this is all my opinion, but China just isn't this huge scary monster that will devour us all. I'm not underestimating them, but I don't believe that they are invincible. No fuckin' way.

Again, I welcome the argument, shred me if you will, but I'm going to take the contrary viewpoint on this.

You won't get any shredding from me my friend, I always  look forward to your posts but I'm limited for time so I'd like to respond later but i admit right now there isn't too much I disagree with in your post.

[MB_722]

I'm starting to actually enjoy shopping at Walmart, it's almost like an old time Freak Show.

stopped shopping there like 2 years ago

[Bindare_Dundat]

I was just doing a little research and found out that in 2005 America's exports amounted to roughly $596 billion with it's top 10 trading partners. China's exports amounted to roughly $513 billion with it's top 10 trading partners. If anyone can find numbers that are more up to date could they let me know? Thanks.

[Eyeball Chambers]

stopped shopping there like 2 years ago

I don't go much, got some floor paint a few weeks ago. 

[GigantorX]

I was just doing a little research and found out that in 2005 America's exports amounted to roughly $596 billion with it's top 10 trading partners. China's exports amounted to roughly $513 billion with it's top 10 trading partners. If anyone can find numbers that are more up to date could they let me know? Thanks.

I will do a search, hopefully have something up in a bit. Although I believe I saw some %'s that shows that Japan has become China's biggest trading partner now (because of our sever recession crisis) and that even with the combined consumption of Europe, Russia, India etc, without the U.S. consumption China has a gigantic hole in its export demand.

So, the Chinese need to be careful about their wanting to decouple from our dollar, to quick a pullout and it would be a catastrophe, just sell a bit of our treasuries at a time, which is what I think they are doing at this point. They simply do not believe our politicians, although it is just as much the Chinese fault for feeding the retarded beast as it is our Congress.

[GigantorX]

I don't go much, got some floor paint a few weeks ago. 

Floor point, huh?!

Well, see ya' later.

[Bindare_Dundat]

I will do a search, hopefully have something up in a bit. Although I believe I saw some %'s that shows that Japan has become China's biggest trading partner now (because of our sever recession crisis) and that even with the combined consumption of Europe, Russia, India etc, without the U.S. consumption China has a gigantic hole in its export demand.

So, the Chinese need to be careful about their wanting to decouple from our dollar, to quick a pullout and it would be a catastrophe, just sell a bit of our treasuries at a time, which is what I think they are doing at this point. They simply do not believe our politicians, although it is just as much the Chinese fault for feeding the retarded beast as it is our Congress.

I agree the number was huge. Suite101 had a good list of % increases from the top 10 but the most recent list is from 2005. I'm curious  to see how the trend between partners changes as we get closer to 2008.

[Eyeball Chambers]

Floor point, huh?!

Well, see ya' later.

Floor Paint...


Whaaaa? 

[GigantorX]

Floor Paint...


Whaaaa? 

Dude, RPF.

Floor paint, huh?

Well, see ya' later!

[pedro01]

I believe that China is half myth/propaganda and half-truth. Do you believe any of the numbers coming out of a Communist govt. ? That every single year no matter what, they magically achieve their goal of 8% growth? They are totally dependent on foreign consumption, yet even when the world is tanking and the very credit pumps that we/the world use to buy Chinese goods are dry, our incomes have dropped, huge job losses and the 'House as an ATM' bubble has burst....the Chinese still are meeting their magical "benchmark" of 8% growth. How? the Govt. pushes MASSIVE stimulus, forces banks to lend to bankrupt companies, tons of under performing loans and the list goes on. Cooking the books is def. going on.

China is a manufacturing powerhouse, but they aren't as explosive as they seem, I would go as far as to say they could be the next bubble to pop. But what indigenous Chinese manufacturing company is researching, designing and building products the world wants to buy? TV's? No. Lenovo has computers but this assembly and other low margin lever pulling....cars? No. Planes? Boeing and AirBus simply build them there. Trinkets? yes. Pencils, Pens, Happy Meal toys? yes.

Also, what will they do with the shiny new factories if they have no-one to sell the products too. And on the other side, what will they build with the factories if U.S./European companies that design/R&D these products are forced out? China does little innovation, little R&D etc, they even admitted that it will be 10 plus years before they can design a car on their own that could pass all safety/emissions tests and compete with the West. They survive on piracy and a sweatshop economy, essentially a feudal banana republic. A very important point is that their "industrial revolution" is going straight into the teeth of a terrible economic correction and a time period when oil and other precious commodities are becoming harder to find and more expense to buy.

I'm sorry about the rant, this is all my opinion, but China just isn't this huge scary monster that will devour us all. I'm not underestimating them, but I don't believe that they are invincible. No fuckin' way.

Again, I welcome the argument, shred me if you will, but I'm going to take the contrary viewpoint on this.

I agree entirely.

Problem is there are plenty of Asian countries with good R&D skills. India & Singapore.

Where does this leave the US long-term ? Little manufacturing and Asian countries raising the bar in R&D...

[big L dawg]

[Bindare_Dundat]

I agree entirely.

Problem is there are plenty of Asian countries with good R&D skills. India & Singapore.

Where does this leave the US long-term ? Little manufacturing and Asian countries raising the bar in R&D...

Hey pedro, Im still looking for that updated info regarding my earlier post, if you find anything please let me know.

[pedro01]

Hey pedro, Im still looking for that updated info regarding my earlier post, if you find anything please let me know.

Which info is that - remind me - it's been a busy week !