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Euro Surges On News Chinese White Knight To Make Repeat Appearance, Attempt To Bail Out Europe For Second Time (Just As Unsuccessfully)
Back in January we wrote with some amusement that China would be Portugal's knight in shining armor following a "Reuters report that Portugal is in the process of making a private placement of bonds, without announcing details on size or the buyer... The WSJ has just confirmed that China was indeed the buyer, and the amount purchased was €1.1 billion." Since then Portugese bonds have tumbled and China has taken at least a good 10% loss. Five months later, it is time to kick the can once more down the road, courtesy of the Chinese yet again, who not surprisingly don't want to experience a partial wipe out on their foolish investments across their soon to be European protectorate should Greece file tomorrow. The FT reports: "Asian investors including the Chinese government are expected to represent a “strong proportion” of the buyers of Portuguese bail-out bonds when the eurozone’s €440bn rescue fund begins auctioning them next month, according to senior fund officials. Klaus Regling, chief executive of the European Financial Stability Facility, told reporters on Wednesday that Beijing was “clearly interested” in the Portuguese auctions and that he expected China to participate." And whoever said that stupidity follows an arithmetic progression was wrong. It's exponential: "He argued the intense interest from Asia and other international investors showed renewed confidence in the future of the euro as a currency." Uh, no. That was the bullshit excuse in January. Now it is merely an attempt to not get destroyed in the upcoming massive pan-continental "rights offering" which will see existing "investors" take haircuts of up to 50%. But since when does Europe even pretend to tell the truth.
From the FT:
“[Asia] is a region that has money to invest in the rest of the world,” Mr Regling said. “They don’t want to go only into one currency. They don’t want to go only into one asset class . . . They look at us and come to the conclusion it’s a good way to diversify.”
Chinese officials have expressed interest in investing in European assets as a way to diversify holdings in their sovereign wealth and other investment funds, which have historically concentrated on dollar-based assets. While Beijing has acknowledged it remains a significant holder in Portuguese and Greek sovereign bonds, Chinese officials have been reluctant to disclose where in Europe it will make investments.
Christophe Frankel, EFSF chief financial officer, confirmed that China had participated in its January auction, which raised cash for Ireland’s bail-out, but declined to disclose how much Beijing had invested.
China’s involvement in the triple A rated bonds issued by the bail-out fund could be an indication Beijing is focusing on ultra-safe assets rather than more risky sovereign bonds for countries such as Ireland, Portugal and Greece
In the meantime, absent this latest cash infusion, Lisbon would be broke within a month:
The move, coming soon after the bail-out was approved by EU finance ministers last week, reflects Lisbon’s urgent need for cash, with nearly €10bn in debts coming due by the middle of next month.
Naturally, the euro which can no longer discount a future further than 1 day or at most a week ahead, is surging. If history is any indication, the move is to be faded, as now it is China's turn to experience the half life effect of repeated and flawed "interventions" which have already forced the SNB and the BOJ to cease and desist from pretending they have more money than the capital markets (or, in China's case, prevent the inevitable). If anything, this last ditch pre-rights offering smacks of nothing short of desperation on the side of Europe's bloated, privileged and endlessly lying kleptocrats. That said, all the shorts which recently flipped out of the USD into the EUR will likely keep the covering momentum going for a while before the same weak marginal hands that got evaporated on the recent move up in the USD experience the same fate on the other side of the Atlantic.
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Short the spike. TD is right... this will soon fade.
Gives anyone wishing to dump their euros a little more bang for the euro so they can then exchange it for PMs, cocoa beans, parrot feathers, bags of salt, dung beetles, or any other tradeable items worth something, before the euro -and the rest of all paper money- collapses to recycled toilet paper status.
In other news, China is building a new "wall of China" in order to prevent the hungry smelly dirty uncultured paupers of europe from entering the middle kingdom when TSHTF.
What's the bid/ask on dung beetles. I WTB.
Seriously, is this the reason the Euro just went apeshit?
You mean that a desperate bailout king in Euroland says this...with no actual bailout bond buying, and the Euro moves 2 cents? So this non story is placed to suggest we are good through June? You have got to be kidding me. So I guess the criminal syndicate known as Wall Street was very nervous about that S&P 100 day sma issue today.
Zero market integrity. None. In fact, more evidence that there is no market anymore.
Good grief [and by that I mean just commence with the zombie apocalypse already because this bullshit is getting so tiring that I rather think I would prefer a world with the flesh eaters to one with these jack ass bankers]
I'm about yay tired of getting monkey-hammered by this crap myself.
what are you like a fucking saint or something, orly?.........here's the way i see it; China bails out the US for Years and that no longer works so its on to the next lowest common denominator which is nation states within a single currency union with a negotiated backstop by the ECB which itself is technically bankrupt.
and, to top that off the mayor of Dublin, Ireland is selling the notion that the Chinese will be coming to the Party....with plastic santas for all dummies to go around.
where is the ira when it is needed
get real........not you, Orly.... you are more than real.
can we spell/smell desperation...........the mayor of Dublin......cash is obviously King
can you just imagine the historic implications of the Chinese in Paris?!?!.......NO!!!!!!
short the GBP, equity indexes, NZD tonight........looking to short OIL
China prints a shit load of new Renminbi which it uses to buy a US T Bill, pledges that as collateral to a European bank for a credit line which it uses to buy Irish or any other kind of imploding debt.
If the US dollar tanks, China simply prints more money and buys another US T with which it makes good on its collateral to the European banks. If Ireland fails it demands hard assets in repayment.
This shit has got to stop. Our politicians are committing TREASON, for which we will need to slaughter our children on the mantle of nationalism when the Chinese come demanding payment on their debt.
The Chinese conjured this stuff up from thin air and will demand hard assets in repayment. What does it take to get people to understand this? These politicos are selling our countries out for nothing.
People have been shot for less...
It will take complete repudiation of all these debts and a gold standard to stop this, nothing less.
But couldn't it work in the opposite direction for the Chinese? I mean a blowback or backfire?
Suppose the Chinese conjure up renminbi and then turn around and buy all of this European paper. Maybe they have to sell US dollars to do it and hedge their bets with physical metal, precious and base. The USD continues to go into the tank and it turns out Gross was right and that Treasuries are a bad move.
The world panics as the US has to raise rates to raise capital and the flight is again to precious metals but not necessarily the USD. The Chinese print more money to buy gold and European sovereign debt because they are now in the pickle they were before with the US, in that they have to keep buying or the whole thing comes down around their ears.
Inflation in China soars. The price of gold and silver and copper and zinc soar along with it. There comes a massive slowdown in the US economy- another round of stagflation- and we muddle through.
Meanwhile, commodity prices come off hard, maybe even crash. The Chinese are forced to sell their commodities at a massive loss in order to keep their European investment hopes alive. The economy is basically insolvent.
There are riots in the streets of Beijing. US manufacturing comes back strong with new investment. The Chinese economy becomes a net importer and inflation soars again in basic goods.
Two billion people say no mas (or whatever it is they say in China...) and there is a massive regime change, making the Middle Kingdom safe for Western "democratic" capitalism.
It seems they are going from the frying pan to the fire on this one. I think it's all in the plan. The old bait-n-switch.
Orly, I think the problem here is that you're still thinking pre crash. China has a problem ostensibly with a rising currency from a budget surplus, the US has the oposite. China needs a good reason to slam the Yuan whereas for the USD it is inevitable.
I can see no good reasson why the Chinese would want to hedge their bets with pm's; they want a weaker currency and magicing it up from fresh air is their only way to weaken it; buying USD's first slows the dollars decline in the short term.
My problem is that they are using this money created from nothing to compete with me and everyone else's hard earned cash. When they call it having been given hard collateral in exchange we will be at war.
People on ZH are forgetting that the average income in some parts in (western) China is around $2. I mean China is waaay from becoming a global player, all the stories about China's $3 trillion reserves, well US firms have $3 trillion parked just outside the US, never mind what they have inside the US.
I think this is getting off topic a bit, China is better known for its human wave tactics as opposed to sophisticated military technology, my point being that the US cannot afford its carriers and missiles; it is not the ascent of China but the decent of the West that is the problem.
My point in all of this is that there is no limit to how much of your stuff I can buy if I can create unlimited free money in my own currency, and there is no limit to how much pain you can suffer trying to repay it if you can't print it.
We need a gold standard, pure and simple...
Sovereign wealth funds should be banned.
'People on ZH are forgetting that the average income in some parts in (western) China is around $2.'
absolutely, just think what happens next when a $5 bag of rice goes up by $5.
China calls in its debt to buy rice...
The Chinese will buy the Greek Crown-Jewels,i.e. the last cash flow positive assets the Greek State owns. Afterwards it's darkness and default + exit EURO.
Great Rob McEwen interview. His perspectives on Europe and bailouts, as well as gold and silver of course.
http://goldandsilverlinings.com/?p=1071
Good stuff. McEwen is one of the best CEOs in PM the mining industry. His interests are properly aligned with stockholders. Own stock in his companies.
Easiest short ever. Why do monetarists think they're in the driver's seat? The arrogance would be funny if it weren't so sad.
I know what a joke. China is a economic and financial joke. Check the NZD spike, claims are coming out china that they will buy New Zealand too! So looking forward to China's meltdown in 2011.
Go NZD!
Let me guess. You looking forward to making cheap shoes and toys in the US doing 14 hour shifts right? Question is though do you have the necessary skills?
China has got to do something useful with their useless dollars. Like buying bankrupt countries so they can be their slaves in the future.
In other news :
http://www.prnewswire.com/news-releases/new-fbi-files-alleging-aipac-the...
New FBI Files Alleging AIPAC Theft of Government Property and Israeli Espionage Released
So... how long before those AIPAC traitors are arrested?
This part caught my eye,
"These files, available on the Internet for the first time, reveal activities that undermined rule of law and governance. They have wrought massive economic harm to American businesses and workers. We urge all concerned Americans to carefully review and ponder the implications of these FBI files and other documents now available from the Israel Lobby Archive."
War on Terror indeed. Who are we fighting again?
In 1985 Israel had a GDP a full 2/3s of one percent of US GDP; how much damage could have been done?
That part caught your eye because it's sensationalized. If the headline read, "a little political espionage and back and forth over tariffs that would effect only 7 companies", like the reports did (but who follows up on sources?) no one would have taken a second look.
It's a non issue; nothing to see here.
I used to wear a blue suit to a certain system program office every day and learned rather quickly which foreign military sales attachés required the utmost vigilance. It would be an error to downplay the scope or opportunistic nature of their intelligence gathering operations.
Fedohile,
Thanks for catching the date on that.
Why the hell is this old news being posted right now lolmao500? I don't like AIPAC, but a 26 year old story?
Because the FBI just declassified and posted it recently.
double down always worked really well for me.
Didn't one of those Arab countries double down on Citi stock at 35 or so?
LOL
The doubling down has been watching POTUS grab ankles and "double down" for his arab brethren. Shameful.
When you bet small..... You lose when you win?
China want to buy a lot of EURO bonds so that it can get rid of some of US dollar and some europeans might have feel more good toward China.
Eurozone: Fuck it, we are going to kick in freegold
China: Wait...We want to get more gold first
Eurozone: Ok then, buy some bonds
More likely:
eurozone: Please help me, I'm european!
China: Confucius say we buy some eurotrash bonds, but with collateral.
eurozone: anything you ask, but please help me, I'm european!
China: Confucius say we take all gold and your women under 25 as collateral.
Surges? WTF?
1 hr for USDHUF to break below 190, or I'm going to bed.
(With a set 189 buy in)
China is smart.
They get to play the good guy and prospect for future European naval bases. The ECB will be still left to face the pitchforks.
Yeah, maybe China will be the new ECB when it's all over.
It's a distraction for their (China's) illiquid time bombs - banks. China should just stick to what they do best building more zombie apartment loans and malls and excepting imported inflation from the US.
Some say we got 2-5yrs before the whole financial systems just collapses. I am looking at 2011 when i hear this vomit from China
Christine Lagarde who? Don't worry baby, Daddy is in town now.
She be ugly. Best they can do?
Full tilt hegemony gets a little great, a lot mediocre and a whole bunch just plain nasty.
she so feckin ugly, she could be a modern masterpiece
well--she was named after a car with an attitude problem. and we all know about women who are compared to cars...
Never go full retard, man.
What fools.. They keep trying to buy power in an Anglo-dominated world. They better keep building aircraft carriers because they are going to need them to collect.
How stupid is China? Prediction: when America cedes the crown of alpha dog, China will not be there to claim it. I bet Germany comes in and scoops it up while China fumbles with its ridiculous 1000000 year plan.
Tyler....what are your thoughts on Schiff vs. NIA....
Haven't followed it, but here a counter question: in exposing fraud and corruption, which the NIA has done in recent months, some of which work has ended up on Zero Hedge, has it backed its findings and observations with facts, and if so, is it providing incremental information over and above what is available in the Borg?
If so, who cares if Vision Victory, or whoever is the purported head of the organization, is the 3rd coming of Tim Sykes?
I defer to Mr. Durden.
Ronald Regan had it right..."Trust but verify.." holds true with any of our sources.... I don't mess around with Penny stocks anyways because I prefer my gambling to be conducted in Casinos....I still hope they are above board so as not to taint their message...
Buffet said, "You only find out who is swimming naked when the tide goes out."
China is trying to prevent the tide going out because China is swimming naked too.
If there is another global financial crisis that start in Europe, Chinese Ponzi scheme economy will be exposed.
This is looking way too wonky. Taking 2 USDHUF at 190.7, if it gets there.
Ok, got 1. Back to 189.
Apparently the US leadership does not have a patent on stupid. The Chinese have bought everything in site, time for them to sunset like Japan. The demographics suck because of 1 child policy. It's all a pipe dream, but like the end of money printing. Money Printing for wallpaper is coming.
I guess Goldman is going to do anything and everything to get that 1.55 Euro/USD huh? I mean the fraud couldn't be more blatant than today. I guess its just a matter of time tonight before we see the 300 pip move north on EUR/USD.
Probably, they are a stupid firm, rich, but stupid. The came out few days back and said "yeah bullish on commodities" even though China's PMI sank, which is probably heading under 50 now (real data) with a nice dash of stagflation. They know that. Right now a big bull trap has formed on a major false breakout in the last 48hrs. Sell on rallies towards the end week. THe China spec on buying toxic European shit came from one article - that's all!
If there are offers are top and big knock out calls...pretty safe to say you'll see some sudden selling.
This is obvious. China is trying to have the USD default before the Euro. China is competing against the USA, and wants to see their main competetor suffer.
Yes, this is possibly true. But this could backfire on the PRC.
He who defaults first, wins.
He who does not default decides the next game's rules. China wants to be the guys that make the rules this time round, just like USA did after WWII, as that way their currency has the best chance of getting preferrential treatment, maybe even reserve status.
A MASSIVE blowup has been made; just not realized.
Throw 1 bad apple in the cart and the whole batch gets rotten.
Sitting right at the big 382 fibo now... A retest of this is normal -- what it does from here is everything...
Well...that explains the USD spelunking. I'll wait to see if the DXY bounces off 75.50 and the E/U fails to break 1.4185 and go short then if all conditions are right...otherwise it's a beer and watch.
Putting in for 1 at 190 on USDHUF. I may have pooched this.
Looks like bad news for stock market bears tomorrow.
Relative strength in FCX, OIH, EEM, etc. was a heads up that another "Risk On" blast was right around the corner.
Oh yippee, I have 3 days of roll to recover. I don't believe it.
I never lose when hammered.
That's what a big balance is for.
What is your call, Robot; 12450/500 resistance for the Dow, or a break above?
The Chinese thing looks like a stick save.........for the moment. Love the one you're with.
btw, when the FED comes to collect your gold in exchange for your share of the national debt owed to its private banks will you be taking it Greek and paying without question?........just for the record, you are a patriot at heart, right?
Just like when all those Germans bought those Greek bonds.
And of course the Chinese announced this so, er, they'll buy them when EURUSD 1.60 instead of EURUSD 1.31?
Huh?
Minute to minute, boy.
Wait till Benny Boy does a head fake and ends QE2...Risk Off down the cliff, then everyone will be beggin' him for QE3 and then to the moon S&P, Oil, Gold, Silver...rinse and repeat bitchez
one more round of money...here comes eu, ecb, and fed....scary to be short stocks
The Chinese peasant class certainly has a nice future to look forward to; the Portuguese beaches and Spanish villas by the dozens.
China's Club Med.
Is the Eiffel Tower next?
Nah, they'll pass on the tower. Chinese like PMs, not junk.
They only reason China wants to save(which will not work) the euro is to have the EU lift the arms embargo against it. With this China would get all the latest western military advanced technology. China wants to gets its hands on those Eurofighter Typhoon jets,maybe some Leclerc tanks,Leopard 2a5. However the EU is so fucked up that not even China could save it. If Greece defaulting could destroy the eurozone imagine when Spain has to ask for a bailout. The EU will go down in history as the biggest fail ever. Hey at least those rapture,Israel first,Sarah palin supporters will stop thinking the EU will be the seat of power of the antichrist. I hope the EU fails and I will not shed tears when it collapses.
HA.
Can hardly wait for the Chinese to hold Trichet's balls to the fire the same way the held Hank Paulson's, over their MBS holdings in Freddie and Fannie.
Hot money. They are throwing a couple USD $Billion here and there like Macau
What else are they going to do with their trillions of USD?
Ok, USDHUF seems to have stabilized. Going for 1 at 190.5.
HUF is a good proxy for CHF, for you that wonder.
Mynhair, I am curious why you don't go straight for CHF then. Why use HUF as proxy?
.
The euro is looking more and more like the proverbial "pyschopathic killer in the sorority house." "When he's up he's coming after you. When he's down he's coming after you, too." I don't see how Europe's economy can function with that thing bouncing around like a super-ball with a bad sense of humor. I will say this "at least you know the dollar pretty much stinks" throughout this "whole kaplooey." Perhaps the the Eurolanders should start a blog?....Hmmm. Then again...maybe not.
Well. got an order in for 7 USDHUF at 189. Make or break time.
No upside stops.
Downside doesn't exist.
china does not care if it loses money, what is gains is far more valuable. the role of a creditor. it will dictate what europe does. it will take what it wants, as it will be owed to them. to call china foolish is to not look past your nose.
Chinee? Dream on, like they are a FACTOR yet.
China is going to stick their finger in the dyke.
Gonna pass on this opening....
Cumon, dykes and fingers?
Greek? Dyke? I had to do something with it even though it was really wrong. I see that now.
Greek? You said Chinee! Have another swig, I am.
A chinee panda named imf wannabe walks into a restaurant, sits down, and orders a Gyro sandwich. He eats the sandwich, pulls out a gun, and shoots the waiter dead. As the panda stands up to go, the manager shouts, "Hey! Where are you going? You just shot my waiter and you didn't pay for your sandwich!" The panda yells back at the manager, "I'm a panda! Look it up!" The manager opens his Greek dictionary and reads the following definition: A money lending marsupial of Asian origin, characterized by black and white coloring. Eats shoots and leaves. Austerity bitchez!
http://www.youtube.com/watch?v=QM7LR46zrQU
http://www.youtube.com/watch?v=UWwIqeMpCA0&feature=related
China is doing the art of war stylee...Now they are selling EUR.
Hey Libs!
http://www.youtube.com/watch?v=KmQ_1sXZJxI
Why is the title to this story racist?
White knight? Not Yellow, Brown, or Kenyan?
Slopes want more bonds? Must not be any more gold to be had for their FRNs. Either that or the Euro-kleptocrats sold their souls to the Chinese so they'd buy 'em........
USDHUF refuses to hit 190.50.
Might have to chase a little here.
China doesn't give a damn about the EZ - except Germany. Massive Chinese offers on the EUR.
It's got a sinking feeling again.
Do you mind if I ask as to the source of / reason for your ongoing obsessive drama with the HUF? And BTW, relative to other fiat denominations, how stable do you estimate the HUF to be?
Wow, what a move, almost half a percent in thirty minutes, and people give robo grief, geez.
with china net selling rather than buying = a bull strap
How do you tell that china are net sellers? thanks!
traders out of asia see CIC related selling. look at the chart now.
thx
then you got buyers into europe open.
but china is talking shit like they always do...hopeless investors.
Questions for you ZH'ers
1) If Greece defaults, what happens to the yields of the remaining PIIGS?
2) Which of the remaining PIIGS will be next to default?
3) How many Eurozone countries will remain when all is said and done?
Interesting thread...mynhair's USD/HUF gig has kept me on the edge of my seat.
So now Goldman Sachs might have to compete to see who will own Greece, and then Ireland, and Protugal, and Spain, etc?
The fact that the chinese want to prevent the inevitable makes me realize how idiotic they are as well. This ponzi will blow up around the world and no one sovereign is safe.
Europe is eating this China crap up right now even though there was heavy China selling few hrs ago. How embarrassing a country (China) has the biggest economic bubble in history governed by closed door maoist releases one article that they 'might' by junk from EZ, also nearly toxic NZ bonds go bid on the China con job.
Market will need to see the money next 24hrs
maybe not 24hrs hedge funds aint buying the china dribble
Oh that's how inflation is gonna come home to roost. The Chinese have finally found something to do with their trillions in reserves; by funding sovereign budget shortfalls!
* China's CIC ready to spend NZ$6 bln on NZ assets and government bonds, will buy A$6 bln in Australian assets also
...they are getting desperate. It's a smoke screen to cover up how shit the economy has become.
an alternate explanation:
May be China diversifies, selling $s (or at least getting less) and getting Euros. Because they may have even less confidence in the $. Remember, beside short-term acts, they also have a long-term perspective.
China's whole national strategy is built upon maintaining the peg to a weak dollar. Propping up the euro lets them prolong the game, while they fight domestically (Chinese central bank vs. the Communist Party) over whether survival of the status quo is more likely under inflation/high GDP or steady prices/high unemployment.
The other part of their strategy is to run trade deficits with Germany and Japan, both to keep those countries happy with the relative value of their currencies and to obtain products the Chinese hope to reverse engineer.
Meet the new white knight - same as the old white knight.
Sell EuroUSD and stocks
Buy long end of US treasurys
http://deadcatbouncing.blogspot.com/
IMHO its not about money, its about property-- I keep remembering the Japanese interest in NYC ice rinks.-- maybe a little behind the curtain talk about how the Chicoms can pick up some valuable assets when the country defaults-- kind of like "they will have to give you some national treasures when they can't pay" type of talk. Big Banks and China-- great combo.