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China Confirmed As Buyer Of Directly Placed Portuguese Debt

Tyler Durden's picture




 

A few days ago, when it was first announced that Portugal is contemplating a direct placement of bonds (with amount and buyer undisclosed), we speculated: "Reuters reports that Portugal is in the process of making a private
placement of bonds, without announcing details on size or the buyer. Our
guess: buyer is China, and size is about €1 billion
." We were off. By €100 million. The WSJ has just confirmed that China was indeed the buyer, and the amount purchased was €1.1 billion. It is unclear if, as we suspect, Goldman Sachs was the underwriter on the transaction.

 

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Wed, 01/12/2011 - 14:24 | 870617 ZeroPower
ZeroPower's picture

The Chinese bankers (supposedly) aren't stupid and hence the question remains, why the hell are they still attempting to diversify into Euromoney if in the long run its gonna either completely fail or go back to under 1.00 EURUSD...

Wed, 01/12/2011 - 14:56 | 870743 NotApplicable
NotApplicable's picture

I wouldn't think of it as Euromoney as much as it is ownership notes of said sovereigns, and their subjects. Honestly, they are just buying the next level of chips so they can sit with in a position of strength at the IMF's upcoming gaming table.

Wed, 01/12/2011 - 15:26 | 870851 Michael
Michael's picture

The Chinese are pulling a Nathan Rothschild on Europe and the world, buying up everything that is not nailed down with cheep liquidity.

The PIIGS are not getting a Bail-Out.

The PIIGS are getting a Debt-In.

That's short for Debt Injection. It's to prevent the big banking house families from getting scalped on their bond holdings.

Wall Street gets a Bail-Out.

Main Street gets a Debt Injection(DI), for the banksters disease.

Wed, 01/12/2011 - 15:33 | 870885 Gully Foyle
Gully Foyle's picture

Michael

"The Chinese are pulling a Nathan Rothschild on Europe and the world, buying up everything that is not nailed down with cheep liquidity."

The Chinese have been doing something similar in Africa. They hand out loans without those nasty little environmental or labor boondogles. They then export their own people to help develop whatever the target is.

Economic colonization that everyone loves. No guns, no hindrance.

Wed, 01/12/2011 - 18:03 | 871328 LowProfile
LowProfile's picture

Economic colonization that everyone loves. No guns, no hindrance.

...Yet.

Wed, 01/12/2011 - 22:30 | 871940 Buck Johnson
Buck Johnson's picture

Thats exactly right, it's economic colonization.  I want all of you to think on this, China has 1.2 billion people  and not enough land for crops even the parts that where polluted.  They need resources and on top of the resources is a place to put their people.  The way they look at it they are allowing their peasants and people to go to these places and essentially build it up for China and in turn they have a relief valve for anger and people demanding jobs and money etc..  I will make a bet, that in the coming war which will be called The Resource Wars, we will see China taking Australia (they have major eyes for that country because of it's location), and reinforcing Africa.  Because they know that America will be in no condition to stop this because of the implosion of her economy and the civil strife in the US. 

Wed, 01/12/2011 - 19:10 | 871516 DosZap
DosZap's picture

And do you actually think they are using Euros to purchase these?,likely using dollars.More n one way to dump bad debt.

Wed, 01/12/2011 - 21:53 | 871853 Founders Keeper
Founders Keeper's picture

[And do you actually think they are using Euros to purchase these?,likely using dollars.More n one way to dump bad debt.]---DosZap

That's what I was thinking.  Chinese cannot get rid of the USD fast enough---without causing a premature panic.

 

Wed, 01/12/2011 - 15:25 | 870852 Gully Foyle
Gully Foyle's picture

 

ZeroPower

Because of the planned high speed rail system due to finish within the next 10 years.

http://inhabitat.com/china-to-connect-its-high-speed-rail-all-the-way-to...

China To Connect Its High Speed Rail All The Way To Europe

http://www.liquida.com/blog-news/14149214/china-beijing-ray-lahood/

China’s High-Speed Rail Train Smashes World Record at 302 mph

An unmodified Chinese commercial train has smashed its old record of 262 mph by reaching 302 mph yesterday running between Beijing and Shanghai.

http://www.liquida.com/page/14324387/

China Announces Plan To Break The Last High Speed Train Record Held In The West

http://www.liquida.com/blog-news/14495310/europe-strasbourg-bbc/

Europe expands high-speed train system with new bridge

Filed under: Europe , France , Italy , Slovakia , Transportation , News A new bridge across the Ill river in Strasbourg is a major step forward for the European Union's plans for a high-speed railway reaching from Paris to Bratislava, the BBC reports.

An earlier bridge had only one track and could only carry trains going a maximum of 100 kph (62mph).

The new bridge has two tracks and can deal with trains going 160kph (99mph).

Wed, 01/12/2011 - 15:53 | 870956 CheapKUNGFU
CheapKUNGFU's picture

and this is where I say...

All your bonds are belong to us, make your time...

 

oh and, eat shit CAPTCHA

Wed, 01/12/2011 - 14:31 | 870618 hugovanderbubble
hugovanderbubble's picture

and also SAFE fund has bought 434 Gold Tons. (without hallmark stamp) - just in 7 months.

 

Ah and of course China + has been part of the " market markers" destination for Spanish Bond Auction, Just look tomorrow.

 

JPM , HSBC, C, Doing their job...

 

Just please answer internally yourself one question...

Would you buy shares of a corporation that their workers dont load stocks?

Apply the same to Portugal, Portuguese banks doesnt have money to cover and ECB has told SAFE Fund to acquire 30% of the spanish auction...

This is all the big  maze, with the devil inside. The biggest falacy ever done in centuries.

System must be Reset NOW¡

 

 

Wed, 01/12/2011 - 14:24 | 870624 Catullus
Catullus's picture

China central bank?

Wed, 01/12/2011 - 14:33 | 870657 TruthInSunshine
TruthInSunshine's picture

It's a giant Ponzi scheme. When it crashes, it's over.

Crash is sooner, not later.

Wed, 01/12/2011 - 14:37 | 870677 inkt2002
inkt2002's picture

 

Wed, 01/12/2011 - 14:46 | 870710 traderjoe
traderjoe's picture

"". 

Your best comment ever. 

Wed, 01/12/2011 - 14:47 | 870715 inkt2002
inkt2002's picture

It was meant to be a picture of a broken record.

Wed, 01/12/2011 - 16:24 | 871052 AnAnonymous
Wed, 01/12/2011 - 14:33 | 870659 koeleköpke
koeleköpke's picture

So what ? the Chinese did some paper-shopping and the Portugese still drink their porto.

Wed, 01/12/2011 - 14:36 | 870673 sschu
sschu's picture

This explains the Euro rise today, it looked like it was headed to 128 soon enough.

Why does China want a stronger Euro, aren't they large purchasers of European goods, especially German machinery? 

Maybe a wild guess with a bit of conspiracy, but maybe the Europeans traded military secrets/technology to the Chinese for some debt purchases.  Nothing would surprise me anymore.

sschu

 

Wed, 01/12/2011 - 14:53 | 870729 duckduckMOOSE
duckduckMOOSE's picture

When Japan arrested the Chinese fishing trawler captain last Sept. China halted shipments of rare earth metals to Japan that play a critical role in manufacturing electronic and high-tech products.  If they own enough of the right people they can make a move on Taiwan with impunity.  http://www.nytimes.com/2010/10/18/opinion/18krugman.html

 

 

Wed, 01/12/2011 - 16:12 | 871014 AnAnonymous
AnAnonymous's picture

It is a consuming game: anyone who does not consume is burnt.

This is not with one billion that the Chinese will gain leverage on Europe.

 

Wed, 01/12/2011 - 19:15 | 871526 DosZap
DosZap's picture

IMHO they do not want a higher EURO, they are simply buying time,and using dollars to hoard anything of value.Before they go tits up.

Converting FRN's into EURO's, and sticking the other party, and China gets the best of both worlds.

Wed, 01/12/2011 - 14:38 | 870680 lizzy36
lizzy36's picture

Great.

China buying 1/20th of 2011 Portugal debt issuance by doing a back door purchase of a Portugal MTN with a zero coupon.
A tad desperate.......NO?

Wed, 01/12/2011 - 14:43 | 870700 hugovanderbubble
hugovanderbubble's picture

Sooner or Later Mars will bailout China:)

Wed, 01/12/2011 - 14:43 | 870701 hugovanderbubble
hugovanderbubble's picture

Sooner or Later Mars will bailout China:)

Wed, 01/12/2011 - 14:41 | 870692 Kaiser Sousa
Kaiser Sousa's picture

i really dont understand this...what the fuck r the "nese" doing...

can they not get enough of debt coupon currency's??????

Wed, 01/12/2011 - 14:48 | 870719 Cdad
Cdad's picture

The worst buyer marks the top.  There you go...China. Sell Portugal.

Wed, 01/12/2011 - 14:58 | 870750 RobotTrader
RobotTrader's picture

Heh, looks like they are infatuated with Fiat Notes, not gold or hard assets.

If I were them I would have piled my sovereign reserves into gold.

But I guess they like paper better.

Wed, 01/12/2011 - 19:31 | 871569 DosZap
DosZap's picture

RT,

Trust me,they are getting all they can get their hands on, hand over fist.

Problem is there is a shortage of Precious, and esp Slvr.They are allowing ZERO export of either out of the country.

Wed, 01/12/2011 - 14:58 | 870752 inkt2002
inkt2002's picture

Breaking News

This is pretty much the nail in the coffin for Bears

Ken Fisher is no longer super bullish. 

Wed, 01/12/2011 - 15:13 | 870805 goldmiddelfinger
goldmiddelfinger's picture

The Uptrend Has Been Halted

By Dick Arms

About this article:
It appears that we are very close to an opportunity to make some profits on the short side. The sideways action over the last week appears to have been enough to halt the ascending trend.

Wed, 01/12/2011 - 14:58 | 870754 Bigger Dickus
Bigger Dickus's picture

These two years have truly been nerve wracking. I closed my trading account a year ago in anticipation of a crash. Where the f*** is my crash? The conomy around me looks like shit.  CRASH ALREADY!!!!!!!!!

Wed, 01/12/2011 - 15:29 | 870865 Gully Foyle
Gully Foyle's picture

Bigger Dickus

"These two years have truly been nerve wracking. I closed my trading account a year ago in anticipation of a crash. Where the f*** is my crash? The conomy around me looks like shit.  CRASH ALREADY!!!!!!!!!"

 

Dude I've been playing Fallout New Vegas in anticipation. Ever since Hackworth clamied some kid in Paducah translated his NES controller skills into direct headshots during his spree, I thought fuck it my Ps3 controller VIBRATES. That has to count for at least a 50 caliber sniper rifle.

Wed, 01/12/2011 - 15:07 | 870781 the rookie cynic
the rookie cynic's picture

You can pretty much replace "undertakers" for "underwriters" in any sentence that includes Goldman Sachs.

Wed, 01/12/2011 - 15:14 | 870811 goldmiddelfinger
goldmiddelfinger's picture

It sad that someone got a commission for this

Wed, 01/12/2011 - 15:32 | 870870 Husk-Erzulie
Husk-Erzulie's picture

China may believe that the fed, well aware of a coming tectonic economic event, is going to try and be the last man standing.  If Bernanke can hold on until the Euro crumbles then all of the hot, frightened money will run to the dollar strengthening the hand of the US and allowing it to dictate the terms of the Euro zone 'recovery'.  By propping up the PIIGs, the Chinese may believe they can force Ben to stumble first- interest rates run away and the US begins defaults before Europe does. If the Fed goes first then China may conceivably be in a position to influence European states away from the Fed preferred end game which would be extending the NATO alliance into a central bank based 'global' currency and military union, a defacto new superpower.  It's a high speed game of chicken right now, China can't stave off their own problems forever either, they, like Ben, just want to be the last man standing.  Even if blooded and bruised.  Propping up the Euro is the pre endgame gambit they have now clearly chosen.  Are they correct? How desperate? Fallbacks?  The outcome? Who can say...

Wed, 01/12/2011 - 15:49 | 870945 sschu
sschu's picture

Your theory may be correct, it would seem China has more in mind than just making a few points on some debt purchases.

It is so comforting that we have a thinker like Bennie etal in charge looking after our well being ... /s

sschu

Wed, 01/12/2011 - 15:56 | 870967 Black Forest
Black Forest's picture

Excellent summary I guess.

Wed, 01/12/2011 - 16:09 | 871002 AnAnonymous
AnAnonymous's picture

I think it is much simpler. Anyone who does not consume in the current environment is burned.

The Chinese included.

Wed, 01/12/2011 - 15:40 | 870918 americanspirit
americanspirit's picture

Look for a Chinese naval base coming soon to the Azores - an easy cruise for their subs to the US East Coast.

Wed, 01/12/2011 - 16:10 | 871005 AnAnonymous
AnAnonymous's picture

The Chinese are not the US citizens. They have yet not deployed one foreign base.

Wed, 01/12/2011 - 18:46 | 871464 Drag Racer
Drag Racer's picture

They have yet not deployed one foreign base.

Thinking in a way of an economic battle, how would you classify the port of Long Beach and every WalMart.

Wed, 01/12/2011 - 15:41 | 870922 americanspirit
americanspirit's picture

Oh - and right at the mouth of the Med too

Wed, 01/12/2011 - 17:33 | 871217 Sokhmate
Sokhmate's picture

Shame on you ZH. Off by 10% is not acceptable. </s>

We're not worthy.

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